Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 267

267. (1) Where:

   (a)  a company creates a charge on property of the company in favour of a
        person who is, or in favour of persons at least one of whom is, a
        relevant person in relation to the charge; and

   (b)  within 6 months after the creation of the charge, the chargee purports
        to take a step in the enforcement of the charge without the Court
        having, under subsection (3), given leave for the charge to be
        enforced; the charge, and any powers purported to be conferred by an
        instrument creating or evidencing the charge, are, and shall be deemed
        always to have been, void.

(2) Without limiting the generality of subsection (1), a person who:

   (a)  appoints a receiver of property of a company under powers conferred by
        an instrument creating or evidencing a charge created by the company;
        or

   (b)  whether directly or by an agent, enters into possession or assumes
        control of property of a company for the purposes of enforcing a
        charge created by the company; shall be taken, for the purposes of
        subsection (1), to take a step in the enforcement of the charge.

(3) On application by the chargee under a charge, the Court may, if it is
satisfied that:

   (a)  immediately after the creation of the charge, the company that created
        the charge was solvent; and

   (b)  in all the circumstances of the case, it is just and equitable for the
        Court to do so; give leave for the charge to be enforced.

(4) Nothing in subsection (1) affects a debt, liability or obligation of a
company that would, if that subsection had not been enacted, have been secured
by a charge created by the company.

(5) Nothing in subsection (1) operates to affect the title of a person to
property (other than the charge concerned or an interest in the charge
concerned) purchased for value from a chargee under a charge, from an agent of
a chargee under a charge, or from a receiver appointed by a chargee under a
charge in the exercise of powers conferred by the charge or implied by law, if
that person purchased the property in good faith and without notice that the
charge was created in favour of a person who is, or in favour of persons at
least one of whom is, as the case may be, a relevant person in relation to the
charge.

(6) The onus of proving that a person purchased property in good faith and
without notice that a charge was created as mentioned in subsection (5) is on
the person asserting that the property was so purchased.

(7) In this section:

"chargee", in relation to a charge, means:

   (a)  in any case-the holder, or all or any of the holders, of the charge;
        or

   (b)  in the case of a charge that is an agreement to give or execute a
        charge in favour of a person or persons, whether upon demand or
        otherwise-that person, or all or any of those persons;

"officer", in relation to a company, includes, in the case of a registered
foreign company, a local agent of the foreign company;

"receiver" includes a receiver and manager;

"relevant person", in relation to a charge created by a company, means:

   (a)  a person who is at the time when the charge is created, or who has
        been at any time during the period of 6 months ending at that time, an
        officer of the company; or

   (b)  a person associated, in relation to the creation of the charge, with a
        person of a kind referred to in paragraph (a).