Commonwealth Numbered Acts

CORPORATE LAW REFORM ACT 1992 No. 210 of 1992 - SECT 96

96. Section 556 of the Corporations Law is amended:

   (a)  by omitting subsection (1) and substituting the following subsections:

"(1) Subject to this Division, in the winding up of a company the following
debts and claims must be paid in priority to all other unsecured debts and
claims:

   (a)  first, expenses (except deferred expenses) properly incurred by a
        relevant authority in preserving, realising or getting in property of
        the company, or in carrying on the company's business;

   (b)  if the Court ordered the winding up - next, the costs in respect of
        the application for the order (including the applicant's taxed costs
        payable under section 466);

   (c)  next, the debts for which paragraph 443D(a) entitles an administrator
        of the company to be indemnified (even if the administration ended
        before the relevant date), except expenses covered by paragraph (a) of
        this subsection and deferred expenses;

   (d)  if the winding up began within 2 months after the end of a period of
        official management of the company - next, debts of the company
        properly incurred by an official manager in carrying on the company's
        business during the period of official management, except expenses
        covered by paragraph (a) of this subsection and deferred expenses;

   (da) if the Court ordered the winding up - next, costs and expenses that
        are payable under subsection 475(8) out of the company's property;

   (db) next, costs that form part of the expenses of the winding up because
        of subsection 539(6);

   (dc) if the winding up began within 2 months after the end of a period of
        official management of the company - next, the remuneration, in
        respect of the period of official management, of any auditor appointed
        in accordance with Part 3.7;

   (dd) next, any other expenses (except deferred expenses) properly incurred
        by a relevant authority;

   (de) next, the deferred expenses;

   (df) if a committee of inspection has been appointed for the purposes of
        the winding up - next, expenses incurred by a person as a member of
        the committee;

   (e)  subject to subsection (1A) - next, wages and superannuation
        contributions payable by the company in respect of services rendered
        to the company by employees before the relevant date;

   (f)  next, amounts due in respect of injury compensation, being
        compensation the liability for which arose before the relevant date;

   (g)  subject to subsection (1B) - next, all amounts due:

        (i)    on or before the relevant date; and

        (ii)   because of an industrial instrument; and

        (iii)  to, or in respect of, employees of the company; and

        (iv)   in respect of leave of absence;

   (h)  subject to subsection (1C) - next, retrenchment payments payable to
        employees of the company.

"(1A) The amount or total paid under paragraph (1)(e) to, or in respect of, an
excluded employee of the company must be such that so much (if any) of it as
is attributable to non-priority days does not exceed $2,000.

"(1B) The amount or total paid under paragraph (1)(g) to, or in respect of, an
excluded employee of the company must be such that so much (if any) of it as
is attributable to non-priority days does not exceed $1,500.

"(1C) A payment under paragraph (1)(h) to an excluded employee of the company
must not include an amount attributable to non- priority days.";

   (b)  by inserting in subsection (2) the following definitions:

" 'deferred expenses', in relation to a company, means expenses properly
incurred by a relevant authority, in so far as they consist of:

   (a)  remuneration, or fees for services, payable to the relevant authority;
        or

   (b)  expenses incurred by the relevant authority in respect of the supply
        of services to the relevant authority by:

        (i)    a partnership of which the relevant authority is a member; or

        (ii)   an employee of the relevant authority; or

        (iii)  a member or employee of such a partnership; or

   (c)  expenses incurred by the relevant authority in respect of the supply
        to the relevant authority of services that it is reasonable to expect
        could have instead been supplied by:

        (i)    the relevant authority; or

        (ii)   a partnership of which the relevant authority is a member; or

        (iii)  an employee of the relevant authority; or

        (iv)   a member or employee of such a partnership;
'non-priority day', in relation to an excluded employee of a company, means a
day on which the employee was:

   (a)  if paragraph (a) of the definition of 'excluded employee' applies - a
        director of the company; or

   (b)  if paragraph (b) of that definition applies - a spouse of an employee
        of the kind referred to in paragraph (a) of that definition; or

   (c)  if paragraph (c) of that definition applies - a relative (other than a
        spouse) of an employee of the kind referred to in paragraph (a) of
        that definition; even if the day was more than 12 months before the
        relevant date;
'official manager' includes a deputy official manager;
'relevant authority', in relation to a company, means any of the following:

   (a)  in any case - a liquidator or provisional liquidator of the company;

   (b)  if the winding up began within 2 months after the end of a period of
        official management of the company - an official manager appointed for
        the purposes of the official management;

   (c)  in any case - an administrator of the company, even if the
        administration ended before the winding up began;

   (d)  in any case - an administrator of a deed of company arrangement
        executed by the company, even if the deed terminated before the
        winding up began;
'spouse' includes a de facto spouse;
'superannuation contribution', in relation to a company, means a contribution
by the company to a fund for the purposes of making provision for, or
obtaining, superannuation benefits for an employee of the company, or for
dependants of such an employee.".