Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.7B - RECOVERING PROPERTY OR COMPENSATION FOR THE BENEFIT OF CREDITORS OF INSOLVENT COMPANY  

Note: This Part applies to a sub-fund of a CCIV in a modified form: see Division 3 of Part 8B.6 (for provisions relating to Division 2B ), Division 5 of Part 8B.6 (for provisions relating to Divisions 2 and 2A ) and Division 6 of Part 8B.6 (for provisions relating to Divisions 3 , 4 , 5 and 6 ).

Division 4 - Director liable to compensate company  

Subdivision A - Proceedings against director  

SECTION 588J   ON APPLICATION FOR CIVIL PENALTY ORDER, COURT MAY ORDER COMPENSATION  

588J(1)    
Where, on an application for a civil penalty order against a person in relation to a contravention of subsection 588G(2) , the Court is satisfied that:

(a) the person committed the contravention in relation to the incurring of a debt by a company; and

(b) the debt is wholly or partly unsecured; and

(c) the person to whom the debt is owed has suffered loss or damage in relation to the debt because of the company ' s insolvency;

the Court may (whether or not it makes a pecuniary penalty order under section 1317G or an order under section 206C disqualifying a person from managing corporations) order the first-mentioned person to pay to the company compensation equal to the amount of that loss or damage.

588J(1A)    

If, on an application for a civil penalty order against a person for a contravention of subsection 588GAB(2) or 588GAC(2) relating to a disposition of property of a company, the Court is satisfied that:

(a) the person contravened the subsection; and

(b) one or more creditors of the company suffered loss or damage because of the disposition and the company ' s insolvency;

the Court may order the person to pay the company compensation equal to the loss or damage (whether or not the Court makes a pecuniary penalty order under section 1317G or an order under section 206C disqualifying the person from managing corporations).

588J(2)    

A company ' s liquidator may intervene in an application for a civil penalty order against a person in relation to a contravention of subsection 588G(2) , 588GAB(2) or 588GAC(2) relating to the company.

588J(3)    
A company ' s liquidator who so intervenes is entitled to be heard:

(a) only if the Court is satisfied that the person committed the contravention; and

(b) only on the question whether the Court should order the person to pay compensation to the company.