BANKRUPTCY ACT 1966

PART VI - ADMINISTRATION OF PROPERTY  

Division 3 - Property available for payment of debts  

Subdivision A - General  

SECTION 123   PROTECTION OF CERTAIN TRANSFERS OF PROPERTY AGAINST RELATION BACK ETC.  

123(1)   [Transactions protected]  

Subject to sections 118 to 122 (inclusive) and sections 128B and 128C , nothing in this Act invalidates, in any case where a debtor becomes a bankrupt:


(a) a payment by the debtor to any of his or her creditors;


(b) a conveyance, transfer or assignment by the debtor for market value;


(c) a contract, dealing or other transaction by or with the debtor for market value; or


(d) any transaction to the extent of a present advance made by an existing creditor;

if:


(e) the transaction took place before the day on which the debtor became a bankrupt;


(f) the person, other than the debtor, with whom it took place, did not, at the time of the transaction, have notice of the presentation of a petition against the debtor; and


(g) the transaction was in good faith and in the ordinary course of business.

123(2)   [Burden of proof]  

The burden of proving the matters referred to in paragraphs (1)(e), (f) and (g) in relation to a transaction lies upon the person who relies on the validity of the transaction.

123(3)   [Notice does not in itself void transaction]  

For the purposes of subsection (1), a transaction shall not be deemed not to have been in good faith and in the ordinary course of business by reason only that, at the time of the transaction, the person, other than the debtor, with whom it took place had notice of the commission of an act of bankruptcy by the debtor.

123(4)   [Payment of penalty and fine]  

Nothing in this Act invalidates a payment by a debtor, on or before the date on which he or she became a bankrupt, of, or in respect of, a penalty or fine imposed on him or her by a court in respect of an offence against a law, whether a law of the Commonwealth or not.

123(5)  
(Omitted by No 32 of 1993, s 29, Sch 1.)

123(6)   [Not to invalidate]  

Subject to sections 121 , 128B and 128C , nothing in this Act invalidates, in any case where a debtor becomes a bankrupt, a conveyance, transfer, charge, disposition, assignment, payment or obligation executed, made or incurred by the debtor, before the day on which the debtor became a bankrupt, under or in pursuance of a maintenance agreement or maintenance order.

123(7)   [Interpretation]  

In this section:

payment
includes the drawing, making or indorsing of a bill of exchange, cheque or promissory note.

transaction
includes payment, delivery, conveyance, transfer, assignment, contract or dealing.




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