CHAPTER 5
-
EXTERNAL ADMINISTRATION
PART 5.3A
-
ADMINISTRATION OF A COMPANY
'
S AFFAIRS WITH A VIEW TO EXECUTING A DEED OF COMPANY ARRANGEMENT
Note: This Part does not apply to a CCIV or a sub-fund of a CCIV: see Division
4
of Part
8B.6
.
History
Pt 5.3A amended by No 8 of 2022, s 3, Sch 2[144] (effective 1 July 2022).
Division 1
-
Preliminary
SECTION 435A
435A
OBJECT OF PART
The object of this Part, and Schedule
2
to the extent that it relates to this Part, is to provide for the business, property and affairs of an insolvent company to be administered in a way that:
(a)
maximises the chances of the company, or as much as possible of its business, continuing in existence; or
(b)
if it is not possible for the company or its business to continue in existence
-
results in a better return for the company's creditors and members than would result from an immediate winding up of the company.
Note: Schedule
2
contains additional rules about companies under external administration.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[100] and [101] apply in relation to external administrations on and after 1 September 2017.]
History
S 435A amended by No 11 of 2016, s 3, Sch 2[100] and
[
101] (effective 1 March 2017).
SECTION 435B
435B
MEANING OF PROPERTY AND RECEIVER
In this Part:
property
of a company includes any PPSA retention of title property of the company.
Note: See sections
9
(definition of
property
) and
51F
(PPSA retention of title property). An extended definition of
property
applies in subsection
444E(3)
: see subsection
444E(4)
.
receiver
includes a receiver and manager.
History
S 453B substituted by No 76 of 2023, s 3, Sch 2[121] (effective 20 October 2023).
SECTION 435C
WHEN ADMINISTRATION BEGINS AND ENDS
435C(1)
The administration of a company:
(a)
begins when an administrator of the company is appointed under section
436A
,
436B
or
436C
; and
(b)
ends on the happening of whichever event of a kind referred to in subsection (2) or (3) happens first after the administration begins.
435C(2)
The normal outcome of the administration of a company is that:
(a)
a deed of company arrangement is executed by both the company and the deed
'
s administrator; or
(b)
the company
'
s creditors resolve under paragraph
439C(b)
that the administration should end; or
(c)
the company
'
s creditors resolve under paragraph
439C(c)
that the company be wound up.
435C(3)
However, the administration of a company may also end because:
(a)
the Court orders, under section
447A
or otherwise, that the administration is to end, for example, because the Court is satisfied that the company is solvent; or
(b)
the convening period, as fixed by subsection
439A(5)
, for a meeting of the company
'
s creditors ends:
(i)
without the meeting being convened in accordance with section
439A
; and
(ii)
without an application being made for the Court to extend under subsection
439A(6)
the convening period for the meeting; or
(c)
an application for the Court to extend under subsection
439A(6)
the convening period for such a meeting is finally determined or otherwise disposed of otherwise than by the Court extending the convening period; or
(d)
the convening period, as extended under subsection
439A(6)
, for such a meeting ends without the meeting being convened in accordance with section
439A
; or
(e)
such a meeting convened under section
439A
ends (whether or not it was earlier adjourned) without a resolution under section
439C
being passed at the meeting; or
(f)
the company contravenes subsection
444B(2)
by failing to execute a proposed deed of company arrangement; or
(g)
the Court appoints a provisional liquidator of the company, or orders that the company be wound up; or
(h)
if the company is a general insurer (within the meaning of the
Insurance Act 1973
)
-
management of the general insurer vests in a judicial manager of the company appointed by the Federal Court under Part
VB
of the
Insurance Act 1973
; or
(i)
if the company is a life company (within the meaning of the
Life Insurance Act 1995
)
-
management of the life company vests in a judicial manager of the life company appointed by the Federal Court under Part
8
of the
Life Insurance Act 1995
.
History
S 435C(3) amended by No 11 of 2016, s 3, Sch 3[21] (effective 1 March 2017).
S 435C(3) amended by No 105 of 2008, s 3, Sch 3, Pt 2
[
27].
435C(4)
During the administration of a company, the company is taken to be under administration.
Division 2
-
Appointment of administrator and first meeting of creditors
SECTION 436A
COMPANY MAY APPOINT ADMINISTRATOR IF BOARD THINKS IT IS OR WILL BECOME INSOLVENT
436A(1)
[
How company may appoint administrator]
A company may, by writing, appoint an administrator of the company if the board has resolved to the effect that:
(a)
in the opinion of the directors voting for the resolution, the company is insolvent, or is likely to become insolvent at some future time; and
(b)
an administrator of the company should be appointed.
436A(2)
[
Limitation]
Subsection (1) does not apply to a company if a person holds an appointment as liquidator, or provisional liquidator, of the company.
History
S 436A(2) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
2] (effective 31 December 2007).
SECTION 436B
LIQUIDATOR MAY APPOINT ADMINISTRATOR
436B(1)
[
Appointment in writing]
A liquidator or provisional liquidator of a company may by writing appoint an administrator of the company if he or she thinks that the company is insolvent, or is likely to become insolvent at some future time.
436B(2)
[
Conditions for appointment]
A liquidator or provisional liquidator of a company must not appoint any of the following persons under subsection (1):
(a)
himself or herself;
(b)
if he or she is a partner of a partnership
-
a partner or employee of the partnership;
(c)
if he or she is an employee
-
his or her employer;
(d)
if he or she is an employer
-
his or her employee;
(e)
if he or she is a director, secretary, employee or senior manager of a corporation
-
a director, secretary, employee or senior manager of the corporation;
unless:
(f)
at a meeting of the company
'
s creditors, the company
'
s creditors pass a resolution approving the appointment; or
(g)
the appointment is made with the leave of the Court.
History
S 436B(2) substituted by No 132 of 2007, s 3, Sch 4, Pt 1
[
3] (effective 31 December 2007).
436B(3)
(Repealed by No 132 of 2007, s 3, Sch 4, Pt 1
[
3] (effective 31 December 2007).)
SECTION 436C
SECURED PARTY MAY APPOINT ADMINISTRATOR
History
S 436C heading amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
34] (effective 30 January 2012).
436C(1)
A person who is entitled to enforce a security interest in the whole, or substantially the whole, of a company
'
s property may by writing appoint an administrator of the company if the security interest has become, and is still, enforceable.
History
S 436C(1) substituted by No 96 of 2010, s 3, Sch 1, Pt 3
[
34] (effective 30 January 2012).
436C(1A)
Subsection (1) applies in relation to a PPSA security interest only if the security interest is perfected within the meaning of the
Personal Property Securities Act 2009
.
History
S 436C(1A) inserted by No 96 of 2010, s 3, Sch 1, Pt 3
[
34] (effective 30 January 2012).
436C(2)
Subsection (1) does not apply to a company if a person holds an appointment as liquidator, or provisional liquidator, of the company.
History
S 436C(2) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
4] (effective 31 December 2007).
SECTION 436D
436D
COMPANY ALREADY UNDER ADMINISTRATION
An administrator cannot be appointed under section 436A, 436B or 436C if the company is already under administration.
SECTION 436DA
DECLARATIONS BY ADMINISTRATOR
-
INDEMNITIES AND RELEVANT RELATIONSHIPS
Scope
436DA(1)
This section applies to an administrator appointed under section
436A
,
436B
or
436C
.
Declaration of relationships and indemnities
436DA(2)
As soon as practicable after being appointed, the administrator must make:
(a)
a declaration of relevant relationships; and
(b)
a declaration of indemnities.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
Notification of creditors
436DA(3)
The administrator must:
(a)
give a copy of each declaration under subsection
(2)
to as many of the company
'
s creditors as reasonably practicable; and
(b)
do so at the same time as the administrator gives those creditors notice of the meeting referred to in section
436E
.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
History
S 436DA(3) amended by No 130 of 2020, s 3, Sch 4[4].
S 436DA(3) amended by No 49 of 2019, s 3, Sch 4[16] and
[
17] (effective 6 April 2019).
436DA(4)
The administrator must table a copy of each declaration under subsection
(2)
at the meeting referred to in section
436E
.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
436DA(4A)
As soon as practicable after making a declaration under subsection
(2)
, the administrator must lodge a copy of the declaration with ASIC.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
[
CCH Note:
S 436DA(4A) will be amended by No 69 of 2020, s 3, Sch 1[709], by substituting
"
the Registrar
"
for
"
ASIC
"
, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 436DA(4A) inserted by No 11 of 2016, s 3, Sch 3[22].
[
CCH Note:
S 436DA(4B) will be inserted by No 69 of 2020, s 3, Sch 1[710] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 436DA(4B) will read:
436DA(4B)
The lodgement must meet any requirements of the data standards.]
Updating of declaration
436DA(5)
If:
(a)
at a particular time, the administrator makes:
(i)
a declaration of relevant relationships; or
(ii)
a declaration of indemnities;
under subsection
(2)
or this subsection; and
(b)
at a later time:
(i)
the declaration has become out-of-date; or
(ii)
the administrator becomes aware of an error in the declaration;
the administrator must, as soon as practicable, make:
(c)
if subparagraph (a)(i) applies
-
a replacement declaration of relevant relationships; or
(d)
if subparagraph (a)(ii) applies
-
a replacement declaration of indemnities.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
436DA(6)
The administrator must table a copy of a replacement declaration under subsection
(5)
:
(a)
if:
(i)
there is a committee of inspection; and
(ii)
the next meeting of the committee of inspection occurs before the next meeting of the company
'
s creditors;
at the next meeting of the committee of inspection; or
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[102] apply in relation to external administrations on and after 1 September 2017.]
(b)
in any other case
-
at the next meeting of the company
'
s creditors.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
History
S 436DA(6) amended by No 11 of 2016, s 3, Sch 2[102].
436DA(6A)
As soon as practicable after making a replacement declaration under subsection
(5)
, the administrator must lodge a copy of the replacement declaration with ASIC.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
History
S 436DA(6A) inserted by No 11 of 2016, s 3, Sch 3[23].
Defence
436DA(7)
In a prosecution for an offence constituted by a failure to include a particular matter in a declaration under this section, it is a defence if the defendant proves that:
(a)
the defendant made reasonable enquiries; and
(b)
after making these enquiries, the defendant had no reasonable grounds for believing that the matter should have been included in the declaration.
History
S 436DA inserted by No 132 of 2007, s 3, Sch 1, Pt 2
[
21].
SECTION 436E
PURPOSE AND TIMING OF FIRST MEETING OF CREDITORS
436E(1)
The administrator of a company under administration must convene a meeting of the company
'
s creditors in order to determine:
(a)
whether to appoint a committee of inspection; and
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[103] apply in relation to external administrations on and after 1 September 2017.]
(b)
if so, who are to be the committee
'
s members.
History
S 436E(1) amended by No 11 of 2016, s 3, Sch 2[103] (effective 1 March 2017).
436E(2)
The meeting must be held within 8 businessdays after the administration begins.
History
S 436E(2) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
5].
436E(3)
The administrator must convene the meeting by:
(a)
giving written notice of the meeting to as many of the company
'
s creditors as reasonably practicable; and
(b)
causing a notice setting out the prescribed information about the meeting to be published in the prescribed manner;
at least 5 business days before the meeting.
History
S 436E(3) amended by No 130 of 2020, s 3, Sch 4[5] (effective 16 December 2020).
S 436E(3) amended by No 48 of 2012, s 3, Sch 1, Pt 2
[
7] (effective 1 July 2012).
S 436E(3) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
6].
S 436E(3) (Note) inserted by No 132 of 2007, s 3, Sch 1, Pt 3
[
68].
436E(3A)
A notice under paragraph (3)(b) that relates to a company may be combined with a notice under paragraph 450A(1)(b) that relates to the company.
History
S 436E(3A) inserted by No 132 of 2007, s 3, Sch 1, Pt 3
[
69].
436E(4)
At the meeting, the company
'
s creditors may also pass a resolution:
(a)
removing the administrator from office; and
(b)
appointing someone else as administrator of the company.
History
S 436E(4) substituted by No 132 of 2007, s 3, Sch 4, Pt 1
[
7].
SECTION 436F
436F
FUNCTIONS OF COMMITTEE OF CREDITORS
(Repealed by No 11 of 2016, s 3, Sch 2
[
104] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[104] apply in relation to external administrations on and after 1 September 2017.]
SECTION 436G
436G
MEMBERSHIP OF COMMITTEE
(Repealed by No 11 of 2016, s 3, Sch 2
[
104] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[104] apply in relation to external administrations on and after 1 September 2017.]
Division 3
-
Administrator assumes control of company's affairs
SECTION 437A
ROLE OF ADMINISTRATOR
437A(1)
While a company is under administration, the administrator:
(a)
has control of the company
'
s business, property and affairs; and
(b)
may carry on that business and manage that property and those affairs; and
(c)
may terminate or dispose of all or part of that business, and may dispose of any of that property; and
(d)
may perform any function, and exercise any power, that the company or any of its officers could perform or exercise if the company were not under administration.
437A(2)
Nothing in subsection (1) limits the generality of anything else in it.
Note: A PPSA security interest in property of a company that is unperfected (within the meaning of the
Personal Property Securities Act 2009
) immediately before an administrator of the company is appointed vests in the company at the time of appointment, subject to certain exceptions (see section 267 of that Act).
History
S 437A(2) (Note) inserted by No 96 of 2010, s 3, Sch 1, Pt 8
[
155] (effective 30 January 2012).
SECTION 437B
437B
ADMINISTRATOR ACTS AS COMPANY'S AGENT
When performing a function, or exercising a power, as administrator of a company under administration, the administrator is taken to be acting as the company's agent.
SECTION 437C
437C
POWERS OF OTHER OFFICERS SUSPENDED
(Repealed by No 11 of 2016, s 3, Sch 2
[
104] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[104] apply in relation to external administrations on and after 1 September 2017.]
SECTION 437D
ONLY ADMINISTRATOR CAN DEAL WITH COMPANY'S PROPERTY
437D(1)
[
Transaction affecting company property]
This section applies where:
(a)
a company under administration purports to enter into; or
(b)
a person purports to enter into, on behalf of a company under administration;
a transaction or dealing affecting property of the company.
437D(2)
[
Transaction void]
The transaction or dealing is void unless:
(a)
the administrator entered into it on the company's behalf; or
(b)
the administrator consented to it in writing before it was entered into; or
(c)
it was entered into under an order of the Court.
437D(3)
[
Exempt payments]
Subsection (2) does not apply to a payment made:
(a)
by an Australian ADI out of an account kept by the company with the ADI; and
(b)
in good faith and in the ordinary course of the ADI's banking business; and
(c)
after the administration began and on or before the day on which:
(i)
the administrator gives to the ADI (under subsection
450A(3)
or otherwise) written notice of the appointment that began the administration; or
(ii)
the administrator complies with paragraph
450A(1)
(b) in relation to that appointment;
whichever happens first.
437D(4)
[
Court order]
Subsection (2) has effect subject to an order that the Court makes after the purported transaction or dealing.
437D(5)
[
Contravention by officer or employee]
If, because of subsection (2), the transaction or dealing is void, or would be void apart from subsection (4), an officer or employee of the company who:
(a)
purported to enter into the transaction or dealing on the company's behalf; or
(b)
was in any other way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the transaction or dealing;
contravenes this subsection.
History
S 437D(5) amended by No 103 of 2004, s 3, Sch 9
[
26] (effective 1 July 2004).
SECTION 437E
ORDER FOR COMPENSATION WHERE OFFICER INVOLVED IN VOID TRANSACTION
437E(1)
[
Court may order compensation]
Where:
(a)
a court finds a person guilty of an offence constituted by a contravention of subsection 437D(5) (including such an offence that is taken to have been committed because of section 5 of the
Crimes Act 1914
); and
(b)
the court is satisfied that the company or another person has suffered loss or damage because of the act or omission constituting the offence;
the court may (whether or not it imposes a penalty) order the first-mentioned person to pay compensation to the company or other person, as the case may be, of such amount as the order specifies.
Note: Section 73A defines when a court is taken to find a person guilty of an offence.
437E(2)
[
Enforcement of order]
An order under subsection (1) may be enforced as if it were a judgment of the court.
437E(3)
[
Relief from liability]
The power of a court under section 1318 to relieve a person from liability as mentioned in that section extends to relieving a person from liability to be ordered under this section to pay compensation.
SECTION 437F
EFFECT OF ADMINISTRATION ON COMPANY'S MEMBERS
437F(1)
Transfer of shares.
A transfer of shares in a company that is made during the administration of the company is void except if:
(a)
both:
(i)
the administrator gives written consent to the transfer; and
(ii)
that consent is unconditional; or
(b)
all of the following subparagraphs apply:
(i)
the administrator gives written consent to the transfer;
(ii)
that consent is subject to one or more specified conditions;
(iii)
those conditions have been satisfied; or
(c)
the Court makes an order under subsection (4) authorising the transfer.
437F(2)
The administrator may only give consent under paragraph (1)(a) or (b) if he or she is satisfied that the transfer is in the best interests of the company
'
s creditors as a whole.
437F(3)
If the administrator refuses to give consent under paragraph (1)(a) or (b) to a transfer of shares in the company:
(a)
the prospective transferor; or
(b)
the prospective transferee; or
(c)
a creditor of the company;
may apply to the Court for an order authorising the transfer.
437F(4)
If the Court is satisfied, on an application under subsection (3), that the transfer is in the best interests of the company
'
s creditors as a whole, the Court may, by order, authorise the transfer.
437F(5)
If the administrator gives consent under paragraph (1)(b) to a transfer of shares in the company:
(a)
the prospective transferor; or
(b)
the prospective transferee; or
(c)
a creditor of the company;
may apply to the Court for an order setting aside any or all of the conditions to which the consent is subject.
