Commonwealth Consolidated Acts Commonwealth Consolidated ActsStay on enforcing rights
(1) A right cannot be enforced against a corporation for:
(a) the reason of the appointment or existence of a managing controller of the whole or substantially the whole of the corporation's property; or
(b) the corporation's financial position, if there is a managing controller of the whole or substantially the whole of the corporation's property; or
(c) a reason, prescribed by the regulations for the purposes of this paragraph, that relates to:
(i) the appointing, or possible appointing, of a managing controller of the whole or substantially the whole of the corporation's property; or
(ii) the corporation's financial position;
if such an appointment is later made for the whole or substantially the whole of the corporation's property; 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 434K.
Example: A right to terminate a contract will not be enforceable to the extent that those rights are triggered by the appointment of a managing controller.
(2) The right cannot be enforced as described in subsection (1) during the period (the stay period ) starting at the appointment of the managing controller and ending:
(a) unless paragraph (b) applies--when the managing controller's control of the corporation's property ends; or
(b) if one or more orders are made under subsection (3) for the corporation as the result of an application made before the end of the managing controller's control of the corporation's property--when the last made of those orders ceases to be in force.
(3) The Court:
(a) may order an extension of the period otherwise applying under subsection (2) for the corporation 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
(4) The right is unenforceable against the corporation indefinitely after the end of the stay period to the extent that a reason for seeking to enforce the right:
(a) is the corporation's financial position before the end of the stay period; or
(b) is the appointment or existence of a managing controller of the whole or substantially the whole of the corporation's property 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
(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 appointment of the managing controller; 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
(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.
(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.
(7) Subsection (1) does not apply to the right to the extent that the managing controller has consented in writing to the enforcement of the right.
Stay on corporation's right to new advance of money or credit
(a) one or more rights of an entity cannot be enforced against a corporation for a period because of subsection (1); and
(b) the corporation has a right under a contract, agreement or arrangement against the entity for a new advance of money or credit;
that right of the corporation cannot be enforced during the same period.
Replacement managing controllers
(9) If a new managing controller of the whole or substantially the whole of the corporation's property is appointed to replace an earlier such managing controller, then:
(a) for the purposes of subsections (2) and (5), treat the new managing controller as if it were appointed when the first such managing controller was; and
(b) treat references in subsection (2) to when the
managing controller's control of the corporation's property ends as
references to when the last such managing controller's control of the
corporation's property ends.