Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018 (10 of 2018)

Schedule 1   Amendment of the Banking Act 1959

Part 1   Main amendments

Banking Act 1959

190   Section 15B

Repeal the section, substitute:

15B Moratorium - effect of Banking Act statutory management on court and tribunal proceedings

(1) A person cannot begin or continue a proceeding in a court or tribunal covered by subsection (8) in respect of a body corporate if a Banking Act statutory manager is in control of the body corporate's business.

(2) Subsection (1) does not apply if:

(a) the court or tribunal grants leave for the proceedings to be begun or continued on the ground that the person would be caused hardship if leave were not granted; and

(b) the beginning or continuing of the proceedings is in accordance with such terms (if any) as the court or tribunal imposes.

(3) A person intending to apply for leave of the court or tribunal under paragraph (2)(a) must give APRA at least 10 days notice of the intention to apply (or a shorter period, if the court or tribunal considers that exceptional circumstances make this necessary).

(4) APRA may apply to the court or tribunal to be joined as a party to the proceedings for leave. If APRA is joined as a party, the court or tribunal must have regard to APRA's views in deciding:

(a) whether to grant leave under paragraph (2)(a); and

(b) if the court or tribunal decides to grant the leave - whether to impose terms as mentioned in paragraph (2)(b); and

(c) if the court or tribunal decides to impose such terms - the nature of those terms.

(5) Subsection (1) also does not apply if:

(a) APRA consents in writing to the proceedings beginning or continuing; or

(b) the Banking Act statutory manager, after considering APRA's views, consents to the proceedings beginning or continuing.

(6) APRA (or the Banking Act statutory manager) cannot revoke a consent given for the purposes of subsection (5).

(7) Neither APRA nor the Banking Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (5).

(8) A proceeding in a court or tribunal is covered by this subsection in respect of a body corporate if it is any of the following:

(a) a proceeding against the body corporate (including a cross-claim or third party claim against the body corporate);

(b) a proceeding in relation to property of the body corporate;

(c) a proceeding to enforce any security (including a mortgage or charge) granted by the body corporate, or by a related body corporate of the body corporate, over any property that the body corporate owns, uses, possesses, occupies or in which the body corporate otherwise has an interest.

(9) Subsection (8) does not cover a proceeding in respect of an offence or a contravention of a provision of a law for which a pecuniary penalty (however described) may be imposed.

(10) In this section, a reference to a tribunal includes a reference to the following:

(a) an industrial tribunal;

(b) an arbitral tribunal.

15BA Moratorium - effect of Banking Act statutory management on enforcement process regarding property

(1) No enforcement process in relation to property of a body corporate can be begun or proceeded with if a Banking Act statutory manager is in control of the body corporate's business.

(2) Subsection (1) does not apply if:

(a) the Federal Court of Australia grants leave for the process to be begun or continued on the ground that the person would be caused hardship if leave were not granted; or

(b) the beginning or continuing of the process is in accordance with such terms (if any) as the Federal Court imposes.

(3) A person intending to apply for leave of the Federal Court of Australia under paragraph (2)(a) must give APRA at least 10 days notice of the intention to apply (or a shorter period, if the Federal Court considers that exceptional circumstances make this necessary).

(4) APRA may apply to the Federal Court of Australia to be joined as a party to the proceedings for leave. If APRA is joined as a party, the Federal Court must have regard to APRA's views in deciding:

(a) whether to grant leave under paragraph (2)(a); and

(b) if the Federal Court decides to grant the leave - whether to impose terms as mentioned in paragraph (2)(b); and

(c) if the Federal Court decides to impose such terms - the nature of those terms.

(5) Subsection (1) also does not apply if:

(a) APRA consents to the process beginning or continuing; or

(b) the Banking Act statutory manager consents to the process beginning or continuing.

(6) APRA (or the Banking Act statutory manager) cannot revoke a consent given for the purposes of subsection (5).

(7) Neither APRA nor the Banking Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (5).

(8) This section has effect subject to section 31B.

15BB Moratorium - effect of Banking Act statutory management on disposal of property

(1) A person must not dispose of property if:

(a) the property is owned by another person; and

(b) the other person is a body corporate; and

(c) a Banking Act statutory manager is in control of the body corporate's business.

Note: The Federal Court of Australia may grant an injunction under section 65A in respect of a contravention of this subsection.

(2) Subsection (1) does not apply if:

(a) APRA consents to the disposal; or

(b) the Banking Act statutory manager consents to the disposal.

(3) Neither APRA nor the Banking Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent under subsection (2).

(4) This section has effect subject to section 31B.

15BC Moratorium - restrictions on exercise of third party property rights

(1) Section 440B of the Corporations Act 2001 applies during a period in which a Banking Act statutory manager is in control of a body corporate's business in the same way it applies during the administration of a company.

(2) For the purposes of this section, treat the reference in paragraph 440B(2)(a) of the Corporations Act 2001 to the administrator's written consent as being a reference to:

(a) the Banking Act statutory manager's written consent; or

(b) APRA's written consent.

(3) Neither APRA nor a Banking Act statutory manager is liable to an action or other proceedings for damages in respect of a refusal to give consent as mentioned in subsection (2).

(4) This section applies despite sections 15B, 15BA and 15BB.

(5) This section has effect subject to section 31B.

15BD Moratorium - effect of Banking Act statutory management on supply of essential services

(1) If:

(a) a Banking Act statutory manager is in control of a body corporate's business; and

(b) the Banking Act statutory manager requests, or authorises someone else to request, a person or authority (the supplier ) to supply an essential service to the body corporate in Australia; and

(c) the body corporate owes an amount to the supplier in respect of the supply of the essential service before the day on which the Banking Act statutory manager took control of the body corporate's business;

the supplier must not:

(d) refuse to comply with the request for the reason only that the amount is owing; or

(e) make it a condition of the supply of the essential service pursuant to the request that the amount is to be paid.

Note: The Federal Court of Australia may grant an injunction under section 65A in respect of a contravention of this subsection.

(2) In this section:

essential service has the same meaning as in section 600F of the Corporations Act 2001.

15BE Moratorium - effect of Banking Act statutory management on annual general meeting

(1) This section applies to a body corporate that is required under section 250Nor section 601BR of the Corporations Act 2001 to hold an annual general meeting within a particular period.

(2) Despite section 250N and section 601BRof that Act, if a Banking Act statutory manager is in control of the body corporate's business at the end of that period, the body corporate need not hold that annual general meeting.