437F(6)
If the Court is satisfied, on an application under subsection (5), that any or all of the conditions covered by the application are not in the best interests of the company
'
s creditors as a whole, the Court may, by order, set aside any or all of the conditions.
437F(7)
The administrator is entitled to be heard in a proceeding before the Court in relation to an application under subsection (3) or (5).
437F(8)
Alteration in the status of members.
An alteration in the status of members of a company that is made during the administration of the company is void except if:
(a)
both:
(i)
the administrator gives written consent to the alteration; and
(ii)
that consent is unconditional; or
(b)
all of the following subparagraphs apply:
(i)
the administrator gives written consent to the alteration;
(ii)
that consent is subject to one or more specified conditions;
(iii)
those conditions have been satisfied; or
(c)
the Court makes an order under subsection (12) authorising the alteration.
Note: An alteration in the status of members of a company that is made during the administration of the company may not be void if it is made for the purposes of the conversion and write-off provisions determined by APRA (see Subdivision B of Division 1A of Part II of the
Banking Act 1959
, Division 2 of Part IIIA of the
Insurance Act 1973
and Division 1A of Part 10A of the
Life Insurance Act 1995
).
History
S 437F(8) amended by No 10 of 2018, s 3, Sch 7
[
2] (effective 5 March 2018).
437F(9)
The administrator may only give consent under paragraph (8)(a) or (b) if he or she is satisfied that the alteration is in the best interests of the company
'
s creditors as a whole.
437F(10)
The administrator must refuse to give consent under paragraph (8)(a) or (b) if the alteration would contravene
Part 2F.2
.
437F(11)
If the administrator refuses to give consent under paragraph (8)(a) or (b) to an alteration in the status of members of a company:
(a)
a member of the company; or
(b)
a creditor of the company;
may apply to the Court for an order authorising the alteration.
437F(12)
If the Court is satisfied, on an application under subsection (11), that:
(a)
the alteration is in the best interests of the company
'
s creditors as a whole; and
(b)
the alteration does not contravene
Part 2F.2
;
the Court may, by order, authorise the alteration.
437F(13)
If the administrator gives consent under paragraph (8)(b) to an alteration in the status of members of a company:
(a)
a member of the company; or
(b)
a creditor of the company;
may apply to the Court for an order setting aside any or all of the conditions to which the consent is subject.
437F(14)
If the Court is satisfied, on an application under subsection (13), that any or all of the conditions covered by the application are not in the best interests of the company
'
s creditors as a whole, the Court may, by order, set aside any or all of the conditions.
437F(15)
The administrator is entitled to be heard in a proceeding before the Court in relation to an application under subsection (11) or (13).
History
S 437F substituted by No 132 of 2007, s 3, Sch 4, Pt 1
[
8].
Division 4
-
Administrator investigates company's affairs
SECTION 438A
438A
ADMINISTRATOR TO INVESTIGATE AFFAIRS AND CONSIDER POSSIBLE COURSES OF ACTION
As soon as practicable after the administration of a company begins, the administrator must:
(a)
investigate the company's business, property, affairs and financial circumstances; and
(b)
form an opinion about each of the following matters:
(i)
whether it would be in the interests of the company's creditors for the company to execute a deed of company arrangement;
(ii)
whether it would be in the creditors' interests for the administration to end;
(iii)
whether it would be in the creditors' interests for the company to be wound up.
SECTION 438B
DIRECTORS TO HELP ADMINISTRATOR
438B(1)
As soon as practicable after the administration of a company begins, each director must:
(a)
deliver to the administrator all books in the director
'
s possession that relate to the company, other than books that the director is entitled, as against the company and the administrator, to retain; and
(b)
if the director knows where other books relating to the company are
-
tell the administrator where those books are.
438B(2)
Within 5 business days after the administration of a company begins or such longer period as the administrator allows, the directors must give to the administrator a report in the prescribed form about the company
'
s business, property, affairs and financial circumstances.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[105] apply in relation to external administrations on and after 1 September 2017.]
History
S 438B(2) amended by No 11 of 2016, s 3, Sch 2[105].
S 438B(2) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
9].
438B(2A)
The administrator must, within 5 business days after receiving a report under subsection
(2)
, lodge a copy of the report.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[106] apply in relation to external administrations on and after 1 September 2017.]
[
CCH Note:
S 438B(2A) will be amended by No 69 of 2020, s 3, Sch 1[711], by inserting
"
in the prescribed form
"
at the end, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 438B(2A) inserted by No 11 of 2016, s 3, Sch 2[106].
438B(3)
A director of a company under administration must:
(a)
attend on the administrator at such times; and
(b)
give the administrator such information about the company
'
s business, property, affairs and financial circumstances;
as the administrator reasonably requires.
438B(4)
A person must not fail to comply with subsection
(1)
,
(2)
,
(2A)
or
(3)
.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[107] apply in relation to external administrations on and after 1 September 2017.]
History
S 438B(4) amended by No 11 of 2016, s 3, Sch 2[107].
S 438B(4) amended by No 117 of 2001, s 3, Sch 1
[
117].
438B(5)
An offence based on subsection
(4)
is an offence of strict liability.
Note: For
strict liability
, see section
6.1
of the
Criminal Code
.
History
S 438B(5) inserted by No 117 of 2001, s 3, Sch 1
[
118].
438B(6)
Subsection
(4)
does not apply to the extent that the person has a reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in subsection
(6)
, see subsection
13.3(3)
of the
Criminal Code
.
History
S 438B(6) inserted by No 117 of 2001, s 3, Sch 1
[
118].
SECTION 438C
ADMINISTRATOR'S RIGHTS TO COMPANY'S BOOKS
438C(1)
[
Books, etc, may not be retained]
A person is not entitled, as against the administrator of a company under administration:
(a)
to retain possession of books of the company; or
(b)
to claim or enforce a lien on such books;
but such a lien is not otherwise prejudiced.
438C(2)
[
Secured creditors]
Paragraph (1)(a) does not apply in relation to books of which a secured creditor of the company is entitled to possession otherwise than because of a lien, but the administrator is entitled to inspect, and make copies of, such books at any reasonable time.
438C(3)
[
Books to be delivered to administrator]
The administrator of a company under administration may give to a person a written notice requiring the person to deliver to the administrator, as specified in the notice, books so specified that are in the person's possession.
438C(4)
[
Time for compliance]
A notice under subsection (3) must specify a period of at least 3 business days as the period within which the notice must be complied with.
438C(5)
[
Entitlement to retain possession of books]
A person must comply with a notice under subsection (3).
History
S 438C(5) amended by No 117 of 2001, s 3, Sch 1
[
119] (effective 15 December 2001).
438C(6)
[
Limitation]
Subsection (5) does not apply to the extent that the person is entitled, as against the company and the administrator, to retain possession of the books.
Note: A defendant bears an evidential burden in relation to the matter in subsection (6), see subsection 13.3(3) of the
Criminal Code
.
History
S 438C(6) inserted by No 117 of 2001, s 3, Sch 1
[
120] (effective 15 December 2001).
438C(7)
[
Strict liability offence]
An offence based on subsection (5) is an offence of strict liability.
Note: For
strict liability
, see section 6.1 of the
Criminal Code
.
History
S 438C(7) inserted by No 117 of 2001, s 3, Sch 1
[
120] (effective 15 December 2001).
SECTION 438D
REPORTS BY ADMINISTRATOR
438D(1)
If it appears to the administrator of a company under administration that:
(a)
a past or present officer or employee, or a member, of the company may have been guilty of an offence in relation to the company; or
(b)
a person who has taken part in the formation, promotion, administration, restructuring, management or winding up of the company:
(i)
may have misapplied or retained, or may have become liable or accountable for, money or property (in Australia or elsewhere) of the company; or
(ii)
may have been guilty of negligence, default, breach of duty or breach of trust in relation to the company;
the administrator must:
(c)
lodge a report about the matter as soon as practicable; and
(d)
give ASIC such information, and such access to and facilities for inspecting and taking copies of documents, as ASIC requires.
[
CCH Note:
S 438D(1) will be amended by No 69 of 2020, s 3, Sch 1[712], by inserting
"
with ASIC
"
after
"
lodge
"
in para (c) (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 438D(1) amended by No 130 of 2020, s 3, Sch 1[37] (effective 1 January 2021).
S 438D(1) amended by No 103 of 2004, s 3, Sch 9
[
27].
438D(2)
The administrator may also lodge further reports specifying any other matter that, in his or her opinion, it is desirable to bring to ASIC
'
s notice.
438D(3)
If it appears to the Court:
(a)
that a past or present officer or employee, or a member, of a company under administration has been guilty of an offence in relation to the company; or
(b)
that a person who has taken part in the formation, promotion, administration, restructuring, management or winding up of a company under administration has engaged in conduct of a kind referred to in paragraph
(1)(b)
in relation to the company;
and that the administrator has not lodged a report about the matter, the Court may, on the application of an interested person, direct the administrator to lodge such a report.
[
CCH Note:
S 438D(3) will be amended by No 69 of 2020, s 3, Sch 1[713], by inserting
"
with ASIC
"
at the end, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 438D(3) amended by No 130 of 2020, s 3, Sch 1[37] (effective 1 January 2021).
S 438D(3) amended by No 103 of 2004, s 3, Sch 9
[
28].
SECTION 438E
438E
ADMINISTRATOR
'
S ACCOUNTS
(Repealed by No 11 of 2016, s 3, Sch 2
[
108] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[108] apply in relation to external administrations on and after 1 September 2017.]
Division 5
-
Meeting of creditors decides company's future
SECTION 439A
ADMINISTRATOR TO CONVENE MEETING AND INFORM CREDITORS
439A(1)
The administrator of a company under administration must convene a meeting of the company
'
s creditors within the convening period as fixed by subsection (5) or extended under subsection (6).
Note: For body corporate representatives
'
powers at a meeting of the company
'
s creditors, see section 250D.
439A(2)
The meeting must be held within 5 business days before, or within 5 business days after, the end of the convening period.
History
S 439A(2) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
11].
439A(3)
(Repealed by No 11 of 2016, s 3, Sch 2
[
109] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[109] apply in relation to external administrations on and after 1 September 2017.]
439A(4)
(Repealed by No 11 of 2016, s 3, Sch 2
[
109] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[109] apply in relation to external administrations on and after 1 September 2017.]
439A(5)
The convening period is:
(a)
if the day after the administration begins is in December, or is less than 25 business days before Good Friday
-
the period of 25 business days beginning on:
(i)
that day; or
(ii)
if that day is not a business day
-
the next business day; or
(b)
otherwise
-
the period of 20 business days beginning on:
(i)
the day after the administration begins; or
(ii)
if that day is not a business day
-
the next business day.
History
S 439A(5) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
13
-
17].
439A(6)
The Court may extend the convening period on an application made during or after the period referred to in paragraph (5)(a) or (b), as the case requires.
History
S 439A(6) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
18].
439A(7)
If an application is made under subsection (6) after the period referred to in paragraph (5)(a) or (b), as the case may be, the Court may only extend the convening period if the Court is satisfied that it would be in the best interests of the creditors if the convening period were extended in accordance with the application.
History
S 439A(7) inserted by No 132 of 2007, s 3, Sch 4, Pt 1
[
19].
439A(8)
If an application is made under subsection (6) after the period referred to in paragraph (5)(a) or (b), as the case may be, then, in making an order about the costs of the application, the Court must have regard to:
(a)
the fact that the application was made after that period; and
(b)
any other conduct engaged in by the administrator; and
(c)
any other relevant matters.
History
S 439A(8) inserted by No 132 of 2007, s 3, Sch 4, Pt 1
[
19].
SECTION 439B
439B
CONDUCT OF MEETING
(Repealed by No 11 of 2016, s 3, Sch 2[110] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[110] apply in relation to external administrations on and after 1 September 2017.]
SECTION 439C
439C
WHAT CREDITORS MAY DECIDE
At a meeting convened under section
439A
, the creditors may resolve:
(a)
that the company execute a deed of company arrangement specified in the resolution (even if it differs from the proposed deed (if any) details of which accompanied any notice of meeting); or
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[111] apply in relation to external administrations on and after 1 September 2017.]
(b)
that the administration should end; or
(c)
that the company be wound up.
History
S 439C amended by No 11 of 2016, s 3, Sch 2[111] (effective 1 March 2017).
Division 6
-
Protection of company's property during administration
SECTION 440A
WINDING UP COMPANY
440A(1)
A company under administration cannot be wound up voluntarily, except as provided by section
446A
or
446AA
.
History
S 440A(1) amended by No 11 of 2016, s 3, Sch 3[8] (effective 1 March 2017).
440A(2)
The Court is to adjourn the hearing of an application for an order to wind up a company if the company is under administration and the Court is satisfied that it is in the interests of the company
'
s creditors for the company to continue under administration rather than be wound up.
440A(3)
The Court is not to appoint a provisional liquidator of a company if the company is under administration and the Court is satisfied that it is in the interests of the company
'
s creditors for the company to continue under administration rather than have a provisional liquidator appointed.
SECTION 440B
RESTRICTIONS ON EXERCISE OF THIRD PARTY PROPERTY RIGHTS
General rule
440B(1)
During the administration of a company, the restrictions set out in the table at the end of this section apply in relation to the exercise of the rights of a person (the
third party
) in property of the company, or other property used or occupied by, or in the possession of, the company, as set out in the table.
Note: The property of the company includes any PPSA retention of title property of the company (see section
435B
).
Exception
-
consent of administrator or leave of court
440B(2)
The restrictions set out in the table at the end of this section do not apply in relation to the exercise of a third party
'
s rights in property if the rights are exercised:
(a)
with the administrator
'
s written consent; or
(b)
with the leave of the Court.
Possessory security interests
-
continued possession
440B(3)
If a company
'
s property is subject to a possessory security interest, and the property is in the lawful possession of the secured party, the secured party may continue to possess the property during the administration of the company.
Restrictions on exercise of third party rights
|
Item
|
If the third party is
…
|
then
…
|
1 |
a secured party in relation to property of the company, and is not otherwise covered by this table |
the third party cannot enforce the security interest. |
2 |
a secured party in relation to a possessory security interest in the property of the company |
the third party cannot sell the property, or otherwise enforce the security interest. |
3 |
a lessor of property used or occupied by, or in the possession of, the company, including a secured party (a
PPSA secured party
) in relation to a PPSA security interest in goods arising out of a lease of the goods |
the following restrictions apply: |
|
(a) |
distress for rent must not be carried out against the property; |
|
(b) |
the third party cannot take possession of the property or otherwise recover it; |
|
(c) |
if the third party is a PPSA secured party
-
the third party cannot otherwise enforce the security interest. |
4 |
an owner (other than a lessor) of property used or occupied by, or in the possession of, the company, including a secured party (a
PPSA secured party
) in relation to a PPSA security interest in the property |
the following restrictions apply: |
|
(a) |
the third party cannot take possession of the property or otherwise recover it; |
|
(b) |
if the third party is a PPSA secured party
-
the third party cannot otherwise enforce the security interest. |
History
S 440B substituted by No 96 of 2010, s 3, Sch 1, Pt 8
[
156] (effective 30 January 2012).
SECTION 440BA
440BA
LIENS AND PLEDGES
(Repealed by No 96 of 2010, s 3, Sch 1, Pt 8
[
156] (effective 30 January 2012).)
SECTION 440BB
440BB
DISTRESS FOR RENT MUST NOT BE CARRIED OUT
(Repealed by No 96 of 2010, s 3, Sch 1, Pt 8
[
156] (effective 30 January 2012).)
SECTION 440C
440C
OWNER OR LESSOR CANNOT RECOVER PROPERTY USED BY COMPANY
(Repealed by No 96 of 2010, s 3, Sch 1, Pt 8
[
156] (effective 30 January 2012).)
SECTION 440D
STAY OF PROCEEDINGS
440D(1)
[
Proceedings not to be begun or proceeded with]
During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except:
(a)
with the administrator's written consent; or
(b)
with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
440D(2)
[
Criminal proceedings, etc]
Subsection (1) does not apply to:
(a)
a criminal proceeding; or
(b)
a prescribed proceeding.
SECTION 440E
440E
ADMINISTRATOR NOT LIABLE IN DAMAGES FOR REFUSING CONSENT
A company's administrator is not liable to an action or other proceeding for damages in respect of a refusal to give an approval or consent for the purposes of this Division.
SECTION 440F
440F
SUSPENSION OF ENFORCEMENT PROCESS
During the administration of a company, no enforcement process in relation to property of the company can be begun or proceeded with, except:
(a)
with the leave of the Court; and
(b)
in accordance with such terms (if any) as the Court imposes.
SECTION 440G
DUTIES OF COURT OFFICER IN RELATION TO PROPERTY OF COMPANY
440G(1)
[
Application]
This section applies where an officer of a court (in this section called the
court officer
), being:
(a)
a sheriff; or
(b)
the registrar or other appropriate officer of the court;
receives written notice of the fact that a company is under administration.
440G(2)
[
Limits on court officer's powers]
During the administration, the court officer cannot:
(a)
take action to sell property of the company under a process of execution; or
(b)
pay to a person (other than the administrator):
(i)
proceeds of selling property of the company (at any time) under a process of execution; or
(ii)
money of the company seized (at any time) under a process of execution; or
(iii)
money paid (at any time) to avoid seizure or sale of property of the company under a process of execution; or
(c)
take action in relation to the attachment of a debt due to the company; or
(d)
pay to a person (other than the administrator) money received because of the attachment of such a debt.
440G(3)
[
Delivery of property to administrator]
The court officer must deliver to the administrator any property of the company that is in the court officer's possession under a process of execution (whenever begun).
440G(4)
[
Payment of money to administrator]
The court officer must pay to the administrator all proceeds or money of a kind referred to in paragraph (2)(b) or (d) that:
(a)
are in the court officer's possession; or
(b)
have been paid into the court and have not since been paid out.
