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This is a Bill, not an Act. For current law, see the Acts databases.
2016-2017
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Treasury Laws Amendment (2017
Enterprise Incentives No. 2) Bill 2017
No. , 2017
(Treasury)
A Bill for an Act to amend the law relating to
corporations, and for related purposes
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 2
Schedule 1--Amendments
3
Part 1--Safe harbour for insolvent trading
3
Corporations Act 2001
3
Part 2--Stay on enforcing rights merely because of
arrangements or restructures
10
Corporations Act 2001
10
Payment Systems and Netting Act 1998
25
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
1
A Bill for an Act to amend the law relating to
1
corporations, and for related purposes
2
The Parliament of Australia enacts:
3
1 Short title
4
This Act is the Treasury Laws Amendment (2017 Enterprise
5
Incentives No. 2) Act 2017.
6
2 Commencement
7
(1) Each provision of this Act specified in column 1 of the table
8
commences, or is taken to have commenced, in accordance with
9
column 2 of the table. Any other statement in column 2 has effect
10
according to its terms.
11
12
2
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. Sections 1 to 3
and anything in
this Act not
elsewhere covered
by this table
The day this Act receives the Royal Assent.
2. Schedule 1,
Part 1
The day after this Act receives the Royal
Assent.
3. Schedule 1,
Part 2
A single day to be fixed by Proclamation.
However, if the provisions do not commence
on or before the later of:
(a) 30 June 2018; and
(b) the last day of the period of 6 months
beginning on the day this Act receives
the Royal Assent;
they commence on the day after that later
day.
Note:
This table relates only to the provisions of this Act as originally
1
enacted. It will not be amended to deal with any later amendments of
2
this Act.
3
(2) Any information in column 3 of the table is not part of this Act.
4
Information may be inserted in this column, or information in it
5
may be edited, in any published version of this Act.
6
3 Schedules
7
Legislation that is specified in a Schedule to this Act is amended or
8
repealed as set out in the applicable items in the Schedule
9
concerned, and any other item in a Schedule to this Act has effect
10
according to its terms.
11
Amendments Schedule 1
Safe harbour for insolvent trading Part 1
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
3
Schedule 1--Amendments
1
Part 1--Safe harbour for insolvent trading
2
Corporations Act 2001
3
1 After subsection 588E(8)
4
Insert:
5
(8A) If, for the purposes of another recovery proceeding in relation to
6
the company, evidence has been adduced or pointed to that
7
suggests a reasonable possibility of:
8
(a) subsection 588GA(1) applying in relation to a person and a
9
debt; or
10
(b) subsection 588WA(1) applying in relation to a corporation
11
and a debt;
12
it must be presumed that that reasonable possibility exists.
13
2 After section 588G
14
Insert:
15
588GA Safe harbour--taking course of action reasonably likely to
16
lead to a better outcome for the company
17
Safe harbour
18
(1) Subsection 588G(2) does not apply in relation to a person and a
19
debt if:
20
(a) at a particular time after the person starts to suspect the
21
company may become or be insolvent, the person starts
22
developing one or more courses of action that are reasonably
23
likely to lead to a better outcome for the company; and
24
(b) the debt is incurred directly or indirectly in connection with
25
any such course of action during the period starting at that
26
time, and ending at the earliest of any of the following times:
27
(i) if the person fails to take any such course of action
28
within a reasonable period after that time--the end of
29
that reasonable period;
30
Schedule 1 Amendments
Part 1 Safe harbour for insolvent trading
4
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
(ii) when the person ceases to take any such course of
1
action;
2
(iii) when any such course of action ceases to be reasonably
3
likely to lead to a better outcome for the company;
4
(iv) the appointment of an administrator, or liquidator, of the
5
company.
6
Note 1:
The person bears an evidential burden in relation to the matter in this
7
subsection (see subsection (3)).
8
Note 2:
For subsection (1) to be available, certain matters must be being done
9
or be done (see subsections (4) and (5)).
10
Working out whether a course of action is reasonably likely to lead
11
to a better outcome
12
(2) For the purposes of (but without limiting) subsection (1), in
13
working out whether a course of action is reasonably likely to lead
14
to a better outcome for the company, regard may be had to whether
15
the person:
16
(a) is properly informing himself or herself of the company's
17
financial position; or
18
(b) is taking appropriate steps to prevent any misconduct by
19
officers or employees of the company that could adversely
20
affect the company's ability to pay all its debts; or
21
(c) is taking appropriate steps to ensure that the company is
22
keeping appropriate financial records consistent with the size
23
and nature of the company; or
24
(d) is obtaining advice from an appropriately qualified entity
25
who was given sufficient information to give appropriate
26
advice; or
27
(e) is developing or implementing a plan for restructuring the
28
company to improve its financial position.
