Bankruptcy Act 1966

Where a member of a partnership becomes a bankrupt, the Court may, upon the application of the trustee, authorize the trustee to commence and prosecute any action in the names of the trustee and of the bankrupt’s partner or partners.

Notice of the application for authority to commence the action shall be given to the bankrupt’s partner or partners, who, or any of whom, may show cause against it.

Upon application by such a partner, the Court may, if it thinks fit, direct that that partner shall receive the share of the proceeds of the action to which he or she is entitled as a partner.

If a partner does not claim any benefit from the action, the Court may order that he or she be indemnified against costs in respect of the action.

Unless the Court otherwise orders, a release by a partner of the debt or demand to which the action relates made after notice has been given to him or her under this section is void as against the trustee.

This section applies to and in relation to joint debtors who are not partners as if they were partners.