440G(5)
[
Costs to be a first charge]
The costs of the execution or attachment are a first charge on property delivered under subsection (3) or proceeds or money paid under subsection (4).
440G(6)
[
Court officer may retain proceeds, etc, to give effect to charge]
In order to give effect to a charge under subsection (5) on proceeds or money, the court officer may retain, on behalf of the person entitled to the charge, so much of the proceeds or money as the court officer thinks necessary.
440G(7)
[
Power of Court]
The Court may, if it is satisfied that it is appropriate to do so, permit the court officer to take action, or to make a payment, that subsection (2) would otherwise prevent.
440G(8)
[
Purchaser in good faith]
A person who buys property in good faith under a sale under a process of execution gets a good title to the property as against the company and the administrator, despite anything else in this section.
SECTION 440H
LIS PENDENS TAKEN TO EXIST
440H(1)
[
Application]
This section has effect only for the purposes of a law about the effect of a lis pendens on purchasers or mortgagees.
440H(2)
[
Winding up application]
During the administration of a company, an application to wind up the company is taken to be pending.
440H(3)
[
Pending application]
An application that is taken because of subsection (2) to be pending constitutes a lis pendens.
[
CCH Note:
There is no section 440I.]
SECTION 440J
ADMINISTRATION NOT TO TRIGGER LIABILITY OF DIRECTOR OR RELATIVE UNDER GUARANTEE OF COMPANY'S LIABILITY
440J(1)
[
Guarantees unenforceable]
During the administration of a company:
(a)
a guarantee of a liability of the company cannot be enforced, as against:
(i)
a director of the company who is a natural person; or
(ii)
a spouse or relative of such a director; and
(b)
without limiting paragraph (a), a proceeding in relation to such a guarantee cannot be begun against such a director, spouse or relative;
except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
History
S 440J(1) amended by No 144 of 2008, Sch 14 Pt 3 item 146
-
147 (effective 10 December 2008).
440J(2)
[
Section 1323]
While subsection (1) prevents a person (
the creditor
) from:
(a)
enforcing as against another person (
the guarantor
) a guarantee of a liability of a company; or
(b)
beginning a proceeding against another person (
the guarantor
) in relation to such a guarantee;
section 1323 applies in relation to the creditor and the guarantor as if:
(c)
a civil proceeding against the guarantor had begun under this Act; and
(d)
the creditor were the only person of a kind referred to in that section as an aggrieved person.
Note: Under section 1323 the Court can make a range of orders to ensure that a person can meet the person's liabilities.
440J(3)
[
Effect of s 1323]
The effect that section 1323 has because of a particular application of subsection (2) is additional to, and does not prejudice, the effect the section otherwise has.
440J(4)
[
Definitions]
In this section:
guarantee
, in relation to a liability of a company, includes a relevant agreement (as defined in section 9) because of which a person other than the company has incurred, or may incur, whether jointly with the company or otherwise, a liability in respect of the liability of the company.
liability
means a debt, liability or other obligation.
SECTION 440JA
440JA
PROPERTY SUBJECT TO A BANKER
'
S LIEN
-
EXEMPTION FROM THIS DIVISION
If:
(a)
a company is under administration; and
(b)
property of the company consists of:
(i)
cash in the form of notes or coins; or
(ii)
a negotiable instrument; or
(iii)
a security (as defined by subsection
92(1)
); or
(iv)
a derivative; and
(c)
the property is subject to a possessory security interest; and
(d)
the secured party is:
(i)
an ADI (within the meaning of the
Banking Act 1959
); or
(ii)
the operator of a clearing and settlement facility;
this Division does not apply to the property.
History
S 440JA amended by No 76 of 2023, s 3, Sch 2[273] and
[
274] (effective 20 October 2023).
S 440JA amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
125]
-
[
126].
S 440JA inserted by No 132 of 2007, s 3, Sch 4, Pt 2
[
49].
Division 7
-
Rights of secured party, owner or lessor
History
Div 7 heading substituted by No 96 of 2010, s 3, Sch 1, Pt 3
[
35] (effective 30 January 2012).
Div 7 heading substituted by No 132 of 2007, s 3, Sch 4, Pt 2
[
50] (effective 31 December 2007).
Subdivision A
-
General
History
Subdiv A heading inserted by No 96 of 2010, s 3, Sch 1, Pt 3
[
35] (effective 30 January 2012).
SECTION 441
441
APPLICATION OF DIVISION
Except as expressly provided, nothing in this Division limits the generality of anything else in it.
History
S 441 inserted by No 96 of 2010, s 3, Sch 1, Pt 3
[
35] (effective 30 January 2012).
Subdivision B
-
Property subject to security interests
History
Subdiv B heading inserted by No 96 of 2010, s 3, Sch 1, Pt 3
[
36] (effective 30 January 2012).
SECTION 441AA
441AA
APPLICATION OF SUBDIVISION
-
PPSA SECURITY INTERESTS
This Subdivision only applies in relation to the enforcement of a PPSA security interest if the security interest is perfected, within the meaning of the
Personal Property Securities Act 2009
, at the time the enforcement starts.
History
S 441AA inserted by No 96 of 2010, s 3, Sch 1, Pt 3
[
36] (effective 30 January 2012).
SECTION 441A
SECURED PARTY ACTS BEFORE OR DURING DECISION PERIOD
Scope
441A(1)
This section applies if:
(a)
the whole, or substantially the whole, of the property of a company under administration is subject to a security interest; and
(b)
before or during the decision period, the secured party enforced the security interest in relation to all property (including any PPSA retention of title property) of the company subject to the security interest, whether or not the security interest was enforced in the same way in relation to all that property.
441A(2)
This section also applies if:
(a)
a company is under administration; and
(b)
the same person is the secured party in relation to each of 2 or more security interests in property (including PPSA retention of title property) of the company; and
(c)
the property of the company (the
secured property
) subject to the respective security interests together constitutes the whole, or substantially the whole, of the company
'
s property; and
(d)
before or during the decision period, the secured party enforced the security interests in relation to all the secured property:
(i)
whether or not the security interests were enforced in the same way in relation to all the secured property; and
(ii)
whether or not any of the security interests was enforced in the same way in relation to all the property of the company subject to that security interest; and
(iii)
in so far as the security interests were enforced in relation to property of the company by a receiver or controller appointed for the purposes of Part 5.2 (whether under an instrument relating to the security interest or a court order)
-
whether or not the same person was appointed in respect of all of the last-mentioned property.
Power of enforcement by secured party, receiver or controller
441A(3)
Nothing in section
198G
,
440B
,
440F
,
440G
or
451E
, or in an order under subsection
444F(2)
or
451G(1)
, prevents any of the following from enforcing the security interest, or any of the security interests:
(a)
the secured party;
(b)
a receiver or controller appointed for the purposes of Part
5.2
(whether under an instrument relating to the security interest or a court order, and even if appointed after the decision period).
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[112] apply in relation to external administrations on and after 1 September 2017.]
History
S 441A(3) amended by No 112 of 2017, s 3, Sch 1[9] and
[
10] (applicable in relation to rights arising under, or self-executing provisions of, contracts, agreements or arrangements entered into at or after 1 July 2018).
S 441A(3) amended by No 11 of 2016, s 3, Sch 2[112] (effective 1 March 2017).
441A(4)
Section
437D
does not apply in relation to a transaction or dealing that affects property of the company and is entered into by:
(a)
the secured party in the performance or exercise of a function or power as secured party; or
(b)
a receiver or controller mentioned in paragraph (3)(b) of this section, in the performance or exercise of a function or power as such a receiver or controller.
History
S 441A substituted by No 96 of 2010, s 3, Sch 1, Pt 3
[
36].
SECTION 441B
WHERE ENFORCEMENT OF SECURITY INTEREST BEGINS BEFORE ADMINISTRATION
History
S 441B heading amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
74].
441B(1)
This section applies if, before the beginning of the administration of a company, a secured party, receiver or other person:
(a)
entered into possession, or assumed control, of property of the company; or
(b)
entered into an agreement to sell such property; or
(c)
made arrangements for such property to be offered for sale by public auction; or
(d)
publicly invited tenders for the purchase of such property; or
(e)
exercised any other power in relation to such property;
for the purpose of enforcing a security interest in that property.
History
S 441B(1) amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
74].
441B(2)
Nothing in section
198G
,
440B
,
440F
,
440G
or
451E
, or in an order under subsection
451G(1)
, prevents the secured party, receiver or other person from enforcing the security interest in relation to that property.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[112] apply in relation to external administrations on and after 1 September 2017.]
History
S 441B(2) amended by No 112 of 2017, s 3, Sch 1[11] (applicable in relation to rights arising under, or self-executing provisions of, contracts, agreements or arrangements entered into at or after 1 July 2018).
S 441B(2) amended by No 11 of 2016, s 3, Sch 2[112] (effective 1 March 2017).
S 441B(2) amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
74].
S 441B(2) amended by No 132 of 2007, s 3, Sch 4, Pt 2
[
52].
441B(3)
Section
437D
does not apply in relation to a transaction or dealing that affects that property and is entered into:
(a)
in the exercise of a power of the secured party as secured party; or
(b)
in the performance or exercise of a function or power of the receiver or other person;
as the case may be.
History
S 441B(3) amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
75].
SECTION 441C
SECURITY INTEREST IN PERISHABLE PROPERTY
Scope
441C(1)
This section applies if perishable property of a company under administration is subject to a security interest.
Power of enforcement by secured party, receiver or controller
441C(2)
Nothing in section
198G
,
440B
or
451E
, or in an order under subsection
451G(1)
, prevents any of the following from enforcing the security interest, so far as it is a security interest in perishable property:
(a)
the secured party;
(b)
a receiver or controller appointed for the purposes of Part
5.2
(whether under an instrument relating to the security interest or a court order, and even if appointed after the decision period).
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[112] apply in relation to external administrations on and after 1 September 2017.]
History
S 441C(2) amended by No 112 of 2017, s 3, Sch 1[12] (applicable in relation to rights arising under, or self-executing provisions of, contracts, agreements or arrangements entered into at or after 1 July 2018).
S 441C(2) amended by No 11 of 2016, s 3, Sch 2[112] (effective 1 March 2017).
441C(3)
Section
437D
does not apply in relation to a transaction or dealing that affects perishable property of the company and is entered into by:
(a)
the secured party in the performance or exercise of a function or power as secured party; or
(b)
a receiver or controller mentioned in paragraph (2)(b) of this section, in the performance or exercise of a function or power as such a receiver or controller.
History
S 441C substituted by No 96 of 2010, s 3, Sch 1, Pt 3
[
37] (effective 30 January 2012).
SECTION 441D
COURT MAY LIMIT POWERS OF SECURED PARTY ETC. IN RELATION TO SECURED PROPERTY
History
S 441D heading amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
38] (effective 30 January 2012).
441D(1)
This section applies if:
(a)
for the purpose of enforcing a security interest in property of a company, the secured party, or a receiver or other person, does or proposes to do an act of a kind referred to in a paragraph of subsection
441B(1)
; and
(b)
the company is under administration when the secured party, receiver or other person does or proposes to do the act, or the company later begins to be under administration;
but does not apply in a case where section
441A
applies.
History
S 441D(1) amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
76] (effective 30 January 2012).
S 441D(1) amended by No 132 of 2007, s 3, Sch 4, Pt 2
[
53] (effective 31 December 2007).
441D(2)
On application by the administrator, the Court may order the secured party, receiver or other person not to perform specified functions, or exercise specified powers, except as permitted by the order.
History
S 441D(2) amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
77] (effective 30 January 2012).
441D(3)
The Court may only make an order if satisfied that what the administrator proposes to do during the administration will adequately protect the secured party
'
s interests.
History
S 441D(3) amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
38] (effective 30 January 2012).
441D(4)
An order may only be made, and only has effect, during the administration.
441D(5)
An order has effect despite sections
441B
and
441C
.
SECTION 441E
441E
GIVING A NOTICE UNDER A SECURITY AGREEMENT ETC.
History
S 441E heading amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
39].
Nothing in section
198G
,
440B
or
451E
, or in an order under subsection
451G(1)
, prevents a person from giving a notice under the provisions of an agreement or instrument under which a security interest is created or arises.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[113] apply in relation to external administrations on and after 1 September 2017.]
History
S 441E amended by No 112 of 2017, s 3, Sch 1[13] (applicable in relation to rights arising under, or self-executing provisions of, contracts, agreements or arrangements entered into at or after 1 July 2018).
S 441E amended by No 11 of 2016, s 3, Sch 2[113] (effective 1 March 2017).
S 441E amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
39].
SECTION 441EA
SALE OF PROPERTY SUBJECT TO A POSSESSORY SECURITY INTEREST
Scope
441EA(1)
This section applies if:
(a)
a company is under administration; and
(b)
property of the company is subject to a possessory security interest; and
(c)
theproperty is in the possession of the secured party; and
(ca)
either:
(i)
there is no other security interest in the property; or
(ii)
there are one or more other security interests in the property, but none of the debts secured by those other security interests has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest; and
(d)
the secured party sells the property.
History
S 441EA(1) amended by No 35 of 2011, s 3, Sch 1
[
5] (effective 30 January 2012).
Distribution of proceeds of sale
441EA(2)
The secured party is entitled to retain proceeds of the sale as follows:
(a)
if the net proceeds of sale equals the debt secured by the possessory security interest
-
the secured party is entitled to retain the net proceeds;
(b)
if the net proceeds of sale exceeds the debt secured by the possessory security interest
-
the secured party is entitled to retain so much of the net proceeds as equals the amount of the debt secured by the security interest, but must pay the excess to the administrator on behalf of the company;
(c)
if the net proceeds of sale fall short of the debt secured by the possessory security interest
-
the secured party is entitled to retain the net proceeds.
History
S 441EA inserted by No 96 of 2010, s 3, Sch 1, Pt 3
[
40] (effective 30 January 2012).
Subdivision C
-
Property not subject to security interests
History
Subdiv C heading inserted by No 96 of 2010, s 3, Sch 1, Pt 3
[
40] (effective 30 January 2012).
SECTION 441EB
441EB
SCOPE OF SUBDIVISION
This Subdivision does not apply in relation to the enforcement of a right, or the performance or exercise of a function or power, if the enforcement, performance or exercise is authorised by (or because of) a transaction or dealing that gives rise to a security interest in the property concerned.
Example: An example of a transaction or dealing in relation to which this Subdivision does not apply because of this section is a commercial consignment of personal property. Such a transaction gives rise to a PPSA security interest because of section 12 of the
Personal Property Securities Act 2009
. The consigned property is PPSA retention of title property of the company (see sections
51F
and
435B
).
Note: Subdivision
B
(property subject to security interests) may apply in relation to transactions or dealings to which this Subdivision does not apply because of this section. For example, Subdivision
B
would apply in relation to a commercial consignment of personal property, because such a transaction gives rise to a PPSA security interest.
History
S 441EB inserted by No 96 of 2010, s 3, Sch 1, Pt 3
[
40] (effective 30 January 2012).
SECTION 441F
WHERE RECOVERY OF PROPERTY BEGINS BEFORE ADMINISTRATION
441F(1)
This section applies if, before the beginning of the administration of a company, a receiver or other person:
(a)
entered into possession, or assumed control, of property used or occupied by, or in the possession of, the company; or
(b)
exercised any other power in relation to such property;
for the purpose of enforcing a right of the owner or lessor of the property to take possession of the property or otherwise recover it.
441F(2)
Nothing in section
198G
or
440B
prevents the receiver or other person from performing a function, or exercising a power, in relation to the property.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[114] apply in relation to external administrations on and after 1 September 2017.]
History
S 441F(2) amended by No 11 of 2016, s 3, Sch 2[114] (effective 1 March 2017).
S 441F(2) amended by No 96 of 2010, s 3, Sch 1, Pt 8
[
157] (effective 30 January 2012).
441F(3)
Section
437D
does not apply in relation to a transaction or dealing that affects the property and is entered into in the performance or exercise of a function or power of the receiver or other person.
SECTION 441G
RECOVERING PERISHABLE PROPERTY
441G(1)
Nothing in section
198G
or
440B
prevents a person from taking possession of, or otherwise recovering, perishable property.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[114] apply in relation to external administrations on and after 1 September 2017.]
History
S 441G(1) amended by No 11 of 2016, s 3, Sch 2[114] (effective 1 March 2017).
S 441G(1) amended by No 96 of 2010, s 3, Sch 1, Pt 8
[
157] (effective 30 January 2012).
441G(2)
Section
437D
does not apply in relation to a transaction or dealing that affects perishable property and is entered into for the purpose of enforcing a right of the owner or lessor of the property to take possession of the property or otherwise recover it.
SECTION 441H
COURT MAY LIMIT POWERS OF RECEIVER ETC. IN RELATION TO PROPERTY USED BY COMPANY
441H(1)
[
Owners or lessors of property used by company]
This section applies if:
(a)
for the purpose of enforcing a right of the owner or lessor of property used or occupied by, or in the possession of, a company to take possession of the property or otherwise recover it, a person:
(i)
enters into possession, or assumes control, of the property; or
(ii)
exercises any other power in relation to the property; and
(b)
the company is under administration when the person does so, or the company later begins to be under administration.
441H(2)
[
Court order]
On application by the administrator, the Court may order the person not to perform specified functions, or exercise specified powers, in relation to the property, except as permitted by the order.
441H(3)
[
Protection of interests of owner or lessor]
The Court may only make an order if satisfied that what the administrator proposes to do during the administration will adequately protect the interests of the owner or lessor.
441H(4)
[
Effect of order]
An order may only be made, and only has effect, during the administration.