29
(3) A person who wishes to rely on subsection (1) in a proceeding for,
30
or relating to, a contravention of subsection 588G(2) bears an
31
evidential burden in relation to that matter.
32
Matters that must be being done or be done
33
(4) Subsection (1) does not apply in relation to a person and a debt if:
34
Amendments Schedule 1
Safe harbour for insolvent trading Part 1
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
5
(a) when the debt is incurred, the company is failing to do one or
1
more of the following matters:
2
(i) pay the entitlements of its employees by the time they
3
fall due;
4
(ii) give returns, notices, statements, applications or other
5
documents as required by taxation laws (within the
6
meaning of the Income Tax Assessment Act 1997); and
7
(b) that failure:
8
(i) amounts to less than substantial compliance with the
9
matter concerned; or
10
(ii) is one of 2 or more failures by the company to do any or
11
all of those matters during the 12 month period ending
12
when the debt is incurred;
13
unless an order applying to the person and that failure is in force
14
under subsection (6).
15
Note:
Employee entitlements are defined in subsection 596AA(2) and
16
include superannuation contributions payable by the company.
17
(5) Subsection (1) is taken never to have applied in relation to a person
18
and a debt if:
19
(a) after the debt is incurred, the person fails to comply with
20
paragraph 429(2)(b), or subsection 475(1), 497(4) or
21
530A(1), in relation to the company; and
22
(b) that failure amounts to less than substantial compliance with
23
the provision concerned;
24
unless an order applying to the person and that failure is in force
25
under subsection (6).
26
(6) The Court may order that subsection (4) or (5) does not apply to a
27
person and one or more failures if:
28
(a) the Court is satisfied that the failures were due to exceptional
29
circumstances or that it is otherwise in the interests of justice
30
to make the order; and
31
(b) an application for the order is made by the person.
32
Definitions
33
(7) In this section:
34
Schedule 1 Amendments
Part 1 Safe harbour for insolvent trading
6
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
better outcome, for the company, means an outcome that is better
1
for the company than the immediate appointment of an
2
administrator, or liquidator, of the company.
3
evidential burden, in relation to a matter, means the burden of
4
adducing or pointing to evidence that suggests a reasonable
5
possibility that the matter exists or does not exist.
6
588GB Information or books not admissible to support the safe
7
harbour if failure to permit inspection etc.
8
When books or information not admissible for the safe harbour
9
(1) If, at a particular time:
10
(a) a person fails to permit the inspection of, or deliver, any
11
books of the company in accordance with:
12
(i) a notice given to the person under subsection 438C(3),
13
section 477 or subsection 530B(4); or
14
(ii) an order made under section 486; or
15
(iii) subsection 438B(1), 477(3) or 530A(1); or
16
(b) a warrant is issued under subsection 530C(2) because the
17
Court is satisfied that a person has concealed, destroyed or
18
removed books of the company or is about to do so;
19
those books, and any secondary evidence of those books, are not
20
admissible in evidence for the person in a relevant proceeding.
21
Note:
For subparagraph (a)(i), a liquidator could give such a notice if this is
22
necessary for winding up the affairs of the company and distributing
23
its property (see paragraph 477(2)(m)).
24
(2) If, at a particular time, a person fails to give any information about
25
the company in accordance with:
26
(a) a notice given to the person under section 477; or
27
(b) paragraph 429(2)(b) or (c) or subsection 438B(2) or (3),
28
475(1), 497(4) or 530A(1) or (2);
29
that information is not admissible in evidence for the person in a
30
relevant proceeding.
31
Amendments Schedule 1
Safe harbour for insolvent trading Part 1
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
7
Exceptions
1
(3) However, subsection (1) or (2) does not apply to a person, and a
2
book or information, if:
3
(a) the person proves that:
4
(i) the person did not possess the book or information at
5
any time referred to in that subsection; and
6
(ii) there were no reasonable steps the person could have
7
taken to obtain the book or information; or
8
(b) each entity seeking to rely on the notice, order, subsection,
9
paragraph or warrant referred to in that subsection fails to
10
comply with subsection (5) in relation to the person; or
11
(c) an order applying to the person, and the book or information,
12
is in force under subsection (4).
