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CORPORATE LAW REFORM ACT 1992 No. 210 of 1992 - SECT 56
56. Part 5.3 of the Corporations Law is repealed and the following Part is
substituted:
"PART 5.3A - ADMINISTRATION OF A COMPANY'S
AFFAIRS WITH A VIEW TO EXECUTING A DEED
OF COMPANY ARRANGEMENT
"Division 1 - Preliminary
Object of Part
"435A. The object of this Part is to provide for the business, property and
affairs of an insolvent company to be administered in a way that:
(a) maximises the chances of the company, or as much as possible of its
business, continuing in existence; or
(b) if it is not possible for the company or its business to continue in
existence - results in a better return for the company's creditors and
members than would result from an immediate winding up of the company.
Interpretation
"435B. In this Part, unless the contrary intention appears:
'receiver' includes a receiver and manager. When administration begins and
ends
"435C.(1) The administration of a company:
(a) begins when an administrator of the company is appointed under section
436A, 436B or 436C; and
(b) ends on the happening of whichever event of a kind referred to in
subsection (2) or (3) happens first after the administration begins.
"(2) The normal outcome of the administration of a company is that:
(a) a deed of company arrangement is executed by both the company and the
deed's administrator; or
(b) the company's creditors resolve under paragraph 439C(b) that the
administration should end; or
(c) the company's creditors resolve under paragraph 439C(c) that the
company be wound up.
"(3) However, the administration of a company may also end because:
(a) the Court orders, under section 447A or otherwise, that the
administration is to end, for example, because the Court is satisfied
that the company is solvent; or
(b) the convening period, as fixed by subsection 439A(5), for a meeting of
the company's creditors ends:
(i) without the meeting being convened in accordance with section
439A; and
(ii) without an application being made for the Court to extend under
subsection 439A(6) the convening period for the meeting; or
(c) an application for the Court to extend under subsection 439A(6) the
convening period for such a meeting is finally determined or otherwise
disposed of otherwise than by the Court extending the convening
period; or
(d) the convening period, as extended under subsection 439A(6), for such a
meeting ends without the meeting being convened in accordance with
section 439A; or
(e) such a meeting convened under section 439A ends (whether or not it was
earlier adjourned) without a resolution under section 439C being
passed at the meeting; or
(f) the company contravenes subsection 444B(2) by failing to execute a
proposed deed of company arrangement; or
(g) the Court appoints a provisional liquidator of the company, or orders
that the company be wound up.
"(4) During the administration of a company, the company is taken to be under
administration.
"Division 2 - Appointment of administrator and
first meeting of creditors Company may appoint administrator if board thinks
it is or will become insolvent
"436A.(1) A company may, by writing under its common seal, appoint an
administrator of the company if the board has resolved to the effect that:
(a) in the opinion of the directors voting for the resolution, the company
is insolvent, or is likely to become insolvent at some future time;
and
(b) an administrator of the company should be appointed.
"(2) Subsection (1) does not apply to a company that is already being wound
up. Liquidator may appoint administrator
"436B.(1) A liquidator or provisional liquidator of a company may by writing
appoint an administrator of the company if he or she thinks that the company
is insolvent, or is likely to become insolvent at some future time.
"(2) With the leave of the Court, a liquidator or provisional liquidator of a
company may appoint himself or herself under subsection (1).
"(3) Subsection (2) has effect subject to Division 14. Chargee may appoint
administrator
"436C.(1) A person who is entitled to enforce a charge on the whole, or
substantially the whole, of a company's property may by writing appoint an
administrator of the company if the charge has become, and is still,
enforceable.
"(2) Subsection (1) does not apply to a company that is already being wound
up. Company already under administration
"436D. An administrator cannot be appointed under section 436A, 436B or 436C
if the company is already under administration. Purpose and timing of first
meeting of creditors
"436E.(1) The administrator of a company under administration must convene a
meeting of the company's creditors in order to determine:
(a) whether to appoint a committee of creditors; and
(b) if so, who are to be the committee's members.
"(2) The meeting must be held within 5 business days after the administration
begins.
"(3) The administrator must convene the meeting by:
(a) giving written notice of the meeting to as many of the company's
creditors as reasonably practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered
office or carries on business, in a daily newspaper that
circulates generally in that jurisdiction; at least 2 business
days before the meeting.
"(4) At the meeting, the company's creditors may also, by resolution:
(a) remove the administrator from office; and
(b) appoint someone else as administrator of the company. Functions of
committee of creditors
"436F.(1) The functions of a committee of creditors of a company under
administration are:
(a) to consult with the administrator about matters relating to the
administration; and
(b) to receive and consider reports by the administrator.
"(2) A committee cannot give directions to the administrator, except as
provided in subsection (3).
"(3) As and when a committee reasonably requires, the administrator must
report to the committee about matters relating to the administration.
Membership of committee
"436G. A person can be a member of a committee of creditors of a company under
administration if, and only if, he or she is:
(a) a creditor of the company; or
(b) the attorney of such a creditor because of a general power of
attorney; or
(c) authorised in writing by such a creditor to be such a member.
"Division 3 - Administrator assumes control of
company's affairs Role of administrator
"437A.(1) While a company is under administration, the administrator:
(a) has control of the company's business, property and affairs; and
(b) may carry on that business and manage that property and those affairs;
and
(c) may terminate or dispose of all or part of that business, and may
dispose of any of that property; and
(d) may perform any function, and exercise any power, that the company or
any of its officers could perform or exercise if the company were not
under administration.
"(2) Nothing in subsection (1) limits the generality of anything else in it.
Administrator acts as company's agent
"437B. When performing a function, or exercising a power, as administrator of
a company under administration, the administrator is taken to be acting as the
company's agent. Powers of other officers suspended
"437C.(1) While a company is under administration, a person (other than the
administrator) cannot perform or exercise, and must not purport to perform or
exercise, a function or power as an officer of the company, except with the
administrator's written approval.
"(2) Subsection (1) does not remove an officer of a company from his or her
office.
"(3) Section 437D does not limit the generality of subsection (1) of this
section.
"(4) In this section:
'officer', in relation to a company under administration, includes:
(a) a receiver who is not also a manager; and
(b) a receiver and manager appointed by a court; and
(c) a liquidator or provisional liquidator appointed by the Court before
the administration began.
"(5) However, a person is not an officer of a company for the purposes of this
section merely because he or she is an employee of the company. Only
administrator can deal with company's property
"437D.(1) This section applies where:
(a) a company under administration purports to enter into; or
(b) a person purports to enter into, on behalf of a company under
administration; a transaction or dealing affecting property of the
company.
"(2) The transaction or dealing is void unless:
(a) the administrator entered into it on the company's behalf; or
(b) the administrator consented to it in writing before it was entered
into; or
(c) it was entered into under an order of the Court.
"(3) Subsection (2) does not apply to a payment made:
(a) by an Australian bank out of an account kept by the company with the
bank; and
(b) in good faith and in the ordinary course of the bank's banking
business; and
(c) after the administration began and on or before the day on which:
(i) the administrator gives to the bank (under subsection 450A(3)
or otherwise) written notice of the appointment that began the
administration; or
(ii) the administrator complies with paragraph 450A(1)(b) in
relation to that appointment; whichever happens first.
"(4) Subsection (2) has effect subject to an order that the Court makes after
the purported transaction or dealing.