441H(5)
[
Paramountcy]
An order has effect despite sections 441F and 441G.
[
CCH Note:
There is no section 441I.]
SECTION 441J
441J
GIVING A NOTICE UNDER AN AGREEMENT ABOUT PROPERTY
Nothing in section
198G
or
440C
prevents a person from giving a notice to a company under an agreement relating to property that is used or occupied by, or is in the possession of, the company.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[115] apply in relation to external administrations on and after 1 September 2017.]
History
S 441J amended by No 11 of 2016, s 3, Sch 2[115] (effective 1 March 2017).
SECTION 441JA
441JA
SALE OF PROPERTY SUBJECT TO A LIEN OR PLEDGE
(Repealed by No 96 of 2010, s 3, Sch 1, Pt 3
[
41] (effective 30 January 2012).)
SECTION 441K
441K
EFFECT OF DIVISION
(Repealed by No 96 of 2010, s 3, Sch 1, Pt 3
[
41] (effective 30 January 2012).)
Division 8
-
Powers of administrator
SECTION 442A
442A
ADDITIONAL POWERS OF ADMINISTRATOR
Without limiting section 437A, the administrator of a company under administration has power to do any of the following:
(a)
remove from office a director of the company;
(b)
appoint a person as such a director, whether to fill a vacancy or not;
(c)
execute a document, bring or defend proceedings, or do anything else, in the company's name and on its behalf;
(d)
whatever else is necessary for the purposes of this Part.
SECTION 442B
DEALING WITH PROPERTY SUBJECT TO CIRCULATING SECURITY INTERESTS
Scope
442B(1)
This section applies if a security interest in property (the
secured property
) of a company under administration was a circulating security interest when the interest arose, but has stopped being a circulating security interest because:
(a)
in the case of a PPSA security interest
-
the property has stopped being a circulating asset (within the meaning of the
Personal Property Securities Act 2009
); or
(b)
in the case of a security interest that was a floating charge when it arose
-
the floating charge has since become a fixed or specific charge.
Note 1: A circulating security interest can be either a PPSA security interest to which a circulating asset has attached or a floating charge: see the definition of
circulating security interest
in section
9
.
Note 2: For the meaning of
circulating asset
, see section 340 of the
Personal Property Securities Act 2009
.
History
S 442B(1) amended by No 76 of 2023, s 3, Sch 2[78] (effective 20 October 2023).
Security interest in circulating asset
442B(2)
Subject to sections
442C
and
442D
, in the case of a PPSA security interest, the administrator may deal with any of the secured property in any way the company could deal with the secured property immediately before it stopped being a circulating asset.
Floating charge
442B(3)
Subject to sections
442C
and
442D
, in the case of a security interest that was a floating charge when it arose, the administrator may deal with any of the secured property as if the security interest were still a floating charge.
Note: Section
442C
deals with the disposal of encumbered property by an administrator. Section
442D
makes the administrator
'
s functions and powers subject to those of a secured party, receiver or controller.
History
S 442B substituted by No 96 of 2010, s 3, Sch 1, Pt 4
[
88] (effective 30 January 2012).
SECTION 442C
WHEN ADMINISTRATOR MAY DISPOSE OF ENCUMBERED PROPERTY
442C(1)
The administrator of a company under administration or of a deed of company arrangement must not dispose of:
(a)
property of the company that is subject to a security interest; or
(b)
property (other than PPSA retention of title property) that is used or occupied by, or is in the possession of, the company but of which someone else is the owner or lessor.
Note: PPSA retention of title property is subject to a PPSA security interest, and so is covered by paragraph (a) (see definition of
PPSA retention of title property
in section 51F).
History
S 442C(1) amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
127] and Pt 8
[
158]
-
[
159] (effective 30 January 2012).
S 442C(1) amended by No 132 of 2007, s 3, Sch 4, Pt 2
[
55].
442C(2)
Subsection (1) does not prevent a disposal:
(a)
in the ordinary course of the company
'
s business; or
(b)
with the written consent of the secured party, owner or lessor, as the case may be; or
(c)
with the leave of the Court.
History
S 442C(2) amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
128] (effective 30 January 2012).
S 442C(2) amended by No 132 of 2007, s 3, Sch 4, Pt 2
[
56].
442C(3)
The Court may only give leave under paragraph (2)(c) if satisfied that arrangements have been made to protect adequately the interests of the secured party, owner or lessor, as the case may be.
History
S 442C(3) amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
129] (effective 30 January 2012).
S 442C(3) amended by No 132 of 2007, s 3, Sch 4, Pt 2
[
57].
442C(4)
If the administrator proposes to dispose of property under paragraph (2)(a), the Court may, by order, direct the administrator not to carry out that proposal.
History
S 442C(4) amended by No 11 of 2016, s 3, Sch 3[24] (effective 1 March 2017).
S 442C(4) inserted by No 132 of 2007, s 3, Sch 4, Pt 2
[
58].
442C(5)
The Court may only make an order under subsection (4) on the application of:
(a)
if paragraph (1)(a) applies
-
the secured party; or
(b)
if paragraph (1)(b) applies
-
the owner or lessor, as the case may be.
History
S 442C(5) amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
130] (effective 30 January 2012).
S 442C(5) inserted by No 132 of 2007, s 3, Sch 4, Pt 2
[
58].
442C(6)
The Court may only make an order under subsection (4) if it is not satisfied that arrangements have been made to protect adequately the interests of the applicant for the order.
History
S 442C(6) inserted by No 132 of 2007, s 3, Sch 4, Pt 2
[
58].
442C(7)
If:
(a)
a company is under administration or is subject to a deed of company arrangement; and
(b)
property of the company is subject to a security interest; and
(c)the administrator disposes of the property;
the disposal extinguishes the security interest.
History
S 442C(7) amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
131] (effective 30 January 2012).
S 442C(7) inserted by No 132 of 2007, s 3, Sch 4, Pt 2
[
58].
442C(8)
For the purposes of paragraph (2)(a), if:
(a)
property is used or occupied by, or is in the possession of, a company; and
(b)
another person is the owner of the property; and
(c)
either:
(i)
the property is PPSA retention of title property; or
(ii)
the property is subject to a retention of title clause under a contract; and
(d)
the owner demands the return of the property;
a disposal of the property that occurs after the demand is made does not mean that the disposal is not in the ordinary course of the company
'
s business.
History
S 442C(8) amended by No 96 of 2010, s 3, Sch 1, Pt 8
[
160] (effective 30 January 2012).
S 442C(8) inserted by No 132 of 2007, s 3, Sch 4, Pt 2
[
58].
SECTION 442CA
PROPERTY SUBJECT TO A POSSESSORY SECURITY INTEREST
-
INSPECTION OR EXAMINATION BY POTENTIAL PURCHASERS ETC.
History
S 442CA heading amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
132] (effective 30 January 2012).
442CA(1)
If:
(a)
a company is under administration; and
(b)
property of the company is subject to a possessory security interest; and
(c)
the administrator is entitled to dispose of the property by way of sale;
the secured party must, if requested to do so by the administrator, give potential purchasers a reasonable opportunity to inspect or examine the property.
History
S 442CA(1) amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
132]
-
[
133] (effective 30 January 2012).
442CA(2)
If:
(a)
a company is under administration; and
(b)
property of the company is subject to a possessory security interest; and
(c)
the administrator disposes of the property by way of sale;
the administrator is entitled to obtain possession of the property in order to effect the sale.
History
S 442CA(2) amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
134] (effective 30 January 2012).
S 442CA inserted by No 132 of 2007, s 3, Sch 4, Pt 2
[
59] (effective 31 December 2007).
SECTION 442CB
PROPERTY SUBJECT TO A SECURITY INTEREST OR TO A RETENTION OF TITLE CLAUSE
-
ADMINISTRATOR
'
S DUTY OF CARE IN EXERCISING POWER OF SALE
History
S 442CB heading amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
135] (effective 30 January 2012).
442CB(1)
If the administrator of a company is entitled to dispose of property of the company by way of sale, and the property is subject to a security interest, the administrator must act reasonably in exercising a power of sale in respect of the property.
Note: A company
'
s property includes its PPSA retention of title property (see the definition of
property
applying to Part
5.3A
, in section
435B
).
History
S 442CB(1) substituted by No 96 of 2010, s 3, Sch 1, Pt 7
[
135] (effective 30 January 2012).
442CB(2)
If:
(a)
a company is under administration; and
(b)
property is used or occupied by, or is in the possession of, the company; and
(c)
another person is the owner of the property; and
(d)
the property is subject to a retention of title clause under a contract; and
(e)
the administrator is entitled to dispose of the property by way of sale;
then, in exercising a power of sale in respect of the property, the administrator must act reasonably.
442CB(3)
Subsections (1) and (2) do not limit section
180
,
181
,
182
,
183
or
184
.
History
S 442CB inserted by No 132 of 2007, s 3, Sch 4, Pt 2
[
59] (effective 31 December 2007).
SECTION 442CC
PROCEEDS OF SALE OF PROPERTY
Property subject to a possessory security interest
442CC(1)
If:
(a)
a company is under administration; and
(b)
property of the company is subject to a possessory security interest; and
(c)
the administrator disposes of the property by way of sale;
then:
(d)
if the net proceeds of sale equals or exceeds the total of the debts secured by:
(i)
the possessory security interest; and
(ii)
any other security interest in the property, where the debt secured by the security interest has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest;
the administrator must:
(iii)
set aside so much of the net proceeds as equals the total of those debts; and
(iv)
apply the amount so set aside in paying those debts; or
(e)
if the net proceeds of sale fall short of the total of the debts secured by:
(i)
the possessory security interest; and
(ii)
any other security interest in the property, where the debt secured by the security interest has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest;
then:
(iii)
the administrator must set aside the net proceeds; and
(iv)
the administrator must apply the amount so set aside in paying those debts in order of priority, on the basis that if the amount is insufficient to fully pay debts of the same priority, they must be paid proportionately; and
(v)
if any of those debts is not fully paid
-
so much of the debt as remains unpaid may be recovered from the company as an unsecured debt.
History
S 442CC(1) amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
136]
-
[
137] (effective 30 January 2012).
PPSA retention of title property
442CC(1A)
If the administrator of a company disposes of PPSA retention of title property of the company by way of sale, then the administrator must apply the net proceeds of the sale in the same way as a secured party is required, under section 140 of the
Personal Property Securities Act 2009
, to apply an amount, personal property or proceeds of collateral received by the secured party as a result of enforcing a security interest in the property.
Note: PPSA retention of title property does not include property that is subject to a retention of title clause (see section
9
, definitions of
PPSA retention of title property
and
retention of title clause
). Subsection (2) deals with property that is subject to a retention of title clause.
History
S 442CC(1A) inserted by No 96 of 2010, s 3, Sch 1, Pt 8
[
161] (effective 30 January 2012).
Property subject to a retention of title clause
442CC(2)
If:
(a)
a company is under administration; and
(b)
property is used or occupied by, or is in the possession of, the company; and
(c)
another person is the owner of the property; and
(d)
the property is subject to a retention of title clause under a contract (the
original contract
); and
(e)
the administrator disposes of the property by way of sale;
then:
(f)
if the net proceeds of sale equals or exceeds the total of:
(i)
so much of the purchase price, or other amount, under the original contract as remains unpaid; and
(ii)
if there are one or more securities over the property
-
the debts secured by the securities;
the administrator must:
(iii)
set aside so much of the net proceeds as equals that total; and
(iv)
apply the amount so set aside in paying that total; or
(g)
if the net proceeds of sale fall short of the total of:
(i)
so much of the purchase price, or other amount, under the original contract as remains unpaid; and
(ii)
if there are one or more securities over the property
-
the debts secured by the securities;
then:
(iii)
the administrator must set aside the net proceeds; and
(iv)
the administrator must apply the amount so set aside in paying those debts in order of priority, on the basis that if the amount is insufficient to fully pay debts of the same priority, they must be paid proportionately; and
(v)
if any of those debts is not fully paid
-
so much of the debt as remains unpaid may be recovered from the company as an unsecured debt.
Note: Property that is subject to a retention of title clause does not include PPSA retention of title property (see section
9
, definitions of
PPSA retention of title property
and
retention of title clause
). Subsection (1A) deals with PPSA retention of title property.
History
S 442CC(2) (Note) inserted by No 96 of 2010, s 3, Sch 1, Pt 8
[
162] (effective 30 January 2012).
History
S 442CC inserted by No 132 of 2007, s 3, Sch 4, Pt 2
[
59].
SECTION 442D
ADMINISTRATOR
'
S POWERS SUBJECT TO POWERS OF SECURED PARTY, RECEIVER OR CONTROLLER
History
S 442D heading amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
42] (effective 30 January 2012).
442D(1)
Where section
441A
applies, the administrator
'
s functions and powers are subject to the functions and powers of a person as:
(a)
the secured party; or
(b)
a receiver or controller appointed under Part
5.2
(whether under an instrument relating to the security interest or a court order, and even if appointed after the decision period).
History
S 442D(1) amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
42] (effective 30 January 2012).
442D(2)
Where section
441C
applies, then, so far as concerns perishable property of the company, the administrator
'
s functions and powers are subject to the functions and powers of a person as:
(a)
the secured party; or
(b)
a receiver or controller appointed under Part
5.2
(whether under an instrument relating to the security interest or a court order, and even if appointed after the decision period).
History
S 442D(2) amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
42] (effective 30 January 2012).
442D(3)
Where section
441B
,
441F
or
441G
applies, then, so far as concerns the property referred to in subsection
441B(1)
,
441F(1)
or
441G(1)
, the administrator
'
s functions and powers are subject to the functions and powers of the secured party, receiver or controller.
History
S 442D(3) amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
43] (effective 30 January 2012).
SECTION 442E
442E
ADMINISTRATOR HAS QUALIFIED PRIVILEGE
A person who is or has been the administrator of a company under administration has qualified privilege in respect of a statement that he or she has made, whether orally or in writing, in the course of performing or exercising any of his or her functions and powers as administrator of the company.
SECTION 442F
PROTECTION OF PERSONS DEALING WITH ADMINISTRATOR
442F(1)
[
Indoor management rule]
Sections 128 and 129 apply in relation to a company under administration as if:
(a)
a reference in those sections to the company, or to an officer of the company, included a reference to the administrator; and
(b)
a reference in those sections to an assumption referred to in section 129 included a reference to an assumption that the administrator is:
(i)
acting within his or her functions and powers as administrator; and
(ii)
in particular, is complying with this Act.
442F(2)
[
Application]
The effect that sections 128 and 129 have because of subsection (1) of this section is additional to, and does not prejudice, the effect that sections 128 and 129 otherwise have in relation to a company under administration.
Division 9
-
Administrator's liability and indemnity for debts of administration
Subdivision A
-
Liability
SECTION 443A
GENERAL DEBTS
443A(1)
The administrator of a company under administration is liable for debts he or she incurs, in the performance or exercise, or purported performance or exercise, of any of his or her functions and powers as administrator, for:
(a)
services rendered; or
(b)
goods bought; or
(c)
property hired, leased, used or occupied, including property consisting of goods that is subject to a lease that gives rise to a PPSA security interest in the goods; or
(d)
the repayment of money borrowed; or
(e)
interest in respect of money borrowed; or
(f)
borrowing costs.
History
S 443A(1) amended by No 96 of 2010, s 3, Sch 1, Pt 8
[
163] (effective 30 January 2012).
S 443A(1) amended by No 132 of 2007, s 3, Sch 4, Pt 3
[
60] (effective 31 December 2007).
443A(2)
Subsection (1) has effect despite any agreement to the contrary, but without prejudice to the administrator
'
s rights against the company or anyone else.
SECTION 443B
PAYMENTS FOR PROPERTY USED OR OCCUPIED BY, OR IN THE POSSESSION OF, THE COMPANY
Scope
443B(1)
This section applies if, under an agreement made before the administration of a company began, the company continues to use or occupy, or to be in possession of, property of which someone else is the owner or lessor, including property consisting of goods that is subject to a lease that gives rise to a PPSA security interest in the goods.
History
S 443B(1) amended and heading inserted by No 96 of 2010, s 3, Sch 1, Pt 8
[
164] (effective 30 January 2012).
General rule
443B(2)
Subject to this section, the administrator is liable for so much of the rent or other amounts payable by the company under the agreement as is attributable to a period:
(a)
that begins more than 5 business days after the administration began; and
(b)
throughout which:
(i)
the company continues to use or occupy, or to be in possession of, the property; and
(ii)
the administration continues.
History
S 443B(2) heading inserted by No 96 of 2010, s 3, Sch 1, Pt 8
[
164] (effective 30 January 2012).
S 443B(2) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
21].
443B(3)
Within 5 business days after the beginning of the administration, the administrator may give to the owner or lessor a notice that:
(a)
specifies the property; and
(b)
states that the company does not propose to exercise rights in relation to the property; and
(c)
if the administrator:
(i)
knows the location of the property; or
(ii)
could, by the exercise of reasonable diligence, know the location of the property;
specifies the location of the property.
History
S 443B(3) substituted by No 11 of 2016, s 3, Sch 3[1] (effective 1 March 2017).
443B(3A)
(Repealed by No 35 of 2011, s 3, Sch 1
[
6] (effective 30 January 2012).)
History
S 443B(3A) inserted by No 96 of 2010, s 3, Sch 1, Pt 8
[
165] (effective 30 January 2012).
443B(4)
Despite subsection (2), the administrator is not liable for so much of the rent or other amounts payable by the company under the agreement as is attributable to a period during which a notice under subsection (3) is in force, but such a notice does not affect a liability of the company.
443B(5)
A notice under subsection (3) ceases to have effect if:
(a)
the administrator revokes it by writing given to the owner or lessor; or
(b)
the company exercises, or purports to exercise, a right in relation to the property.
