Commonwealth Numbered Acts

CORPORATE LAW REFORM ACT 1992 No. 210 of 1992 - SECT 120

120. After section 600 of the Corporations Law the following Division and
heading are inserted:

"Division 3 - Provisions applying to various kinds of
external administration Powers of Court where outcome of voting at creditors'
meeting determined by related entity

"600A.(1) Subsection (2) applies where, on the application of a creditor of a
company or Part 5.1 body, the Court is satisfied:

   (a)  that a proposed resolution has been voted on at:

        (i)    in the case of a company - a meeting of creditors of the
               company held:

   (a)  under Part 5.3A or a deed of company arrangement executed by the
        company; or

   (b)  in connection with winding up the company; or

        (ii)   in the case of a Part 5.1 body - a meeting of creditors, or of
               a class of creditors, of the body held under Part 5.1; and

   (b)  that, if the vote or votes that a particular related creditor, or
        particular related creditors, of the company or body cast on the
        proposed resolution had been disregarded for the purposes of
        determining whether or not the proposed resolution was passed, the
        proposed resolution:

        (i)    if it was in fact passed - would not have been passed; or

        (ii)   if in fact it was not passed - would have been passed; or the
               question would have had to be decided on a casting vote; and

   (c)  that the passing of the proposed resolution, or the failure to pass
        it, as the case requires:

        (i)    is contrary to the interests of the creditors as a whole or of
               that class of creditors as a whole, as the case may be; or

        (ii)   has prejudiced, or is reasonably likely to prejudice, the
               interests of the creditors who voted against the proposed
               resolution, or for it, as the case may be, to an extent that is
               unreasonable having regard to:

   (a)  the benefits resulting to the related creditor, or to some or all of
        the related creditors, from the resolution, or from the failure to
        pass the proposed resolution, as the case may be; and

   (b)  the nature of the relationship between the related creditor and the
        company or body, or of the respective relationships between the
        related creditors and the company or body; and

   (c)  any other relevant matter.

"(2) The Court may make one or more of the following:

   (a)  if the proposed resolution was passed - an order setting aside the
        resolution;

   (b)  an order that the proposed resolution be considered and voted on at a
        meeting of the creditors of the company or body, or of that class of
        creditors, as the case may be, convened and held as specified in the
        order;

   (c)  an order directing that the related creditor is not, or such of the
        related creditors as the order specifies are not, entitled to vote on:

        (i)    the proposed resolution; or

        (ii)   a resolution to amend or vary the proposed resolution;

   (d)  such other orders as the Court thinks necessary.

"(3) In this section:
'related creditor', in relation to a company or Part 5.1 body, in relation to
a vote, means a person who, when the vote was cast, was a related entity, and
a creditor, of the company or body. Review by Court of resolution of creditors
passed on casting vote of chairperson of meeting

"600B.(1) This section applies if, because the person presiding at the meeting
exercises a casting vote, a resolution is passed at a meeting of creditors of
a company held:

   (a)  under Part 5.3A or a deed of company arrangement executed by the
        company; or

   (b)  in connection with winding up the company.

"(2) A person may apply to the Court for an order setting aside or varying the
resolution, but only if:

   (a)  the person voted against the resolution in some capacity (even if the
        person voted for the resolution in another capacity); or

   (b)  a person voted against the resolution on the first-mentioned person's
        behalf.

"(3) On an application, the Court may:

   (a)  by order set aside or vary the resolution; and

   (b)  if it does so - make such further orders, and give such directions, as
        it thinks necessary.

"(4) On and after the making of an order varying the resolution, the
resolution has effect as varied by the order. Court's powers where proposed
resolution of creditors lost on casting vote of chairperson of meeting

"600C.(1) This section applies if, because the person presiding at the meeting
exercises a casting vote, or refuses or fails to exercise such a vote, a
proposed resolution is not passed at a meeting of creditors of a company held:

   (a)  under Part 5.3A or a deed of company arrangement executed by the
        company; or

   (b)  in connection with winding up the company.

"(2) A person may apply to the Court for an order under subsection (3), but
only if:

   (a)  the person voted for the proposed resolution in some capacity (even if
        the person voted against the proposed resolution in another capacity);
        or

   (b)  a person voted for the proposed resolution on the first-mentioned
        person's behalf.

"(3) On an application, the Court may:

   (a)  order that the proposed resolution is taken to have been passed at the
        meeting; and

   (b)  if it does so - make such further orders, and give such directions, as
        it thinks necessary.

"(4) If an order is made under paragraph (3)(a), the proposed resolution:

   (a)  is taken for all purposes (other than those of subsection (1)) to have
        been passed at the meeting; and

   (b)  is taken to have taken effect:

        (i)    if the order specifies a time when the proposed resolution is
               to be taken to have taken effect - at that time, even if it is
               earlier than the making of the order; or

        (ii)   otherwise - on the making of the order. Interim order on
               application under section 600A, 600B or 600C

"600D.(1) Where:

   (a)  an application under subsection 600A(1), 600B(2) or 600C(2) has not
        yet been determined; and

   (b)  the Court is of the opinion that it is desirable to do so; the Court
        may make such interim orders as it thinks appropriate.

"(2) An interim order must be expressed to apply until the application is
determined, but may be varied or discharged. Order under section 600A or 600B
does not affect act already done pursuant to resolution

"600E. An act done pursuant to a resolution as in force before the making
under section 600A or 600B of an order setting aside or varying the resolution
is as valid and binding on and after the making of the order as if the order
had not been made. Limitation on right of suppliers of essential services to
insist on payment as condition of supply

"600F.(1) If:

   (a)  a relevant authority of an eligible company requests, or authorises
        someone else to request, a person or authority ('the supplier') to
        supply an essential service to the company in this jurisdiction; and

   (b)  the company owes an amount to the supplier in respect of the supply of
        the essential service before the effective day; the supplier must not:

   (c)  refuse to comply with the request for the reason only that the amount
        is owing; or

   (d)  make it a condition of the supply of the essential service pursuant to
        the request that the amount is to be paid.

"(2) In this section:
'effective day', in relation to a relevant authority of an eligible company,
means the day when the relevant authority became a relevant authority of the
company, even if that day began before this section commenced;
'eligible company' means a company:

   (a)  that is being wound up; or

   (b)  a provisional liquidator of which is acting; or

   (c)  that is under administration; or

   (d)  that has executed a deed of company arrangement that has not yet
        terminated; or

   (e)  a receiver, or receiver and manager, of property of which is acting;
'essential service' means:

   (a)  electricity; or

   (b)  gas; or

   (c)  water; or

   (d)  a telecommunications service within the meaning of the
        Telecommunications Act 1991;
'relevant authority', in relation to an eligible company, means:

   (a)  the liquidator; or

   (b)  the provisional liquidator; or

   (c)  the administrator of the company; or

   (d)  the administrator of the deed of company arrangement; or

   (e)  the receiver, or receiver and manager; as the case requires.
                "Division 4 - Transitional".