Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.3B - CRISIS RESOLUTION FOR CS FACILITY LICENSEES  

DIVISION 3 - STATUTORY MANAGEMENT  

Subdivision E - Other matters  

SECTION 836G   PROCEEDS OF SALE OF PROPERTY  

Property subject to a possessory security interest

836G(1)    
If:

(a)    a body corporate is under statutory management; and

(b)    property of the body corporate is subject to a possessory security interest; and

(c)    the statutory manager of the body corporate disposes of the property by way of sale;

then:

(d)    if the net proceeds of sale equals or exceeds the total of the debts secured by:

(i) the possessory security interest; and

(ii) any other security interest in the property, where the debt secured by the security interest has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest;

the statutory manager of the body corporate must:

(iii) set aside so much of the net proceeds as equals the total of those debts; and

(iv) apply the amount so set aside in paying those debts; or

(e)    if the net proceeds of sale fall short of the total of the debts secured by:

(i) the possessory security interest; and

(ii) any other security interest in the property, where the debt secured by the security interest has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest;

then:

(iii) the statutory manager must set aside the net proceeds; and

(iv) the statutory manager must apply the amount so set aside in paying those debts in order of priority, on the basis that if the amount is insufficient to fully pay debts of the same priority, they must be paid proportionately; and

(v) if any of those debts is not fully paid - so much of the debt as remains unpaid may be recovered from the body corporate as an unsecured debt.

PPSA retention of title property

836G(2)    
If the statutory manager of a body corporate disposes of PPSA retention of title property of the body corporate by way of sale, then the statutory manager must apply the net proceeds of the sale in the same way as a secured party is required, under section 140 of the Personal Property Securities Act 2009 , to apply an amount, personal property or proceeds of collateral received by the secured party as a result of enforcing a security interest in the property.

Note: PPSA retention of title property does not include property that is subject to a retention of title clause: see the definitions of PPSA retention of title property and retention of title clause in section 9 . Subsection (3) of this section deals with property that is subject to a retention of title clause.

Property subject to a retention of title clause

836G(3)    
If:

(a)    a body corporate is under statutory management; and

(b)    property is used or occupied by, or is in the possession of, the body; and

(c)    another person is the owner of the property; and

(d)    the property is subject to a retention of title clause under a contract (the original contract ); and

(e)    the statutory manager disposes of the property by way of sale;

then:

(f)    if the net proceeds of sale equals or exceeds the total of:

(i) so much of the purchase price, or other amount, under the original contract as remains unpaid; and

(ii) if there are one or more securities over the property - the debts secured by the securities;

the statutory manager must:

(iii) set aside so much of the net proceeds as equals that total; and

(iv) apply the amount so set aside in paying that total; or

(g)    if the net proceeds of sale fall short of the total of:

(i) so much of the purchase price, or other amount, under the original contract as remains unpaid; and

(ii) if there are one or more securities over the property - the debts secured by the securities;

then:

(iii) the statutory manager must set aside the net proceeds; and

(iv) the statutory manager must apply the amount so set aside in paying those debts in order of priority, on the basis that if the amount is insufficient to fully pay debts of the same priority, they must be paid proportionately; and

(v) if any of those debts is not fully paid - so much of the debt as remains unpaid may be recovered from the body as an unsecured debt.

Note: Property that is subject to a retention of title clause does not include PPSA retention of title property: see the definitions of PPSA retention of title property and retention of title clause in section 9. Subsection (2) of this section deals with PPSA retention of title property.