13
(4) The Court may order that subsection (1) or (2) does not apply to a
14
person, and a book or information, if:
15
(a) the Court is satisfied that the failures by the person as
16
mentioned in that subsection were due to exceptional
17
circumstances or that it is otherwise in the interests of justice
18
to make the order; and
19
(b) an application for the order is made by the person.
20
Notice of effect of this section must be given
21
(5) An entity that seeks to rely on a notice, order, subsection or
22
warrant referred to in subsection (1) or (2) must set out the effect
23
of this section:
24
(a) for a notice under subsection 438C(3), section 477 or
25
subsection 530B(4)--in that notice; or
26
(b) for an order under section 486 or for subsection 438B(3),
27
477(3) or 530A(2)--in a written notice given to the person
28
when the entity seeks to rely on that order or subsection; or
29
(c) for a warrant issued under subsection 530C(2)--in a written
30
notice given to the person when the entity seeks to exercise
31
the warrant.
32
This subsection does not apply to an entity that seeks to rely on
33
paragraph 429(2)(b) or (c) or subsection 438B(1) or (2), 475(1),
34
497(4) or 530A(1).
35
Schedule 1 Amendments
Part 1 Safe harbour for insolvent trading
8
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
(6) A failure to comply with subsection (5) does not affect the validity
1
of the notice, order, subsection or warrant referred to in
2
subsection (5).
3
Definitions
4
(7) In this section:
5
relevant proceeding means a proceeding:
6
(a) for, or relating to, a contravention of subsection 588G(2); and
7
(b) in which a person seeks to rely on subsection 588GA(1).
8
Example: A proceeding under section 588M.
9
3 Section 588H (heading)
10
Repeal the heading, substitute:
11
588H Defences about reasonable grounds, illness or reasonable steps
12
4 After section 588W
13
Insert:
14
588WA Safe harbour--taking reasonable steps to ensure company's
15
directors have the benefit of the directors' safe harbour
16
(1) Subsection 588V(1) does not apply in relation to a corporation that
17
is the holding company of a company, and to a debt, if:
18
(a) the corporation takes reasonable steps to ensure that
19
subsection 588GA(1) (about a safe harbour for directors
20
taking certain courses of action) applies in relation to:
21
(i) each of the directors of the company; and
22
(ii) the debt; and
23
(b) subsection 588GA(1) does so apply in relation to each of
24
those directors and to the debt.
25
(2) A corporation that wishes to rely on subsection (1) in a proceeding
26
for, or relating to, a contravention of subsection 588V(1) bears an
27
evidential burden in relation to that matter.
28
(3) In this section:
29
Amendments Schedule 1
Safe harbour for insolvent trading Part 1
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
9
evidential burden, in relation to a matter, means the burden of
1
adducing or pointing to evidence that suggests a reasonable
2
possibility that the matter exists or does not exist.
3
5 Section 588X (heading)
4
Repeal the heading, substitute:
5
588X Defences about reasonable grounds, illness or reasonable steps
6
6 Application of amendments
7
The amendments made by this Part apply in relation to:
8
(a) courses of action developed or taken before, at or after the
9
commencement of this Part; and
10
(b) debts incurred at or after that commencement.
11
Schedule 1 Amendments
Part 2 Stay on enforcing rights merely because of arrangements or restructures
10
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
Part 2--Stay on enforcing rights merely because of
1
arrangements or restructures
2
Corporations Act 2001
3
7 At the end of Part 5.1
4
Add:
5
415D Stay on enforcing rights merely because of a proceeding under
6
this Part etc.
7
(1) A right cannot be enforced against a body for:
8
(a) the reason that the body, if it is a disclosing entity, has
9
publicly announced that it will be making an application
10
under section 411 for the purpose of avoiding being wound
11
up in insolvency; or
12
(b) the reason that the body is the subject of an application under
13
section 411; or
14
(c) the reason that the body is the subject of a compromise or
15
arrangement approved under this Part as a result of an
16
application under section 411; or
17
(d) any of the following reasons:
18
(i) the body's financial position;
19
(ii) a reason prescribed by the regulations for the purposes
20
of this subparagraph;
21
however disregard the reason if the body is not the subject of
22
such an announcement, application, compromise or
23
arrangement;
24
if the right arises for that reason by express provision (however
25
described) of a contract, agreement or arrangement.
26
Note:
This result is subject to subsections (5), (6) and (8), and to any order
27
under section 415E.
