Corporations Act 2001

CHAPTER 2L - DEBENTURES  

PART 2L.1 - REQUIREMENT FOR TRUST DEED AND TRUSTEE  

SECTION 283AA   REQUIREMENT FOR TRUST DEED AND TRUSTEE  

283AA(1)    
Before a body:


(a) makes an offer of debentures in this jurisdiction that needs disclosure to investors under Chapter 6D , or does not need disclosure to investors under Chapter 6D because of subsection 708(14) (disclosure document exclusion for debenture roll overs) or section 708A (sale offers that do not need disclosure); or


(b) makes an offer of debentures in this jurisdiction or elsewhere as consideration for the acquisition of securities under an off-market takeover bid; or


(c) issues debentures in this jurisdiction or elsewhere under a compromise or arrangement under Part 5.1 approved at a meeting held as a result of an order under subsection 411(1) or (1A) ;

regardless of where any resulting issue, sale or transfer occurs, the body must enter into a trust deed that complies with section 283AB and appoint a trustee that complies with section 283AC .

Note: For rules about when an offer of debentures will need disclosure to investors under Chapter 6D , see sections 706 , 707 , 708 , 708AA and 708A .


283AA(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 .


283AA(2)    
The body may revoke the trust deed after it has repaid all amounts payable under the debentures in accordance with the debentures ' terms and the trust deed.

283AA(3)    
The body must comply with this Chapter.

Note: Sections 168 and 601CZB require a register of debenture holders to be set up and kept.


283AA(4)    


The regulations may exempt a specified offer of debentures, or a specified class of offers of debentures, from subsection (1).

SECTION 283AB   TRUST DEED  

283AB(1)   [ Requirements]  

The trust deed must provide that the following are held in trust by the trustee for the benefit of the debenture holders:


(a) the right to enforce the borrower's duty to repay;


(b) any charge or security for repayment;


(c) the right to enforce any other duties that the borrower and any guarantor have under:


(i) the terms of the debentures; or

(ii) the provisions of the trust deed or this Chapter.

Note: For information about the duties that the borrower and any guarantor body have under this Chapter, see sections 283BB to 283CE.

283AB(2)   [ 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 .

SECTION 283AC   WHO CAN BE A TRUSTEE  
Who can be trustee

283AC(1)    
The trustee must be:


(a) the Public Trustee of any State or Territory; or


(aa) a licensed trustee company; or


(b) a body corporate authorised by a law of any State or Territory to take in its own name a grant of probate of the will, or letters of administration of the estate, of a deceased person; or


(c) a body corporate registered under section 21 of the Life Insurance Act 1995 ; or


(d) an Australian ADI; or


(e) a body corporate, all of whose shares are held beneficially by a body corporate or bodies corporate of the kind referred to in paragraph (b), (c) or (d) if that body or those bodies:


(i) are liable for all of the liabilities incurred, or to be incurred, by the trustee as trustee; or

(ii) have subscribed for and beneficially hold shares in the trustee and there is an uncalled liability of at least $500,000 in respect of those shares that can only be called up if the trustee becomes a Chapter 5 body corporate (see section 254N ); or


(f) a body corporate approved by ASIC (see section 283GB ).

Note: Section 283BD provides that if the borrower becomes aware that the trustee cannot be a trustee, the trustee must be replaced.



Circumstances in which a person cannot be trustee

283AC(2)    
A person may only be appointed or act as trustee (except to the extent provided for by section 283AD ) if the appointment or acting will not result in a conflict of interest or duty. This subsection is not intended to affect any rule of law or equity.

283AC(3)    


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 .


SECTION 283AD  

283AD   EXISTING TRUSTEE CONTINUES TO ACT UNTIL NEW TRUSTEE TAKES OFFICE  
An existing trustee continues to act as the trustee until a new trustee is appointed and has taken office as trustee, despite any rule of law or equity to the contrary.

Note: This section applies even if the existing trustee resigns.

SECTION 283AE   REPLACEMENT OF TRUSTEE  

283AE(1)   Related party of existing trustee may be appointed as a new trustee.  

In addition to any other powers of appointment under the terms of the debentures or provisions of the trust deed, the borrower may appoint a body corporate that is related to the existing trustee as trustee in place of the existing trustee if:


(a) the body corporate can be a trustee under section 283AC; and


(b) the existing trustee consents in writing to the appointment.

The appointment has effect despite any terms of the debentures or provisions of the trust deed.

283AE(2)   Appointment by Court.  

The Court may:


(a) appoint a person who may be a trustee under section 283AC as trustee on the application of the borrower, a debenture holder or ASIC if:


(i) a trustee has not been validly appointed; or

(ii) the trustee has ceased to exist; or


(b) terminate the existing trustee's appointment and appoint a person who may be a trustee under section 283AC as trustee in the existing trustee's place on the application of the borrower, the existing trustee, a debenture holder or ASIC if:


(i) the existing trustee cannot be trustee under section 283AC; or

(ii) the existing trustee fails, or refuses, to act.