Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 592

592. (1) Where:

   (a)  a company has incurred a debt;

   (b)  immediately before the time when the debt was incurred:

        (i)    there were reasonable grounds to expect that the company will
               not be able to pay all its debts as and when they become due;
               or

        (ii)   there were reasonable grounds to expect that, if the company
               incurs the debt, it will not be able to pay all its debts as
               and when they become due; and

   (c)  the company was, at the time when the debt was incurred, or becomes at
        a later time, a company to which this section applies; any person who
        was a director of the company, or took part in the management of the
        company, at the time when the debt was incurred contravenes this
        subsection and the company and that person or, if there are 2 or more
        such persons, those persons are jointly and severally liable for the
        payment of the debt.

(2) In any proceedings against a person under subsection (1), it is a defence
if it is proved:

   (a)  that the debt was incurred without the person's express or implied
        authority or consent; or

   (b)  that at the time when the debt was incurred, the person did not have
        reasonable cause to expect:

        (i)    that the company would not be able to pay all its debts as and
               when they became due; or

        (ii)   that, if the company incurred that debt, it would not be able
               to pay all its debts as and when they became due.

(3) Proceedings may be brought under subsection (1) for the recovery of a debt
whether or not the person against whom the proceedings are brought, or any
other person, has been convicted of an offence under subsection (1) in respect
of the incurring of that debt.

(4) In proceedings brought under subsection (1) for the recovery of a debt,
the liability of a person under that subsection in respect of the debt may be
established on the balance of probabilities.

(5) Where subsection (1) renders a person or persons liable to pay a debt
incurred by a company, the payment by that person or either or any of those
persons of the whole or any part of that debt does not render the company
liable to the person concerned in respect of the amount so paid.

(6) Where:

   (a)  a company has done an act (including the making of a contract or the
        entering into of a transaction) with intent to defraud creditors of
        the company or of any other person or for any other fraudulent
        purpose; and

   (b)  the company was at the time when it does the act, or becomes at a
        later time, a company to which this section applies; any person who
        was knowingly concerned in the doing of the act with that intent or
        for that purpose contravenes this subsection.

(7) A certificate issued by the proper officer of an Australian court stating
that a person specified in the certificate:

   (a)  was convicted of an offence under subsection (1) in relation to a debt
        specified in the certificate incurred by a company so specified; or

   (b)  was convicted of an offence under subsection (6) in relation to a
        company specified in the certificate; is, in any proceedings, prima
        facie evidence of the matters stated in the certificate.

(8) A document purporting to be a certificate issued under subsection (7)
shall, unless the contrary is established, be deemed to be such a certificate
and to have been duly issued.