28
Example: A right to terminate a contract will not be enforceable to the extent
29
that those rights are triggered by the body becoming the subject of
30
such an announcement, application, compromise or arrangement.
31
Amendments Schedule 1
Stay on enforcing rights merely because of arrangements or restructures Part 2
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
11
Period of the stay
1
(2) The right cannot be enforced as described in subsection (1) during
2
the period (the stay period) that:
3
(a) starts:
4
(i) if the body makes an announcement referred to in
5
paragraph (1)(a)--when the announcement is made; or
6
(ii) otherwise--when the application under section 411 is
7
made; and
8
(b) ends:
9
(i) if the body makes an announcement referred to in
10
paragraph (1)(a), and fails to make the announced
11
application within the next 3 months or within any
12
period ordered under subsection (3) for the body--at the
13
end of the longer of those periods; or
14
(ii) when the application under section 411 is withdrawn or
15
when the Court dismisses the application; or
16
(iii) unless subparagraph (iv) applies--at the end of any
17
compromise or arrangement approved under this Part as
18
a result of the application under section 411; or
19
(iv) if such a compromise or arrangement ends because of a
20
resolution or order for the body to be wound up--when
21
the body's affairs have been fully wound up.
22
(3) The Court may order a longer period than the 3 months otherwise
23
applying under subparagraph (2)(b)(i) for the body if the Court is
24
satisfied that the longer period is appropriate having regard to the
25
interests of justice.
26
Enforcing rights after the stay for reasons relating to earlier
27
circumstances
28
(4) The right is unenforceable against the body indefinitely after the
29
end of the stay period to the extent that a reason for seeking to
30
enforce the right:
31
(a) is the body's financial position before the end of the stay
32
period; or
33
(b) is the body having been the subject of any of the following
34
before the end of the stay period:
35
(i) an announcement referred to in paragraph (1)(a);
36
Schedule 1 Amendments
Part 2 Stay on enforcing rights merely because of arrangements or restructures
12
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
(ii) an application under section 411;
1
(iii) a compromise or arrangement approved under this Part
2
as a result of an application under section 411; or
3
(c) is a reason, prescribed by the regulations for the purposes of
4
this paragraph, relating to circumstances in existence during
5
the stay period.
6
Application must be made to avoid insolvency
7
(5) However, subsection (1) does not apply, and is taken never to have
8
applied, if the application under section 411 fails to state that it is
9
being made for the purpose of the body avoiding being wound up
10
in insolvency.
11
Rights not subject to the stay
12
(6) Subsection (1) does not apply to the right if it is:
13
(a) a right under a contract, agreement or arrangement entered
14
into after the day the order (if any) approving under this Part
15
a compromise or arrangement as a result of the application
16
takes effect; or
17
(b) a right contained in a kind of contract, agreement or
18
arrangement:
19
(i) prescribed by the regulations for the purposes of this
20
subparagraph; or
21
(ii) declared under paragraph (7)(a); or
22
(c) a right of a kind declared under paragraph (7)(b); or
23
(d) a right of a kind declared under paragraph (7)(c), and the
24
circumstances specified in that declaration exist.
25
Note:
For paragraph (a), subsection 411(10) sets out when the order takes
26
effect.
27
(7) For the purposes of subsection (6), the Minister may, by legislative
28
instrument:
29
(a) declare kinds of contracts, agreements or arrangements
30
referred to in a specified law of the Commonwealth; or
31
(b) declare kinds of rights to which subsection (1) does not
32
apply; or
33
(c) declare kinds of rights to which subsection (1) does not apply
34
in specified circumstances.
35
Amendments Schedule 1
Stay on enforcing rights merely because of arrangements or restructures Part 2
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
13
(8) If the application under section 411 results in the approval under
1
this Part of a compromise or arrangement, subsection (1) does not
2
apply to the right to the extent that the person appointed to
3
administer the compromise or arrangement has consented in
4
writing to the enforcement of the right.
5
Stay on body's right to new advance of money or credit
6
(9) If:
7
(a) one or more rights of an entity cannot be enforced against a
8
body for a period because of subsection (1); and
9
(b) the body has a right under a contract, agreement or
10
arrangement against the entity for a new advance of money
11
or credit;
12
that right of the body cannot be enforced during the same period.
