Commonwealth Numbered Acts

BANKRUPTCY AMENDMENT ACT 1987 No. 119 of 1987 - SECT 5

5. After section 5 of the Principal Act the following sections are inserted:
Acting in accordance with a person's directions or instructions

"5A. For the purposes of this Act, a person shall not be regarded as a person
in accordance with whose directions or instructions the directors of a body
corporate are accustomed to act merely because the directors act on advice
given by the person in the proper performance of the functions attaching to
the person's professional capacity or to the person's business relationship
with the directors or with the body corporate. Associated entities: companies

"5B. For the purposes of this Act, a company is associated with a person if,
and only if, the person:

   (a)  is a company officer of the company or otherwise is concerned, or
        takes part, in the company's management;

   (b)  is able to control, or to influence materially, the company's
        activities or internal affairs;

   (c)  is a member of the company;

   (d)  is in a position to cast, or to control the casting of, a vote at a
        general meeting of the company;

   (e)  has power to dispose of, or to exercise control over the disposal of,
        a share in the company;

   (f)  is financially interested in the company's success or failure or
        apparent success or failure;

   (g)  is owed a debt by the company;

   (h)  is employed, or is engaged under a contract for services, by the
        company; (j) acts as agent for the company in any transaction or
        dealing; or

   (k)  gives professional advice to the company. Associated entities: natural
        persons

"5C. For the purposes of this Act, a natural person (in this section called
the 'associate') is associated with another person if, and only if, the other
person:

   (a)  is a close relative of the associate;

   (b)  is a trustee of a trust under which the associate is capable of
        benefiting;

   (c)  is employed, or is engaged under a contract for services, by the
        associate;

   (d)  acts as agent for the associate in any transaction or dealing;

   (e)  is an attorney of the associate under a power of attorney;

   (f)  has appointed the associate as the other person's attorney under a
        power of attorney;

   (g)  gives professional advice to the associate; or

   (h)  is given professional advice by the associate. Associated entities:
        partnerships

"5D. For the purposes of this Act, a partnership is associated with a person
if, and only if, the person:

   (a)  is a partner in the partnership;

   (b)  is able to control, or to influence materially, the partnership's
        activities or internal affairs;

   (c)  is financially interested in the partnership's success or failure or
        apparent success or failure;

   (d)  is a creditor of the partnership;

   (e)  is employed, or is engaged under a contract for services, by the
        partnership;

   (f)  acts as agent for the partnership in any transaction or dealing; or

   (g)  gives professional advice to the partnership. Associated entities:
        trusts

"5E. For the purposes of this Act, a trust is associated with a person if, and
only if, the person:

   (a)  is the settlor, or one of the settlors, of the trust;

   (b)  has power under the terms of the trust to appoint or remove a trustee
        of the trust or to vary, or cause to be varied, any of the terms of
        the trust;

   (c)  is a trustee of the trust;

   (d)  is able to control, or to influence materially, the activities of the
        trustee of the trust;

   (e)  if a trustee of the trust is a company-is a company officer of the
        company or otherwise is concerned, or takes part, in the company's
        management;

   (f)  is capable of benefiting under the trust;

   (g)  is a creditor of the trustee of the trust;

   (h)  is employed, or is engaged under a contract for services, by the
        trustee of the trust;

   (j)  acts as agent for the trustee of the trust in any transaction or
        dealing; or

   (k)  gives professional advice to the trustee of the trust. Controlling an
        entity in relation to a matter

"5F. (1) Subject to this section, a person shall be taken, for the purposes of
this Act, to control an entity at a particular time in relation to a matter
if, and only if:

   (a)  no act, omission or decision inconsistent with the person's
        directions, instructions or wishes was; and

   (b)  having regard to all the circumstances, it may reasonably be expected
        that no such act, omission or decision would have been; done or made
        at that time, in relation to the matter, by or on behalf of the
        entity.

"(2) A person shall not be taken to control an entity at a particular time in
relation to a matter merely because:

   (a)  no act, omission or decision inconsistent with advice given by the
        person in the proper performance of the functions attaching to his or
        her professional capacity, or to his or her business relationship with
        the entity, was; and

   (b)  having regard to all the circumstances, it may reasonably be expected
        that no such act, omission or decision would have been; done or made
        at that time, in relation to that matter, by or on behalf of the
        entity.