"(5) If, because of subsection (2), the transaction or dealing is void, or
would be void apart from subsection (4), an officer of the company who:
(a) purported to enter into the transaction or dealing on the company's
behalf; or
(b) was in any other way, by act or omission, directly or indirectly,
knowingly concerned in, or party to, the transaction or dealing;
contravenes this subsection. Order for compensation where officer
involved in void transaction
"437E.(1) Where:
(a) a court finds a person guilty of an offence constituted by a
contravention of subsection 437D(5) (including such an offence that is
taken to have been committed because of section 5 of the
Crimes Act 1914 or that section as it applies as a law of this
jurisdiction); and
(b) the court is satisfied that the company or another person has suffered
loss or damage because of the act or omission constituting the
offence; the court may (whether or not it imposes a penalty) order the
first-mentioned person to pay compensation to the company or other
person, as the case may be, of such amount as the order specifies.
Note: Section 73A defines when a court is taken to find a person
guilty of an offence.
"(2) An order under subsection (1) may be enforced as if it were a judgment of
the court.
"(3) The power of a court under section 1318 to relieve a person from
liability as mentioned in that section extends to relieving a person from
liability to be ordered under this section to pay compensation. Effect of
administration on company's members
"437F. A transfer of shares in a company, or an alteration in the status of
members of a company, that is made during the administration of the company is
void except so far as the Court otherwise orders.
"Division 4 - Administrator investigates company's
affairs Administrator to investigate affairs and consider possible courses of
action
"438A. As soon as practicable after the administration of a company begins,
the administrator must:
(a) investigate the company's business, property, affairs and financial
circumstances; and
(b) form an opinion about each of the following matters:
(i) whether it would be in the interests of the company's creditors
for the company to execute a deed of company arrangement;
(ii) whether it would be in the creditors' interests for the
administration to end;
(iii) whether it would be in the creditors' interests for the company
to be wound up. Directors to help administrator
"438B.(1) As soon as practicable after the administration of a company begins,
each director must:
(a) deliver to the administrator all books in the director's possession
that relate to the company, other than books that the director is
entitled, as against the company and the administrator, to retain; and
(b) if the director knows where other books relating to the company are -
tell the administrator where those books are.
"(2) Within 7 days after the administration of a company begins or such longer
period as the administrator allows, the directors must give to the
administrator a statement about the company's business, property, affairs and
financial circumstances.
"(3) A director of a company under administration must:
(a) attend on the administrator at such times; and
(b) give the administrator such information about the company's business,
property, affairs and financial circumstances; as the administrator
reasonably requires.
"(4) A person must not, without reasonable excuse, fail to comply with
subsection (1), (2) or (3). Administrator's rights to company's books
"438C.(1) A person is not entitled, as against the administrator of a company
under administration:
(a) to retain possession of books of the company; or
(b) to claim or enforce a lien on such books; but such a lien is not
otherwise prejudiced.
"(2) Paragraph (1)(a) does not apply in relation to books of which a secured
creditor of the company is entitled to possession otherwise than because of a
lien, but the administrator is entitled to inspect, and make copies of, such
books at any reasonable time.
"(3) The administrator of a company under administration may give to a person
a written notice requiring the person to deliver to the administrator, as
specified in the notice, books so specified that are in the person's
possession.
"(4) A notice under subsection (3) must specify a period of at least 3
business days as the period within which the notice must be complied with.
"(5) A person must comply with a notice under subsection (3) except so far as
the person is entitled, as against the company and the administrator, to
retain possession of the books. Reports by administrator
"438D.(1) If it appears to the administrator of a company under administration
that:
(a) a past or present officer, or a member, of the company may have been
guilty of an offence in relation to the company; or
(b) a person who has taken part in the formation, promotion,
administration, management or winding up of the company:
(i) may have misapplied or retained, or may have become liable or
accountable for, money or property (in Australia or elsewhere)
of the company; or
(ii) may have been guilty of negligence, default, breach of duty or
breach of trust in relation to the company; the administrator
must:
(c) lodge a report about the matter as soon as practicable; and
(d) give the Commission such information, and such access to and
facilities for inspecting and taking copies of documents, as the
Commission requires.
"(2) The administrator may also lodge further reports specifying any other
matter that, in his or her opinion, it is desirable to bring to the
Commission's notice.
"(3) If it appears to the Court:
(a) that a past or present officer, or a member, of a company under
administration has been guilty of an offence in relation to the
company; or
(b) that a person who has taken part in the formation, promotion,
administration, management or winding up of a company under
administration has engaged in conduct of a kind referred to in
paragraph (1)(b) in relation to the company; and that the
administrator has not lodged a report about the matter, the Court may,
on the application of an interested person or of its own motion,
direct the administrator to lodge such a report.
"Division 5 - Meeting of creditors decides company's
future Administrator to convene meeting and inform creditors
"439A.(1) The administrator of a company under administration must convene a
meeting of the company's creditors within the convening period as fixed by
subsection (5) or extended under subsection (6).
"(2) The meeting must be held within 5 business days after the end of the
convening period.
"(3) The administrator must convene the meeting by:
(a) giving written notice of the meeting to as many of the company's
creditors as reasonably practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered
office or carries on business, in a daily newspaper that
circulates generally in that jurisdiction; at least 5 business
days before the meeting.
"(4) The notice given to a creditor under paragraph (3)(a) must be accompanied
by a copy of:
(a) a report by the administrator about the company's business, property,
affairs and financial circumstances; and
(b) a statement setting out the administrator's opinion about each of the
following matters:
(i) whether it would be in the creditors' interests for the company
to execute a deed of company arrangement;
(ii) whether it would be in the creditors' interests for the
administration to end;
(iii) whether it would be in the creditors' interests for the company
to be wound up; and his or her reasons for those opinions; and
(c) if a deed of company arrangement is proposed - a statement setting out
details of the proposed deed.
"(5) The convening period is:
(a) if the administration begins on a day that is in December, or is less
than 28 days before Good Friday - the period of 28 days beginning on
that day; or
(b) otherwise - the period of 21 days beginning on the day when the
administration begins.
"(6) The Court may extend the convening period on an application made within
the period referred to in paragraph (5)(a) or (b), as the case requires.
Conduct of meeting
"439B.(1) At a meeting convened under section 439A, the administrator is to
preside.
"(2) A meeting convened under section 439A may be adjourned from time to time,
but cannot be adjourned to a day that is more than 60 days after the first day
on which the meeting was held, even if no resolution under section 439C has
been passed at the meeting. What creditors may decide
"439C. At a meeting convened under section 439A, the creditors may resolve:
(a) that the company execute a deed of company arrangement specified in
the resolution (even if it differs from the proposed deed (if any)
details of which accompanied the notice of meeting); or
(b) that the administration should end; or
(c) that the company be wound up.
"Division 6 - Protection of company's property during
administration Winding up company
"440A.(1) A company under administration cannot be wound up voluntarily,
except as provided by section 446A.
"(2) The Court is to adjourn the hearing of an application for an order to
wind up a company if the company is under administration and the Court is
satisfied that it is in the interests of the company's creditors for the
company to continue under administration rather than be wound up.
