Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.6 - WINDING UP GENERALLY  

Note: This Part applies to a sub-fund of a CCIV in a modified form: see Division 5 of Part 8B.6 .

Division 7B - Effect on enforcement process against company's property  

SECTION 569   EXECUTIONS, ATTACHMENTS ETC. BEFORE WINDING UP  

569(1)   [ Amounts received as result of enforcement proceedings]  

Where:

(a) a creditor has issued execution against property of a company, or instituted proceedings to attach a debt due to a company or to enforce a charge or a charging order against property of a company, within 6 months immediately before the commencement of the winding up; and

(b) the company commences to be wound up;

the creditor must pay to the liquidator an amount equal to the amount (if any) received by the creditor as a result of the execution, attachment or enforcement of the charge or the charging order, less an amount in respect of the costs of the execution, attachment or enforcement of the charge or the charging order, being an amount agreed between the creditor and the liquidator or, if no agreement is reached, an amount equal to the taxed cost of that execution, attachment or enforcement.

569(2)   [ Creditor's right to prove]  

Where the creditor has paid to the liquidator an amount in accordance with subsection (1), the creditor may prove in the winding up for the creditor's debt as an unsecured creditor as if the execution or attachment or the enforcement of the charge or the charging order, as the case may be, had not taken place.

569(3)   [ Creditor with notice of proposed winding up]  

Subject to subsections (4) and (5), where a creditor of a company receives:

(a) notice in writing of an application to the Court for the winding up of the company; or

(b) notice in writing of the convening of a meeting of the company to consider a resolution that the company be wound up voluntarily;

it is not competent for the creditor to take any action, or any further action, as the case may be, to attach a debt due to the company or to enforce a charge or a charging order against property of the company.

569(4)   [ Exceptions]  

Subsection (3) does not affect the right of a creditor to take action or further action if:

(a) in a case to which paragraph (3)(a) applies - the application has been withdrawn or dismissed; or

(b) in a case to which paragraph (3)(b) applies - the meeting of the company has refused to pass the resolution.

569(5)   [ Further exception]  

Subsection (3) does not prevent a creditor from performing a binding contract for the sale of property entered into before the creditor received a notice referred to in that subsection.

569(6)   [ Purchaser in good faith]  

Notwithstanding anything contained in this Division, a person who purchases property in good faith:

(a) under a sale by the sheriff in consequence of the issue of execution against property of a company that, after the sale, commences to be wound up; or

(b) under a sale in consequence of the enforcement by a creditor of a charge or a charging order against property of a company that, after the sale, commences to be wound up;

acquires a good title to it as against the liquidator and the company.

569(7)   [ Definitions]  

In this section:

charge
means a charge created by a law upon registration of a judgment in a registry.

charging order
means a charging order made by a court in respect of a judgment.