Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 456

456. (1) The appointment of a person as official manager of a company
terminates where:

   (a)  that person tenders his or her resignation in writing to either:

        (i)    the committee of management appointed pursuant to this Part; or

        (ii)   a meeting of creditors of the company;

   (b)  a special resolution that the appointment of the person be terminated
        is passed at a meeting of creditors of the company of which special
        notice stating that the meeting is convened for the purpose of
        considering such a resolution has been given; or

   (c)  the Court makes an order that the appointment of the person be
        terminated.

(2) The appointment of a person as official manager of a company shall be
terminated by the committee of management or, if there is no committee of
management, by the Court on the application of any creditor or member of the
company if:

   (a)  the official manager becomes an insolvent under administration;

   (b)  the official manager becomes incapable, by reason of mental infirmity,
        of managing his or her affairs;

   (c)  having been appointed by an order of the Court under subsection 439
        (5), the official manager ceases to be a registered company auditor;
        or

   (d)  the official manager becomes the auditor of the company.

(3) Where a vacancy occurs in the office of official manager of a company, the
committee of management may appoint, or if there is no committee of
management, a meeting of creditors of the company convened for that purpose by
any 2 of their number may by special resolution appoint, as official manager,
a person who is qualified for appointment.

(4) A person is qualified for appointment under subsection (3) if the person:

   (a)  has consented in writing to act as official manager of the company;

   (b)  is not the auditor of the company;

   (c)  is not an officer of a body corporate that is a mortgagee of property
        of the company; and

   (d)  has furnished to the committee of management or the chairman of the
        meeting of creditors, as the case may be, a certificate signed by the
        person stating that he or she is not an insolvent under
        administration.

(5) A person appointed official manager under subsection (3) shall assume, and
is responsible for, the management of the company and shall perform the
duties, and may perform any of the functions and exercise any of the powers,
of the directors of the company.

(6) Where the appointment of an official manager terminates or is terminated,
until a person is appointed official manager under subsection (3), the powers
and functions of the official manager vest in, and the duties of the official
manager shall be performed by:

   (a)  the deputy official manager;

   (b)  if there is no deputy official manager-the committee of management; or

   (c)  if there is no deputy official manager and no committee of
        management-a person appointed by the Court, on the application of a
        creditor of the company, to act as official manager until a person is
        appointed official manager under subsection (3).

(7) A person who convenes a meeting of creditors of a company for the purpose
of considering a resolution that the appointment of a person as official
manager of the company be terminated shall give to the person who is the
official manager not less than 14 days written notice of the meeting and of
the purpose for which it is being convened.

(8) Where a person who is an official manager of a company receives a notice
given under subsection (7), he or she shall:

   (a)  before the date on which the meeting is to be held, prepare a report
        showing how the official management of the company has been conducted
        by him or her;

   (b)  present the report to the meeting and give such explanations of that
        report as are reasonably requested by any creditor; and

   (c)  within 7 days after the holding of the meeting, lodge with the
        Commission a notice of the holding of the meeting:

        (i)    setting out the date on which the meeting was held; and

        (ii)   stating whether the resolution for the termination of the
               appointment of the person as official manager was passed;
together with a copy of the report prepared in accordance with paragraph (a).

(9) Where a person (other than a person who has been given notice of a meeting
under subsection (7) ) ceases to be an official manager of a company
(including a person who ceases to be an official manager by reason that his or
her appointment is terminated by the Court under subsection 439 (5) ):

   (a)  the person shall, notwithstanding that he or she has ceased to be the
        official manager, within 14 days after the day on which he or she
        ceased to be the official manager, prepare a report showing how the
        official management was conducted by him or her and, for this purpose,
        he or she has a right of access to the books of the company; and

   (b)  the person shall, within 28 days after the day on which he or she
        ceased to be the official manager, convene a meeting of all persons
        who were creditors of the company at the commencement of the official
        management and all persons who, on the day on which the person ceased
        to be the official manager, were creditors of the company.