"(3) The Court is not to appoint a provisional liquidator of a company if the
company is under administration and the Court is satisfied that it is in the
interests of the company's creditors for the company to continue under
administration rather than have a provisional liquidator appointed. Charge
unenforceable
"440B. During the administration of a company, a person cannot enforce a
charge on property of the company, except:
(a) with the administrator's written consent; or
(b) with the leave of the Court. Owner or lessor cannot recover property
used by company
"440C. During the administration of a company, the owner or lessor of property
that is used or occupied by, or is in the possession of, the company cannot
take possession of the property or otherwise recover it, except:
(a) with the administrator's written consent; or
(b) with the leave of the Court. Stay of proceedings
"440D.(1) During the administration of a company, a proceeding in a court
against the company or in relation to any of its property cannot be begun or
proceeded with, except:
(a) with the administrator's written consent; or
(b) with the leave of the Court and in accordance with such terms (if any)
as the Court imposes.
"(2) Subsection (1) does not apply to:
(a) a criminal proceeding; or
(b) a prescribed proceeding. Administrator not liable in damages for
refusing consent
"440E. A company's administrator is not liable to an action or other
proceeding for damages in respect of a refusal to give an approval or consent
for the purposes of this Division. Suspension of enforcement process
"440F. During the administration of a company, no enforcement process in
relation to property of the company can be begun or proceeded with, except:
(a) with the leave of the Court; and
(b) in accordance with such terms (if any) as the Court imposes. Duties of
court officer in relation to property of company
"440G.(1) This section applies where an officer of a court (in this section
called the 'court officer'), being:
(a) a sheriff; or
(b) the registrar or other appropriate officer of the court; receives
written notice of the fact that a company is under administration.
"(2) During the administration, the court officer cannot:
(a) take action to sell property of the company under a process of
execution; or
(b) pay to a person (other than the administrator):
(i) proceeds of selling property of the company (at any time) under
a process of execution; or
(ii) money of the company seized (at any time) under a process of
execution; or
(iii) money paid (at any time) to avoid seizure or sale of property
of the company under a process of execution; or
(c) take action in relation to the attachment of a debt due to the
company; or
(d) pay to a person (other than the administrator) money received because
of the attachment of such a debt.
"(3) The court officer must deliver to the administrator any property of the
company that is in the court officer's possession under a process of execution
(whenever begun).
"(4) The court officer must pay to the administrator all proceeds or money of
a kind referred to in paragraph (2)(b) or (d) that:
(a) are in the court officer's possession; or
(b) have been paid into the court and have not since been paid out.
"(5) The costs of the execution or attachment are a first charge on property
delivered under subsection (3) or proceeds or money paid under subsection (4).
"(6) In order to give effect to a charge under subsection (5) on proceeds or
money, the court officer may retain, on behalf of the person entitled to the
charge, so much of the proceeds or money as the court officer thinks
necessary.
"(7) The Court may, if it is satisfied that it is appropriate to do so, permit
the court officer to take action, or to make a payment, that subsection (2)
would otherwise prevent.
"(8) A person who buys property in good faith under a sale under a process of
execution gets a good title to the property as against the company and the
administrator, despite anything else in this section. Lis pendens taken to
exist
"440H.(1) This section has effect only for the purposes of a law about the
effect of a lis pendens on purchasers or mortgagees.
"(2) During the administration of a company, an application to wind up the
company is taken to be pending.
"(3) An application that is taken because of subsection (2) to be pending
constitutes a lis pendens. Administration not to trigger liability of director
or relative under guarantee of company's liability
"440J.(1) During the administration of a company:
(a) a guarantee of a liability of the company cannot be enforced, as
against:
(i) a director of the company who is a natural person; or
(ii) a spouse, de facto spouse or relative of such a director; and
(b) without limiting paragraph (a), a proceeding in relation to such a
guarantee cannot be begun against such a director, spouse, de facto
spouse or relative; except with the leave of the Court and in
accordance with such terms (if any) as the Court imposes.
"(2) While subsection (1) prevents a person ('the creditor') from:
(a) enforcing as against another person ('the guarantor') a guarantee of a
liability of a company; or
(b) beginning a proceeding against another person ('the guarantor') in
relation to such a guarantee; section 1323 applies in relation to the
creditor and the guarantor as if:
(c) a civil proceeding against the guarantor had begun under this Law; and
(d) the creditor were the only person of a kind referred to in that
section as an aggrieved person. Note: Under section 1323 the Court can
make a range of orders to ensure that a person can meet the person's
liabilities.
"(3) The effect that section 1323 has because of a particular application of
subsection (2) is additional to, and does not prejudice, the effect the
section otherwise has.
"(4) In this section:
'guarantee', in relation to a liability of a company, includes a relevant
agreement (as defined in section 9) because of which a person other than the
company has incurred, or may incur, whether jointly with the company or
otherwise, a liability in respect of the liability of the company;
'liability' means a debt, liability or other obligation.
"Division 7 - Rights of chargee, owner or lessor Where chargee acts before or
during decision period
"441A.(1) This section applies where:
(a) the whole, or substantially the whole, of the property of a company
under administration is subject to a charge; and
(b) before or during the decision period, the chargee enforced the charge
in relation to all property of the company subject to the charge,
whether or not the charge was enforced in the same way in relation to
all that property.
"(2) This section also applies where:
(a) a company is under administration; and
(b) the same person is the chargee in relation to each of 2 or more
charges on property of the company; and
(c) the property of the company (in this subsection called the 'charged
property') subject to the respective charges together constitutes the
whole, or substantially the whole, of the company's property; and
(d) before or during the decision period, the chargee enforced the charges
in relation to all the charged property:
(i) whether or not the charges were enforced in the same way in
relation to all the charged property; and
(ii) whether or not any of the charges was enforced in the same way
in relation to all the property of the company subject to that
charge; and
(iii) in so far as the charges were enforced in relation to property
of the company in a way referred to in paragraph (a), (b) or
(d) of the definition of 'enforce' in section 9 - whether or
not the same person was appointed in respect of all of the
last-mentioned property.
"(3) Nothing in section 437C or 440B, or in an order under subsection 444F(2),
prevents any of the following from enforcing the charge, or any of the
charges:
(a) the chargee;
(b) a receiver or person appointed as mentioned in paragraph (a), (b) or
(d) of the definition of 'enforce' in section 9 as that definition
applies in relation to the charge, or any of the charges (even if
appointed after the decision period).
"(4) Section 437D does not apply in relation to a transaction or dealing that
affects property of the company and is entered into by:
(a) the chargee; or
(b) a receiver or person of a kind referred to in paragraph (3)(b) of this
section; in the performance or exercise of a function or power as
chargee, or as such a receiver or person, as the case may be. Where
enforcement of charge begins before administration
"441B.(1) This section applies if, before the beginning of the administration
of a company, a chargee, receiver or other person:
(a) entered into possession, or assumed control, of property of the
company; or
(b) entered into an agreement to sell such property; or
(c) made arrangements for such property to be offered for sale by public
auction; or
(d) publicly invited tenders for the purchase of such property; or
(e) exercised any other power in relation to such property; for the
purpose of enforcing a charge on that property.
"(2) Nothing in section 437C or 440B prevents the chargee, receiver or other
person from enforcing the charge in relation to that property.
"(3) Section 437D does not apply in relation to a transaction or dealing that
affects that property and is entered into:
(a) in the exercise of a power of the chargee as chargee; or
(b) in the performance or exercise of a function or power of the receiver
or other person; as the case may be. Charge on perishable property
"441C.(1) This section applies where perishable property of a company under
administration is subject to a charge.
"(2) Nothing in section 437C or 440B prevents:
(a) the chargee; or
(b) a receiver or person appointed (at any time) as mentioned in paragraph
(a), (b) or (d) of the definition of 'enforce' in section 9; from
enforcing the charge, so far as it is a charge on perishable property.