13
415E Lifting the stay
14
(1) The Court may order that subsection 415D(1) does not apply for
15
one or more rights against a body if the Court is satisfied:
16
(a) that the relevant compromise or arrangement:
17
(i) to be applied for; or
18
(ii) applied for; or
19
(iii) approved;
20
under this Part is not for the purpose of the body avoiding
21
being wound up in insolvency; or
22
(b) that this is appropriate in the interests of justice.
23
(2) The order may also provide that the holder of those rights may
24
choose to enforce those rights from the earlier of:
25
(a) the day any announcement referred to in
26
paragraph 415D(1)(a) was made by the body; and
27
(b) the day any application under section 411 was made for the
28
compromise or arrangement.
29
(3) An application for the order may be made by the holder of those
30
rights.
31
Schedule 1 Amendments
Part 2 Stay on enforcing rights merely because of arrangements or restructures
14
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
415F Order for rights to be enforceable only with leave of the Court
1
Orders
2
(1) The Court may order that one or more rights under a contract,
3
agreement or arrangement are enforceable against a body only:
4
(a) with the leave of the Court; and
5
(b) in accordance with such terms (if any) as the Court imposes.
6
Example: The order could be sought for a right to terminate for convenience.
7
(2) The Court may make the order (the stay order) if:
8
(a) the body is the subject of any of the following:
9
(i) an announcement referred to in paragraph 415D(1)(a);
10
(ii) an application under section 411 (the section 411
11
application);
12
(iii) a compromise or arrangement approved under this Part
13
as a result of a section 411 application; and
14
(b) the Court is satisfied that:
15
(i) the rights are being exercised; or
16
(ii) the rights are likely to be exercised; or
17
(iii) there is a threat to exercise the rights;
18
because of a reason referred to in paragraphs 415D(1)(a) to
19
(d); and
20
(c) an application for the stay order is:
21
(i) if the body has made an announcement referred to in
22
paragraph 415D(1)(a), but not yet a section 411
23
application--made by the body; or
24
(ii) if the body has made a section 411 application, but a
25
resulting compromise or arrangement is yet to be
26
approved under this Part--included in the section 411
27
application; or
28
(iii) if a compromise or arrangement has been approved
29
under this Part as a result of the section 411
30
application--made by the person appointed to
31
administer the compromise or arrangement; and
32
(d) in a case where the body has made a section 411
33
application--the section 411 application states it is being
34
Amendments Schedule 1
Stay on enforcing rights merely because of arrangements or restructures Part 2
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
15
made for the purpose of the body avoiding being wound up in
1
insolvency.
2
(3) A stay order must specify the period for which it applies. In
3
working out the period, the Court must have regard to:
4
(a) subsections 415D(2), (3) and (4); and
5
(b) the interests of justice.
6
(4) Subsection (1) does not apply to a right referred to in
7
subsection 415D(6) or (8).
8
Interim orders
9
(5) Before deciding an application for a stay order, the Court may
10
grant an interim order for one or more rights under a contract,
11
agreement or arrangement not to be enforced against a body.
12
(6) The Court must not require an applicant for a stay order to give an
13
undertaking as to damages as a condition of granting an interim
14
order.
15
415G When other laws prevail--certain other Commonwealth Acts
16
If there is any inconsistency between sections 415D to 415F and
17
one of the following Acts, that Act prevails to the extent of the
18
inconsistency:
19
(a) the Payment Systems and Netting Act 1998;
20
(b) the International Interests in Mobile Equipment (Cape Town
21
Convention) Act 2013.
22
8 At the end of Part 5.2
23
Add:
24
434J Stay on enforcing rights merely because of the appointment of
25
a managing controller of a corporation's property etc.
26
Stay on enforcing rights
27
(1) A right cannot be enforced against a corporation for:
28
Schedule 1 Amendments
Part 2 Stay on enforcing rights merely because of arrangements or restructures
16
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
(a) the reason of the appointment or existence of a managing
1
controller of the whole or substantially the whole of the
2
corporation's property; or
3
(b) any of the following reasons:
4
(i) the corporation's financial position;
5
(ii) a reason prescribed by the regulations for the purposes
6
of this subparagraph;
7
however disregard the reason if there is not a managing
8
controller of the whole or substantially the whole of the
9
corporation's property;
10
if the right arises for that reason by express provision (however
11
described) of a contract, agreement or arrangement.
12
Note:
This result is subject to subsections (5) and (7), and to any order under
13
section 434K.
14
Example: A right to terminate a contract will not be enforceable to the extent
15
that those rights are triggered by the appointment of a managing
16
controller.
