Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 237

237. (1) Subject to this section:

   (a)  a company, an associate of a company (other than a body corporate that
        is related to the company and is itself a company) or a prescribed
        superannuation fund in relation to a company shall not give a
        prescribed benefit to a person in connection with the retirement of a
        person from a prescribed office in relation to the company; and

   (b)  a person shall not give a prescribed benefit to a prescribed person in
        connection with the transfer of the whole or any part of the
        undertaking or property of a company.

(2) Subsection (1) does not apply if particulars with respect to the
prescribed benefit have been disclosed to the members of, and the giving of
the proposed prescribed benefit has been approved in general meeting by:

   (a)  if neither paragraph (b) nor (c) applies-the company;

   (b)  if the company is a subsidiary of a listed company or listed
        companies-the company and the listed company or listed companies; or

   (c)  if the company is not a subsidiary of a listed company but is a
        subsidiary whose ultimate holding company is incorporated in Australia
        or an external Territory-the company and the ultimate holding company.

(3) The particulars to be disclosed for the purposes of subsection (2)
include:

   (a)  if the proposed prescribed benefit is a payment:

        (i)    the amount of the payment; or

        (ii)   if that amount cannot be ascertained at the time of the
               disclosure-the manner in which that amount is to be calculated
               and any matter, event or circumstance that will, or is likely
               to, affect the calculation of that amount; and

   (b)  otherwise:

        (i)    the money value of the proposed prescribed benefit; or

        (ii)   if that value cannot be ascertained at the time of the
               disclosure-the manner in which that value is to be calculated
               and any matter, event or circumstance that will, or is likely
               to, affect the calculation of that value.

(4) Where, because:

   (a)  the particulars required by subsection (1) to be disclosed to the
        members of a body corporate or bodies corporate in relation to the
        giving to a person of a proposed prescribed benefit have been so
        disclosed; and

   (b)  the giving to the person of the proposed prescribed benefit has been
        approved by the body corporate or bodies corporate in general meeting;
        subsection (1) does not prohibit the giving to the person of the
        proposed prescribed benefit, that subsection does not prohibit the
        giving to the person, instead of the proposed prescribed benefit, of a
        prescribed benefit the amount or money value of which is less than the
        amount or money value of the proposed prescribed benefit.

(5) Paragraph (1) (a) does not apply in relation to:

   (a)  the giving of an exempt benefit; or

   (b)  the giving of a prescribed benefit in prescribed circumstances.

(6) Paragraph (1) (a) does not apply in relation to the giving of a
prescribed benefit in connection with the retirement of a person from a
prescribed office (in this subsection called the "relevant office") in
relation to a company, if:

   (a)  the prescribed benefit is a genuine payment by way of pension or lump
        sum payment in respect of past services rendered by the person to the
        company or to a body corporate that is a related body corporate, or
        that was, when the past services were rendered, a related body
        corporate, of the company, including any superannuation, retiring
        allowance, superannuation gratuity or similar payment; and

   (b)  the value of the pension or lump sum payment, when added to the value
        of all other pensions (if any) and lump sum payments (if any) already
        paid or payable in connection with the retirement of the person from a
        prescribed office in relation to the company (including any pensions
        or payments to which subsection (5) applies), does not exceed:

        (i)    where, at the time when the person retired from the relevant
               office, the person was, and had been throughout a period (in
               this subsection called
the "relevant period"), or throughout periods totalling a period (in this
subsection also called the "relevant period"), of not less than 3 years, an
eligible employee in relation to the company-the amount ascertained in
accordance with the formula:
TE X RP ,
3
where:
TE is the amount of the total emoluments of the person during the last 3 years
of the relevant period; and
RP is the number of years in the relevant period or 7, whichever is the lesser
number; or

        (ii)   otherwise-the total emoluments of the person during the period
               of 3 years ending when the person retired from the
               relevant office.

(7) In determining for the purposes of paragraph (6) (b) the value of a
pension or lump sum payment, any part of the pension or lump sum payment that
is attributable to a contribution made by the person or by a person other
than:

   (a)  the company;
(b) a body corporate (in this subsection called a "relevant body corporate")
that is a related body corporate of the company, or that was, when the
contribution was made, such a related body corporate; or

   (c)  an associate of the company, or of a relevant body corporate, in
        respect of:

        (i)    the payment of the pension, or the making of the lump sum
               payment, as the case may be; or

        (ii)   the making of the contribution; shall be disregarded.

(8) For the purposes of subparagraph (6) (b) (i), where at a particular time,
or throughout a particular period:

   (a)  a person was a genuine full-time employee of a company; or

   (b)  a person was a genuine full-time employee of a body corporate and the
        body corporate was related to a company; the person shall be taken to
        have been at that time, or throughout that period, as the case may be,
        an eligible employee in relation to the company.

(9) Paragraph (1) (a) does not apply in relation to the giving of a
prescribed benefit by a person to another person if failure by the
first-mentioned person to give the prescribed benefit to the other person
would constitute, otherwise than because of breach of contract or breach of
trust, a contravention of a law in force in Australia or elsewhere.

(10) A prescribed person shall not receive a prescribed benefit if the giving
of the prescribed benefit contravenes subsection (1).

(11) Where the giving of a prescribed benefit to a person contravenes
subsection (1), then:

   (a)  if the benefit is a payment-the amount of the payment; or

   (b)  otherwise-the money value of the prescribed benefit; shall be deemed
        to be received by the person in trust for the company concerned.

(12) Subsection (11) applies in relation to the whole of the amount of a
payment or of the money value of a prescribed benefit notwithstanding that, if
that amount or value had been less, the giving of the benefit would not have
contravened subsection (1).

