THE CORPORATIONS LAW

CHAPTER 5 - EXTERNAL ADMINISTRATION

PART 5.7B - RECOVERING PROPERTY OR COMPENSATION FOR THE BENEFIT OF CREDITORS OF INSOLVENT COMPANY

Division 4 - Director liable to compensate company

Subdivision A - Proceedings against director

SECTION 588J   ON APPLICATION FOR CIVIL PENALTY ORDER, COURT MAY ORDER COMPENSATION  

588J(1)  (Grounds for compensation order)  

Where, on an application for a civil penalty order against a person in relation to a contravention of subsection 588G(2), the Court is satisfied that:

(a)  the person committed the contravention in relation to the incurring of a debt by a company; and

(b)  the debt is wholly or partly unsecured; and

(c)  the person to whom the debt is owed has suffered loss or damage in relation to the debt because of the company's insolvency;

the Court may (whether or not it makes a pecuniary penalty order under section 1317G or an order under section 206C disqualifying a person from managing corporations) order the first-mentioned person to pay to the company compensation equal to the amount of that loss or damage.

588J(2)  (Liquidator may intervene)  

A company's liquidator may intervene in an application for a civil penalty order against a person in relation to a contravention of subsection 588G(2).

588J(3)  [Liquidator's right to be heard]  

A company's liquidator who so intervenes is entitled to be heard:

(a)  only if the Court is satisfied that the person committed the contravention in relation to the incurring of a debt by that company; and

(b)  only on the question whether the Court should order the person to pay compensation to the company.