443B(6)
For the purposes of subsection (5), the company does not exercise, or purport to exercise, a right in relation to the property merely because the company continues to occupy, or to be in possession of, the property, unless the company:
(a)
also uses the property; or
(b)
asserts a right, as against the owner or lessor, so to continue.
Restrictions on general rule
443B(7)
Subsection (2) does not apply in relation to so much of a period as elapses after:
(a)
a receiver of the property is appointed; or
(b)
under an agreement or instrument under which a security interest in the property is created or arises:
(i)
the secured party appoints an agent to enter into possession, or to assume control, of the property; or
(ii)
the secured party takes possession, or assumes control, of the property;
(c)
(Repealed)
but this subsection does not affect a liability of the company.
History
S 443B(7) amended and heading inserted by No 96 of 2010, s 3, Sch 1, Pt 3
[
44] and Pt 8
[
165] (effective 30 January 2012).
443B(8)
Subsection (2) does not apply in so far as a court, by order, excuses the administrator from liability, but an order does not affect a liability of the company.
443B(9)
The administrator is not taken because of subsection (2):
(a)
to have adopted the agreement; or
(b)
to be liable under the agreement otherwise than as mentioned in subsection (2).
SECTION 443BA
CERTAIN TAXATION LIABILITIES
443BA(1)
[
Taxation liabilities of administrator]
The administrator of a company is liable to pay to the Commissioner of Taxation:
(a)
each amount payable under a remittance provision because of a deduction made by the administrator; and
(b)
without limiting paragraph (a), so much of each amount payable under a remittance provision because of a deduction made by the company during the administration as equals so much of the deduction as is attributable to a period throughout which the administration continued;
even if the amount became payable after the end of the administration.
443BA(2)
[
Definitions]
In this section:
remittance provision
means any of the following former provisions of the
Income Tax Assessment Act 1936
:
(aa)
section 220AAE, 220AAM or 220AAR;
(a)
section 221F (except subsection 221F(12)) or section 221G (except subsection 221G(4A));
(b)
subsection 221YHDC(2);
(c)
subsection 221YHZD(1) or (1A);
(d)
subsection 221YN(1);
and any of theprovisions of Subdivision 16-B in Schedule 1 to the
Taxation Administration Act 1953
.
History
Definition of
remittance provision
amended by No 101 of 2006, s 3, Sch 2
[
29], (effective 14 September 2006).
Definition of
remittance provision
amended by No 123 of 2001, s 3, Sch 1
[
219] (effective 15 July 2001).
unpaid amount
(Repealed by No 79 of 2010, Sch 1, Pt 2
[
13] (effective 1 July 2010).)
History
S 443BA(2) amended by No 79 of 2010, Sch 1, Pt 2
[
13] (effective 1 July 2010).
S 443BA(2) amended by No 123 of 2001, s 3, Sch 1
[
219] (effective 15 July 2001).
SECTION 443C
443C
ADMINISTRATOR NOT OTHERWISE LIABLE FOR COMPANY'S DEBTS
The administrator of a company under administration is not liable for the company's debts except under this Subdivision.
Subdivision B
-
Indemnity
SECTION 443D
443D
RIGHT OF INDEMNITY
The administrator of a company under administration is entitled to be indemnified out of the company
'
s property (other than any PPSA retention of title property subject to a PPSA security interest that is perfected within the meaning of the
Personal Property Securities Act 2009
) for:
(a)
debts for which the administrator is liable under Subdivision A or a remittance provision as defined in subsection
443BA(2)
; and
(aa)
any other debts or liabilities incurred, or damages or losses sustained, in good faith and without negligence, by the administrator in the performance or exercise, or purported performance or exercise, of any of his or her functions or powers as administrator; and
(b)
the remuneration to which he or she is entitled under Division
60
of Schedule
2
(external administrator
'
s remuneration).
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[116] apply in relation to external administrations on and after 1 September 2017.]
History
S 443D amended by No 11 of 2016, s 3, Sch 2[116] (effective 1 March 2017).
S 443D amended by No 96 of 2010, s 3, Sch 1, Pt 8
[
166] (effective 30 January 2012).
S 443D amended by No 132 of 2007, s 3, Sch 5
[
6].
S 443D amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
22].
SECTION 443E
RIGHT OF INDEMNITY HAS PRIORITY OVER OTHER DEBTS
General rule
443E(1)
Subject to section
556
, a right of indemnity under section
443D
has priority over:
(a)
all the company
'
s unsecured debts; and
(b)
any debts of the company secured by a PPSA security interest in property of the company if, when the administration of the company begins, the security interest is vested in the company because of the operation of any of the following provisions:
(i)
section 267 or 267A of the
Personal Property Securities Act 2009
(property subject to unperfected security interests);
(ii)
section
588FL
of this Act (collateral not registered within time); and
(c)
subject otherwise to this section
-
debts of the company secured by a circulating security interest in property of the company.
Debts secured by circulating security interests
-
receiver appointed before the beginning of administration etc.
443E(2)
A right of indemnity under section
443D
does not have priority over debts of the company under administration that are secured by a circulating security interest in property of the company, except so far as the secured party agrees, if:
(a)
before the beginning of the administration, the secured party:
(i)
appointed a receiver of property of the company under a power contained in an instrument relating to the security interest; or
(ii)
obtained an order for the appointment of a receiver of property of the company for the purpose of enforcing the security interest; or
(iii)
entered into possession, or assumed control, of property of the company for that purpose; or
(iv)
appointed a person so to enter into possession or assume control (whether as agent for the secured party or for the company); and
(b)
the receiver or person is still in office, or the secured party is still in possession or control of the property.
Debts secured by circulating security interests
-
receiver appointed during administration etc.
443E(3)
Subsection (4) applies if:
(a)
debts of a company under administration are secured by a circulating security interest in property of the company; and
(b)
during the administration, the secured party, consistently with this Part:
(i)
appoints a receiver of property of the company under a power contained in an instrument relating to the security interest; or
(ii)
obtains an order for the appointment of a receiver of property of the company for the purpose of enforcing the security interest; or
(iii)
enters into possession, or assumes control, of property of the company for that purpose; or
(iv)
appoints a person so to enter into possession or assume control (whether as agent for the secured party or for the company).
443E(4)
A right of indemnity of the administrator under section
443D
has priority over those debts only in so far as it is a right of indemnity for debts incurred, or remuneration accruing, before written notice of the appointment, or of the entering into possession or assuming of control, as the case may be, was given to the administrator.
Debts secured by circulating security interests
-
priority over right of indemnity in relation to repayment of money borrowed etc.
443E(5)
A right of indemnity under section
443D
does not have priority over debts of the company under administration that are secured by a circulating security interest in property of the company, except so far as the secured party consents in writing, to the extent that the right of indemnity relates to debts incurred for:
(a)
the repayment of money borrowed; or
(b)
interest in respect of money borrowed; or
(c)
borrowing costs.
History
S 443E substituted by No 96 of 2010, s 3, Sch 1, Pt 4
[
89] (effective 30 January 2012).
SECTION 443F
LIEN TO SECURE INDEMNITY
443F(1)
To secure a right of indemnity under section
443D
, the administrator has a lien on the company
'
s property.
443F(2)
A lien under subsection (1) has priority over another security interest only in so far as the right of indemnity under section
443D
has priority over debts secured by the other security interest.
History
S 443F(2) amended by No 96 of 2010, s 3, Sch 1, Pt 7
[
138]
-
[
139] (effective 30 January 2012).
Division 10
-
Execution and effect of deed of company arrangement
SECTION 444A
EFFECT OF CREDITORS' RESOLUTION
444A(1)
[
Creditors resolve that company execute deed]
This section applies where, at a meeting convened under section 439A, a company's creditors resolve that the company execute a deed of company arrangement.
444A(2)
[
Administrator of the deed]
The administrator of the company is to be the administrator of the deed, unless the creditors, by resolution passed at the meeting, appoint someone else to be administrator of the deed.
444A(3)
[
Administrator to prepare deed]
The administrator of the company must prepare an instrument setting out the terms of the deed.
History
S 444A(3) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
23] (effective 31 December 2007).
444A(4)
[
Contents of deed]
The instrument must also specify the following:
(a)
the administrator of the deed;
(b)
the property of the company (whether or not already owned by the company when it executes the deed) that is to be available to pay creditors' claims;
(c)
the nature and duration of any moratorium period for which the deed provides;
(d)
to what extent the company is to be released from its debts;
(e)
the conditions (if any) for the deed to come into operation;
(f)
the conditions (if any) for the deed to continue in operation;
(g)
the circumstances in which the deed terminates;
(h)
the order in which proceeds of realising the property referred to in paragraph (b) are to be distributed among creditors bound by the deed;
(i)
the day (not later than the day when the administration began) on or before which claims must have arisen if they are to be admissible under the deed.
444A(5)
[
Prescribed provisions]
The instrument is taken to include the prescribed provisions, except so far as it provides otherwise.
SECTION 444B
EXECUTION OF DEED
444B(1)
This section applies where an instrument is prepared under section 444A.
444B(2)
The company must execute the instrument within:
(a)
15 business days after the end of the meeting of creditors; or
(b)
such further period as the Court allows on an application made within those 15 business days.
History
S 444B(2) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
24].
444B(3)
The board of the company may, by resolution, authorise the instrument to be executed by or on behalf of the company.
444B(4)
Subsection (3) has effect despite section
198G
, but does not limit the functions and powers of the administrator of the company.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[117] apply in relation to external administrations on and after 1 September 2017.]
History
S 444B(4) amended by No 11 of 2016, s 3, Sch 2[117] (effective 1 March 2017).
444B(5)
The proposed administrator of the deed must execute the instrument before, or as soon as practicable after, the company executes it.
History
S 444B(5) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
25].
444B(6)
When executed by both the company and the deed's proposed administrator, the instrument becomes a deed of company arrangement.
History
S 444B(6) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
26].
444B(7)
Division 12 provides for consequences of the company contravening subsection (2).
SECTION 444C
CREDITOR ETC. NOT TO ACT INCONSISTENTLY WITH DEED BEFORE ITS EXECUTION
444C(1)
[
Application]
Where, at a meeting convened under section 439A, a company's creditors resolve that the company execute a deed of company arrangement, this section applies until:
(a)
the deed is executed by both the company and the deed's administrator; or
(b)
the period within which subsection 444B(2) requires the company to execute the deed ends;
whichever happens sooner.
444C(2)
[
Binding effect of deed before execution]
In so far as a person would be bound by the deed if it had already been so executed, the person:
(a)
must not do anything inconsistent with the deed, except with the leave of the Court; and
(b)
is subject to section 444E.
SECTION 444D
EFFECT OF DEED ON CREDITORS
444D(1)
A deed of company arrangement binds all creditors of the company, so far as concerns claims arising on or before the day specified in the deed under paragraph
444A(4)(i)
.
444D(2)
Subsection (1) does not prevent a secured creditor from realising or otherwise dealing with the security interest, except so far as:
(a)
the deed so provides in relation to a secured creditor who voted in favour of the resolution of creditors because of which the company executed the deed; or
(b)
the Court orders under subsection
444F(2)
.
History
S 444D(2) amended by No 96 of 2010, s 3, Sch 1, Pt 5
[
105] (effective 30 January 2012).
444D(3)
Subsection (1) does not affect a right that an owner or lessor of property has in relation to that property, except so far as:
(a)
the deed so provides in relation to an owner or lessor of property who voted in favour of the resolution of creditors because of which the company executed the deed; or
(b)
the Court orders under subsection
444F(4)
.
444D(3A)
Subsection (3) does not apply in relation to an owner or lessor of PPSA retention of title property of the company.
Note: Subsection (2) applies in relation to an owner or lessor of PPSA retention of title property of the company. Such an owner or lessor is a secured creditor of the company (see section
51F
(meaning of
PPSA retention of title property
)).
History
S 444D(3A) inserted by No 96 of 2010, s 3, Sch 1, Pt 8
[
167] (effective 30 January 2012).
444D(4)
Section
231
does not prevent a creditor of the company from becoming a member of the company as a result of the deed requiring the creditor to accept an offer of shares in the company.
History
S 444D(4) inserted by No 132 of 2007, s 3, Sch 4, Pt 1
[
27] (effective 31 December 2007).
SECTION 444DA
GIVING PRIORITY TO ELIGIBLE EMPLOYEE CREDITORS
444DA(1)
[
Priority of employee creditors]
A deed of company arrangement must contain a provision to the effect that, for the purposes of the application by the administrator of the property of the company coming under his or her control under the deed, any eligible employee creditors willbe entitled to a priority at least equal to what they would have been entitled if the property were applied in accordance with sections
556
,
560
and
561
.
444DA(2)
[
Exceptions]
However, the rule in subsection (1) does not apply if:
(a)
at a meeting of eligible employee creditors held before the meeting convened under section
439A
, the eligible employee creditors pass a resolution agreeing to the non-inclusion of such a provision; or
(b)
the Court makes an order under subsection (5) approving the non-inclusion of such a provision.
444DA(3)
Meeting of eligible employee creditors.
The administrator of the company must convene a meeting under paragraph (2)(a) by giving written notice of the meeting to as many of the eligible employee creditors as reasonably practicable at least 5 business days before the meeting.
444DA(4)
[
Contents of statement]
A notice under subsection (3) must be accompanied by a copy of a statement setting out:
(a)
the administrator
'
s opinion whether the non-inclusion of such a provision would be likely to result in the same or a better outcome for eligible employee creditors as a whole than would result from an immediate winding up of the company; and
(b)
his or her reasons for that opinion; and
(c)
such other information known to the administrator as will enable the eligible employee creditors to make an informed decision about the matter covered by paragraph (a).
444DA(5)
Court approval.
The Court may approve the non-inclusion of such a provision if the Court is satisfied that the non-inclusion of the provision would be likely to result in the same or a better outcome for eligible employee creditors as a whole than would result from an immediate winding up of the company.
444DA(6)
[
Who may apply]
The Court may only make an order under subsection (5) on the application of:
(a)
the administrator, or proposed administrator, of the deed; or
(b)
an eligible employee creditor; or
(c)
any interested person.
444DA(7)
[
When Court may make order]
The Court may make an order under subsection (5) before or after the meeting convened under section
439A
.
History
S 444DA inserted by No 132 of 2007, s 3, Sch 1, Pt 1
[
4] (effective 31 December 2007).
SECTION 444DB
SUPERANNUATION CONTRIBUTION DEBTS NOT ADMISSIBLE TO PROOF
444DB(1)
Whole of superannuation contribution debt.
A deed of company arrangement must contain a provision to the effect that the administrator of the deed must determine that the whole of a debt by way of a superannuation contribution is not admissible to proof against the company if:
(a)
a debt by way of superannuation guarantee charge:
(i)
has been paid; or
(ii)
is, or is to be, admissible to proof against the company; and
(b)
the administrator of the deed is satisfied that the superannuation guarantee charge is attributable to the whole of the first-mentioned debt.
444DB(2)
[
Where whole of debt not admissible]
If the administrator of a deed of company arrangement determines, under a provision covered by subsection (1), that the whole of a debt is not admissible to proof against the company, the whole of the debt is extinguished.
444DB(3)
Part of superannuation contribution debt.
A deed of company arrangement must contain a provision to the effect that the administrator of the deed must determine that a particular part of a debt by way of a superannuation contribution is not admissible to proof against the company if:
(a)
a debt by way of superannuation guarantee charge:
(i)
has been paid; or
(ii)
is, or is to be, admissible to proof against the company; and
(b)
the administrator of the deed is satisfied that the superannuation guarantee charge is attributable to that part of the first-mentioned debt.
444DB(4)
[
Where part of debt not admissible]
If the administrator of a deed of company arrangement determines, under a provision covered by subsection (3), that a part of a debt is not admissible to proof against the company, that part of the debt is extinguished.
444DB(5)
Definition.
In this section:
superannuation contribution
has the same meaning as in section
556
.
History
S 444DB inserted by No 132 of 2007, s 3, Sch 1, Pt 1
[
4] (effective 31 December 2007).
SECTION 444E
PROTECTION OF COMPANY
'
S PROPERTY FROM PERSONS BOUND BY DEED
444E(1)
Until a deed of company arrangement terminates, this section applies to a person bound by the deed.
444E(2)
The person cannot:
(a)
make an application for an order to wind up the company; or
(b)
proceed with such an application made before the deed became binding on the person.
444E(3)
The person cannot:
(a)
begin or proceed with a proceeding against the company or in relation to any of its property; or
(b)
begin or proceed with enforcement process in relation to property of the company;
except:
(c)
with the leave of the Court; and
(d)
in accordance with such terms (if any) as the Court imposes.
444E(4)
In subsection (3):
property
of a company includes:
(a)
any PPSA retention of title property of the company; and
(b)
any other property used or occupied by, or in the possession of, the company.
Note: See sections
9
(definition of
property
) and
51F
(PPSA retention of title property).
History
Definition of
property
substituted by No 96 of 2010, s 3, Sch 1, Pt 8
[
168] (effective 30 January 2012).
SECTION 444F
COURT MAY LIMIT RIGHTS OF SECURED CREDITOR OR OWNER OR LESSOR
444F(1)
This section applies where:
(a)
at a meeting convened under section
439A
, a company
'
s creditors have resolved that the company execute a deed of company arrangement; or
(b)
a company has executed such a deed.
History
S 444F(1) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
28] (effective 31 December 2007).
444F(2)
Subject to subsection 441A(3), the Court may order a secured creditor of the company not to realise or otherwise deal with the security interest, except as permitted by the order.
History
S 444F(2) amended by No 96 of 2010, s 3, Sch 1, Pt 5
[
105] (effective 30 January 2012).
