Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.2 - RECEIVERS, AND OTHER CONTROLLERS, OF PROPERTY OF CORPORATIONS  

Note: This Part applies to CCIVs with modifications: see Division 3 of Part 8B.6 .

SECTION 416  

416   MEANING OF PROPERTY AND RECEIVER  

In this Part:

property
, in relation to a corporation, means property:

(a) in the case of a company - in Australia or outside Australia; or

(b) in the case of a registered foreign company - in this jurisdiction or an external Territory; or

(c) in the case of a registrable Australian body - in this jurisdiction but outside the body ' s place of origin.

Note: See section 9 (definition of property ).

receiver
, in relation to property of a corporation, includes a receiver and manager.

SECTION 417   APPLICATION OF PART  

417(1)   [ Application of Part]  

Except so far as the contrary intention appears in this Part or Part 11.2, this Part applies in relation to a receiver of property of a corporation who is appointed after 1 January 1991, even if the appointment arose out of a transaction entered into, or an act or thing done, before 1 January 1991.

417(2)   [ Aboriginal and Torres Strait Islander corporation]  

To avoid doubt, this Part does not apply, of its own force, to the property of a corporation that is an Aboriginal and Torres Strait Islander corporation.

Note 1: The definition of property in section 416 does not define that term in relation to a corporation that is an Aboriginal and Torres Strait Islander corporation.

Note 2: Section 516-1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 applies this Part to a corporation that is an Aboriginal and Torres Strait Islander corporation with the modifications provided for in that section.

SECTION 418   PERSONS NOT TO ACT AS RECEIVERS  

418(1)    
A person is not qualified to be appointed, and must not act, as receiver of property of a corporation if the person:

(a) is a secured party in relation to any property (including PPSA retention of title property) of the corporation; or

(b) is an auditor or a director, secretary, senior manager or employee of the corporation; or

(c) is a director, secretary, senior manager or employee of a body corporate that is a secured party in relation to any property (including PPSA retention of title property) of the corporation; or

(d) is not a registered liquidator; or

(e) is a director, secretary, senior manager or employee of a body corporate related to the corporation; or

(f) unless ASIC directs in writing that this paragraph does not apply in relation to the person in relation to the corporation - has at any time within the last 12 months been a director, secretary, senior manager, employee or promoter of the corporation or of a related body corporate.

418(2)    
(Repealed by No 103 of 2004, s 3, Sch 9 [ 20].)

418(3)    
Paragraph (1)(d) does not apply in relation to a body corporate authorised by or under a law of the Commonwealth, of a State or of a Territory to act as receiver of property of the corporation concerned.

418(4)    

In this section:

senior manager
does not include a receiver and manager.

SECTION 418A   COURT MAY DECLARE WHETHER CONTROLLER IS VALIDLY ACTING  

418A(1)    
Where there is doubt, on a specific ground, about:

(a) whether a purported appointment of a person, after 23 June 1993, as receiver of property of a corporation is valid; or

(b) whether a person who has entered into possession, or assumed control, of property of a corporation after 23 June 1993 did so validly under the terms of a security interest in that property;

the person, the corporation or any of the corporation ' s creditors may apply to the Court for an order under subsection (2).

418A(2)    
On an application, the Court may make an order declaring whether or not:

(a) the purported appointment was valid; or

(b) the person entered into possession, or assumed control, validly under the terms of the security interest;

as the case may be, on the ground specified in the application or on some other ground.

SECTION 419   LIABILITY OF CONTROLLER  

419(1)    

A receiver, or any other authorised person, who, whether as agent for the corporation concerned or not, enters into possession or assumes control of any property of a corporation for the purpose of enforcing any security interest is, notwithstanding any agreement to the contrary, but without prejudice to the person ' s rights against the corporation or any other person, liable for debts incurred by the person in the course of the receivership, possession or control for services rendered, goods purchased or property hired, leased (including a lease of goods that gives rise to a PPSA security interest in the goods), used or occupied.

419(2)    

Subsection (1) does not constitute the person entitled to the security interest a mortgagee in possession.

419(3)    
Where:

(a) a person (in this subsection called the controller ) enters into possession or assumes control of property of a corporation; and

(b) the controller purports to have been properly appointed as a receiver in respect of that property under a power contained in an instrument, but has not been properly so appointed; and

(c) civil proceedings in an Australian court arise out of an act alleged to have been done by the controller;

the court may, if it is satisfied that the controller believed on reasonable grounds that the controller had been properly so appointed, order that:

(d) the controller be relieved in whole or in part of a liability that the controller has incurred but would not have incurred if the controller had been properly so appointed; and

(e) a person who purported to appoint the controller as receiver be liable in respect of an act, matter or thing in so far as the controller has been relieved under paragraph (d) of liability in respect of that act, matter or thing.

SECTION 419A   LIABILITY OF CONTROLLER UNDER PRE-EXISTING AGREEMENT ABOUT PROPERTY USED BY CORPORATION  

419A(1)    
This section applies if:

(a) under an agreement made before the control day in relation to a controller of property of a corporation, the corporation continues after that day to use or occupy, or to be in possession of, property ( the third party property ) of which someone else is the owner or lessor; and

(b) the controller is controller of the third party property.

(c) (Repealed)

419A(2)    
Subject to subsections (4) and (7), the controller is liable for so much of the rent or other amounts payable by the corporation under the agreement as is attributable to a period:

(a) that begins more than 7 days after the control day; and

(b) throughout which:

(i) the corporation continues to use or occupy, or to be in possession of, the third party property; and

(ii) the controller is controller of the third party property.

419A(3)    
Within 7 days after the control day, the controller may give to the owner or lessor a notice that specifies the third party property and states that the controller does not propose to exercise rights in relation to that property as controller of the property, whether on behalf of the corporation or anyone else.

419A(4)    
Despite subsection (2), the controller is not liable for so much of the rent or other amounts payable by the corporation under the agreement as is attributable to a period during which a notice under subsection (3) is in force, but such a notice does not affect a liability of the corporation.

419A(5)    
A notice under subsection (3) ceases to have effect if:

(a) the controller revokes it by writing given to the owner or lessor; or

(b) the controller exercises, or purports to exercise, a right in relation to the third party property as controller of the property, whether on behalf of the corporation or anyone else.

419A(6)    
For the purposes of subsection (5), the controller does not exercise, or purport to exercise, a right as mentioned in paragraph (5)(b) merely because the controller continues to be in possession, or to have control, of the third party property, unless the controller:

(a) also uses the property; or

(b) asserts a right, as against the owner or lessor, so to continue.

419A(7)    
Subsection (2) does not apply in so far as a court, by order, excuses the controller from liability, but an order does not affect a liability of the corporation.

419A(8)    
The controller is not taken because of subsection (2):

(a) to have adopted the agreement; or

(b) to be liable under the agreement otherwise than as mentioned in subsection (2).

SECTION 420   POWERS OF RECEIVER  

420(1)    
Subject to this section, a receiver of property of a corporation has power to do, in Australia and elsewhere, all things necessary or convenient to be done for or in connection with, or as incidental to, the attainment of the objectives for which the receiver was appointed.