(13) This section is in addition to, and not in derogation of, any other law
that requires disclosure to be made with respect to the giving or receipt of a
prescribed benefit.

(14) In this section:

   (a)  a reference to the giving of a prescribed benefit by a person includes
        a reference to the giving of a prescribed benefit that the person is
        obliged under a contract to give;

   (b)  a reference to the giving of a prescribed benefit, or to a pension or
        lump sum payment paid or payable, in connection with the retirement of
        a person from an office is a reference to the giving of a
        prescribed benefit, or to a pension or lump sum paid or payable, as
        the case may be:

        (i)    by way of compensation for, or otherwise in connection with,
               the loss by the person of the office; or

        (ii)   in connection with the retirement of the person from the
               office;

   (c)  a reference to a payment includes a reference to a payment by way of
        damages for breach of contract; and

   (d)  a reference to retirement of a person from an office includes a
        reference to:

        (i)    loss by the person of the office;

        (ii)   resignation by the person from the office; or

        (iii)  death of the person at a time when the person holds the office.

(15) Without limiting the generality of paragraph (14) (b) where a person
gives a prescribed benefit to another person for the purpose, or for purposes
including the purpose, of enabling or assisting a person to give to a person a
prescribed benefit in connection with the retirement of a person (in this
subsection called the "relevant person") from an office, the first-mentioned
person shall be taken, for the purposes of this section, to give the
first-mentioned prescribed benefit in connection with the retirement of the
relevant person from that office.

(16) Where a company, or an associate of a company, gives a prescribed benefit
to a superannuation fund in prescribed circumstances, the superannuation fund
shall be taken to be, for the purposes of this section, a prescribed
superannuation fund in relation to the company.

(17) Where a prescribed superannuation fund in relation to a company gives a
prescribed benefit to another superannuation fund in prescribed circumstances,
the other superannuation fund shall be taken to be, for the purposes of this
section, a prescribed superannuation fund in relation to the company.

(18) For the purposes of this section, where:

   (a)  a company, or an associate of a company, gives a prescribed benefit to
        a superannuation fund solely for the purpose of enabling or assisting
        the superannuation fund to give to a person a prescribed benefit in
        connection with the retirement of a person from a prescribed office in
        relation to the company; or

   (b)  a superannuation fund gives a prescribed benefit to another
        superannuation fund solely for the purpose of enabling or assisting
        the other superannuation fund to give to a person a prescribed benefit
        in connection with the retirement of a person from a prescribed office
        in relation to a company; the prescribed benefit first referred to in
        paragraph (a) or (b) shall be taken to be given in prescribed
        circumstances.

(19) In this section:

"emoluments", in relation to a person who is a director or other officer of a
body corporate, means the amount or value of any money, consideration or
benefit given, directly or indirectly, to that person in connection with the
management of affairs of the body corporate or of any holding company or
subsidiary of the body corporate, whether as a director or officer or
otherwise, but does not include amounts in payment or reimbursement of
out-of-pocket expenses incurred for the benefit of the body corporate;

"exempt benefit" means a prescribed benefit given in connection with the
retirement of a person from a prescribed office in relation to a company,
being a prescribed benefit:

   (a)  given under an agreement entered into before the commencement of this
        Part where the giving of the prescribed benefit would have been lawful
        if this Act had not been enacted;

   (b)  given under an agreement where particulars of the terms of that
        agreement have been disclosed to the members of the company and
        approved by the company in general meeting;

   (c)  that is a genuine payment by way of damages for breach of contract;

   (d)  given to the person under an agreement made between the company and
        the person before the person became the holder of the
        prescribed office as the consideration or part of the consideration
        for the person agreeing to hold the prescribed office; or

   (e)  that is a payment made in respect of leave of absence to which the
        person is entitled under an industrial instrument;

"give", in relation to a prescribed benefit, includes:

   (a)  in the case of a prescribed benefit that is a payment-make; and

   (b)  in the case of a prescribed benefit that is an interest in
        property-transfer;

"person" includes a superannuation fund;

"prescribed benefit" means a payment or other valuable consideration or any
other benefit and includes, without limiting the generality of the foregoing,
an interest in property of any kind;

"prescribed office", in relation to a company, means:

   (a)  an office of director of the company or of a related body corporate;

   (b)  the office of principal executive officer of the company or of a
        related body corporate; and

   (c)  any other office in connection with the management of affairs of the
        company or of a related body corporate that is held by a person who
        also holds, or who has, at any time within the 12 months immediately
        before the loss of, or retirement from, that office, held, an office
        mentioned in
paragraph (a) or (b); "prescribed person", in relation to a company, means:

   (a)  a person who holds, or has at any previous time held, a prescribed
        office in relation to the company;

   (b)  the spouse of a person referred to in paragraph (a);

   (c)  a person who is a relative of a person referred to in paragraph (a) or
        of the spouse of such a person; or

   (d)  an associate of a person referred to in paragraph (a) or the spouse of
        an associate of such a person;

"relevant benefit", in relation to a proposal to give a prescribed benefit in
connection with the retirement of a person from a prescribed office in
relation to a company, being a prescribed benefit in relation to which
paragraph (1) (a) would apply, means any other prescribed benefit (including
an exempt benefit) given, or proposed to be given, in connection with the
retirement of the person from the prescribed office;

"superannuation fund" means a provident, benefit, superannuation or retirement
fund.

(20) The giving of approval by a body corporate for the giving of a
prescribed benefit as mentioned in paragraph (1) (b) does not relieve a
director of the body corporate of any duty to the body corporate under
section  232 or otherwise, and whether of a fiduciary nature or not, in
connection with the giving of the prescribed benefit.