Commonwealth Numbered Acts

CORPORATE LAW REFORM ACT 1992 No. 210 of 1992 - SECT 92

92. Section 553 of the Corporations Law is repealed and the following headings
and sections are substituted:

"Subdivision A - Admission to proof of debts and claims Debts or claims that
are provable in winding up

"553.(1) Subject to this Division, in every winding up, all debts payable by,
and all claims against, the company (present or future, certain or contingent,
ascertained or sounding only in damages), being debts or claims the
circumstances giving rise to which occurred before the relevant date, are
admissible to proof against the company.

"(2) Where, after the relevant date, an order is made under section 91 of the
ASC Law against a company that is being wound up, the amount that, pursuant to
the order, the company is liable to pay is admissible to proof against the
company. Member cannot prove debt unless contributions paid

"553A. A debt owed by a company to a person in the person's capacity as a
member of the company, whether by way of dividends, profits or otherwise, is
not admissible to proof against the company unless the person has paid to the
company or the liquidator all amounts that the person is liable to pay as a
member of the company. Insolvent companies - penalties and fines not generally
provable

"553B.(1) Subject to subsection (2), penalties or fines imposed by a court in
respect of an offence against a law are not admissible to proof against an
insolvent company.

"(2) An amount payable under a pecuniary penalty order, or an interstate
pecuniary penalty order, within the meaning of the Proceeds of Crime Act 1987,
is admissible to proof against an insolvent company. Insolvent companies -
mutual credit and set-off

"553C.(1) Subject to subsection (2), where there have been mutual credits,
mutual debts or other mutual dealings between an insolvent company that is
being wound up and a person who wants to have a debt or claim admitted against
the company:

   (a)  an account is to be taken of what is due from the one party to the
        other in respect of those mutual dealings; and

   (b)  the sum due from the one party is to be set off against any sum due
        from the other party; and

   (c)  only the balance of the account is admissible to proof against the
        company, or is payable to the company, as the case may be.

"(2) A person is not entitled under this section to claim the benefit of a
set-off if, at the time of giving credit to the company, or at the time of
receiving credit from the company, the person had notice of the fact that the
company was insolvent. Debts or claims may be proved formally or informally

"553D.(1) A debt or claim must be proved formally if the liquidator, in
accordance with the regulations, requires it to be proved formally.

"(2) A debt or claim that is not required to be proved formally:

   (a)  may be proved formally; or

   (b)  may be proved in some other way, subject to compliance with the
        requirements of the regulations (if any) relating to the informal
        proof of debts and claims.

"(3) A debt or claim is proved formally if it satisfies the requirements of
the regulations relating to the formal proof of debts and claims. Application
of Bankruptcy Act to winding up of insolvent company

"553E. Subject to this Division and to sections 206RD and 279, in the winding
up of an insolvent company the same rules are to prevail and be observed with
regard to debts provable as are in force for the time being under the
Bankruptcy Act 1966 in relation to the estates of bankrupt persons (except the
rules in sections 82 to 94 (inclusive) and 96 of that Act), and all persons
who in any such case would be entitled to prove for and receive dividends out
of the property of the company may come in under the winding up and make such
claims against the company as they respectively are entitled to because of
this section.
         "Subdivision B - Computation of debts and claims".