"(3) Section 437D does not apply in relation to a transaction or dealing that
affects perishable property of the company and is entered into by:
(a) the chargee; or
(b) a receiver or person appointed (at any time) as mentioned in paragraph
(a), (b) or (d) of the definition of 'enforce' in section 9; in the
performance or exercise of a function or power as chargee, or as such
a receiver or person, as the case may be. Court may limit powers of
chargee, etc. in relation to charged property
"441D.(1) This section applies if:
(a) for the purpose of enforcing a charge on property of a company, the
chargee, or a receiver or other person, does an act of a kind referred
to in a paragraph of subsection 441B(1); and
(b) the company is under administration when the chargee, receiver or
other person does the act, or the company later begins to be under
administration; but does not apply in a case where section 441A
applies.
"(2) On application by the administrator, the Court may order the chargee,
receiver or other person not to perform specified functions, or exercise
specified powers, except as permitted by the order.
"(3) The Court may only make an order if satisfied that what the administrator
proposes to do during the administration will adequately protect the chargee's
interests.
"(4) An order may only be made, and only has effect, during the
administration.
"(5) An order has effect despite sections 441B and 441C. Giving a notice under
a charge
"441E. Nothing in section 437C or 440B prevents a person from giving a notice
under the provisions of a charge. Where recovery of property begins before
administration
"441F.(1) This section applies if, before the beginning of the administration
of a company, a receiver or other person:
(a) entered into possession, or assumed control, of property used or
occupied by, or in the possession of, the company; or
(b) exercised any other power in relation to such property; for the
purpose of enforcing a right of the owner or lessor of the property to
take possession of the property or otherwise recover it.
"(2) Nothing in section 437C or 440C prevents the receiver or other person
from performing a function, or exercising a power, in relation to the
property.
"(3) Section 437D does not apply in relation to a transaction or dealing that
affects the property and is entered into in the performance or exercise of a
function or power of the receiver or other person. Recovering perishable
property
"441G.(1) Nothing in section 437C or 440C prevents a person from taking
possession of, or otherwise recovering, perishable property.
"(2) Section 437D does not apply in relation to a transaction or dealing that
affects perishable property and is entered into for the purpose of enforcing a
right of the owner or lessor of the property to take possession of the
property or otherwise recover it. Court may limit powers of receiver etc. in
relation to property used by company
"441H.(1) This section applies if:
(a) for the purpose of enforcing a right of the owner or lessor of
property used or occupied by, or in the possession of, a company to
take possession of the property or otherwise recover it, a person:
(i) enters into possession, or assumes control, of the property; or
(ii) exercises any other power in relation to the property; and
(b) the company is under administration when the person does so, or the
company later begins to be under administration.
"(2) On application by the administrator, the Court may order the person not
to perform specified functions, or exercise specified powers, in relation to
the property, except as permitted by the order.
"(3) The Court may only make an order if satisfied that what the administrator
proposes to do during the administration will adequately protect the interests
of the owner or lessor.
"(4) An order may only be made, and only has effect, during the
administration.
"(5) An order has effect despite sections 441F and 441G. Giving a notice under
an agreement about property
"441J. Nothing in section 437C or 440C prevents a person from giving a notice
to a company under an agreement relating to property that is used or occupied
by, or is in the possession of, the company. Effect of Division
"441K. Except as expressly provided, nothing in this Division limits the
generality of anything else in it.
"Division 8 - Powers of administrator Additional powers of administrator
"442A. Without limiting section 437A, the administrator of a company under
administration has power to do any of the following:
(a) remove from office a director of the company;
(b) appoint a person as such a director, whether to fill a vacancy or not;
(c) execute a document, bring or defend proceedings, or do anything else,
in the company's name and on its behalf;
(d) whatever else is necessary for the purposes of this Part. Dealing with
property subject to a floating charge that has crystallised
"442B.(1) This section applies where a charge on property of a company under
administration was a floating charge when created but has since become a fixed
or specific charge.
"(2) Subject to sections 442C and 442D, the administrator may deal with any of
that property as if the charge were still a floating charge. When
administrator may dispose of encumbered property
"442C.(1) The administrator of a company under administration or of a deed of
company arrangement must not dispose of:
(a) property of the company that is subject to a charge; or
(b) property that is used or occupied by, or is in the possession of, the
company but of which someone else is the owner or lessor.
"(2) Subsection (1) does not prevent a disposal:
(a) in the ordinary course of the company's business; or
(b) with the written consent of the chargee, owner or lessor, as the case
may be; or
(c) with the leave of the Court.
"(3) The Court may only give leave under paragraph (2)(c) if satisfied that
arrangements have been made to protect adequately the interests of the
chargee, owner or lessor, as the case may be. Administrator's powers subject
to powers of chargee, receiver etc.
"442D.(1) Where section 441A applies, the administrator's functions and powers
are subject to the functions and powers of a person as:
(a) the chargee; or
(b) a receiver or person of a kind referred to in paragraph 441A(3)(b)
(even if appointed after the decision period).
"(2) Where section 441C applies, then, so far as concerns perishable property
of the company, the administrator's functions and powers are subject to the
functions and powers of a person as:
(a) the chargee; or
(b) a receiver or person appointed (at any time) as mentioned in paragraph
(a), (b) or (d) of the definition of 'enforce' in section 9.
"(3) Where section 441B, 441F or 441G applies, then, so far as concerns the
property referred to in subsection 441B(1), 441F(1) or 441G(1), the
administrator's functions and powers are subject to the functions and powers
of the chargee, receiver or other person. Administrator has qualified
privilege
"442E. A person who is or has been the administrator of a company under
administration has qualified privilege in respect of a statement that he or
she has made, whether orally or in writing, in the course of performing or
exercising any of his or her functions and powers as administrator of the
company. Protection of persons dealing with administrator
"442F.(1) Sections 164 and 166 apply in relation to a company under
administration as if:
(a) a reference in those sections to the company, or to an officer of the
company, included a reference to the administrator; and
(b) a reference in those sections to an assumption referred to in
subsection 164(3) included a reference to an assumption that the
administrator is:
(i) acting within his or her functions and powers as administrator;
and
(ii) in particular, is complying with this Law.
"(2) The effect that sections 164 and 166 have because of subsection (1) of
this section is additional to, and does not prejudice, the effect that
sections 164 and 166 otherwise have in relation to a company under
administration.
"Division 9 - Administrator's liability and indemnity
for debts of administration
Subdivision A - Liability General debts
"443A.(1) The administrator of a company under administration is liable for
debts he or she incurs, in the performance or exercise, or purported
performance or exercise, of any of his or her functions and powers as
administrator, for:
(a) services rendered; or
(b) goods bought; or
(c) property hired, leased, used or occupied.
"(2) Subsection (1) has effect despite any agreement to the contrary, but
without prejudice to the administrator's rights against the company or anyone
else. Payments for property used or occupied by, or in the possession of, the
company
"443B.(1) This section applies if, under an agreement made before the
administration of a company began, the company continues to use or occupy, or
to be in possession of, property of which someone else is the owner or lessor.
"(2) Subject to this section, the administrator is liable for so much of the
rent or other amounts payable by the company under the agreement as is
attributable to a period:
(a) that begins more than 7 days after the administration began; and
(b) throughout which:
(i) the company continues to use or occupy, or to be in possession
of, the property; and
(ii) the administration continues.