420(2)    
Without limiting the generality of subsection (1), but subject to any provision of the court order by which, or the instrument under which, the receiver was appointed, being a provision that limits the receiver ' s powers in any way, a receiver of property of a corporation has, in addition to any powers conferred by that order or instrument, as the case may be, or by any other law, power, for the purpose of attaining the objectives for which the receiver was appointed:

(a)    to enter into possession and take control of property of the corporation in accordance with the terms of that order or instrument; and

(b)    to lease, let on hire or dispose of property of the corporation; and

(c)    to grant options over property of the corporation on such conditions as the receiver thinks fit; and

(d)    to borrow money on the security of property of the corporation; and

(e)    to insure property of the corporation; and

(f)    to repair, renew or enlarge property of the corporation; and

(g)    to convert property of the corporation into money; and

(h)    to carry on any business of the corporation; and

(j)    to take on lease or on hire, or to acquire, any property necessary or convenient in connection with the carrying on of a business of the corporation; and

(k)    to execute any document, bring or defend any proceedings or do any other act or thing in the name of and on behalf of the corporation; and

(m)    to draw, accept, make and indorse a bill of exchange or promissory note; and

(n)    to use a seal of the corporation; and

(o)    to engage or discharge employees on behalf of the corporation; and

(p)    to appoint a solicitor, accountant or other professionally qualified person to assist the receiver; and

(q)    to appoint an agent to do any business that the receiver is unable to do, or that it is unreasonable to expect the receiver to do, in person; and

(r)    

where a debt or liability is owed to the corporation - to prove the debt or liability in a bankruptcy, insolvency or winding up and, in connection therewith, to receive dividends and to assent to a proposal for a composition, a scheme of arrangement or a restructuring plan; and

(s)    

if the receiver was appointed under an instrument that created a security interest in uncalled share capital of the corporation:

(i) to make a call in the name of the corporation for the payment of money unpaid on the corporation ' s shares; or

(ii) on giving a proper indemnity to a liquidator of the corporation - to make a call in the liquidator ' s name for the payment of money unpaid on the corporation ' s shares; and

(t)    to enforce payment of any call that is due and unpaid, whether the calls were made by the receiver or otherwise; and

(u)    to make or defend an application for the winding up of the corporation; and

(w)    to refer to arbitration any question affecting the corporation.

420(3)    
The conferring by this section on a receiver of powers in relation to property of a corporation does not affect any rights in relation to that property of any other person other than the corporation.

420(4)    
In this section, a reference, in relation to a receiver, to property of a corporation is, unless the contrary intention appears, a reference to the property of the corporation in relation to which the receiver was appointed.

420(5)    

In this section:

lease
includes a lease of goods that gives rise to a PPSA security interest in the goods.

SECTION 420A   CONTROLLER'S DUTY OF CARE IN EXERCISING POWER OF SALE  

420A(1)   [ Controller to take reasonable care]  

In exercising a power of sale in respect of property of a corporation, a controller must take all reasonable care to sell the property for:

(a) if, when it is sold, it has a market value - not less than that market value; or

(b) otherwise - the best price that is reasonably obtainable, having regard to the circumstances existing when the property is sold.

420A(2)   [ Effect of section on duties]  

Nothing in subsection (1) limits the generality of anything in section 180, 181, 182, 183 or 184.

SECTION 420B   COURT MAY AUTHORISE MANAGING CONTROLLER TO DISPOSE OF PROPERTY DESPITE PRIOR SECURITY INTEREST  

420B(1)    

On the application of a managing controller of property of a corporation, the Court may by order authorise the controller to sell, or to dispose of in some other specified way, specified property of the corporation, even though it is subject to a security interest (the prior security interest ) that has priority over a security interest (the controller ' s security interest ) in that property that the controller is enforcing.

420B(2)    
However, the Court may only make an order if satisfied that:

(a) apart from the existence of the prior security interest, the controller would have power to sell, or to so dispose of, the property; and

(b) the controller has taken all reasonable steps to obtain the consent of the secured party in relation to the prior security interest to the sale or disposal, but has not obtained that consent; and

(c) sale or disposal of the property under the order is in the best interests of the corporation ' s creditors and of the corporation; and

(d) sale or disposal of the property under the order will not unreasonably prejudice the rights or interests of the secured party in relation to the prior security interest.

420B(3)    

The Court is to have regard to the need to protect adequately the rights and interests of the secured party in relation to the prior security interest.

420B(4)    

If the property would be sold or disposed of together with other property that is subject to the controller ' s security interest, the Court may have regard to:

(a) the amount (if any) by which it is reasonable to expect that the net proceeds of selling or disposing of that other property otherwise than together with the first-mentioned property would be less than so much of the net proceeds of selling or disposing of all the property together as would be attributable to that other property; and

(b) the amount (if any) by which it is reasonable to expect that the net proceeds of selling or disposing of the first-mentioned property otherwise than together with the other property would be greater than so much of the net proceeds of selling or disposing of all the property together as would be attributable to the first-mentioned property.

420B(5)    
Nothing in subsection (3) or (4) limits the matters to which the Court may have regard for the purposes of subsection (2).

420B(6)    
An order may be made subject to conditions, for example (but without limitation):

(a) a condition that:

(i) the net proceeds of the sale or disposal; and

(ii) the net proceeds of the sale or disposal of such other property (if any) as is specified in the condition and is subject to the controller ' s security interest;

or a specified part of those net proceeds, be applied in payment of specified amounts secured by the prior security interest; or

(b) a condition that the controller apply a specified amount in payment of specified amounts secured by the prior security interest.

SECTION 420C   RECEIVER'S POWER TO CARRY ON CORPORATION'S BUSINESS DURING WINDING UP  

420C(1)   [ Power of receiver to carry on business]  

A receiver of property of a corporation that is being wound up may:

(a) with the written approval of the corporation's liquidator or with the approval of the Court, carry on the corporation's business either generally or as otherwise specified in the approval; and

(b) do whatever is necessarily incidental to carrying on that business under paragraph (a).

420C(2)   [ Receiver's other powers not affected]  

Subsection (1) does not:

(a) affect a power that the receiver has otherwise than under that subsection; or

(b) empower the receiver to do an act that he or she would not have power to do if the corporation were not being wound up.

420C(3)   [ Receiver as agent for corporation]  

A receiver of property of a corporation who carries on the corporation's business under subsection (1) does so:

(a) as agent for the corporation; and

(b) in his or her capacity as receiver of property of the corporation.

420C(4)   [ Consequences of carrying on a business]  

The consequences of subsection (3) include, but are not limited to, the following:

(a) for the purposes of subsection 419(1), a debt that the receiver incurs in carrying on the business as mentioned in subsection (3) of this section is incurred in the course of the receivership;

(b) a debt or liability that the receiver incurs in so carrying on the business is not a cost, charge or expense of the winding up.