17
Period of the stay
18
(2) The right cannot be enforced as described in subsection (1) during
19
the period (the stay period) starting at the appointment of the
20
managing controller and ending:
21
(a) unless paragraph (b) applies--when the managing
22
controller's control of the corporation's property ends; or
23
(b) if one or more orders are made under subsection (3) for the
24
corporation as the result of an application made before the
25
end of the managing controller's control of the corporation's
26
property--when the last made of those orders ceases to be in
27
force.
28
(3) The Court:
29
(a) may order an extension of the period otherwise applying
30
under subsection (2) for the corporation if the Court is
31
satisfied that the extension is appropriate having regard to the
32
interests of justice; and
33
(b) before deciding an application for an order under
34
paragraph (a), may grant an interim order, but must not
35
require the applicant to give an undertaking as to damages as
36
a condition for doing so.
37
Amendments Schedule 1
Stay on enforcing rights merely because of arrangements or restructures Part 2
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
17
Enforcing rights after the stay for reasons relating to earlier
1
circumstances
2
(4) The right is unenforceable against the corporation indefinitely after
3
the end of the stay period to the extent that a reason for seeking to
4
enforce the right:
5
(a) is the corporation's financial position before the end of the
6
stay period; or
7
(b) is the appointment or existence of a managing controller of
8
the whole or substantially the whole of the corporation's
9
property before the end of the stay period; or
10
(c) is a reason, prescribed by the regulations for the purposes of
11
this paragraph, relating to circumstances in existence during
12
the stay period.
13
Rights not subject to the stay
14
(5) Subsection (1) does not apply to the right if it is:
15
(a) a right under a contract, agreement or arrangement entered
16
into after the appointment of the managing controller; or
17
(b) a right contained in a kind of contract, agreement or
18
arrangement:
19
(i) prescribed by the regulations for the purposes of this
20
subparagraph; or
21
(ii) declared under paragraph (6)(a); or
22
(c) a right of a kind declared under paragraph (6)(b); or
23
(d) a right of a kind declared under paragraph (6)(c), and the
24
circumstances specified in that declaration exist.
25
(6) For the purposes of subsection (5), the Minister may, by legislative
26
instrument:
27
(a) declare kinds of contracts, agreements or arrangements
28
referred to in a specified law of the Commonwealth; or
29
(b) declare kinds of rights to which subsection (1) does not
30
apply; or
31
(c) declare kinds of rights to which subsection (1) does not apply
32
in specified circumstances.
33
Schedule 1 Amendments
Part 2 Stay on enforcing rights merely because of arrangements or restructures
18
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
(7) Subsection (1) does not apply to the right to the extent that the
1
managing controller has consented in writing to the enforcement of
2
the right.
3
Stay on corporation's right to new advance of money or credit
4
(8) If:
5
(a) one or more rights of an entity cannot be enforced against a
6
corporation for a period because of subsection (1); and
7
(b) the corporation has a right under a contract, agreement or
8
arrangement against the entity for a new advance of money
9
or credit;
10
that right of the corporation cannot be enforced during the same
11
period.
12
Replacement managing controllers
13
(9) If a new managing controller of the whole or substantially the
14
whole of the corporation's property is appointed to replace an
15
earlier such managing controller, then:
16
(a) for the purposes of subsections (2) and (5), treat the new
17
managing controller as if it were appointed when the first
18
such managing controller was; and
19
(b) treat references in subsection (2) to when the managing
20
controller's control of the corporation's property ends as
21
references to when the last such managing controller's
22
control of the corporation's property ends.
23
434K Lifting the stay
24
(1) The Court may order that subsection 434J(1) does not apply for
25
one or more rights against a corporation if the Court is satisfied
26
that this is appropriate in the interests of justice.
27
(2) An application for the order may be made by the holder of those
28
rights.
29
Amendments Schedule 1
Stay on enforcing rights merely because of arrangements or restructures Part 2
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
19
434L Order for rights to be enforceable only with leave of the Court
1
Orders
2
(1) The Court may order that one or more rights under a contract,
3
agreement or arrangement are enforceable against a corporation
4
only:
5
(a) with the leave of the Court; and
6
(b) in accordance with such terms (if any) as the Court imposes.
7
Example: The order could be sought for a right to terminate for convenience.