"(3) Within 7 days after the beginning of the administration, the
administrator may give to the owner or lessor a notice that specifies the
property and states that the company does not propose to exercise rights in
relation to the property.
"(4) Despite subsection (2), the administrator is not liable for so much of
the rent or other amounts payable by the company under the agreement as is
attributable to a period during which a notice under subsection (3) is in
force, but such a notice does not affect a liability of the company.
"(5) A notice under subsection (3) ceases to have effect if:
(a) the administrator revokes it by writing given to the owner or lessor;
or
(b) the company exercises, or purports to exercise, a right in relation to
the property.
"(6) For the purposes of subsection (5), the company does not exercise, or
purport to exercise, a right in relation to the property merely because the
company continues to occupy, or to be in possession of, the property, unless
the company:
(a) also uses the property; or
(b) asserts a right, as against the owner or lessor, so to continue.
"(7) Subsection (2) does not apply in relation to so much of a period as
elapses after:
(a) a receiver of the property is appointed; or
(b) a chargee appoints an agent, under the provisions of a charge on the
property, to enter into possession, or to assume control, of the
property; or
(c) a chargee takes possession, or assumes control, of the property under
the provisions of a charge on the property; but this subsection does
not affect a liability of the company.
"(8) Subsection (2) does not apply in so far as the Court, by order, excuses
the administrator from liability, but an order does not affect a liability of
the company.
"(9) The administrator is not taken because of subsection (2):
(a) to have adopted the agreement; or
(b) to be liable under the agreement otherwise than as mentioned in
subsection (2). Administrator not otherwise liable for company's debts
"443C. The administrator of a company under administration is not liable for
the company's debts except under section 443A or 443B.
"Subdivision B - Indemnity
Right of indemnity
"443D. The administrator of a company under administration is entitled to be
indemnified out of the company's property for:
(a) debts for which the administrator is liable under section 443A or
443B; and
(b) his or her remuneration as fixed under section 449E. Right of
indemnity has priority over other debts
"443E.(1) Subject to section 556, a right of indemnity under section 443D has
priority over:
(a) all the company's unsecured debts; and
(b) subject to subsections (2) and (3) of this section, debts of the
company secured by a floating charge on property of the company.
"(2) Where:
(a) debts of a company under administration are secured by a floating
charge on property of the company; and
(b) before the beginning of the administration, the chargee:
(i) appointed a receiver of property of the company under a power
contained in an instrument relating to the charge; or
(ii) obtained an order for the appointment of a receiver of property
of the company for the purpose of enforcing the charge; or
(iii) entered into possession, or assumed control, of property of the
company for that purpose; or
(iv) appointed a person so to enter into possession or assume
control (whether as agent for the chargee or for the company);
and
(c) the receiver or person is still in office, or the chargee is still in
possession or control of the property; the right of indemnity of the
administrator under section 443D does not have priority over those
debts, except so far as the chargee agrees.
"(3) Where:
(a) debts of a company under administration are secured by a floating
charge on property of the company; and
(b) during the administration, the chargee, consistently with this Part:
(i) appoints a receiver of property of the company under a power
contained in an instrument relating to the charge; or
(ii) obtains an order for the appointment of a receiver of property
of the company for the purpose of enforcing the charge; or
(iii) enters into possession, or assumes control, of property of the
company for that purpose; or
(iv) appoints a person so to enter into possession or assume control
(whether as agent for the chargee or for the company); the right of
indemnity of the administrator under section 443D has priority over
those debts only in so far as it is a right of indemnity for debts
incurred, or remuneration accruing, before written notice of the
appointment, or of the entering into possession or assuming of
control, as the case may be, was given to the administrator. Lien to
secure indemnity
"443F.(1) To secure a right of indemnity under section 443D, the administrator
has a lien on the company's property.
"(2) A lien under subsection (1) has priority over a charge only in so far as
the right of indemnity under section 443D has priority over debts secured by
the charge.
"Division 10 - Execution and effect of deed of company
arrangement Effect of creditors' resolution
"444A.(1) This section applies where, at a meeting convened under section
439A, a company's creditors resolve that the company execute a deed of company
arrangement.
"(2) The administrator of the company is to be the administrator of the deed,
unless the creditors, by resolution passed at the meeting, appoint someone
else to be administrator of the deed.
"(3) The administrator of the deed must prepare an instrument setting out the
terms of the deed.
"(4) The instrument must also specify the following:
(a) the administrator of the deed;
(b) the property of the company (whether or not already owned by the
company when it executes the deed) that is to be available to pay
creditors' claims;
(c) the nature and duration of any moratorium period for which the deed
provides;
(d) to what extent the company is to be released from its debts;
(e) the conditions (if any) for the deed to come into operation;
(f) the conditions (if any) for the deed to continue in operation;
(g) the circumstances in which the deed terminates;
(h) the order in which proceeds of realising the property referred to in
paragraph (b) are to be distributed among creditors bound by the deed;
(i) the day (not later than the day when the administration began)
on or before which claims must have arisen if they are to be
admissible under the deed.
"(5) The instrument is taken to include the prescribed provisions, except so
far as it provides otherwise. Execution of deed
"444B.(1) This section applies where an instrument is prepared under section
444A.
"(2) The company must execute the instrument within:
(a) 21 days after the end of the meeting of creditors; or
(b) such further period as the Court allows on an application made within
those 21 days.
"(3) The board of the company may, by resolution, authorise the instrument to
be executed by or on behalf of the company.
"(4) Subsection (3) has effect despite section 437C, but does not limit the
functions and powers of the administrator of the company.
"(5) The administrator of the deed must execute the instrument before, or as
soon as practicable after, the company executes it.
"(6) When executed by both the company and the deed's administrator, the
instrument becomes a deed of company arrangement.
"(7) Division 12 provides for consequences of the company contravening
subsection (2). Creditor etc. not to act inconsistently with deed before its
execution
"444C.(1) Where, at a meeting convened under section 439A, a company's
creditors resolve that the company execute a deed of company arrangement, this
section applies until:
(a) the deed is executed by both the company and the deed's administrator;
or
(b) the period within which subsection 444B(2) requires the company to
execute the deed ends; whichever happens sooner.
"(2) In so far as a person would be bound by the deed if it had already been
so executed, the person:
(a) must not do anything inconsistent with the deed, except with the leave
of the Court; and
(b) is subject to section 444E. Effect of deed on creditors
"444D.(1) A deed of company arrangement binds all creditors of the company, so
far as concerns claims arising on or before the day specified in the deed
under paragraph 444A(4)(i).
"(2) Subsection (1) does not prevent a secured creditor from realising or
otherwise dealing with the security, except so far as:
(a) the deed so provides in relation to a secured creditor who voted in
favour of the resolution of creditors because of which the company
executed the deed; or
(b) the Court orders under subsection 444F(2).
"(3) Subsection (1) does not affect a right that an owner or lessor of
property has in relation to that property, except so far as:
(a) the deed so provides in relation to an owner or lessor of property who
voted in favour of the resolution of creditors because of which the
company executed the deed; or
(b) the Court orders under subsection 444F(4). Protection of company's
property from persons bound by deed
"444E.(1) Until a deed of company arrangement terminates, this section applies
to a person bound by the deed.
"(2) The person cannot:
(a) make an application for an order to wind up the company; or
(b) proceed with such an application made before the deed became binding
on the person.
