THE CORPORATIONS LAW

CHAPTER 5 - EXTERNAL ADMINISTRATION

PART 5.6 - WINDING UP GENERALLY

Division 7A - Disclaimer of onerous property

SECTION 568   DISCLAIMER BY LIQUIDATOR; APPLICATION TO COURT BY PARTY TO CONTRACT  

568(1)  (Liquidator's power to disclaim)  

Subject to this section, a liquidator of a company may at any time, on the company's behalf, by signed writing disclaim property of the company that consists of:

(a)  land burdened with onerous covenants; or

(b)  shares; or

(c)  property that is unsaleable or is not readily saleable; or

(d)  property that may give rise to a liability to pay money or some other onerous obligation; or

(e)  property where it is reasonable to expect that the costs, charges and expenses that would be incurred in realising the property would exceed the proceeds of realising the property; or

(f)  a contract;

whether or not:

(g)  except in the case of a contract - the liquidator has tried to sell the property, has taken possession of it or exercised an act of ownership in relation to it; or

(h)  in the case of a contract - the company or the liquidator has tried to assign, or has exercised rights in relation to, the contract or any property to which it relates.

568(1AA)  [Share buy-back agreement]  

This section does not apply to an agreement by the company to buy back its own shares.

568(1A)  [Disclaiming of contracts]  

A liquidator cannot disclaim a contract (other than an unprofitable contract or a lease of land) except with the leave of the Court.

568(1B)  [Power of Court]  

On an application for leave under subsection (1A), the Court may:

(a)  grant leave subject to such conditions; and

(b)  make such orders in connection with matters arising under, or relating to, the contract;

as the Court considers just and equitable.

568(2)-(7)  (Omitted by No 210 of 1992, s 108(a) (effective 23 June 1993).)

568(8)  [Loss of right of disclaimer]  

Where:

(a)  an application in writing has been made to the liquidator by a person interested in property requiring the liquidator to decide whether he or she will disclaim the property; and

(b)  the liquidator has, for the period of 28 days after the receipt of the application, or for such extended period as is allowed by the Court, declined or neglected to disclaim the property;

the liquidator is not entitled to disclaim the property under this section and, in the case of a contract, he or she shall be deemed to have adopted it.

568(9)  [Discharge or rescission of contract by Court order]  

The Court may, on the application of a person who is, as against the company, entitled to the benefit or subject to the burden of a contract made with the company, make an order:

(a)  discharging the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise, as the Court thinks proper; or

(b)  rescinding the contract on such terms as to restitution by or to either party, or otherwise, as the Court thinks proper.

568(10)  [Amounts payable under order]  

Amounts payable pursuant to an order under subsection (9) may be proved as a debt in the winding up.

568(11)-(12)  (Omitted by No 210 of 1992, s 108(b) (effective 23 June 1993).)

568(13)  [Statement of interest in onerous property]  

For the purpose of determining whether property of a company is of a kind to which subsection (1) applies, the liquidator may, by notice served on a person claiming to have an interest in the property, require the person to furnish to the liquidator within such period, not being less than 14 days, as is specified in the notice, a statement of the interest claimed by the person and the person shall comply with the requirement.