8
(2) The Court may make the order if:
9
(a) there is a managing controller of the whole or substantially
10
the whole of the corporation's property; and
11
(b) the Court is satisfied that:
12
(i) the rights are being exercised; or
13
(ii) the rights are likely to be exercised; or
14
(iii) there is a threat to exercise the rights;
15
because of a reason referred to in paragraph 434J(1)(a) or (b);
16
and
17
(c) an application for the order is made by the managing
18
controller.
19
(3) An order under subsection (1) must specify the period for which it
20
applies. In working out the period, the Court must have regard to:
21
(a) subsections 434J(2), (3) and (4); and
22
(b) the interests of justice.
23
(4) Subsection (1) does not apply to a right referred to in
24
subsection 434J(5) or (7).
25
Interim orders
26
(5) Before deciding an application for an order under subsection (1),
27
the Court may grant an interim order for one or more rights under a
28
contract, agreement or arrangement not to be enforced against a
29
corporation.
30
Schedule 1 Amendments
Part 2 Stay on enforcing rights merely because of arrangements or restructures
20
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
(6) The Court must not require an applicant for an order under
1
subsection (1) to give an undertaking as to damages as a condition
2
of granting an interim order.
3
434M When other laws prevail--certain other Commonwealth Acts
4
If there is any inconsistency between sections 434J to 434L and
5
one of the following Acts, that Act prevails to the extent of the
6
inconsistency:
7
(a) the Payment Systems and Netting Act 1998;
8
(b) the International Interests in Mobile Equipment (Cape Town
9
Convention) Act 2013.
10
9 Subsection 441A(3)
11
Omit "or 440G", substitute ", 440G or 451E".
12
10 Subsection 441A(3)
13
After "444F(2)", insert "or 451G(1)".
14
11 Subsection 441B(2)
15
Omit "or 440G", substitute ", 440G or 451E, or in an order under
16
subsection 451G(1),".
17
12 Subsection 441C(2)
18
Omit "or 440B", substitute ", 440B or 451E, or in an order under
19
subsection 451G(1),".
20
13 Section 441E
21
Omit "or 440B", substitute ", 440B or 451E, or in an order under
22
subsection 451G(1),".
23
14 At the end of Division 17 of Part 5.3A
24
Add:
25
Amendments Schedule 1
Stay on enforcing rights merely because of arrangements or restructures Part 2
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
21
451E Stay on enforcing rights merely because the company is under
1
administration etc.
2
Stay on enforcing rights
3
(1) A right cannot be enforced against a company for:
4
(a) the reason that the company has come or is under
5
administration; or
6
(b) any of the following reasons:
7
(i) the company's financial position;
8
(ii) a reason prescribed by the regulations for the purposes
9
of this subparagraph;
10
however disregard the reason if the company is not under
11
administration;
12
if the right arises for that reason by express provision (however
13
described) of a contract, agreement or arrangement.
14
Note:
This result is subject to subsections (5) and (7), and to any order under
15
section 451F.
16
Example: A right to terminate a contract will not be enforceable to the extent
17
that those rights are triggered by the company coming under
18
administration.
19
Period of the stay
20
(2) The right cannot be enforced as described in subsection (1) during
21
the period (the stay period) starting when the company comes
22
under administration and ending at the latest of the following:
23
(a) when the administration ends;
24
(b) if one or more orders are made under subsection (3) for the
25
company as the result of an application made before the
26
administration ends--when the last made of those orders
27
ceases to be in force;
28
(c) if the administration ends because of a resolution or order for
29
the company to be wound up--when the company's affairs
30
have been fully wound up.
31
(3) The Court:
32
(a) may order an extension of the period otherwise applying
33
under subsection (2) for the company if the Court is satisfied
34
Schedule 1 Amendments
Part 2 Stay on enforcing rights merely because of arrangements or restructures
22
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
that the extension is appropriate having regard to the interests
1
of justice; and
2
(b) before deciding an application for an order under
3
paragraph (a), may grant an interim order, but must not
4
require the applicant to give an undertaking as to damages as
5
a condition for doing so.
6
Enforcing rights after the stay for reasons relating to earlier
7
circumstances
8
(4) The right is unenforceable against the company indefinitely after
9
the end of the stay period to the extent that a reason for seeking to
10
enforce the right:
11
(a) is the company's financial position before the end of the stay
12
period; or
13
(b) is the company having come or been under administration
14
before the end of the stay period; or
15
(c) is a reason, prescribed by the regulations for the purposes of
16
this paragraph, relating to circumstances in existence during
17
the stay period.