SECTION 421   MANAGING CONTROLLER'S DUTIES IN RELATION TO BANK ACCOUNTS AND FINANCIAL RECORDS  

421(1)   [ Duties]  

A managing controller of property of a corporation must:

(a) open and maintain an account, with an Australian ADI, bearing:

(i) the managing controller's own name; and

(ii) in the case of a receiver of the property - the title ``receiver''; and

(iii) otherwise - the title ``managing controller''; and

(iv) the corporation's name;

or 2 or more such accounts; and

(b) within 3 business days after money of the corporation comes under the control of the managing controller, pay that money into such an account that the managing controller maintains; and

(c) ensure that no such account that the managing controller maintains contains money other than money of the corporation that comes under the control of the managing controller; and

(d) keep such financial records as correctly record and explain all transactions that the managing controller enters into as the managing controller.

421(2)   [ Inspection of managing controller's records]  

Any director, creditor or member of a corporation may, unless the Court otherwise orders, personally or by an agent, inspect records kept by a managing controller of property of the corporation for the purposes of paragraph (1)(d).

SECTION 421A   MANAGING CONTROLLER TO REPORT WITHIN 2 MONTHS ABOUT CORPORATION'S AFFAIRS  

421A(1)   [ Obligation to prepare report]  

A managing controller of property of a corporation must prepare a report about the corporation's affairs that is in the prescribed form and is made up to a day not later than 30 days before the day when it is prepared.

421A(2)   [ Lodgment]  

The managing controller must prepare and lodge the report within 2 months after the control day.

421A(3)    
(Repealed by No 132 of 2007, s 3, Sch 1, Pt 3 [ 58] (effective 31 December 2007).)

421A(4)   [ Prejudicial information excluded]  

If, in the managing controller's opinion, it would seriously prejudice:

(a) the corporation's interests; or

(b) the achievement of the objectives for which the controller was appointed, or entered into possession or assumed control of property of the corporation, as the case requires;

if particular information that the controller would otherwise include in the report were made available to the public, the controller need not include the information in the report.

421A(5)   [ Summary of excluded information]  

If the managing controller omits information from the report as permitted by subsection (4), the controller must include instead a notice:

(a) stating that certain information has been omitted from the report; and

(b) summarising what the information is about, but without disclosing the information itself.

SECTION 422   REPORTS BY RECEIVER OR MANAGING CONTROLLER  

422(1)    

If it appears to the receiver or managing controller of property of a corporation that:

(a)    

a past or present officer or employee, or a member, of the corporation may have been guilty of an offence in relation to the corporation; or

(aa)    

if the corporation is a registered foreign company - a past or present local agent of the corporation may have been guilty of an offence in relation to the corporation; or

(b)    

a person who has taken part in the formation, promotion, administration, restructuring, management or winding up of the corporation:

(i) may have misapplied or retained, or may have become liable or accountable for, any money or property (whether the property is in Australia or elsewhere) of the corporation; or

(ii) may have been guilty of any negligence, default, breach of duty or breach of trust in relation to the corporation;

the receiver or managing controller must:

(c)    lodge as soon as practicable a report about the matter; and

(d)    give to ASIC such information, and such access to and facilities for inspecting and taking copies of any documents, as ASIC requires.

422(2)    

The receiver or managing controller may also lodge further reports specifying any other matter that, in the opinion of the receiver or managing controller, it is desirable to bring to the notice of ASIC.

422(3)    
If it appears to the Court:

(a)    

that a past or present officer or employee, or a member, of a corporation in respect of property of which a receiver has been appointed has been guilty of an offence in relation to the corporation; or

(aa)    

that a past or present local agent of a corporation:

(i) that is a registered foreign company; and

(ii) in respect of property of which a receiver has been appointed;

has been guilty of an offence in relation to the corporation; or

(b)    

that a person who has taken part in the formation, promotion, administration, restructuring, management or winding up of a corporation in respect of property of which a receiver has been appointed has engaged in conduct referred to in paragraph (1)(b) in relation to the corporation;

and that the receiver has not lodged a report about the matter, the Court may, on the application of a person interested in the appointment of the receiver, direct the receiver to lodge such a report.

422(4)    

If:

(a)    there is a managing controller in relation to property of a corporation; and

(b)    

it appears to the Court that:

(i) a past or present officer or employee, or a member, of the corporation has been guilty of an offence in relation to the corporation; or

(ia) if the corporation is a registered foreign company - a past or present local agent of the corporation has been guilty of an offence in relation to the corporation; or

(ii) a person who has taken part in the formation, promotion, administration, restructuring, management or winding up of the corporation has engaged in conduct referred to in paragraph (1)(b) in relation to the corporation; and

(c)    it appears to the Court that the managing controller has not lodged a report about the matter;

the Court may, on the application of a person interested in the appointment of the managing controller, direct the managing controller to lodge such a report.

SECTION 422A   ANNUAL RETURN BY CONTROLLER  

422A(1)    
This section applies if a person is the controller of property of a corporation during all or part of a control return year for the controller for the corporation.

422A(2)    
However, this section does not apply if:

(a)    the control of the property ends during the control return year; and

(b)    the person is the controller of the property when the control of the property ends.

Note: If a person is the controller of property of the corporation when the control of the property ends, the person must instead lodge a return under section 422B .

422A(3)    
The person must lodge a return in relation to the control of the property of the corporation.

422A(4)    
The return must:

(a)    be in the approved form; and

(b)    be lodged with ASIC within 3 months after the end of the control return year.

Note: Fees for lodging documents and late lodgement fees may be imposed under the Corporations (Fees) Act 2001 .

422A(5)    
Each of the following is a control return year for a controller for a corporation:

(a)    the period of 12 months beginning on the day on which the person first began to be a controller of the property of the corporation;

(b)    each subsequent period of 12 months.

SECTION 422B   END OF CONTROL RETURN  

Application of this section

422B(1)    
This section applies if the control of the property of a corporation ends.

End of receivership return to be lodged

422B(2)    
The person who is the controller of the property of the corporation when the control of the property of the corporation ends (the last controller ) must lodge a return in relation to the control of the property of the corporation.

422B(3)    
The return must:

(a)    be in the approved form; and

(b)    be lodged with ASIC within 1 month after the control of the property of the corporation ends.

Note: Fees for lodging documents and late lodgement fees may be imposed under the Corporations (Fees) Act 2001 .

Notice of lodgement to be given

422B(4)    
The last controller must give notice that the return has been lodged to a person mentioned in subsection (5) , if that person requests in writing that the last controller give the person such a notice.

422B(5)    
The persons who may request such a notice are:

(a)    the members of the corporation; and

(b)    the creditors; and

(c)    the corporation; and

(d)    if the corporation is a company under external administration - the external administrator of the company.

SECTION 422C   TRANSFER OF BOOKS TO NEW CONTROLLER  

Application of this section

422C(1)    
This section applies if:

(a) a person (the former controller ) ceases to act as a controller of property of a corporation; and

(b) ASIC has not issued a notice to the former controller under section 422D ; and

(c) a registered liquidator (the new controller ):

(i) is appointed instead as the controller of that property of the corporation; or

(ii) if the corporation is a company under external administration - is appointed instead as the external administrator of the company; or

(iii) if subparagraphs (i) and (ii) do not apply and the corporation is a company under external administration - is the external administrator of the company.