444F(3)
The Court may only make an order under subsection (2) if satisfied that:
(a)
for the creditor to realise or otherwise deal with the security interest would have a material adverse effect on achieving the purposes of the deed; and
(b)
having regard to:
(i)
the terms of the deed; and
(ii)
the terms of the order; and
(iii)
any other relevant matter;
the creditor
'
s interests will be adequately protected.
History
S 444F(3) amended by No 96 of 2010, s 3, Sch 1, Pt 5
[
106] (effective 30 January 2012).
444F(4)
The Court may order the owner or lessor of property that is used or occupied by, or is in the possession of, the company not to take possession of the property or otherwise recover it.
444F(4A)
Subsection (4) does not apply in relation to PPSA retention of title property of the company.
History
S 444F(4A) inserted by No 96 of 2010, s 3, Sch 1, Pt 8
[
169] (effective 30 January 2012).
444F(5)
The Court may only make an order under subsection (4) if satisfied that:
(a)
for the owner or lessor to take possession of the property or otherwise recover it would have a material adverse effect on achieving the purposes of the deed; and
(b)
having regard to:
(i)
the terms of the deed; and
(ii)
the terms of the order; and
(iii)
any other relevant matter;
the interests of the owner or lessor will be adequately protected.
444F(6)
An order under this section may be made subject to conditions.
444F(7)
An order under this section may only be made on the application of:
(a)
if paragraph (1)(a) applies
-
the administrator of the company; or
(b)
if paragraph (1)(b) applies
-
the deed
'
s administrator.
SECTION 444G
444G
EFFECT OF DEED ON COMPANY, OFFICERS AND MEMBERS
A deed of company arrangement also binds:
(a)
the company; and
(b)
its officers and members; and
(c)
the deed's administrator.
SECTION 444GA
TRANSFER OF SHARES
444GA(1)
[
Who must approve transfer]
The administrator of a deed of company arrangement may transfer shares in the company if the administrator has obtained:
(a)
the written consent of the owner of the shares; or
(b)
the leave of the Court.
444GA(2)
[
Who may oppose]
A person is not entitled to oppose an application for leave under subsection (1) unless the person is:
(a)
a member of the company; or
(b)
a creditor of the company; or
(c)
any other interested person; or
(d)
ASIC.
444GA(3)
[
What Court must consider]
The Court may only give leave under subsection (1) if it is satisfied that the transfer would not unfairly prejudice the interests of members of the company.
History
S 444GA inserted by No 132 of 2007, s 3, Sch 4, Pt 1
[
29] (effective 31 December 2007).
SECTION 444H
444H
EXTENT OF RELEASE OF COMPANY'S DEBTS
A deed of company arrangement releases the company from a debt only in so far as:
(a)
the deed provides for the release; and
(b)
the creditor concerned is bound by the deed.
[
CCH Note:
There is no section 444I.]
SECTION 444J
444J
GUARANTEES AND INDEMNITIES
Section
444H
does not affect a creditor
'
s rights under a guarantee or indemnity.
History
S 444J inserted by No 132 of 2007, s 3, Sch 4, Pt 1
[
30] (effective 31 December 2007).
Division 11
-
Variation, termination and avoidance of deed
SECTION 445A
445A
VARIATION OF DEED BY CREDITORS
A deed of company arrangement may be varied by a resolution passed at a meeting of the company's creditors, but only if the variation is not materially different from a proposed variation set out in the notice of the meeting.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[118] apply in relation to external administrations on and after 1 September 2017.]
History
S 445A amended by No 11 of 2016, s 3, Sch 2[118] (effective 1 March 2017).
SECTION 445B
COURT MAY CANCEL VARIATION
445B(1)
[
Cancellation application by creditor]
Where a deed of company arrangement is varied under section 445A, a creditor of the company may apply to the Court for an order cancelling the variation.
445B(2)
[
Court may cancel variation]
On an application, the Court:
(a)
may make an order cancelling the variation, or confirming it, either wholly or in part, on such conditions (if any) as the order specifies; and
(b)
may make such other orders as it thinks appropriate.
SECTION 445C
445C
WHEN DEED TERMINATES
A deed of company arrangement terminates when:
(a)
the Court makes under section 445D an order terminating the deed; or
(b)
the company
'
s creditors pass a resolution terminating the deed at a meeting; or
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[119] apply in relation to external administrations on and after 1 September 2017.]
(c)
if the deed specifies circumstances in which it is to terminate
-
those circumstances exist; or
(d)
the administrator of the deed executes a notice of termination of the deed in accordance with section
445FA
;
whichever happens first.
History
S 445C amended by No 11 of 2016, s 3, Sch 2[119] (effective 1 March 2017).
S 445C amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
31
-
32].
SECTION 445CA
445CA
WHEN CREDITORS MAY TERMINATE DEED
The creditors are not entitled to pass a resolution under paragraph
445C(b)
unless:
(a)
there has been a breach of the deed; and
(b)
the breach has not been rectified before the resolution is passed.
History
S 445CA inserted by No 132 of 2007, s 3, Sch 4, Pt 1
[
33] (effective 31 December 2007).
SECTION 445D
WHEN COURT MAY TERMINATE DEED
445D(1)
The Court may make an order terminating a deed of company arrangement if satisfied that:
(a)
information about the company's business, property, affairs or financial circumstances that:
(i)
was false or misleading; and
(ii)
can reasonably be expected to have been material to creditors of the company in deciding whether to vote in favour of the resolution that the company execute the deed;
was given to the administrator of the company or to such creditors; or
(b)
such information was contained in a document that accompanied a notice of the meeting at which the resolution was passed; or
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[120] and [121] apply in relation to external administrations on and after 1 September 2017.]
(c)
there was an omission from such a document and the omission can reasonably be expected to have been material to such creditors in so deciding; or
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[120] and [121] apply in relation to external administrations on and after 1 September 2017.]
(d)
there has been a material contravention of the deed by a person bound by the deed; or
(e)
effect cannot be given to the deed without injustice or undue delay; or
(f)
the deed or a provision of it is, an act or omission done or made under the deed was, or an act or omission proposed to be so done or made would be:
(i)
oppressive or unfairly prejudicial to, or unfairly discriminatory against, one or more such creditors; or
(ii)
contrary to the interests of the creditors of the company as a whole; or
(g)
the deed should be terminated for some other reason.
History
S 445D(1) amended by No 11 of 2016, s 3, Sch 2[120] and
[
121] (effective 1 March 2017).
445D(2)
An order may be made on the application of:
(a)
a creditor of the company; or
(b)
the company; or
(ba)
ASIC; or
(c)
any other interested person.
History
S 445D(2) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
34].
SECTION 445E
445E
CREDITORS MAY TERMINATE DEED AND RESOLVE THAT COMPANY BE WOUND UP
Where:
(a)
the company
'
s creditors pass a resolution at a meeting terminating the deed; and
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[122] apply in relation to external administrations on and after 1 September 2017.]
(b)
the notice of the meeting set out a proposed resolution that the company be wound up;
the creditors may also resolve at the meeting that the company be wound up.
History
S 445E amended by No 11 of 2016, s 3, Sch 2[122] (effective 1 March 2017).
SECTION 445F
445F
MEETING OF CREDITORS TO CONSIDER PROPOSED VARIATION OR TERMINATION OF DEED
(Repealed by No 11 of 2016, s 3, Sch 2
[
123] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[123] apply in relation to external administrations on and after 1 September 2017.]
SECTION 445FA
NOTICE OF TERMINATION OF DEED
445FA(1)
If a company is subject to a deed of company arrangement, and:
(a)
the administrator of the deed has applied all of the proceeds of the realisation of the assets available for the payment of creditors; or
(b)
the administrator of the deed has paid to the creditors:
(i)
the sum of 100 cents in the dollar; or
(ii)
any lesser sum determined by the creditors at a general meeting; or
(c)
all of the following conditions are satisfied:
(i)
the company
'
s obligations under the deed have been fulfilled;
(ii)
the obligations of any other party to the deed have been fulfilled;
(iii)
creditors
'
claims under the deed have been dealt with in accordance with the deed;
the administrator of the deed must:
(d)
certify to that effect in writing; and
(e)
within 28 days, lodge with ASIC a notice of termination of the deed.
[
CCH Note:
S 445FA(1) will be amended by No 69 of 2020, s 3, Sch 1[714], by substituting
"
the Registrar
"
for
"
ASIC
"
in para (e) (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
445FA(2)
The notice of termination must be in the prescribed form.
Note: For termination of the deed, see section
445C
.
[
CCH Note:
S 445FA(2) will be amended by No 69 of 2020, s 3, Sch 1[715], by substituting
"
meet any requirements of the data standards
"
for
"
be in the prescribed form
"
, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 445FA inserted by No 132 of 2007, s 3, Sch 4, Pt 1
[
35].
SECTION 445G
WHEN COURT MAY VOID OR VALIDATE DEED
445G(1)
[
Doubt about deed]
Where there is doubt, on a specific ground, whether a deed of company arrangement was entered into in accordance with this Part or complies with this Part, the administrator of the deed, a member or creditor of the company, or ASIC, may apply to the Court for an order under this section.
445G(2)
[
Court may declare deed void]
On an application, the Court may make an order declaring the deed, or a provision of it, to be void or not to be void, as the case requires, on the ground specified in the application or some other ground.
445G(3)
[
Court may declare deed valid]
On an application, the Court may declare the deed, or a provision of it, to be valid, despite a contravention of a provision of this Part, if the Court is satisfied that:
(a)
the provision was substantially complied with; and
(b)
no injustice will result for anyone bound by the deed if the contravention is disregarded.
445G(4)
[
Court may vary deed]
Where the Court declares a provision of a deed of company arrangement to be void, the Court may by order vary the deed, but only with the consent of the deed's administrator.
SECTION 445H
445H
EFFECT OF TERMINATION OR AVOIDANCE
The termination or avoidance, in whole or in part, of a deed of company arrangement does not affect the previous operation of the deed.
Division 11AA
-
Notification of contravention of deed
History
Div 11AA inserted by No 11 of 2016, s 3, Sch 3
[
2] (effective 1 March 2017).
SECTION 445HA
NOTIFICATION OF CONTRAVENTION OF DEED OF COMPANY ARRANGEMENT
Director to notify administrator
445HA(1)
If a director of a company that is subject to a deed of company arrangement becomes aware that:
(a)
there has been a material contravention of the deed by a person bound by the deed (who may be the director); or
(b)
there is likely to be a material contravention of the deed by a person bound by the deed (who may be the director);
the director must, as soon as practicable after becoming aware of the contravention or likely contravention, give notice of the contravention or likely contravention to the administrator of the deed of company arrangement.
History
S 445HA(1) amended by No 64 of 2020, s 3, Sch 3[22] (effective 23 June 2020).
Administrator to notify company
'
s creditors
445HA(2)
If the administrator of a deed of company arrangement becomes aware that:
(a)
there has been a material contravention of the deed by a person bound by the deed (who may be the administrator); or
(b)
there is likely to be a material contravention of the deed by a person bound by the deed (who may be the administrator);
the administrator must, as soon as practicable after becoming aware of the contravention or likely contravention, give notice of the contravention or likely contravention to as many of the company
'
s creditors as reasonably practicable. The notice must be lodged with ASIC and must be in the prescribed form (if any).
History
S 445HA(2) amended by No 64 of 2020, s 3, Sch 3[23] (effective 23 June 2020).
History
S 445HA inserted by No 11 of 2016, s 3, Sch 3
[
2] (effective 1 March 2017).
Division 11A
-
Deed administrator
'
s accounts
History
Div 11A (comprising s 445J) repealed by No 11 of 2016, s 3, Sch 2
[
124] (effective 1 March 2017).
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[124] apply in relation to external administrations on and after 1 September 2017.]
[
CCH Note
: The next section is s 446A.]
Division 12
-
Transition to creditors
'
voluntary winding up
SECTION 446A
ADMINISTRATOR BECOMES LIQUIDATOR IN CERTAIN CASES
446A(1)
This section applies if:
(a)
the creditors of a company under administration resolve at a particular time under paragraph
439C(c)
that the company be wound up; or
(b)
a company under administration contravenes subsection
444B(2)
at a particular time; or
(c)
the company
'
s creditors:
(i)
pass a resolution terminating a deed of company arrangement executed by the company; and
(ii)
also resolve at a particular time under section
445E
that the company be wound up.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[125] apply in relation to external administrations on and after 1 September 2017.]
History
S 446A(1) amended by No 11 of 2016, s 3, Sch 2[125] (effective 1 March 2017).
446A(2)
The company is taken:
(a)
to have passed, at the time referred to in paragraph (1)(a) or (b) or subparagraph (1)(c)(ii), as the case may be, a special resolution under section
491
that the company be wound up voluntarily; and
(b)
to have done so without a declaration having been made and lodged under section
494
.
446A(3)
Section
497
is taken to have been complied with in relation to the winding up.
446A(4)
(Repealed by No 132 of 2007, s 3, Sch 1, Pt 2
[
22].)
446A(5)
The liquidator must:
(a)
within 5 business days after the day on which the company is taken to have passed the resolution, lodge a written notice stating that the company is taken because of this section to have passed such a resolution and specifying that day; and
(b)
cause the notice to be published, within the period ascertained in accordance with the regulations, in the prescribed manner.
[
CCH Note:
S 446A(5) will be amended by No 141 of 2020, s 3, Sch 4[117], by inserting
"
with the Registrar
"
after
"
lodge
"
, (effective on the later of: (a) 18 December 2020; and (b) the day items 1 to 1258 of Schedule 1 to the
Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020
commence.).]
History
S 446A(5) amended by No 48 of 2012, s 3, Sch 1, Pt 2
[
9] (effective 1 July 2012).
S 446A(5) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
37
-
38].
446A(6)
Section
482
applies in relation to the winding up as if it were a winding up in insolvency or by the Court.
Note: Section
482
empowers the Court to stay or terminate a winding up and give consequential directions.
446A(7)
An application under section
482
as applying because of subsection (6) may be made:
(a)
despite section
198G
(exercise of powers while company under external administration), by the company pursuant to a resolution of the board; or
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[126] apply in relation to external administrations on and after 1 September 2017.]
(b)
by the liquidator; or
(c)
by a creditor; or
(d)
by a contributory.
Note: See also section
499
(appointment of liquidator).
History
S 446A(7) amended by No 11 of 2016, s 3, Sch 2[126] (effective 1 March 2017).
S 446A (Note) inserted by No 132 of 2007, s 3, Sch 1, Pt 2
[
23].
[
CCH Note:
S 446A(8) will be inserted by No 141 of 2020, s 3, Sch 4[118] (effective on the later of: (a) 18 December 2020; and (b) the day items 1 to 1258 of Schedule 1 to the
Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020
commence.). S 446A(8) will read:
446A(8)
A lodgement under paragraph (5)(a) must meet any requirements of the data standards.]
SECTION 446AA
ADMINISTRATOR BECOMES LIQUIDATOR
-
ADDITIONAL CASES
Scope
446AA(1)
This section applies if a company has executed a deed of company arrangement and:
(a)
the Court, at a particular time, makes an order under section
445D
terminating the deed of company arrangement; or
(b)
both:
(i)
the deed of company arrangement specifies circumstances in which the deed is to terminate and the company is to be wound up; and
(ii)
those circumstances exist at a particular time.
Resolution that company be wound up voluntarily
446AA(2)
The company is taken:
(a)
to have passed, at the time referred to in paragraph (1)(a) or subparagraph (1)(b)(ii), as the case may be, a special resolution under section
491
that the company be wound up voluntarily; and
(b)
to have done so without a declaration having been made and lodged under section
494
.
Information about company
'
s affairs
446AA(3)
Section
497
is taken to have been complied with in relation to the winding up.
Notice of resolution
446AA(4)
The liquidator must:
(a)
within 5 business days after the day on which the company is taken to have passed the resolution, lodge with ASIC a written notice in the prescribed form:
(i)
stating that the company is taken because of this section to have passed such a resolution; and
(ii)
specifying that day; and
(b)
cause the notice to be published, within 5 business days after that day, in the prescribed manner.
[
CCH Note 1:
S 446AA(4) will be amended by No 69 of 2020, s 3, Sch 1[716], by substituting
"
the Registrar a notice
"
for
"
ASIC a written notice in the prescribed form
"
in para (a) (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
[
CCH Note 2:
S 446AA(4A) will be inserted by No 69 of 2020, s 3, Sch 1[717] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 446AA(4A) will read:
446AA(4A)
The notice must meet any requirements of the data standards.]
Power to stay or terminate winding up
446AA(5)
Section
482
applies in relation to the winding up as if it were a winding up in insolvency or by the Court.
Note: Section
482
empowers the Court to stay or terminate a winding up and give consequential directions.
446AA(6)
An application under section
482
as applying because of subsection
(5)
may be made:
(a)
despite section
198G
(exercise of directors
'
powers while company under external administration), by the company pursuant to a resolution of the board; or
(b)
by the liquidator; or
(c)
by a creditor; or
(d)
by a contributory.
Note: See also section
499
(appointment of liquidator).
History
S 446AA inserted by No 11 of 2016, s 3, Sch 3[9].
SECTION 446B
REGULATIONS MAY PROVIDE FOR TRANSITION IN OTHER CASES
446B(1)
The regulations may prescribe cases where:
(a)
a company under administration; or
(b)
a company that has executed a deed of company arrangement (even if the deed has terminated);
is taken to have passed a special resolution under section
491
that the company be wound up voluntarily.
446B(2)
The regulations may provide for Part
5.5
or Schedule
2
to apply with prescribed modifications in cases prescribed for the purposes of subsection (1).
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[127] apply in relation to external administrations on and after 1 September 2017.]
History
S 446B(2) amended by No 11 of 2016, s 3, Sch 2[127] (effective 1 March 2017).