"(3) A reference in subsection (1) or (2), in relation to a matter, to an act,
omission or decision is a reference to an act, omission or decision that,
having regard to the nature of that matter, is of substantial importance.

"(4) A person shall not be taken to control a company at a particular time in
relation to a matter if the company is not a private company at that time.
Financial affairs of a company

"5G. For the purposes of this Act, a company's financial affairs include:

   (a)  the company's promotion, formation, membership, control, operations
        and state of affairs;

   (b)  the management and proceedings of the company;

   (c)  any act or thing done (including any contract made and any transaction
        entered into) by or on behalf of the company, or to or in relation to
        the company or its business or property, at a time when:

        (i)    a receiver, or a receiver and manager, is in possession of, or
               has control over, property of the company;

        (ii)   the company is under official management;

        (iii)  a compromise or arrangement made between the company and
               another person or other persons is being administered; or

        (iv)   the company is being wound up;
and, without limiting the generality of the foregoing, any conduct of such a
receiver or such a receiver and manager, of any person appointed as the
official manager or deputy official manager of the company, of any person
administering such a compromise or arrangement or of any liquidator or
provisional liquidator of the company;

   (d)  the ownership of shares in, and debentures of, the company;

   (e)  the power of persons to exercise, or to control the exercise of, the
        rights to vote attached to shares in the company or to dispose of, or
        to exercise control over the disposal of, such shares;

   (f)  the circumstances under which a person acquired or disposed of, or
        became entitled to acquire or dispose of, shares in, or debentures of,
        the company; and (g) matters concerned with ascertaining the persons
        with whom the company is or has been associated. Financial affairs of
        a natural person

"5H. For the purposes of this Act, the financial affairs of a natural person
include:

   (a)  the person's operations and state of affairs;

   (b)  any act or thing done (including any contract made and any transaction
        entered into) by or on behalf of the person, or to or in relation to
        the person or his or her business or property, at a time when:

        (i)    the person was, under this Act or the law of an external
               Territory, a bankrupt in respect of a bankruptcy from which the
               person had not been discharged;

        (ii)   the person had, under the law of an external Territory or the
               law of a country other than Australia, the status of an
               undischarged bankrupt;

        (iii)  the property of the person was subject to control under
               Division 2 of Part X by reason of an authority given by the
               person under section 188; or

        (iv)   a deed of assignment, deed of arrangement, or composition,
               under Part X or under the corresponding provisions of a law of
               an external Territory or a country other than Australia was in
               effect in relation to the person or the person's property;

   (c)  without limiting the generality of paragraph (b), any conduct of the
        trustee of such a bankrupt estate or of such a deed of assignment or
        arrangement, a person acting under such an authority or a person
        administering such a composition; and

   (d)  matters concerned with ascertaining the persons with whom the person
        is or has been associated. Financial affairs of a partnership

"5J. For the purposes of this Act, the financial affairs of a partnership
include:

   (a)  the partnership's promotion, formation, membership, control,
        operations and state of affairs;

   (b)  the management and proceedings of the partnership;

   (c)  any act or thing done (including any contract made and transaction
        entered into) on behalf of the partnership, or to or in relation to
        the partnership, at a time when the partnership is being wound up; and

   (d)  matters concerned with ascertaining the persons with whom the
        partnership is or has been associated. Financial affairs of a trust

"5K. For the purposes of this Act, the financial affairs of a trust include:

   (a)  the creation of the trust;

   (b)  matters arising under, or otherwise relating to, the terms of the
        trust;

   (c)  the appointment and removal of a trustee of the trust;

   (d)  the business, trading, transactions and dealings of the trustee of the
        trust;

   (e)  the profits, income and receipts of the trustee of the trust;

   (f)  the losses, outgoings and expenditure of the trustee of the trust;

   (g)  the trust property, including transactions and dealings in, and the
        income arising from, the trust property;

   (h)  the liabilities of the trustee of the trust;

   (j)  the management of the trust;

   (k)  any act or thing done (including any contract made and transaction
        entered into) by or on behalf of the trustee of the trust, or to or in
        relation to the trust, at a time when the trust is being wound up;

   (m)  matters concerned with ascertaining the persons with whom the trust is
        or has been associated; and

   (n)  matters concerned with ascertaining the rights of the beneficiaries
        under the trust and any payments, or distributions of property, that
        the beneficiaries have received, or are entitled to receive, under the
        terms of the trust.".