"(3) The person cannot:
(a) begin or proceed with a proceeding against the company or in relation
to any of its property; or
(b) begin or proceed with enforcement process in relation to property of
the company; except:
(c) with the leave of the Court; and
(d) in accordance with such terms (if any) as the Court imposes.
"(4) In subsection (3):
'property', in relation to the company, includes property used or occupied by,
or in the possession of, the company. Court may limit rights of secured
creditor or owner or lessor
"444F.(1) This section applies where:
(a) it is proposed that a company execute a deed of company arrangement;
or
(b) a company has executed such a deed.
"(2) Subject to subsection 441A(3), the Court may order a secured creditor of
the company not to realise or otherwise deal with the security, except as
permitted by the order.
"(3) The Court may only make an order under subsection (2) if satisfied that:
(a) for the creditor to realise or otherwise deal with the security would
have a material adverse effect on achieving the purposes of the deed;
and
(b) having regard to:
(i) the terms of the deed; and
(ii) the terms of the order; and
(iii) any other relevant matter; the creditor's interests will be
adequately protected.
"(4) The Court may order the owner or lessor of property that is used or
occupied by, or is in the possession of, the company not to take possession of
the property or otherwise recover it.
"(5) The Court may only make an order under subsection (4) if satisfied that:
(a) for the owner or lessor to take possession of the property or
otherwise recover it would have a material adverse effect on achieving
the purposes of the deed; and
(b) having regard to:
(i) the terms of the deed; and
(ii) the terms of the order; and
(iii) any other relevant matter; the interests of the owner or lessor
will be adequately protected.
"(6) An order under this section may be made subject to conditions.
"(7) An order under this section may only be made on the application of:
(a) if paragraph (1)(a) applies - the administrator of the company; or
(b) if paragraph (1)(b) applies - the deed's administrator. Effect of deed
on company, officers and members
"444G. A deed of company arrangement also binds:
(a) the company; and
(b) its officers and members; and
(c) the deed's administrator. Extent of release of company's debts
"444H. A deed of company arrangement releases the company from a debt only in
so far as:
(a) the deed provides for the release; and
(b) the creditor concerned is bound by the deed.
"Division 11 - Variation, termination and avoidance of
deed Variation of deed by creditors
"445A. A deed of company arrangement may be varied by a resolution passed at a
meeting of the company's creditors convened under section 445F, but only if
the variation is not materially different from a proposed variation set out in
the notice of the meeting. Court may cancel variation
"445B.(1) Where a deed of company arrangement is varied under section 445A, a
creditor of the company may apply to the Court for an order cancelling the
variation.
"(2) On an application, the Court:
(a) may make an order cancelling the variation, or confirming it, either
wholly or in part, on such conditions (if any) as the order specifies;
and
(b) may make such other orders as it thinks appropriate. When deed
terminates
"445C. A deed of company arrangement terminates when:
(a) the Court makes under section 445D an order terminating the deed; or
(b) the company's creditors pass a resolution terminating the deed at a
meeting that was convened under section 445F by a notice setting out
the proposed resolution; or
(c) if the deed specifies circumstances in which it is to terminate -
those circumstances exist; whichever happens first. When Court may
terminate deed
"445D.(1) The Court may make an order terminating a deed of company
arrangement if satisfied that:
(a) information about the company's business, property, affairs or
financial circumstances that:
(i) was false or misleading; and
(ii) can reasonably be expected to have been material to creditors
of the company in deciding whether to vote in favour of the
resolution that the company execute the deed; was given to the
administrator of the company or to such creditors; or
(b) such information was contained in a report or statement under
subsection 439A(4) that accompanied a notice of the meeting at which
the resolution was passed; or
(c) there was an omission from such a report or statement and the omission
can reasonably be expected to have been material to such creditors in
so deciding; or
(d) there has been a material contravention of the deed by a person bound
by the deed; or
(e) effect cannot be given to the deed without injustice or undue delay;
or
(f) the deed or a provision of it is, an act or omission done or made
under the deed was, or an act or omission proposed to be so done or
made would be:
(i) oppressive or unfairly prejudicial to, or unfairly
discriminatory against, one or more such creditors; or
(ii) contrary to the interests of the creditors of the company as a
whole; or
(g) the deed should be terminated for some other reason.
"(2) An order may be made on the application of:
(a) a creditor of the company; or
(b) the company; or
(c) any other interested person. Creditors may terminate deed and resolve
that company be wound up
"445E. Where:
(a) at a meeting convened under section 445F, the company's creditors pass
a resolution terminating the deed; and
(b) the notice of the meeting set out a proposed resolution that the
company be wound up; the creditors may also resolve at the meeting
that the company be wound up. Meeting of creditors to consider
proposed variation or termination of deed
"445F.(1) The administrator of a deed of company arrangement:
(a) may at any time convene a meeting of the company's creditors; and
(b) must convene such a meeting if so requested in writing by creditors
the value of whose claims against the company is not less than 10% of
the value of all the creditors' claims against the company.
"(2) A meeting under this section must be convened by the deed's
administrator:
(a) giving written notice of the meeting to as many of the company's
creditors as reasonable practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered
office or carries on business, in a daily newspaper that
circulates generally in that jurisdiction; at least 5 business
days before the meeting.
"(3) The notice given to a creditor under paragraph (2)(a) must:
(a) set out each resolution (if any) under section 445A or paragraph
445C(b) that the deed's administrator proposes that the meeting vote
on; and
(b) if the meeting is convened under paragraph (1)(b) of this section -
set out each proposed resolution under section 445A or paragraph
445C(b) that is set out in the request.
"(4) At a meeting convened under this section, the deed's administrator is to
preside.
"(5) A meeting convened under this section may be adjourned from time to time.
When Court may void or validate deed
"445G.(1) Where there is doubt, on a specific ground, whether a deed of
company arrangement was entered into in accordance with this Part or complies
with this Part, the administrator of the deed, a member or creditor of the
company, or the Commission, may apply to the Court for an order under this
section.
"(2) On an application, the Court may make an order declaring the deed, or a
provision of it, to be void or not to be void, as the case requires, on the
ground specified in the application or some other ground.
"(3) On an application, the Court may declare the deed, or a provision of it,
to be valid, despite a contravention of a provision of this Part, if the Court
is satisfied that:
(a) the provision was substantially complied with; and
(b) no injustice will result for anyone bound by the deed if the
contravention is disregarded.
"(4) Where the Court declares a provision of a deed of company arrangement to
be void, the Court may by order vary the deed, but only with the consent of
the deed's administrator. Effect of termination or avoidance
"445H. The termination or avoidance, in whole or in part, of a deed of company
arrangement does not affect the previous operation of the deed.
"Division 12 - Transition to creditors' voluntary winding up Administrator
becomes liquidator in certain cases
"446A.(1) This section applies if:
(a) the creditors of a company under administration resolve at a
particular time under paragraph 439C(c) that the company be wound up;
or
(b) a company under administration contravenes subsection 444B(2) at a
particular time; or
(c) at a meeting convened under section 445F, a company's creditors:
(i) pass a resolution terminating a deed of company arrangement
executed by the company; and
(ii) also resolve at a particular time under section 445E that the
company be wound up.
"(2) The company is taken:
(a) to have passed, at the time referred to in paragraph (1)(a) or (b) or
subparagraph (1)(c)(ii), as the case may be, a special resolution
under section 491 that the company be wound up voluntarily; and
(b) to have done so without a declaration having been made and lodged
under section 494.
