Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.8 - OFFENCES  

Note: This Part applies to a sub-fund of a CCIV in a modified form: see Division 7 of Part 8B.6 .

SECTION 590   OFFENCES BY OFFICERS OF CERTAIN COMPANIES  

590(1)    

A person who, being a past or present officer or employee of a company to which this section applies:

(a)    

does not disclose to the appropriate officer all the property of the company, and how and to whom and for what consideration and when any part of the property of the company was disposed of within 10 years next before the relevant day, except such part as has been disposed of in the ordinary course of the business of the company; or

(b) (Repealed)

(c)    

has, within 10 years next before the relevant day or at a time on or after that day:

(i) engaged in conduct that resulted in the fraudulent concealment or removal of any part of the property of the company to the value of $100 or more; or

(ii) engaged in conduct that resulted in the concealment of any debt due to or by the company; or

(iii) engaged in conduct that resulted in the fraudulent parting with, alteration or making of any omission in, or being privy to fraudulent parting with, altering or making any omission in, any book affecting or relating to affairs of the company; or

(iv) by any false representation or other fraud, obtained on credit, for or on behalf of the company, any property that the company has not subsequently paid for; or

(v) engaged in conduct that resulted in the fraudulent pawning, pledging or disposal of, otherwise than in the ordinary course of the business of the company, property of the company that has been obtained on credit and has not been paid for;

(d)    fraudulently makes any material omission in any statement or report relating to affairs of the company; or

(e) (Repealed)

(f)    

engaged in conduct that prevented the production to the appropriate officer of any book affecting or relating to affairs of the company; or

(g)    has, within 10 years next before the relevant day or at a time on or after that day, attempted to account for any part of the property of the company by making entries in the books of the company showing fictitious transactions, losses or expenses; or

(h)    has, within 10 years next before the relevant day or at a time on or after that day, been guilty of any false representation or other fraud for the purpose of obtaining the consent of the creditors of the company or any of them to an agreement with reference to affairs of the company or to the winding up;

contravenes this subsection.

590(2)    

Absolute liability applies to so much of an offence based on paragraph (1)(c) , (g) or (h) as requires that an event occur within 10 years next before the relevant day or at a time on or after that day.

Note: For absolute liability , see section 6.2 of the Criminal Code .

590(3)    

Paragraph (1)(a) does not apply to the extent that the person is not capable of disclosing the information referred to in that paragraph.

Note: A defendant bears an evidential burden in relation to the matters in subsection (3) , see subsection 13.3(3) of the Criminal Code .

590(4)    

A person who, being a past or present officer or employee of a company to which this section applies, does not deliver up to, or in accordance with the directions of, the appropriate officer:

(a)    all the property of the company in the person ' s possession; or

(b)    all books in the person ' s possession belonging to the company (except books of which the person is entitled, as against the company and the appropriate officer, to retain possession);

contravenes this subsection.

590(4A)    

A person who, being a past or present officer or employee of a company and knowing or believing that a false debt has been proved by a person, fails for a period of one month to inform the appropriate officer of his or her knowledge or belief contravenes this subsection.

590(4B)    

A person must not intentionally or recklessly fail to comply with subsection (4) or (4A) .

590(5)    
Where a person pawns, pledges or disposes of any property in circumstances that amount to a contravention by virtue of subparagraph (1)(c)(v) , a person who takes in pawn or pledge or otherwise receives the property knowing it to be pawned, pledged or disposed of in those circumstances contravenes this subsection.

590(6)    
A person who takes in pawn or pledge or otherwise receives property in circumstances mentioned in subsection (5) and with the knowledge mentioned in that subsection is taken to hold the property as trustee for the company concerned and is liable to account to the company for the property.

590(7)    
Where, in proceedings under subsection (6) , it is necessary to establish that a person has taken property in pawn or pledge, or otherwise received property:

(a)    in circumstances mentioned in subsection (5) ; and

(b)    with the knowledge mentioned in that subsection;

the matter referred to in paragraph (b) of this subsection may be established on the balance of probabilities.

Meaning of relevant day

590(8)    

In this section:

relevant day
means the day on which:

(a) in relation to a company that has been wound up, has been in the course of being wound up, or is being wound up:

(i) if, because of Division 1A of Part 5.6 , the winding up is taken to have begun on the day when an order that the company be wound up was made - the application for the order was filed; or

(ii) otherwise - the winding up is taken because of Division 1A of Part 5.6 to have begun; or

(b) in relation to a company of which a provisional liquidator has been appointed - the provisional liquidator was appointed; or

(c) in relation to a company that is or has been under administration - the administration began; or

(d) in relation to a company that has executed a deed of company arrangement - the deed was executed; or

(e) in relation to a company that is or has been under restructuring - the restructuring began; or

(f) in relation to a company that has made a restructuring plan - the plan was made; or

(g) in relation to a company affairs of which are or have been under investigation:

(i) if paragraph 589(2)(a) applies - the investigation began; or

(ii) if paragraph 589(2)(b) applies - a direction was given to the NCSC to arrange for the investigation; or

(h) in relation to a company in respect of property of which a receiver, or a receiver and manager, has been appointed - the receiver, or the receiver and manager, was appointed; or

(i) in relation to a company that is unable to pay its debts - the execution or other process was returned unsatisfied in whole or in part; or

(j) in relation to a company that has ceased to carry on business - a notice was first published in relation to the company under subsection 601AA(4) or 601AB(3) ; or

(k) in relation to a company that has entered into a compromise or arrangement with its creditors - the compromise or arrangement was approved by the Court.