Banking Act 1959

Part II - Provisions relating to the carrying on of banking business

Division 2 - Protection of depositors

Subdivision AA - Recapitalisation directions by APRA

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SECTION 13N Recapitalisation direction not grounds for denial of obligations

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(1)

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This section applies if a body corporate is party to a contract, whether the proper law of the contract is:

(a) Australian law (including the law of a State or Territory); or

(b) law of a foreign country (including the law of part of a foreign country).

(2)

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None of the matters mentioned in subsection (3) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:

(a) deny any obligation under the contract;

(b) accelerate any debt under the contract;

(c) close out any transaction relating to the contract;

(d) enforce any security under the contract.

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(3)

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The matters are as follows:

(a) the body corporate being subject to a recapitalisation direction;

(b) if the body corporate is a member of a relevant group of bodies corporate - another member of the group being subject to a recapitalisation direction.

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History

S 13N substituted by No 10 of 2018, s 3 and Sch 1 item 102, effective 5 March 2018. For application provisions, see note under Subdiv D heading of Pt II Div 1BA. S 13N formerly read:

SECTION 13N Recapitalisation direction not grounds for denial of obligations
(1)
This section applies if an ADI is party to a contract, whether the proper law of the contract is:

(a) Australian law, including the law of a State or Territory; or

(b) law of a foreign country, including the law of part of a foreign country.

(2)
The fact that the ADI is subject to a recapitalisation direction does not allow the contract, or a party to the contract, other than the ADI, to do any of the following:

(a) deny any obligation under the contract;

(b) accelerate any debt under the contract;

(c) close out any transaction relating to the contract;

(d) enforce any security under that contract.
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History

S 13N(2) amended by No 43 of 2016, s 3 and Sch 1 item 38, by inserting para (d), applicable in relation to the enforcement of a security after 1 June 2016, even if the security was given before 1 June 2016.

S 13N inserted by No 82 of 2010, s 3 and Sch 1 item 25, effective 27 July 2010.

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