Transfer of books to new controller

422C(2)    
The former controller must transfer to the new controller possession or control of any books relating to the control of the property that are in the former controller ' s possession or control.

422C(2A)    
The transfer must be made:

(a) if the new controller is appointed instead of the former controller - within 5 business days after the new controller is appointed; or

(b) otherwise - within 5 business days after the former controller ceases to act.

422C(3)    
The former controller may take a copy of any part of the books before transferring possession or control of them to the new controller.

New controller must allow inspection etc.

422C(4)    
After possession or control of the books is transferred, the new controller must allow the former controller to inspect them at any reasonable time and take a copy of any part of the books.

Offence

422C(5)    
A person commits an offence if:

(a) the person is subject to a requirement under subsection (2) or (4); and

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 50 penalty units.

Lien against books not prejudiced

422C(6)    
If the new controller is entitled to take possession or control of the books under this section:

(a) a person is not entitled, as against the new controller, to claim a lien on the books; and

(b) such a lien is not otherwise prejudiced.

SECTION 422D   TRANSFER OF BOOKS TO ASIC ETC.  

Transfer of books to ASIC

422D(1)    
If a person ceases to act as a controller of property of a corporation, ASIC may, by written notice given to the person, require the person to:

(a) if the person has possession or control of books relating to the control of that property of the corporation in his or her possession or control - transfer possession or control of those books to ASIC within the period specified in the notice; or

(b) otherwise - notify ASIC, within the period and in the manner specified in the notice, that the person does not have books relating to the control of that property of the corporation in the person ' s possession or control.

Offence

422D(2)    
A person commits an offence if:

(a) the person is subject to a requirement under subsection (1); and

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 50 penalty units.

ASIC must transfer books to new controller

422D(3)    
If:

(a) possession or control of books relating to the control of property of a corporation is transferred to ASIC under this section; and

(b) the books are in ASIC ' s possession or control; and

(c) a person (the new controller ) is or becomes:

(i) the controller of that property of the corporation; or

(ii) if the corporation is a company under external administration - the external administrator of the company;

ASIC must, as soon as practicable, transfer possession or control of those books to the new controller.

ASIC must transfer books to company

422D(4)    
If:

(a) possession or control of books relating to the control of property of a corporation is transferred to ASIC under this section; and

(b) the books are in ASIC ' s possession or control; and

(c) it is unlikely that another person will be appointed as:

(i) the controller of that property of the corporation; or

(ii) if the corporation is a company under external administration - the external administrator of the company;

ASIC must, as soon as practicable, transfer possession or control of those books to the relevant corporation.

Lien against books not prejudiced

422D(5)    
If ASIC is entitled to take possession or control of the books under this section:

(a) a person is not entitled, as against ASIC, to claim a lien on the books; and

(b) such a lien is not otherwise prejudiced.

422D(6)    
If ASIC is required to give possession or control of the books to the new controller under this section:

(a) a person is not entitled, as against the new controller, to claim a lien on the books; and

(b) such a lien is not otherwise prejudiced.

Notice is not a legislative instrument

422D(7)    
A notice under subsection (1) is not a legislative instrument.

Retention period for books

422D(8)    
ASIC must retain all books:

(a) that are relevant to the control of property of the corporation; and

(b) possession or control of which is transferred to ASIC under this section; and

(c) possession or control of which is not transferred to another entity under this section, or under any other law;

for a period (the retention period ) of 2 years after the day on which ASIC takes possession or control of the books.

Destruction of books at end of retention period

422D(9)    
ASIC may destroy the books at the end of the retention period.

Relationship with other laws

422D(10)    
Subsections (8) and (9) do not apply to the extent that ASIC is under an obligation to retain the books, or a part of the books, under another provision of this Act or under any other law.

SECTION 423   SUPERVISION OF CONTROLLER  

423(1)    
If:

(a)    

it appears to the Court or to ASIC that a controller of property of a corporation has not faithfully performed, or is not faithfully performing, the controller ' s functions or has not observed, or is not observing, a requirement of:

(i) in the case of a receiver - the order by which, or the instrument under which, the receiver was appointed; or

(ii) otherwise - an instrument under which the controller entered into possession, or took control, of that property; or

(iii) in any case - the Court; or

(iv) in any case - this Act, the regulations or the rules of court; or

(b)    a person complains to the Court or to ASIC about an act or omission of a controller of property of a corporation in connection with performing or exercising any of the controller ' s functions and powers;

the Court or ASIC, as the case may be, may inquire into the matter and, where the Court or ASIC so inquires, the Court may take such action as it thinks fit.

423(2)    
ASIC may report to the Court any matter that in its opinion is a misfeasance, neglect or omission on the part of a controller of property of a corporation and the Court may order the controller to make good any loss that the estate of the corporation has sustained thereby and may make such other order or orders as it thinks fit.

423(3)    
The Court may at any time:

(a)    require a controller of property of a corporation to answer questions about the performance or exercise of any of the controller ' s functions and powers as controller; or

(b)    examine a person about the performance or exercise by such a controller of any of the controller ' s functions and powers as controller; or

(c)    direct an investigation to be made of such a controller ' s books.

SECTION 424   CONTROLLER MAY APPLY TO COURT  

424(1)   [ Court directions as to performance of functions and powers]  

A controller of property of a corporation may apply to the Court for directions in relation to any matter arising in connection with the performance or exercise of any of the controller's functions and powers as controller.

424(2)   [ Receiver appointed under instrument]  

In the case of a receiver of property of a corporation, subsection (1) applies only if the receiver was appointed under a power contained in an instrument.

SECTION 425   COURT ' S POWER TO FIX RECEIVER ' S REMUNERATION  

425(1)    
The Court may by order fix the amount to be paid by way of remuneration to any person who, under a power contained in an instrument, has been appointed as receiver of property of a corporation.

425(2)    
The power of the Court to make an order under this section:

(a)    extends to fixing the remuneration for any period before the making of the order or the application for the order; and

(b)    is exercisable even if the receiver has died, or ceased to act, before the making of the order or the application for the order; and

(c)    if the receiver has been paid or has retained for the receiver's remuneration for any period before the making of the order any amount in excess of that fixed for that period - extends to requiring the receiver or the receiver's personal representatives to account for the excess or such part of the excess as is specified in the order.

425(3)    
The power conferred by paragraph (2)(c) must not be exercised in respect of any period before the making of the application for the order unless, in the opinion of the Court, there are special circumstances making it proper for the power to be so exercised.

425(4)    
The Court may from time to time vary or amend an order under this section.

425(5)    
An order under this section may be made, varied or amended on the application of:

(a)    a liquidator of the corporation; or

(b)    an administrator of the corporation; or

(c)    an administrator of a deed of company arrangement executed by the corporation; or

(ca)    

if the corporation is under restructuring - the corporation with the consent of the restructuring practitioner for the corporation; or

(cb)    

the restructuring practitioner for a restructuring plan made by the corporation; or

(d)    ASIC.