18
Rights not subject to the stay
19
(5) Subsection (1) does not apply to the right if it is:
20
(a) a right under a contract, agreement or arrangement entered
21
into after the company comes under administration; or
22
(b) a right contained in a kind of contract, agreement or
23
arrangement:
24
(i) prescribed by the regulations for the purposes of this
25
subparagraph; or
26
(ii) declared under paragraph (6)(a); or
27
(c) a right of a kind declared under paragraph (6)(b); or
28
(d) a right of a kind declared under paragraph (6)(c), and the
29
circumstances specified in that declaration exist.
30
Note:
Subsection (1) also does not apply to certain secured creditors (see
31
Subdivision B of Division 7).
32
(6) For the purposes of subsection (5), the Minister may, by legislative
33
instrument:
34
Amendments Schedule 1
Stay on enforcing rights merely because of arrangements or restructures Part 2
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
23
(a) declare kinds of contracts, agreements or arrangements
1
referred to in a specified law of the Commonwealth; or
2
(b) declare kinds of rights to which subsection (1) does not
3
apply; or
4
(c) declare kinds of rights to which subsection (1) does not apply
5
in specified circumstances.
6
(7) Subsection (1) does not apply to the right to the extent that the
7
administrator of the company has consented in writing to the
8
enforcement of the right.
9
Stay on company's right to new advance of money or credit
10
(8) If:
11
(a) one or more rights of an entity cannot be enforced against a
12
company for a period because of subsection (1); and
13
(b) the company has a right under a contract, agreement or
14
arrangement against the entity for a new advance of money
15
or credit;
16
that right of the company cannot be enforced during the same
17
period.
18
451F Lifting the stay
19
(1) The Court may order that subsection 451E(1) does not apply for
20
one or more rights against a company if the Court is satisfied that
21
this is appropriate in the interests of justice.
22
(2) An application for the order may be made by the holder of those
23
rights.
24
451G Order for rights to be enforceable only with leave of the Court
25
Orders
26
(1) The Court may order that one or more rights under a contract,
27
agreement or arrangement are enforceable against a company only:
28
(a) with the leave of the Court; and
29
(b) in accordance with such terms (if any) as the Court imposes.
30
Example: The order could be sought for a right to terminate for convenience.
31
Schedule 1 Amendments
Part 2 Stay on enforcing rights merely because of arrangements or restructures
24
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
No. , 2017
(2) The Court may make the order if:
1
(a) the company is under administration; and
2
(b) the Court is satisfied that:
3
(i) the rights are being exercised; or
4
(ii) the rights are likely to be exercised; or
5
(iii) there is a threat to exercise the rights;
6
because of a reason referred to in paragraph 451E(1)(a) or
7
(b); and
8
(c) an application for the order is made by the administrator of
9
the company.
10
(3) An order under subsection (1) must specify the period for which it
11
applies. In working out the period, the Court must have regard to:
12
(a) subsections 451E(2), (3) and (4); and
13
(b) the interests of justice.
14
(4) Subsection (1) does not apply to a right referred to in
15
subsection 451E(5) or (7).
16
Note:
An order under subsection (1) also does not restrict certain secured
17
creditors (see Subdivision B of Division 7).
18
Interim orders
19
(5) Before deciding an application for an order under subsection (1),
20
the Court may grant an interim order for one or more rights under a
21
contract, agreement or arrangement not to be enforced against a
22
company.
23
(6) The Court must not require an applicant for an order under
24
subsection (1) to give an undertaking as to damages as a condition
25
of granting an interim order.
26
451H When other laws prevail--certain other Commonwealth Acts
27
If there is any inconsistency between sections 451E to 451G and
28
one of the following Acts, that Act prevails to the extent of the
29
inconsistency:
30
(a) the Payment Systems and Netting Act 1998;
31
(b) the International Interests in Mobile Equipment (Cape Town
32
Convention) Act 2013.
33
Amendments Schedule 1
Stay on enforcing rights merely because of arrangements or restructures Part 2
No. , 2017
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill
2017
25
Payment Systems and Netting Act 1998
1
15 Section 5 (paragraph (d) of the definition of specified
2
provisions)
3
Before "437D", insert "415D to 415F, 434J to 434L,".
4
16 Section 5 (paragraph (d) of the definition of specified
5
provisions)
6
After "440B,", insert "451E to 451G,".
7
17 Application of amendments
8
The amendments made by this Part apply in relation to rights arising
9
under contracts, agreements or arrangements entered into at or after the
10
commencement of this Part.
11