446B(3)
Without limiting subsection (2), the regulations may provide, in relation to such cases, for matters of a kind provided for by any of subsections
446A(2)
to
(7)
and
446AA(2)
to
(6)
, inclusive.
History
S 446B(3) amended by No 11 of 2016, s 3, Sch 3[10] (effective 1 March 2017).
446B(4)
Regulations in force for the purposes of this section have effect accordingly.
SECTION 446C
LIQUIDATOR MAY REQUIRE SUBMISSION OF A REPORT ABOUT THE COMPANY
'
S AFFAIRS
Scope
446C(1)
This section applies if:
(a)
at a particular time (the
liquidation time
), a company resolves by special resolution that it be wound up voluntarily; and
(b)
immediately before the liquidation time:
(i)
the company was under administration; or
(ii)
the company was subject to a deed of company arrangement.
Report
446C(2)
The liquidator may, by written notice given to a person who is or has been an officer of the company, require the person to:
(a)
give the liquidator a report containing such information as is specified in the notice about:
(i)
the affairs of the company, as at a date specified in the notice; or
(ii)
if one or more of the affairs of the company are specified in the notice
-
those affairs, as at a date specified in the notice; and
(b)
verify the report by a statement in writing in the prescribed form.
446C(3)
The following provisions have effect:
(a)
if subparagraph
(1)(b)(i)
applies
-
the date specified in the subsection
(2)
notice must not be earlier than the beginning of the administration;
(b)
if subparagraph
(1)(b)(ii)
applies
-
the date specified in the subsection
(2)
notice must not be earlier than the beginning of the administration that ended when the deed was executed.
Deadline for giving report to liquidator
446C(4)
If a person is given a notice under subsection
(2)
, the person must give the liquidator the report required by the notice:
(a)
within 14 days after the notice was given; or
(b)
if the liquidator, by written notice given to the person, allows a longer period
-
within that longer period.
446C(5)
The liquidator may allow a longer period under paragraph
(4)(b)
only on written application made within the period of 14 days mentioned in paragraph
(4)(a)
.
446C(6)
The liquidator may allow a longer period under paragraph
(4)(b)
only if the liquidator believes there are special reasons for doing so.
Report to be lodged with ASIC
446C(7)
The liquidator must, within 7 days after receiving a report under subsection
(2)
, lodge a copy of the report with ASIC.
[
CCH Note:
S 446C(7) will be amended by No 69 of 2020, s 3, Sch 1[718] and
[
719], by substituting
"
the Registrar
"
for
"
ASIC
"
in the heading and
"
the Registrar. The lodgement must meet any requirements of the data standards.
"
for
"
ASIC.
"
, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
Cost of preparation of report
446C(8)
If:
(a)
a person is required to give a report under subsection
(2)
; and
(b)
the person incurs costs or expenses in relation to the preparation or giving of the report;
the person is entitled to be paid by the liquidator out of the property of the company (other than its PPSA retention of title property), so much of those costs and expenses as the liquidator considers reasonable.
History
S 446C(8) amended by No 96 of 2010, s 3, Sch 1, Pt 8
[
170].
Reasonable excuse
446C(9)
Subsection
(4)
does not apply to the extent that the person has a reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in subsection
(9)
, see subsection
13.3(3)
of the
Criminal Code
.
Strict liability
446C(10)
An offence against subsection
1311(1)
that relates to subsection
(4)
of this section is an offence of strict liability.
Note: For
strict liability
, see section
6.1
of the
Criminal Code
.
History
S 446C inserted by No 132 of 2007, s 3, Sch 4, Pt 3
[
63].
Division 13
-
Powers of Court
SECTION 447A
GENERAL POWER TO MAKE ORDERS
447A(1)
[
General powers of Court]
The Court may make such order as it thinks appropriate about how this Part is to operate in relation to a particular company.
447A(2)
[
Example of Court order]
For example, if the Court is satisfied that the administration of a company should end:
(a)
because the company is solvent; or
(b)
because provisions of this Part are being abused; or
(c)
for some other reason;
the Court may order under subsection (1) that the administration is to end.
447A(3)
[
Order subject to conditions]
An order may be made subject to conditions.
447A(4)
[
Who may apply for order]
An order may be made on the application of:
(a)
the company; or
(b)
a creditor of the company; or
(c)
in the case of a company under administration
-
the administrator of the company; or
(d)
in the case of a company that has executed a deed of company arrangement
-
the deed's administrator; or
(e)
ASIC; or
(f)
any other interested person.
SECTION 447B
ORDERS TO PROTECT CREDITORS DURING ADMINISTRATION
447B(1)
[
ASIC may apply]
On the application of ASIC, the Court may make such order as it thinks necessary to protect the interests of a company's creditors while the company is under administration.
447B(2)
[
Creditor may apply]
On the application of a creditor of a company, the Court may make such order as it thinks necessary to protect the creditor's interests while the company is under administration.
447B(3)
[
Order subject to conditions]
An order may be made subject to conditions.
SECTION 447C
COURT MAY DECLARE WHETHER ADMINISTRATOR VALIDLY APPOINTED
447C(1)
[
Doubt about appointment]
If there is doubt, on a specific ground, about whether a purported appointment of a person as administrator of a company, or of a deed of company arrangement, is valid, the person, the company or any of the company's creditors may apply to the Court for an order under subsection (2).
447C(2)
[
Court may declare appointment valid or invalid]
On an application, the Court may make an order declaring whether or not the purported appointment was valid on the ground specified in the application or on some other ground.
SECTION 447D
447D
ADMINISTRATOR MAY SEEK DIRECTIONS
(Repealed by No 11 of 2016, s 3, Sch 2
[
128] (effective 1 March 2017).)
[CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[128] apply in relation to external administrations on and after 1 September 2017.]
SECTION 447E
447E
SUPERVISION OF ADMINISTRATOR OF COMPANY OR DEED
(Repealed by No 11 of 2016, s 3, Sch 2
[
128] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[128] apply in relation to external administrations on and after 1 September 2017.]
SECTION 447F
447F
EFFECT OF DIVISION
Nothing in this Division limits the generality of anything else in it.
Division 14
-
Qualifications of administrators
SECTION 448A
448A
APPOINTEE MUST CONSENT
A person cannot be appointed as administrator of a company or of a deed of company arrangement unless:
(a)
the person has consented in writing to the appointment; and
(b)
as at the time of the appointment, the person has not withdrawn the consent.
SECTION 448B
ADMINISTRATOR MUST BE REGISTERED LIQUIDATOR
448B(1)
[
Prohibition against appointment]
A person must not consent to be appointed, and must not act, as administrator of a company or of a deed of company arrangement.
History
S 448B(1) amended by No 117 of 2001, s 3, Sch 1
[
121] (effective 15 December 2001).
448B(2)
[
Limitation]
Subsection (1) does not apply if the person is a registered liquidator.
Note: A defendant bears an evidential burden in relation to the matter in subsection (2), see subsection 13.3(3) of the
Criminal Code
.
History
S 448B(2) inserted by No 117 of 2001, s 3, Sch 1
[
122] (effective 15 December 2001).
448B(3)
[
Strict liability offence]
An offence based on subsection (1) is an offence of strict liability.
Note: For
strict liability
, see section 6.1 of the
Criminal Code
.
History
S 448B(3) inserted by No 117 of 2001, s 3, Sch 1
[
122] (effective 15 December 2001).
SECTION 448C
DISQUALIFICATION OF PERSON CONNECTED WITH COMPANY
448C(1)
Subject to this section, a person must not, except with the leave of the Court, seek or consent to be appointed as, or act as, administrator of a company or of a deed of company arrangement if:
(a)
the person, or a body corporate in which the person has a substantial holding, is indebted in an amount exceeding $5,000 to the company or to a body corporate related to the company; or
(b)
the person is, otherwise than in a capacity as:
(i)
administrator of the company or a related body corporate; or
(ii)
administrator of a deed of company arrangement executed by the company or a related body corporate; or
(iii)
restructuring practitioner for the company or a related body corporate; or
(iv)
restructuring practitioner for a restructuring plan made by the company or a related body corporate; or
(v)
liquidator of the company or a related body corporate;
a creditor of the company or of a related body corporate in an amount exceeding $5,000; or
(c)
the person is a director, secretary, senior manager or employee of the company; or
(d)
the person is a director, secretary, senior manager or employee of a body corporate that is a secured party in relation to property of the company; or
(e)
the person is an auditor of the company; or
(f)
the person is a partner or employee of an auditor of the company; or
(g)
the person is a partner, employer or employee of an officer of the company; or
(h)
the person is a partner or employee of an employee of an officer of the company.
History
S 448C(1) amended by No 130 of 2020, s 3, Sch 1[38] (effective 1 January 2021).
S 448C(1) amended by No 96 of 2010, s 3, Sch 1, Pt 6
[
117] (effective 30 January 2012).
S 448C(1) amended by No 103 of 2004, s 3, Sch 9
[
29] and
[
30].
448C(1A)
An offence based on subsection (1) is an offence of strict liability.
Note: For
strict liability
, see section 6.1 of the
Criminal Code
.
History
S 448C(1A) inserted by No 117 of 2001, s 3, Sch 1
[
123].
448C(2)
For the purposes of paragraph (1)(a), disregard a debt owed by a natural person to a body corporate if:
(a)
the body corporate is:
(i)
an Australian ADI; or
(ii)
a body corporate registered under section
21
of the
Life Insurance Act 1995
; and
(b)
the debt arose because of a loan that the body corporate or entity made to the person in the ordinary course of its ordinary business; and
(c)
the person used the amount of the loan to pay the whole or part of the purchase price of premises that the person uses as their principal place of residence.
History
S 448C(2) amended by No 75 of 2009, Sch 1
[
196] (effective 28 February 2010).
448C(3)
For the purposes of this section, a person is taken to be a director, secretary, senior manager, employee or auditor of a company if:
(a)
the person is or has, within the last 2 years, been a director, secretary, senior manager, employee, auditor or promoter of the company or a related body corporate; and
(b)
ASIC has not directed that the person not be taken to be a director, secretary, senior manager, employee or auditor for the purposes of this section.
ASIC may give a direction under paragraph (b) only if it thinks fit in the circumstances of the case.
History
S 448C(3) substituted by No 103 of 2004, s 3, Sch 9
[
31].
448C(4)
For the purposes of paragraphs (1)(g) and (h),
officer
does not include liquidator.
History
S 448C(4) inserted by No 132 of 2007, s 3, Sch 4, Pt 1
[
39].
SECTION 448D
448D
DISQUALIFICATION OF INSOLVENT UNDER ADMINISTRATION
(Repealed by No 11 of 2016, s 3, Sch 2
[
128] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[128] apply in relation to external administrations on and after 1 September 2017.]
Division 15
-
Removal and replacement of administrator
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[129] apply in relation to external administrations on and after 1 September 2017.]
History
Div 15 heading substituted by No 11 of 2016, s 3, Sch 2[129] (effective 1 March 2017).
SECTION 449A
449A
APPOINTMENT OF ADMINISTRATOR CANNOT BE REVOKED
The appointment of a person as administrator of a company or of a deed of company arrangement cannot be revoked.
SECTION 449B
449B
COURT MAY REMOVE ADMINISTRATOR
(Repealed by No 11 of 2016, s 3, Sch 2
[
130] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[130] apply in relation to external administrations on and after 1 September 2017.]
SECTION 449C
VACANCY IN OFFICE OF ADMINISTRATOR OF COMPANY
449C(1)
Where the administrator of a company under administration:
(a)
dies; or
(b)
becomes prohibited from acting as administrator of the company; or
(c)
resigns by notice in writing given to his or her appointer and to the company;
his or her appointer may appoint someone else as administrator of the company.
449C(2)
In subsection (1):
appointer
, in relation to the administrator of a company under administration, means:
(a)
if the administrator was appointed by the Court under Division
90
of Schedule
2
(review of the external administration of a company) or subsection (6) of this section
-
the Court; or
(b)
otherwise:
(i)
if the administration began because of an appointment under section
436A
-
the company; or
(ii)
if the administration began because of an appointment under section
436B
-
a liquidator or provisional liquidator of the company; or
(iii)
if the administration began because of an appointment under section
436C
-
a person who is entitled, or would apart from section
440B
or
441D
be entitled, to enforce the security interest.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[131] apply in relation to external administrations on and after 1 September 2017.]
History
Definition of
appointer
amended by No 11 of 2016, s 3, Sch 2[131] (effective 1 March 2017).
Definition of
appointer
amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
78] (effective 30 January 2012).
449C(3)
An appointment under subsection (1) by the company under administration must be made pursuant to a resolution of the board.
449C(4)
Within 5 business days after being appointed under subsection (1) as administrator of a company otherwise than by the Court, a person must convene a meeting of the company
'
s creditors so that they may:
(a)
determine whether to remove the person from office; and
(b)
if so, appoint someone else as administrator of the company.
449C(5)
(Repealed by No 11 of 2016, s 3, Sch 2
[
132] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[132] apply in relation to external administrations on and after 1 September 2017.]
449C(6)
Where a company is under administration, but for some reason no administrator is acting, the Court may appoint a person as administrator on the application of ASIC or of an officer, member or creditor of the company.
449C(7)
Subsections (3) and (6) have effect despite section
198G
.
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[133] apply in relation to external administrations on and after 1 September 2017.]
History
S 449C(7) amended by No 11 of 2016, s 3, Sch 2[133] (effective 1 March 2017).
SECTION 449CA
DECLARATIONS BY ADMINISTRATOR
-
INDEMNITIES AND RELEVANT RELATIONSHIPS
Scope
449CA(1)
This section applies to an administrator appointed under subsection
449C(1)
otherwise than by the Court.
Declaration of relationships and indemnities
449CA(2)
As soon as practicable after being appointed, the administrator must make:
(a)
a declaration of relevant relationships; and
(b)
a declaration of indemnities.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
Notification of creditors
449CA(3)
The administrator must:
(a)
give a copy of each declaration under subsection
(2)
to as many of the company
'
s creditors as reasonably practicable; and
(b)
do so at the same time as the administrator gives those creditors notice of the meeting convened under subsection
449C(4)
.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
449CA(4)
The administrator must table a copy of each declaration under subsection
(2)
at the meeting convened under subsection
449C(4)
.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
449CA(4A)
As soon as practicable after making a declaration under subsection
(2)
, the administrator must lodge a copy of the declaration with ASIC.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
[
CCH Note:
S 449CA(4A) will be amended by No 69 of 2020, s 3, Sch 1[720], by substituting
"
the Registrar
"
for
"
ASIC
"
, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 449CA(4A) inserted by No 11 of 2016, s 3, Sch 3[25].
[
CCH Note:
S 449CA(4B) will be inserted by No 69 of 2020, s 3, Sch 1[721] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 449CA(4B) will read:
449CA(4B)
The lodgement must meet any requirements of the data standards.]
Updating of declaration
449CA(5)
If:
(a)
at a particular time, the administrator makes:
(i)
a declaration of relevant relationships; or
(ii)
a declaration of indemnities;
under subsection
(2)
or this subsection; and
(b)
at a later time:
(i)
the declaration has become out-of-date; or
(ii)
the administrator becomes aware of an error in the declaration;
the administrator must, as soon as practicable, make:
(c)
if subparagraph (a)(i) applies
-
a replacement declaration of relevant relationships; or
(d)
if subparagraph (a)(ii) applies
-
a replacement declaration of indemnities.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
449CA(6)
The administrator must table a copy of a replacement declaration under subsection
(5)
:
(a)
if:
(i)
there is a committee of inspection; and
(ii)
the next meeting of the committee of inspection occurs before the next meeting of the company
'
s creditors;
at the next meeting of the committee of inspection; or
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[134] apply in relation to external administrations on and after 1 September 2017.]
(b)
in any other case
-
at the next meeting of the company
'
s creditors.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
History
S 449CA(6) amended by No 11 of 2016, s 3, Sch 2[134].
449CA(6A)
As soon as practicable after making a replacement declaration under subsection
(5)
, the administrator must lodge a copy of the replacement declaration with ASIC.
Note: Failure to comply with this subsection is an offence (see subsection
1311(1)
).
[
CCH Note:
S 449CA(6A) will be amended by No 69 of 2020, s 3, Sch 1[722], by substituting
"
the Registrar
"
for
"
ASIC
"
, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 449CA(6A) inserted by No 11 of 2016, s 3, Sch 3[26].
[
CCH Note:
S 449CA(6B) will be inserted by No 69 of 2020, s 3, Sch 1[723] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 449CA(6B) will read:
S 449CA(6B)
The lodgement must meet any requirements of the data standards.]
Defence
449CA(7)
In a prosecution for an offence constituted by a failure to include a particular matter in a declaration under this section, it is a defence if the defendant proves that:
(a)
the defendant made reasonable enquiries; and
(b)
after making these enquiries, the defendant had no reasonable grounds for believing that the matter should have been included in the declaration.
History
S 449CA inserted by No 132 of 2007, s 3, Sch 1, Pt 2
[
24].
SECTION 449D
449D
VACANCY IN OFFICE OF ADMINISTRATOR OF DEED OF COMPANY ARRANGEMENT
(Repealed by No 11 of 2016, s 3, Sch 2
[
135] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[135] apply in relation to external administrations on and after 1 September 2017.]
SECTION 449E
449E
REMUNERATION OF ADMINISTRATOR
(Repealed by No 11 of 2016, s 3, Sch 2
[
135] (effective 1 March 2017).)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[135] apply in relation to external administrations on and after 1 September 2017.]
Division 16
-
Notices about steps taken under Part
SECTION 450A
APPOINTMENT OF ADMINISTRATOR
450A(1)
Where an administrator of a company is appointed under section
436A
,
436B
or
436C
, the administrator must:
(a)
lodge a notice of the appointment before the end of the next business day after the appointment; and
(b)
cause a notice setting out the prescribed information about the appointment to be published, within the period ascertained in accordance with the regulations, in the prescribed manner.