425(6)    
An order under this section may be varied or amended on the application of the receiver concerned.

425(7)    
An order under this section may be made, varied or amended only as provided in subsections (5) and (6).

425(8)    

In exercising its powers under this section, the Court must have regard to whether the remuneration is reasonable, taking into account any or all of the following matters:

(a)    the extent to which the work performed by the receiver was reasonably necessary;

(b)    the extent to which the work likely to be performed by the receiver is likely to be reasonably necessary;

(c)    the period during which the work was, or is likely to be, performed by the receiver;

(d)    the quality of the work performed, or likely to be performed, by the receiver;

(e)    the complexity (or otherwise) of the work performed, or likely to be performed, by the receiver;

(f)    the extent (if any) to which the receiver was, or is likely to be, required to deal with extraordinary issues;

(g)    the extent (if any) to which the receiver was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case;

(h)    the value and nature of any property dealt with, or likely to be dealt with, by the receiver;

(i)    

whether the receiver was, or is likely to be, required to deal with:

(i) one or more other receivers; or

(ii) one or more receivers and managers; or

(iii) one or more liquidators; or

(iv) one or more administrators; or

(v) one or more administrators of deeds of company arrangement; or

(vi) one or more restructuring practitioners; or

(vii) one or more restructuring practitioners for restructuring plans;

(j)    the number, attributes and behaviour, or the likely number, attributes and behaviour, of the company ' s creditors;

(k)    if the remuneration is ascertained, in whole or in part, on a time basis:

(i) the time properly taken, or likely to be properly taken, by the receiver in performing the work; and

(ii) whether the total remuneration payable to the receiver is capped;

(l)    any other relevant matters.

SECTION 426  

426   CONTROLLER HAS QUALIFIED PRIVILEGE IN CERTAIN CASES  
A controller of property of a corporation has qualified privilege in respect of:

(a)    

a matter contained in a report or return that the controller lodges under section 421A , 422 , 422A or 422B ; or

(b)    

a comment that the controller makes under paragraph 429(2)(c) (including as it applies under paragraph 429A(3)(g) ).

SECTION 427   NOTIFICATION OF MATTERS RELATING TO CONTROLLER  

427(1)    

A person who:

(a)    obtains an order for the appointment of a receiver of property of a corporation; or

(b)    appoints such a receiver under a power contained in an instrument;

must, within 7 days after obtaining the order or making the appointment, lodge notice that the order has been obtained, or that the appointment has been made, as the case may be.

427(1A)    

A person who appoints another person to enter into possession, or take control, of property of a corporation (whetheror not as agent for the corporation) for the purpose of enforcing a security interest otherwise than as receiver of that property must, within 7 days after making the appointment, lodge notice of the appointment.

427(1B)    

A person who enters into possession, or takes control, as mentioned in subsection (1A) must, within 7 days after entering into possession or taking control, lodge notice that the person has done so, unless another person:

(a)    appointed the first-mentioned person so to enter into possession or take control; and

(b)    complies with subsection (1A) in relation to the appointment.

427(2)    
Within 14 days after becoming a controller of property of a corporation, a person must lodge notice in the prescribed form of the address of the person ' s office.

427(3)    
A controller of property of a corporation must, within 14 days after a change in the situation of the controller ' s office, lodge notice in the prescribed form of the change.

427(4)    

A person who ceases to be a controller of property of a corporation must, within 7 days after so ceasing, lodge notice that the person has so ceased.

SECTION 428   STATEMENT THAT RECEIVER APPOINTED OR OTHER CONTROLLER ACTING  
Property of corporation

428(1)    
Where a receiver of property (whether in or outside this jurisdiction or in or outside Australia) of a corporation has been appointed, the corporation must set out, in every public document, and in every negotiable instrument, of the corporation, after the name of the corporation where it first appears, a statement that a receiver, or a receiver and manager, as the case requires, has been appointed.

428(2)    
Where there is a controller (other than a receiver) of property (whether in Australia or elsewhere) of a corporation, the corporation must set out, in every public document, and in every negotiable instrument, of the corporation, after the corporation ' s name where it first appears, a statement that a controller is acting.

428(2A)    

However, if the only property of the corporation in respect of which a receiver has been appointed, or in respect of which there is a controller, is:

(a) scheme property of any registered schemes of which the corporation is the responsible entity; or

(b) property the corporation holds on trust, if the corporation:

(i) is a licensed trustee company; or

(ii) holds an Australian financial services licence that covers the provision of custodial or depository services;

subsections (1) and (2) apply only to documents or instruments that relate to the relevant registered schemes and trusts. The statement may refer to those schemes and trusts.

Scheme property

428(2B)    

A corporation must set out in every public document, and in every negotiable instrument, of the corporation that relates to a registered scheme, after the name of the corporation where it first appears, a statement that a receiver, or a receiver and manager, as the case requires, has been appointed, if:

(a) the corporation is the responsible entity of the registered scheme; and

(b) a receiver of scheme property (whether in or outside this jurisdiction or in or outside Australia) of the registered scheme has been appointed; and

(c) the scheme property is not property of the corporation.

The statement may refer to the registered scheme.

428(2C)    

A corporation must set out in every public document, and in every negotiable instrument, of the corporation that relates to a registered scheme, after the name of the corporation where it first appears, a statement that a controller is acting, if:

(a) the corporation is the responsible entity of the registered scheme; and

(b) there is a controller (other than a receiver) of scheme property (whether in Australia or elsewhere) of the registered scheme; and

(c) the scheme property is not property of the corporation.

The statement may refer to the registered scheme.

Strict liability offence

428(3)    

An offence based on subsection (1), (2), (2B) or (2C) is an offence of strict liability.

SECTION 429   REPORTING OFFICERS TO REPORT TO CONTROLLER ABOUT CORPORATION ' S AFFAIRS  

429(1)    
In this section:

reporting officer
, in relation to a corporation in respect of property of which a person is controller, means a person who was:

(a) in the case of a company or registrable Australian body - a director or secretary of the company or registrable Australian body; or

(b) in the case of a foreign company - a local agent of the foreign company;

on the control day.

429(2)    
Where a person becomes a controller of property of a corporation:

(a)    the person must serve on the corporation as soon as practicable notice that the person is a controller of property of the corporation; and

(b)    within 10 business days after the corporation receives the notice, the reporting officers must make out and submit to the person a report in the prescribed form about the affairs of the corporation as at the control day; and

(c)    

the person must, within one month after receipt of the report:

(i) lodge a copy of the report and a notice setting out any comments the person sees fit to make relating to the report or, if the person does not see fit to make any comment, a notice stating that the person does not see fit to make any comment; and

(ii) send to the corporation a copy of the notice lodged in accordance with subparagraph (i); and

(iii) if the person became a controller of the property:

(A) because of an appointment as receiver of the property that was made by or on behalf of the holder of debentures of the corporation; or

(B) by entering into possession, or taking control, of the property for the purpose of enforcing a security interest securing such debentures;

and there are trustees for the holders of those debentures - send to those trustees a copy of the report and a copy of the notice lodged under subparagraph (i).