"(3) Section 497 is taken to have been complied with in relation to the
winding up.
"(4) For the purposes of subsection 499(1):
(a) the company is taken to have nominated:
(i) if paragraph (1)(a) or (b) of this section applies - the
administrator of the company; or
(ii) if paragraph (1)(c) of this section applies - the administrator
of the deed; to be liquidator for the purposes of the winding
up; and
(b) the creditors are taken not to have so nominated anyone.
"(5) The liquidator must:
(a) within 7 days after the day on which the company is taken to have
passed the resolution, lodge a written notice stating that the company
is taken because of this section to have passed such a resolution and
specifying that day; and
(b) cause a notice of that kind to be published, within 21 days after that
day:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered
office or carries on business, in a daily newspaper that
circulates generally in that jurisdiction.
"(6) Section 482 applies in relation to the winding up as if it were a winding
up in insolvency or by the Court. Note: Section 482 empowers the Court to stay
or terminate a winding up and give consequential directions.
"(7) An application under section 482 as applying because of subsection (6)
may be made:
(a) despite subsection 499(4), by the company pursuant to a resolution of
the board; or
(b) by the liquidator; or
(c) by a creditor; or
(d) by a contributory. Regulations may provide for transition in other
cases
"446B.(1) The regulations may prescribe cases where:
(a) a company under administration; or
(b) a company that has executed a deed of company arrangement (even if the
deed has terminated); is taken to have passed a special resolution
under section 491 that the company be wound up voluntarily.
"(2) The regulations may provide for Part 5.5 to apply with prescribed
modifications in cases prescribed for the purposes of subsection (1).
"(3) Without limiting subsection (2), the regulations may provide, in relation
to such cases, for matters of a kind provided for by any of subsections
446A(2) to (7), inclusive.
"(4) Regulations in force for the purposes of this section have effect
accordingly.
"Division 13 - Powers of Court
General power to make orders
"447A.(1) The Court may make such order as it thinks appropriate about how
this Part is to operate in relation to a particular company.
"(2) For example, if the Court is satisfied that the administration of a
company should end:
(a) because the company is solvent; or
(b) because provisions of this Part are being abused; or
(c) for some other reason; the Court may order under subsection (1) that
the administration is to end.
"(3) An order may be made subject to conditions.
"(4) An order may be made on the application of:
(a) the company; or
(b) a creditor of the company; or
(c) in the case of a company under administration - the administrator of
the company; or
(d) in the case of a company that has executed a deed of company
arrangement - the deed's administrator; or
(e) the Commission; or
(f) any other interested person. Orders to protect creditors during
administration
"447B.(1) On the application of the Commission, the Court may make such order
as it thinks necessary to protect the interests of a company's creditors while
the company is under administration.
"(2) On the application of a creditor of a company, the Court may make such
order as it thinks necessary to protect the creditor's interests while the
company is under administration.
"(3) An order may be made subject to conditions. Court may declare whether
administrator validly appointed
"447C.(1) If there is doubt, on a specific ground, about whether a purported
appointment of a person as administrator of a company, or of a deed of company
arrangement, is valid, the person, the company or any of the company's
creditors may apply to the Court for an order under subsection (2).
"(2) On an application, the Court may make an order declaring whether or not
the purported appointment was valid on the ground specified in the application
or on some other ground. Administrator may seek directions
"447D.(1) The administrator of a company under administration, or of a deed of
company arrangement, may apply to the Court for directions about a matter
arising in connection with the performance or exercise of any of the
administrator's functions and powers.
"(2) The administrator of a deed of company arrangement may apply to the Court
for directions about a matter arising in connection with the operation of, or
giving effect to, the deed. Supervision of administrator of company or deed
"447E.(1) Where the Court is satisfied that the administrator of a company
under administration, or of a deed of company arrangement:
(a) has managed, or is managing, the company's business, property or
affairs in a way that is prejudicial to the interests of some or all
of the company's creditors or members; or
(b) has done an act, or made an omission, or proposes to do an act, or to
make an omission, that is or would be prejudicial to such interests;
the Court may make such order as it thinks just.
"(2) Where the Court is satisfied that:
(a) a company is under administration but:
(i) there is a vacancy in the office of administrator of the
company; or
(ii) no administrator of the company is acting; or
(b) a deed of company arrangement has not yet terminated but:
(i) there is a vacancy in the office of administrator of the deed;
or
(ii) no administrator of the deed is acting; the Court may make such
order as it thinks just.
"(3) An order may only be made on the application of the Commission or of a
creditor or member of the company. Effect of Division
"447F. Nothing in this Division limits the generality of anything else in it.
"Division 14 - Qualifications of administrators Appointee must consent
"448A. A person cannot be appointed as administrator of a company or of a deed
of company arrangement unless:
(a) the person has consented in writing to the appointment; and
(b) as at the time of the appointment, the person has not withdrawn the
consent. Administrator must be registered liquidator
"448B. A person must not consent to be appointed, and must not act, as
administrator of a company or of a deed of company arrangement unless he or
she is a registered liquidator. Disqualification of person connected with
company
"448C.(1) Subject to this section, a person must not, except with the leave of
the Court, seek or consent to be appointed as, or act as, administrator of a
company or of a deed of company arrangement if:
(a) the person, or a body corporate in which the person is a substantial
shareholder for the purposes of Part 6.7, is indebted in an amount
exceeding $5,000 to the company or to a body corporate related to the
company; or
(b) the person is, otherwise than in a capacity as administrator or
liquidator of, or as administrator of a deed of company arrangement
executed by, the company or a related body corporate, a creditor of
the company or of a related body corporate in an amount exceeding
$5,000; or
(c) the person is an officer of the company (otherwise than because of
being an administrator or liquidator of, or an administrator of a deed
of company arrangement executed by, a body corporate related to the
company); or
(d) the person is an officer of a body corporate that is a mortgagee of
property of the company; or
(e) the person is an auditor of the company; or
(f) the person is a partner or employee of an auditor of the company; or
(g) the person is a partner, employer or employee of an officer of the
company; or
(h) the person is a partner or employee of an employee of an officer of
the company.
"(2) The reference in paragraph (1)(a) to indebtedness to a body corporate
does not, in relation to indebtedness of a natural person, include a reference
to indebtedness of that person to a body corporate that is a prescribed
corporation for the purposes of Part 4.5 where:
(a) the indebtedness arose as a result of a loan made to that person by
the body corporate in the ordinary course of its ordinary business;
and
(b) the amount of that loan was used by the person to pay the whole or
part of the purchase price of premises used by the person as his or
her principal place of residence.
"(3) For the purposes of subsection (1), a person is taken to be an officer or
auditor of a company if:
(a) the person is an officer or auditor of the company or of a related
body corporate; or
(b) except where the Commission, if it thinks fit in the circumstances of
the case, directs that this paragraph not apply in relation to the
person - the person has, within the last 2 years, been an officer,
auditor or promoter of the company or of a related body corporate.
Disqualification of insolvent under administration
"448D. A person must not consent to be appointed, and must not act, as
administrator of a company or of a deed of company arrangement if he or she is
an insolvent under administration.