[
CCH Note:
S 450A(1) will be amended by No 69 of 2020, s 3, Sch 1[724], by inserting
"
with the Registrar
"
after
"
lodge
"
in para (a) (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 450A(1) amended by No 48 of 2012, s 3, Sch 1, Pt 2
[
11] (effective 1 July 2012).
[
CCH Note:
S 450A(1AA) will be inserted by No 69 of 2020, s 3, Sch 1[725] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 450A(1AA) will read:
450A(1AA)
A notice under paragraph (1)(a) must meet any requirements of the data standards.]
450A(1A)
A notice under paragraph
(1)(b)
that relates to a company may be combined with a notice under paragraph
436E(3)(b)
that relates to the company.
History
S 450A(1A) inserted by No 132 of 2007, s 3, Sch 1, Pt 3
[
78].
450A(2)
As soon as practicable, and in any event before the end of the next business day, after appointing an administrator of a company under section
436C
, a person must give to the company a written notice of the appointment.
450A(3)
As soon as practicable, and in any event before the end of the next business day, after an administrator of a company is appointed under section
436A
,
436B
or
436C
, he or she must give a written notice of the appointment to:
(a)
each person who holds a security interest in the whole, or substantially the whole, of the company
'
s property; and
(b)
each person who holds 2 or more security interests in property of the company where the property of the company subject to the respective security interests together constitutes the whole, or substantially the whole, of the company
'
s property.
History
S 450A(3) amended by No 130 of 2020, s 3, Sch 4[6].
S 450A(3) amended by No 96 of 2010, s 3, Sch 1, Pt 3
[
79].
S 450A(3) (Note) inserted by No 132 of 2007, s 3, Sch 1, Pt 3
[
79].
450A(4)
An administrator need not give a notice under subsection
(3)
to the person who appointed the administrator.
SECTION 450B
450B
EXECUTION OF DEED OF COMPANY ARRANGEMENT
As soon as practicable after a deed of company arrangement is executed, the deed
'
s administrator must:
(a)
send to each creditor of the company a written notice of the execution of the deed; and
(b)
lodge notice in the prescribed form with ASIC of the execution of the deed.
(c)
(Repealed)
[
CCH Note:
Regulation 10.25.02(3)(g) (which was effective 1 March 2017) provides that the amendments made by No 11 of 2016, s 3, Sch 2[136] apply in relation to external administrations on and after 1 September 2017.]
[
CCH Note 1:
S 450B will be amended by No 69 of 2020, s 3, Sch 1[726] and
[
727], by inserting
"
(1)
"
before
"
As
"
and substituting para (b) (effective 1 July 2026 or a day or days to be fixed by Proclamation). Para (b) will read:
(b)
lodge with the Registrar notice of the execution of the deed.]
[
CCH Note 2:
S 450B(2) will be inserted by No 69 of 2020, s 3, Sch 1[728] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 450B(2) will read:
450B(2)
The notice must meet any requirements of the data standards.]
History
S 450B amended by No 130 of 2020, s 3, Sch 4[7].
S 450B amended by No 11 of 2016, s 3, Sch 2[136].
S 450B amended by No 132 of 2007, s 3, Sch 1, Pt 3
[
80].
S 450B (Note) inserted by No 132 of 2007, s 3, Sch 1, Pt 3
[
81].
SECTION 450C
450C
FAILURE TO EXECUTE DEED OF COMPANY ARRANGEMENT
As soon as practicable after a company contravenes subsection
444B(2)
, the deed
'
s administrator must:
(a)
lodge a notice that the company has failed to execute the instrument within the required period; and
(b)
send such a notice to each of the company
'
s creditors.
[
CCH Note 1:
S 450C will be amended by No 69 of 2020, s 3, Sch 1[729] and
[
730], by inserting
"
(1)
"
before
"
As
"
and
"
with the Registrar
"
after
"
lodge
"
in para (a) (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
[
CCH Note 2:
S 450C(2) will be inserted by No 69 of 2020, s 3, Sch 1[731] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 450C(2) will read:
450C(2)
The notice must meet any requirements of the data standards.]
History
S 450C amended by No 130 of 2020, s 3, Sch 4[8].
S 450C amended by No 132 of 2007, s 3, Sch 1, Pt 3
[
82] and
[
83].
SECTION 450D
450D
TERMINATION OF DEED OF COMPANY ARRANGEMENT
Where a deed of company arrangement terminates because of paragraph
445C(b)
, the deed
'
s administrator must:
(a)
lodge a notice of the termination; and
(b)
send such a notice to each of the company
'
s creditors.
(c)
(Repealed by No 132 of 2007)
[
CCH Note 1:
S 450D will be amended by No 69 of 2020, s 3, Sch 1[732] and
[
733], by inserting
"
(1)
"
before
"
Where
"
and
"
with the Registrar
"
after
"
lodge
"
in para (a) (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
[
CCH Note 2:
S 450D(2) will be inserted by No 69 of 2020, s 3, Sch 1[734] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 450D(2) will read:
450D(2)
The notice must meet any requirements of the data standards.]
History
S 450D amended by No 130 of 2020, s 3, Sch 4[9].
S 450D amended by No 132 of 2007, s 3, Sch 1, Pt 3
[
84]
-
[
86].
SECTION 450E
NOTICE IN PUBLIC DOCUMENTS ETC. OF COMPANY
450E(1)
[
``(`administrator appointed')'']
A company under administration must set out, in every public document, and in every negotiable instrument, of the company, after the company's name where it first appears, the expression (``administrator appointed'').
450E(2)
[
``(`subject to deed of company arrangement')'']
Except with the leave of the Court, until a deed of company arrangement terminates, the company must set out, in every public document, and in every negotiable instrument, of the company, after the company's name where it first appears, the expression (``subject to deed of company arrangement'').
History
S 450E(2) amended by No 132 of 2007, s 3, Sch 4, Pt 1
[
41] (effective 31 December 2007).
450E(3)
[
Strict liability offence]
An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For
strict liability
, see section 6.1 of the
Criminal Code
.
History
S 450E(3) inserted by No 117 of 2001, s 3, Sch 1
[
124] (effective 15 December 2001).
450E(4)
[
Standing to apply for leave]
The Court may only grant leave under subsection (2) on the application of:
(a)
the administrator of the deed of company arrangement; or
(b)
any interested person.
History
S 450E(4) inserted by No 132 of 2007, s 3, Sch 4, Pt 1
[
42] (effective 31 December 2007).
450E(5)
[
Conditions for granting leave]
The Court may only grant leave under subsection (2) if it is satisfied that the granting of leave will not result in any significant risk to the interests of the company
'
s creditors (including contingent or prospective creditors) as a whole.
History
S 450E(5) inserted by No 132 of 2007, s 3, Sch 4, Pt 1
[
42] (effective 31 December 2007).
SECTION 450F
450F
EFFECT OF CONTRAVENTION OF THIS DIVISION
A contravention of this Division does not affect the validity of anything done or omitted under this Part, except so far as the Court otherwise orders.
Division 17
-
Miscellaneous
SECTION 451A
APPOINTMENT OF 2 OR MORE ADMINISTRATORS OF COMPANY
451A(1)
[
Two or more persons may be appointed]
Where a provision of this Act provides for an administrator of a company to be appointed, 2 or more persons may be appointed as administrators of the company.
451A(2)
[
How two or more administrators to exercise powers, etc]
Where, because of subsection (1), there are 2 or more administrators of a company:
(a)
a function or power of an administrator of the company may be performed or exercised by any one of them, or by any 2 or more of them together, except so far as the instrument or resolution appointing them otherwise provides; and
(b)
a reference in this Act to an administrator, or to the administrator, of a company is, in the case of the first-mentioned company, a reference to whichever one or more of those administrators the case requires.
SECTION 451B
APPOINTMENT OF 2 OR MORE ADMINISTRATORS OF DEED OF COMPANY ARRANGEMENT
451B(1)
[
Two or more persons may be appointed]
Where a provision of this Act provides for an administrator of a deed of company arrangement to be appointed, 2 or more persons may be appointed as administrators of the deed.
451B(2)
[
How two or more administrators to exercise powers, etc]
Where, because of subsection (1), there are 2 or more administrators of a deed of company arrangement:
(a)
a function or power of an administrator of the deed may be performed or exercised by any one of them, or by any 2 or more of them together, except so far as the deed, or the resolution or instrument appointing them, otherwise provides; and
(b)
a reference in this Act to an administrator, or to the administrator, of a deed of company arrangement is, in the case of the first-mentioned deed, a reference to whichever one or more of those administrators the case requires.
SECTION 451C
451C
EFFECT OF THINGS DONE DURING ADMINISTRATION OF COMPANY
A payment made, transaction entered into, or any other act or thing done, in good faith, by, or with the consent of, the administrator of a company under administration:
(a)
is valid and effectual for the purposes of this Act; and
(b)
is not liable to be set aside in a winding up of the company.
SECTION 451D
451D
TIME FOR DOING ACT DOES NOT RUN WHILE ACT PREVENTED BY THIS PART
Where:
(a)
for any purpose (for example, thepurposes of a law, agreement or instrument) an act must or may be done within a particular period or before a particular time; and
(b)
this Part prevents the act from being done within that period or before that time;
the period is extended, or the time is deferred, because of this section, according to how long this Part prevented the act from being done.
SECTION 451E
STAY ON ENFORCING RIGHTS MERELY BECAUSE THE COMPANY IS UNDER ADMINISTRATION ETC.
Stay on enforcing rights
451E(1)
A right cannot be enforced against a company for:
(a)
the reason that the company has come or is under administration; or
(b)
the company
'
s financial position, if the company is under administration; or
(c)
a reason, prescribed by the regulations for the purposes of this paragraph, that relates to:
(i)
the company coming, or possibly coming, under administration; or
(ii)
the company
'
s financial position;
if the company later comes under administration; or
(d)
a reason that, in substance, is contrary to this subsection;
if the right arises for that reason by express provision (however described) of a contract, agreement or arrangement.
Note: This result is subject to subsections (5) and (7), and to any order under section
451F
.
Example: A right to terminate a contract will not be enforceable to the extent that those rights are triggered by the company coming under administration.
Period of the stay
451E(2)
The right cannot be enforced as described in subsection (1) during the period (the
stay period
) starting when the company comes under administration and ending at the latest of the following:
(a)
when the administration ends;
(b)
if one or more orders are made under subsection (3) for the company as the result of an application made before the administration ends
-
when the last made of those orders ceases to be in force;
(c)
if the administration ends because of a resolution or order for the company to be wound up
-
when the company
'
s affairs have been fully wound up.
451E(3)
The Court:
(a)
may order an extension of the period otherwise applying under subsection (2) for the company if the Court is satisfied that the extension is appropriate having regard to the interests of justice; and
(b)
before deciding an application for an order under paragraph (a), may grant an interim order, but must not require the applicant to give an undertaking as to damages as a condition for doing so.
Enforcing rights after the stay for reasons relating to earlier circumstances
451E(4)
The right is unenforceable against the company indefinitely after the end of the stay period to the extent that a reason for seeking to enforce the right:
(a)
is the company
'
s financial position before the end of the stay period; or
(b)
is the company having come or been under administration before the end of the stay period; or
(c)
is a reason, prescribed by the regulations for the purposes of this paragraph, relating to circumstances in existence during the stay period; or
(d)
is a reason referred to in paragraph (1)(c) or (d).
Rights not subject to the stay
451E(5)
Subsection (1) does not apply to the right if it is:
(a)
a right under a contract, agreement or arrangement entered into after the company comes under administration; or
(b)
a right contained in a kind of contract, agreement or arrangement:
(i)
prescribed by the regulations for the purposes of this subparagraph; or
(ii)
declared under paragraph (6)(a); or
(c)
a right of a kind:
(i)
prescribed by the regulations for the purposes of this subparagraph; or
(ii)
declared under paragraph (6)(b); or
(d)
a right of a kind declared under paragraph (6)(c), and the circumstances specified in that declaration exist.
Note: Subsection (1) also does not apply to certain secured creditors (see Subdivision B of Division 7).
History
S 451E(5) amended by No 6 of 2020, s 3, Sch 1[6] (effective 18 February 2020).
451E(6)
For the purposes of subsection (5), the Minister may, by legislative instrument:
(a)
declare kinds of contracts, agreements or arrangements referred to in a specified law of the Commonwealth; or
(b)
declare kinds of rights to which subsection (1) does not apply; or
(c)
declare kinds of rights to which subsection (1) does not apply in specified circumstances.
451E(7)
Subsection (1) does not apply to the right to the extent that:
(a)
the administrator of the company; or
(b)
if a liquidator of the company is appointed after the administration ends
-
the liquidator;
has consented in writing to the enforcement of the right.
Stay on company
'
s right to new advance of money or credit
451E(8)
If:
(a)
one or more rights of an entity cannot be enforced against a company for a period because of subsection (1); and
(b)
the company has a right under a contract, agreement or arrangement against the entity for a new advance of money or credit;
that right of the company cannot be enforced during the same period.
History
S 451E inserted by No 112 of 2017, s 3, Sch 1[14] (applicable in relation to rights arising under, or self-executing provisions of, contracts, agreements or arrangements entered into at or after 1 July 2018).
SECTION 451F
LIFTING THE STAY
451F(1)
The Court may order that subsection
451E(1)
does not apply for one or more rights against a company if the Court is satisfied that this is appropriate in the interests of justice.
451F(2)
An application for the order may be made by the holder of those rights.
History
S 451F inserted by No 112 of 2017, s 3, Sch 1[14] (applicable in relation to rights arising under, or self-executing provisions of, contracts, agreements or arrangements entered into at or after 1 July 2018).
SECTION 451G
ORDER FOR RIGHTS TO BE ENFORCEABLE ONLY WITH LEAVE OF THE COURT
Orders
451G(1)
The Court may order that one or more rights under a contract, agreement or arrangement are enforceable against a company only:
(a)
with the leave of the Court; and
(b)
in accordance with such terms (if any) as the Court imposes.
Example: The order could be sought for a right to terminate for convenience.
451G(2)
The Court may make the order if:
(a)
the company is under administration; and
(b)
the Court is satisfied that:
(i)
the rights are being exercised; or
(ii)
the rights are likely to be exercised; or
(iii)
there is a threat to exercise the rights;
because of one or more reasons referred to in paragraphs
451E(1)(a)
to (d); and
(c)
an application for the order is made by the administrator of the company.
451G(3)
An order under subsection (1) must specify the period for which it applies. In working out the period, the Court must have regard to:
(a)
subsections
451E(2)
,
(3)
and
(4)
; and
(b)
the interests of justice.
451G(4)
Subsection (1) does not apply to a right referred to in subsection
451E(5)
or
(7)
.
Note: An order under subsection (1) also does not restrict certain secured creditors (see Subdivision
B
of Division
7
).
Interim orders
451G(5)
Before deciding an application for an order under subsection (1), the Court may grant an interim order for one or more rights under a contract, agreement or arrangement not to be enforced against a company.
451G(6)
The Court must not require an applicant for an order under subsection (1) to give an undertaking as to damages as a condition of granting an interim order.
History
S 451G inserted by No 112 of 2017, s 3, Sch 1
[
14] (applicable in relation to rights arising under, or self-executing provisions of, contracts, agreements or arrangements entered into at or after 1 July 2018).
SECTION 451GA
SELF-EXECUTING PROVISIONS
451GA(1)
The object of subsection (2) is to ensure that a self-executing provision:
(a)
cannot start to apply against a company for certain reasons; and
(b)
can be the subject of a Court order providing that the provision can only start to apply against a company with the leave of the Court, and in accordance with such terms (if any) as the Court imposes.
451GA(2)
Sections
451E
to
451G
also apply in relation to a self-executing provision in a corresponding way to the way they apply in relation to a right. For this purpose, assume those sections apply with such modifications as are necessary, including any prescribed by the regulations for the purposes of this subsection.
Note 1: This subsection achieves the object in subsection (1) by extending the application of all of the outcomes, exceptions and powers in sections
451E
to
451G
.
Note 2: These modifications include, for example, treating:
(a) a reference that a right cannot be enforced (however described) as including a reference that a self-executing provision cannot start to apply; and
(b) the words
"
if the right arises for that reason by express provision (however described) of a contract, agreement or arrangement
"
as being omitted from subsection
451E(1)
; and
(c) a reference that one or more rights are enforceable as including a reference that one or more self-executing provisions can start to apply; and
(d) paragraph
451G(2)(b)
as alternatively providing that the Court is satisfied that one or more reasons referred to in paragraphs
451E(1)(a)
to (d) can cause the self-executing provisions to start to apply.
451GA(3)
In this section:
self-executing provision
means a provision of a contract, agreement or arrangement that can start to apply automatically:
(a)
for one or more reasons; and
(b)
without any party to the contract, agreement or arrangement making a decision that the provision should start to apply.
History
S 451GA inserted by No 112 of 2017, s 3, Sch 1
[
14] (applicable in relation to rights arising under, or self-executing provisions of, contracts, agreements or arrangements entered into at or after 1 July 2018).
SECTION 451H
451H
WHEN OTHER LAWS PREVAIL
-
CERTAIN OTHER COMMONWEALTH ACTS
If there is any inconsistency between sections
451E
to
451GA
and one of the following Acts, that Act prevails to the extent of the inconsistency:
(a)
the
Payment Systems and Netting Act 1998
;
(b)
the
International Interests in Mobile Equipment (Cape Town Convention) Act 2013
.
History
S 451H inserted by No 112 of 2017, s 3, Sch 1
[
14] (applicable in relation to rights arising under, or self-executing provisions of, contracts, agreements or arrangements entered into at or after 1 July 2018).