429(2A)    

However, if:

(a)    the corporation:

(i) is a licensed trustee company; or

(ii) holds an Australian financial services licence that covers the provision of custodial or depository services; and

(b)    the only property of the corporation in respect of which a person is controller is property the corporation holds on trust;

subsection (2) applies only to affairs of the corporation that relate to the relevant registered schemes and trusts, and the notice under paragraph (2)(a) may refer to those schemes and trusts.

Note: See section 429A if the property is scheme property of a registered scheme.

429(3)    
Where notice has been served on a corporation under paragraph (2)(a) , the reporting officers may apply to the controller or to the Court to extend the period within which the report is to be submitted and:

(a)    if application is made to the controller - if the controller believes that there are special reasons for so doing, the controller may, by notice in writing given to the reporting officers, extend that period until a specified day; and

(b)    if application is made to the Court - if the Court believes that there are special reasons for so doing, the Court may, by order, extend that period until a specified day.

429(4)    
As soon as practicable after granting an extension under paragraph (3)(a) , the controller must lodge a copy of the notice.

429(5)    
As soon as practicable after the Court grants an extension under paragraph (3)(b) , the reporting officers must lodge a copy of the order.

429(6)    

Subsections (2) , (3) and (4) and 429A(3) do not apply in a case where a person becomes a controller of property of a corporation:

(a)    to act with an existing controller of property of the corporation; or

(b)    in place of a controller of such property who has died or ceased to be a controller of such property.

429(6A)    

However, if subsection (2) or 429A(3) applies in a case where a controller of property of a corporation dies, or ceases to be a controller of property of the corporation, before subsection (2) or 429A(3) is fully complied with, then:

(a)    

the references in paragraphs (2)(b) and (c) and 429A(3)(e) , (f) , (g) and (h) to the person; and

(b)    the references in subsections (3) and (4) to the controller;

include references to the controller ' s successor and to any continuing controller.

429(7)    

Where a corporation is being wound up, this section (including subsection (6A) ) and sections 429A and 430 apply even if the controller and the liquidator are the same person, but with any necessary modifications arising from that fact.

SECTION 429A   SPECIAL RULES FOR SCHEME PROPERTY  

Report by controller of scheme property

429A(1)    
If:

(a) a person becomes a controller of property of a corporation; and

(b) the only property of the corporation in respect of which a person is controller is scheme property of a registered scheme; and

(c) the corporation is the responsible entity of the registered scheme;

subsection 429(2) applies only to affairs of the corporation that relate to the relevant registered schemes and trusts, and the notice under paragraph 429(2)(a) may refer to those schemes and trusts.

429A(2)    
Subsection 429(2) does not apply if:

(a) a person becomes a controller of property of a corporation; and

(b) the only property of the corporation in respect of which a person is controller is scheme property of a registered scheme; and

(c) the corporation is not the responsible entity of the registered scheme; and

(d) the corporation holds an Australian financial services licence that covers the provision of custodial or depository services.

Reporting to and by responsible entity

429A(3)    
If:

(a) a person becomes a controller of property of a corporation; and

(b) the property is scheme property of a registered scheme; and

(c) the property is not property of the responsible entity of the scheme; and

(d) the corporation holds an Australian financial services licence that covers the provision of custodial or depository services;

the following paragraphs apply:

(e) the person must serve on the responsible entity as soon as practicable notice that the person is a controller of the scheme property;

(f) within 14 days after the responsible entity receives the notice, the persons who, on the control day, were directors or the secretary of the responsible entity must make out and submit to the person who is a controller a report in the prescribed form about the affairs of the scheme asat the control day;

(g) paragraph 429(2)(c) and subsections 429(3) to (5) apply, in relation to a report submitted under paragraph (f) of this subsection, in the same way as those provisions apply in relation to reports submitted under paragraph 429(2)(b) , with the following modifications:

(i) if subsection (2) of this section applies - subparagraph 429(2)(c)(ii) (which requires the person to send a copy of the notice to the corporation) does not apply;

(ii) a reference in those provisions to the reporting officers is treated as being a reference to the directors and secretary mentioned in paragraph (f) of this subsection;

(h) if the person receives a report to which paragraph 429(2)(c) applies (including because of paragraph (g) of this subsection) - the person must, within one month after receipt of the report, send a copy of the notice lodged in accordance with subparagraph 429(2)(c)(i) to the responsible entity.

SECTION 430   CONTROLLER MAY REQUIRE REPORTS  

430(1)    
A controller of property of a corporation may, by notice given to the person or persons, require one or more persons included in one or more of the following classes of persons to make out as required by the notice, verify by a statement in writing in the prescribed form, and submit to the controller, a report, containing such information as is specified in the notice as to the affairs of the corporation or as to such of those affairs as are specified in the notice, as at a date specified in the notice:

(a)    persons who are or have been officers of the corporation;

(aa)    

if the corporation is a registered foreign company - persons who are past or present local agents of the corporation;

(b)    where the corporation was incorporated within one year before the control day - persons who have taken part in the formation of the corporation;

(c)    persons who are employed by the corporation or have been so employed within one year before the control day and are, in the opinion of the controller, capable of giving the information required;

(d)    persons who are, or have been within one year before the control day, officers of, or employed by, a corporation that is, or within that year was, an officer of the corporation;

(e)    

if the corporation is a registered foreign company - persons who:

(i) are present local agents of another corporation and that other corporation is an officer of the corporation or a past or present local agent of the corporation; or

(ii) have been, within one year before the control day, local agents of another corporation and that other corporation is an officer of the corporation or a past or present local agent of the corporation.

430(2)    
Without limiting the generality of subsection (1) , a notice under that subsection may specify the information that the controller requires as to affairs of the corporation by reference to information that this Act requires to be included in any other report, statement or notice under this Act.

430(3)    
A person making a report and verifying it as required by subsection (1) must, subject to the regulations, be allowed, and must be paid by the controller (or the controller ' s successor) out of the controller's receipts, such costs and expenses incurred in and about the preparation and making of the report and the verification of the report as the controller (or the controller's successor) considers reasonable.

430(4)    
A person must comply with a requirement made under subsection (1) .

430(5)    
A reference in this section to the controller ' s successor includes a reference to a continuing controller.

SECTION 431  

431   CONTROLLER MAY INSPECT BOOKS  
A controller of property of a corporation is entitled to inspect at any reasonable time any books of the corporation that relate to that property and a person must not fail to allow the controller to inspect such books at such a time.

SECTION 432   AUDITING RETURNS BY CONTROLLERS  

432(1)    
(Repealed by No 11 of 2016, s 3, Sch 2[96] (effective 1 March 2017).)

432(1A)    
(Repealed by No 11 of 2016, s 3, Sch 2[96] (effective 1 March 2017).)

