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 8 - Pooling  

Subdivision B - Pooling orders  

SECTION 579E   POOLING ORDERS  

Making of pooling order

579E(1)    
If it appears to the Court that the following conditions are satisfied in relation to a group of 2 or more companies:

(a)    each company in the group is being wound up;

(b)    any of the following subparagraphs applies:

(i) each company in the group is a related body corporate of each other company in the group;

(ii) apart from this section, the companies in the group are jointly liable for one or more debts or claims;

(iii) the companies in the group jointly own or operate particular property that is or was used, or for use, in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group;

(iv) one or more companies in the group own particular property that is or was used, or for use, by any or all of the companies in the group in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group;

the Court may, if the Court is satisfied that it is just and equitable to do so, by order, determine that the group is a pooled group for the purposes of this section.

Note 1: Section 9 provides that pooling order means an order under subsection (1) of this section.

Note 2: See also subsection (12) (just and equitable criteria).

Consequences of pooling order

579E(2)    
If a pooling order comes into force in relation to a group of 2 or more companies:

(a)    each company in the group is taken to be jointly and severally liable for each debt payable by, and each claim against, each other company in the group; and

(b)    each debt payable by a company or companies in the group to any other company or companies in the group is extinguished; and

(c)    each claim that a company or companies in the group has against any other company or companies in the group is extinguished.

Note: For exemptions, see paragraph 579G(1)(a) .

579E(3)    
Subsection (2) applies to a debt or claim:

(a)    whether present or future; and

(b)    whether certain or contingent; and

(c)    whether ascertained or sounding only in damages.

579E(4)    
Subsection (2) does not apply to a debt payable by, or a claim against, a company in the group unless the debt or claim is admissible to proof against the company.

579E(5)    
If a pooling order comes into force in relation to a group of 2 or more companies, the order of priority applicable under sections 556 , 560 and 561 is not altered for a company in the group.

579E(6)    
If:

(a)    a pooling order comes into force in relation to a group of 2 or more companies; and

(b)    

a secured creditor of a company in the group surrenders the relevant security interest to the liquidator of the company for the benefit of creditors of the companies in the group generally;

the debt may be recovered as a debt that is jointly and severally payable by the companies in the group.

579E(7)    
If:

(a)    a pooling order comes into force in relation to a group of 2 or more companies; and

(b)    

a secured creditor of a company in the group realises the security interest;

so much of the debt as remains after deducting the net amount realised may be recovered as a debt that is jointly and severally payable by the companies in the group.

579E(8)    
The following provisions have effect subject to any modifications under paragraph 579G(1)(d) :

(a)    subsection (2) ;

(b)    subsection (3) ;

(c)    subsection (4) ;

(d)    subsection (5) ;

(e)    subsection (6) ;

(f)    subsection (7) .

579E(9)    
Subsection (2) does not apply in relation to a secured creditor unless the relevant debt is payable by a company or companies in the group to any other company or companies in the group.

579E(10)    
The Court must not make a pooling order in relation to a group of 2 or more companies if:

(a)    both:

(i) the Court is satisfied the order would materially disadvantage an eligible unsecured creditor of a company in the group; and

(ii) the eligible unsecured creditor has not consented to the making of the order; or

(b)    all of the following conditions are satisfied:

(i) a company in the group is being wound up under a members ' voluntary winding up;

(ii) the Court is satisfied that the order would materially disadvantage a member of that company;

(iii) the member is not a company in the group;

(iv) the member has not consented to the making of the order.

Note: For eligible unsecured creditor , see section 579Q .

Standing

579E(11)    
The Court may only make a pooling order on the application of the liquidator or liquidators of the companies in the group.

Just and equitable criteria

579E(12)    
In determining whether it is just and equitable to make a pooling order, the Court must have regard to all of the following matters:

(a)    the extent to which:

(i) a company in the group; and

(ii) the officers or employees of a company in the group;

were involved in the management or operations of any of the other companies in the group;

(b)    the conduct of:

(i) a company in the group; and

(ii) the officers or employees of a company in the group;

towards the creditors of any of the other companies in the group;

(c)    the extent to which the circumstances that gave rise to the winding up of any of the companies in the group are directly or indirectly attributable to the acts or omissions of:

(i) any of the other companies in the group; or

(ii) the officers or employees of any of the other companies in the group;

(d)    the extent to which the activities and business of the companies in the group have been intermingled;

(e)    the extent to which creditors of any of the companies in the group may be advantaged or disadvantaged by the making of the order;

(f)    any other relevant matters.

Lodgment of pooling order

579E(13)    
A pooling order must be lodged with ASIC.