"Division 15 - Removal, replacement and remuneration of
administrator Appointment of administrator cannot be revoked
"449A. The appointment of a person as administrator of a company or of a deed
of company arrangement cannot be revoked. Court may remove administrator
"449B. On the application of the Commission or of a creditor of the company
concerned, the Court may:
(a) remove from office the administrator of a company under administration
or of a deed of company arrangement; and
(b) appoint someone else as administrator of the company or deed. Vacancy
in office of administrator of company
"449C.(1) Where the administrator of a company under administration:
(a) dies; or
(b) becomes prohibited from acting as administrator of the company; or
(c) resigns by notice in writing given to his or her appointer and to the
company; his or her appointer may appoint someone else as
administrator of the company.
"(2) In subsection (1):
'appointer', in relation to the administrator of a company under
administration, means:
(a) if the administrator was appointed by the Court under section 449B or
subsection (6) of this section - the Court; or
(b) otherwise:
(i) if the administration began because of an appointment under
section 436A - the company; or
(ii) if the administration began because of an appointment under
section 436B - a liquidator or provisional liquidator of the
company; or
(iii) if the administration began because of an appointment under
section 436C - a person who is entitled, or would apart from
section 440B or 441D be entitled, to enforce the charge.
"(3) An appointment under subsection (1) by the company under administration
must be made pursuant to a resolution of the board.
"(4) Within 5 business days after being appointed under subsection (1) as
administrator of a company otherwise than by the Court, a person must convene
a meeting of the company's creditors so that they may:
(a) determine whether to remove the person from office; and
(b) if so, appoint someone else as administrator of the company.
"(5) A person must convene a meeting under subsection (4) by:
(a) giving written notice of the meeting to as many of the company's
creditors as reasonably practicable; and
(b) causing notice of the meeting to be published:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered
office or carries on business, in a daily newspaper that
circulates generally in that jurisdiction; at least 2 business
days before the meeting.
"(6) Where a company is under administration, but for some reason no
administrator is acting, the Court may appoint a person as administrator on
the application of the Commission or of an officer, member or creditor of the
company.
"(7) Subsections (3) and (6) have effect despite section 437C. Vacancy in
office of administrator of deed of company arrangement
"449D.(1) Where the administrator of a deed of company arrangement:
(a) dies; or
(b) becomes prohibited from acting as administrator of the deed; or
(c) resigns by notice in writing given to the company; the Court may
appoint someone else as administrator of the deed.
"(2) Where a deed of company arrangement has not yet terminated, but for some
reason no administrator of the deed is acting, the Court may appoint a person
as administrator of the deed.
"(3) An appointment may be made on the application of the Commission or of an
officer, member or creditor of the company. Remuneration of administrator
"449E.(1) The administrator of a company under administration, or of a deed of
company arrangement, is entitled to:
(a) such remuneration as is fixed by a resolution of the company's
creditors passed at a meeting convened under section 439A, or under
section 439A or 445F, as the case may be; or
(b) if no remuneration is so fixed - such remuneration as the Court fixes
on the application of the administrator.
"(2) Where remuneration is fixed under paragraph (1)(a), the Court may, on the
application of the administrator or of an officer, member or creditor of the
company:
(a) review the remuneration; and
(b) confirm, increase or reduce it.
"(3) Subsection (2) has effect despite section 437C.
"Division 16 - Notices about steps taken under Part Appointment of
administrator
"450A.(1) Where an administrator of a company is appointed under section 436A,
436B or 436C, the administrator must:
(a) lodge a notice of the appointment before the end of the next business
day after the appointment; and
(b) cause such a notice to be published, within 3 business days after the
appointment:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered
office or carries on business, in a daily newspaper that
circulates generally in that jurisdiction.
"(2) As soon as practicable, and in any event before the end of the next
business day, after appointing an administrator of a company under section
436C, a person must give to the company a written notice of the appointment.
"(3) As soon as practicable, and in any event before the end of the next
business day, after an administrator of a company is appointed under section
436A, 436B or 436C, he or she must give a written notice of the appointment
to:
(a) each person who holds a charge on the whole, or substantially the
whole, of the company's property; and
(b) each person who holds 2 or more charges on property of the company
where the property of the company subject to the respective charges
together constitutes the whole, or substantially the whole, of the
company's property.
"(4) An administrator need not give a notice under subsection (3) to the
person who appointed the administrator. Execution of deed of company
arrangement
"450B. As soon as practicable after a deed of company arrangement is executed,
the deed's administrator must:
(a) send to each creditor of the company a written notice of the execution
of the deed; and
(b) cause such a notice to be published:
(i) in a national newspaper; or
(ii) in each jurisdiction in which the company has its registered
office or carries on business, in a daily newspaper that
circulates generally in that jurisdiction; and
(c) lodge a copy of the deed. Failure to execute deed of company
arrangement
"450C. As soon as practicable after a company contravenes subsection 444B(2),
the deed's administrator must:
(a) lodge a notice that the company has failed to execute the instrument
within the required period; and
(b) cause a notice of the failure to be published as prescribed.
Termination of deed of company arrangement
"450D. Where a deed of company arrangement terminates because of paragraph
445C(b), the deed's administrator must:
(a) lodge a notice of the termination; and
(b) send such a notice to each of the company's creditors; and
(c) cause such a notice to be published as prescribed. Notice in public
documents etc. of company
"450E.(1) A company under administration must set out, in every public
document, and in every eligible negotiable instrument, of the company, after
the company's name where it first appears, the expression '(administrator
appointed)'.
"(2) Until a deed of company arrangement terminates, the company must set out,
in every public document, and in every eligible negotiable instrument, of the
company, after the company's name where it first appears, the expression
'(subject to deed of company arrangement)'. Effect of contravention of this
Division
"450F. A contravention of this Division does not affect the validity of
anything done or omitted under this Part, except so far as the Court otherwise
orders.
"Division 17 - Miscellaneous Appointment of 2 or more administrators of
company
"451A.(1) Where a provision of this Law provides for an administrator of a
company to be appointed, 2 or more persons may be appointed as administrators
of the company.
"(2) Where, because of subsection (1), there are 2 or more administrators of a
company:
(a) a function or power of an administrator of the company may be
performed or exercised by any one of them, or by any 2 or more of them
together, except so far as the instrument or resolution appointing
them otherwise provides; and
(b) a reference in this Law to an administrator, or to the administrator,
of a company is, in the case of the first-mentioned company, a
reference to whichever one or more of those administrators the case
requires. Appointment of 2 or more administrators of deed of company
arrangement
"451B.(1) Where a provision of this Law provides for an administrator of a
deed of company arrangement to be appointed, 2 or more persons may be
appointed as administrators of the deed.
"(2) Where, because of subsection (1), there are 2 or more administrators of a
deed of company arrangement:
(a) a function or power of an administrator of the deed may be performed
or exercised by any one of them, or by any 2 or more of them together,
except so far as the deed, or the resolution or instrument appointing
them, otherwise provides; and
(b) a reference in this Law to an administrator, or to the administrator,
of a deed of company arrangement is, in the case of the
first-mentioned deed, a reference to whichever one or more of those
administrators the case requires. Effect of things done during
administration of company
"451C. A payment made, transaction entered into, or any other act or thing
done, in good faith, by, or with the consent of, the administrator of a
company under administration:
(a) is valid and effectual for the purposes of this Law; and
(b) is not liable to be set aside in a winding up of the company. Time for
doing act does not run while act prevented by this Part
"451D. Where:
(a) for any purpose (for example, the purposes of a law, agreement or
instrument) an act must or may be done within a particular period or
before a particular time; and
(b) this Part prevents the act from being done within that period or
before that time; the period is extended, or the time is deferred,
because of this section, according to how long this Part prevented the
act from being done.".
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