432(2)    
ASIC may, of its own motion or on the application of the corporation or a creditor of the corporation, cause the returns lodged in accordance with sections 422A and 422B to be audited by a registered company auditor appointed by ASIC and, for the purpose of the audit, the controller must furnish the auditor with such books and information as the auditor requires.

432(3)    

Where ASIC causes the returns to be audited on the request of the corporation or a creditor, ASIC may require the corporation or creditor, as the case may be, to give security for the payment of the cost of the audit.

432(4)    
The costs of an audit under subsection (2) must be fixed by ASIC and ASIC may if it thinks fit make an order declaring that, for the purposes of subsection 419(1) , those costs are taken to be a debt incurred by the controller as mentioned in subsection 419(1) and, where such an order is made, the controller is liable accordingly.

432(5)    
A person must comply with a requirement made under this section.

SECTION 433   PROPERTY SUBJECT TO CIRCULATING SECURITY INTEREST - PAYMENT OF CERTAIN DEBTS TO HAVE PRIORITY  

433(2)    
This section applies where:

(a) a receiver is appointed on behalf of the holders of any debentures of a company or registered body that are secured by a circulating security interest, or possession is taken or control is assumed, by or on behalf of the holders of any debentures of a company or registered body, of any property comprised in or subject to a circulating security interest; and

(b) at the date of the appointment or of the taking of possession or assumption of control (in this section called the relevant date ):

(i) the company or registered body has not commenced to be wound up voluntarily; and

(ii) the company or registered body has not been ordered to be wound up by the Court.

433(3)    
In the case of a company, the receiver or other person taking possession or assuming control of property of the company must pay, out of the property coming into his, her or its hands, the following debts or amounts in priority to any claim for principal or interest in respect of the debentures:

(a) first, any amount that in a winding up is payable in priority to unsecured debts pursuant to section 562;

(b) next, if an auditor of the company had applied to ASIC under subsection 329(6) for consent to his, her or its resignation as auditor and ASIC had refused that consent before the relevant date - the reasonable fees and expenses of the auditor incurred during the period beginning on the day of the refusal and ending on the relevant date;

(c) subject to subsections (6) and (7), next, any debt or amount that in a winding up is payable in priority to other unsecured debts pursuant to paragraph 556(1)(e), (g) or (h) or section 560.

433(4)    
In the case of a registered body, the receiver or other person taking possession or assuming control of property of the registered body must pay, out of the property of the registered body coming into his, her or its hands, the following debts or amounts in priority to any claim for principal or interest in respect of the debentures:

(a) first, any amount that in a winding up is payable in priority to unsecured debts pursuant to section 562;

(b) next, any debt or amount that in a winding up is payable in priority to other unsecured debts pursuant to paragraph 556(1)(e), (g) or (h) or section 560.

433(5)    
The receiver or other person taking possession or assuming control of property must pay debts and amounts payable pursuant to paragraph (3)(c) or (4)(b) in the same order of priority as is prescribed by Division 6 of Part 5.6 in respect of those debts and amounts.

433(6)    
In the case of a company, if an auditor of the company had applied to ASIC under subsection 329(6) for consent to his, her or its resignation as auditor and ASIC had, before the relevant date, refused that consent, a receiver must, when property comes to the receiver ' s hands, before paying any debt or amount referred to in paragraph (3)(c), make provision out of that property for the reasonable fees and expenses of the auditor incurred after the relevant date but before the date on which the property comes into the receiver ' s hands, being fees and expenses in respect of which provision has not already been made under this subsection.

433(7)    
If an auditor of the company applies to ASIC under subsection 329(6) for consent to his, her or its resignation as auditor and, after the relevant date, ASIC refuses that consent, the receiver must, in relation to property that comes into the receiver ' s hands after the refusal, before paying any debt or amount referred to in paragraph (3)(c), make provision out of that property for the reasonable fees and expenses of the auditor incurred after the refusal and before the date on which the property comes into the receiver ' s hands, being fees and expenses in respect of which provision has not already been made under this subsection.

433(8)    
A receiver must make provision in respect of reasonable fees and expenses of an auditor in respect of a particular period as required by subsection (6) or (7) whether or not the auditor has made a claim for fees and expenses for that period, but where the auditor has not made a claim, the receiver may estimate the reasonable fees and expenses of the auditor for that period and make provision in accordance with the estimate.

433(9)    
For the purposes of this section, the references in Division 6 of Part 5.6 to the relevant date are to be read as references to the date of the appointment of the receiver, or of possession being taken or control being assumed, as the case may be.

SECTION 434   ENFORCING CONTROLLER ' S DUTY TO MAKE RETURNS  

434(1)    
If a controller of property of a corporation:

(a)    who has made default in making or lodging any return, account or other document or in giving any notice required by law fails to make good the default within 14 days after the service on the controller, by any member or creditor of the corporation or trustee for debenture holders, of a notice requiring the controller to do so; or

(b)    who has become a controller of property of the corporation otherwise than by being appointed a receiver of such property by a court and who has, after being required at any time by the liquidator of the corporation so to do, failed to render proper accounts of, and to vouch, the controller ' s receipts and payments and to pay over to the liquidator the amount properly payable to the liquidator;

the Court may make an order directing the controller to make good the default within such time as is specified in the order.

434(2)    
An application under subsection (1) may be made:

(a)    if paragraph (1)(a) applies - by a member or creditor of the corporation or by a trustee for debenture holders; and

(b)    if paragraph (1)(b) applies - by the liquidator of the corporation.

SECTION 434A  

434A   COURT MAY REMOVE CONTROLLER FOR MISCONDUCT  
Where, on the application of a corporation, the Court is satisfied that a controller of property of the corporation has been guilty of misconduct in connection with performing or exercising any of the controller's functions and powers, the Court may order that, on and after a specified day, the controller cease to act as receiver or give up possession or control, as the case requires, of property of the corporation.

SECTION 434B   COURT MAY REMOVE REDUNDANT CONTROLLER  

434B(1)    
The Court may order that, on and after a specified day, a controller of property of a corporation:

(a) cease to act as receiver, or give up possession or control, as the case requires, of property of the corporation; or

(b) act as receiver, or continue in possession or control, as the case requires, only of specified property of the corporation.

434B(2)    
However, the Court may only make an order under subsection (1) if satisfied that the objectives for which the controller was appointed, or entered into possession or took control of property of the corporation, as the case requires, have been achieved, so far as is reasonably practicable, except in relation to any property specified in the order under paragraph (1)(b).

434B(3)    
For the purposes of subsection (2), the Court must have regard to:

(a) the corporation ' s interests; and

(b) the interests of the secured party in relation to the security interest that the controller is enforcing; and

(c) the interests of the corporation ' s other creditors; and

(d) any other relevant matter.

434B(4)    
The Court may only make an order under subsection (1) on the application of a liquidator appointed for the purposes of winding up the corporation in insolvency.

434B(5)    

An order under subsection (1) may also prohibit the secured party from doing any or all of the following, except with the leave of the Court:

(a) appointing a person as receiver of property of the corporation under a power contained in an instrument relating to the security interest;

(b) entering into possession, or taking control, of such property for the purpose of enforcing the security interest;

(c) appointing a person so to enter into possession or take control (whether as agent for the secured party or for the corporation).