(10) Notice of the meeting referred to in paragraph (9) (b) shall be given to
the creditors of the company by sending by post to each of the creditors, not
less than 7 days, nor more than 14 days, before the date fixed for the holding
of the meeting, a notice specifying the day, time, place and purpose of the
meeting and a copy of the report prepared in accordance with paragraph (9)
(a).

(11) At the meeting of creditors convened under paragraph (9) (b), the person
who was the official manager of the company shall present his or her report to
the meeting and shall give such explanations of that report as are reasonably
requested by any creditor.

(12) Within 7 days after the holding of the meeting referred to in paragraph
(9) (b), the person who was the official manager shall lodge notice of the
holding of the meeting and of the date on which it was held, together with a
copy of the report prepared in accordance with paragraph (9) (a).

(13) At a meeting of creditors convened under paragraph (9) (b), 2 creditors
constitute a quorum and, if a quorum is not present at the meeting, the person
who was the official manager shall, within 7 days after the day for which the
meeting was convened, lodge:

   (a)  a notice stating that the meeting was duly convened and that no quorum
        was present; and

   (b)  a copy of the report prepared in accordance with paragraph (9) (a).

(14) If the meeting is not held on the day for which it is convened under
paragraph (9) (b), the person who was official manager shall, within 7 days
after that day, lodge:

   (a)  a notice stating that the meeting was not held on that day; and

   (b)  a copy of the report prepared in accordance with paragraph (9) (a).

(15) The expenses incurred by a person who was an official manager of a
company in connection with the preparation of a report in accordance with
paragraph (8) (a) form part of the costs of the official management.

(16) The expenses incurred by a person who was official manager of a company
in connection with the preparation of a report in accordance with paragraph
(9) (a) and in relation to the convening and holding of the meeting in
accordance with paragraph (9) (b) form part of the costs of the official
management and shall be deemed to have been incurred during the period of the
official management.

(17) Subject to subsection (18), where a person ceases to be the official
manager of a company (including a person who ceases to be an official manager
by reason that his or her appointment is terminated by the Court under
subsection 439 (5)), the adoption by a meeting of creditors of the company of
the report prepared by him or her under paragraph (8) (a) or (9) (a), as the
case requires, and of his or her explanations, discharges him or her from all
liability in respect of any act or omission by him or her in the management of
the company or otherwise in relation to his or her conduct as official
manager.

(18) The adoption by a meeting of creditors of a company of a report prepared
in accordance with paragraph (8) (a) or (9) (a) by a person who has ceased to
be the official manager of the company and of any explanations of the person
in relation to the report does not:

   (a)  discharge the person from the liabilities referred to in subsection
        (17) if the adoption was obtained by fraud or by suppression or
        concealment of a material fact; or

   (b)  discharge the person from a liability to which, by virtue of a law
        other than this Act, he or she would be subject in respect of any
        negligence, default, breach of trust or breach of duty committed by
        him or her in relation to the company.

(19) If the report prepared by a person in accordance with paragraph (8) (a)
or (9) (a) and the explanations of the report are not adopted by a meeting of
creditors within 2 months after:

   (a)  in the case of a report prepared in accordance with paragraph (8)
        (a)-the date of the meeting to which the report was presented; or

   (b)  in the case of a report prepared in accordance with paragraph (9)
        (a)-the date on which notice of the meeting convened in accordance
        with paragraph (9) (b) was given to the creditors of the company; the
        person may apply to the Court for an order of release.

(20) If a person who was official manager of the company complies with
subsection (13), he or she may apply to the Court for an order of release.

(21) On an application under subsection (19) or (20), the Court may, if it
thinks fit, make an order releasing the applicant from liability for acts or
omissions by him or her in the management of the company and such an order has
the same effect as the adoption of a report and explanations has under
subsection (17).

(22) Where the Court makes an order under subsection (21), it may by order
direct that any costs or expenses incurred by the applicant in connection with
the application shall form part of the costs of the official management and
shall be deemed to have been incurred during the period of the official
management.

(23) Where the Court makes an order under subsection (21), the person who was
the official manager shall lodge with the Commission an office copy of the
order within 7 days after the passing and entering of the order.