SECTION 434C   EFFECT OF SECTIONS 434A AND 434B  

434C(1)    

Except as expressly provided in section 434A or 434B , an order under that section does not affect a security interest in property of a corporation.

434C(2)    
Nothing in section 434A or 434B limits any other power of the Court to remove, or otherwise deal with, a controller of property of a corporation (for example, the Court ' s powers under section 423 ).

SECTION 434D  

434D   APPOINTMENT OF 2 OR MORE RECEIVERS OF PROPERTY OF A CORPORATION  

If 2 or more persons have been appointed as receivers of property of a corporation:

(a) a function or power of a receiver of property of the corporation may be performed or exercised by any one of them, or by any 2 or more of them together, except so far as the order or instrument appointing them otherwise provides; and

(b) a reference in this Act to a receiver, or to the receiver, of property of a corporation is, in the case of the first-mentioned corporation, a reference to whichever one or more of those receivers the case requires.

SECTION 434E  

434E   APPOINTMENT OF 2 OR MORE RECEIVERSAND MANAGERS OF PROPERTY OF A CORPORATION  

If 2 or more persons have been appointed as receivers and managers of property of a corporation:

(a) a function or power of a receiver and manager of property of the corporation may be performed or exercised by any one of them, or by any 2 or more of them together, except so far as the order or instrument appointing them otherwise provides; and

(b) a reference in this Act to a receiver and manager, or to the receiver and manager, of property of a corporation is, in the case of the first-mentioned corporation, a reference to whichever one or more of those receivers and managers the case requires.

SECTION 434F  

434F   APPOINTMENT OF 2 OR MORE CONTROLLERS OF PROPERTY OF A CORPORATION  

If 2 or more persons have been appointed as controllers of property of a corporation:

(a) a function or power of a controller of property of the corporation may be performed or exercised by any one of them, or by any 2 or more of them together, except so far as the order or instrument appointing them otherwise provides; and

(b) a reference in this Act to a controller, or to the controller, of property of a corporation is, in the case of the first-mentioned corporation, a reference to whichever one or more of those controllers the case requires.

SECTION 434G  

434G   APPOINTMENT OF 2 OR MORE MANAGING CONTROLLERS OF PROPERTY OF A CORPORATION  

If 2 or more persons have been appointed as managing controllers of property of a corporation:

(a) a function or power of a managing controller of property of the corporation may be performed or exercised by any one of them, or by any 2 or more of them together, except so far as the order or instrument appointing them otherwise provides; and

(b) a reference in this Act to a managing controller, or to the managing controller, of property of a corporation is, in the case of the first-mentioned corporation, a reference to whichever one or more of those managing controllers the case requires.

SECTION 434H   REGULATIONS MAY PROVIDE FOR REPORTING TO ASIC  

434H(1)    
The regulations may provide for and in relation to the obligations of a controller, or a managing controller, of the property of a corporation:

(a)    to give information; and

(b)    to provide reports; and

(c)    to produce documents;

to ASIC.

434H(2)    
Without limiting subsection (1) , the regulations may provide for and in relation to:

(a)    the manner and form in which information is to be given, a report provided or a document produced; and

(b)    the timeframes in which information is to be given, a report provided or a document produced; and

(c)    who is to bear the cost of giving information, providing a report or producing a document.

SECTION 434J   STAY ON ENFORCING RIGHTS MERELY BECAUSE OF THE APPOINTMENT OF A MANAGING CONTROLLER OF A CORPORATION ' S PROPERTY ETC.  

Stay on enforcing rights

434J(1)    
A right cannot be enforced against a corporation for:

(a) the reason of the appointment or existence of a managing controller of the whole or substantially the whole of the corporation ' s property; or

(b) the corporation ' s financial position, if there is a managing controller of the whole or substantially the whole of the corporation ' s property; or

(c) a reason, prescribed by the regulations for the purposes of this paragraph, that relates to:

(i) the appointing, or possible appointing, of a managing controller of the whole or substantially the whole of the corporation ' s property; or

(ii) the corporation ' s financial position;

if such an appointment is later made for the whole or substantially the whole of the corporation ' s property; or

(d) a reason that, in substance, is contrary to this subsection;

if the right arises for that reason by express provision (however described) of a contract, agreement or arrangement.

Note: This result is subject to subsections (5) and (7), and to any order under section 434K .

Example: A right to terminate a contract will not be enforceable to the extent that those rights are triggered by the appointment of a managing controller.

Period of the stay

434J(2)    
The right cannot be enforced as described in subsection (1) during the period (the stay period ) starting at the appointment of the managing controller and ending:

(a) unless paragraph (b) applies - when the managing controller ' s control of the corporation ' s property ends; or

(b) if one or more orders are made under subsection (3) for the corporation as the result of an application made before the end of the managing controller ' s control of the corporation ' s property - when the last made of those orders ceases to be in force.

434J(3)    
The Court:

(a) may order an extension of the period otherwise applying under subsection (2) for the corporation if the Court is satisfied that the extension is appropriate having regard to the interests of justice; and

(b) before deciding an application for an order under paragraph (a), may grant an interim order, but must not require the applicant to give an undertaking as to damages as a condition for doing so.

Enforcing rights after the stay for reasons relating to earlier circumstances

434J(4)    
The right is unenforceable against the corporation indefinitely after the end of the stay period to the extent that a reason for seeking to enforce the right:

(a) is the corporation ' s financial position before the end of the stay period; or

(b) is the appointment or existence of a managing controller of the whole or substantially the whole of the corporation ' s property before the end of the stay period; or

(c) is a reason, prescribed by the regulations for the purposes of this paragraph, relating to circumstances in existence during the stay period; or

(d) is a reason referred to in paragraph (1)(c) or (d).

Rights not subject to the stay

434J(5)    
Subsection (1) does not apply to the right if it is:

(a) a right under a contract, agreement or arrangement entered into after the appointment of the managing controller; or

(b) a right contained in a kind of contract, agreement or arrangement:

(i) prescribed by the regulations for the purposes of this subparagraph; or

(ii) declared under paragraph (6)(a); or

(c) a right of a kind:

(i) prescribed by the regulations for the purposes of this subparagraph; or

(ii) declared under paragraph (6)(b); or

(d) a right of a kind declared under paragraph (6)(c), and the circumstances specified in that declaration exist.

434J(6)    
For the purposes of subsection (5), the Minister may, by legislative instrument:

(a) declare kinds of contracts, agreements or arrangements referred to in a specified law of the Commonwealth; or

(b) declare kinds of rights to which subsection (1) does not apply; or

(c) declare kinds of rights to which subsection (1) does not apply in specified circumstances.

434J(7)    
Subsection (1) does not apply to the right to the extent that the managing controller has consented in writing to the enforcement of the right.

Stay on corporation ' s right to new advance of money or credit

434J(8)    
If:

(a) one or more rights of an entity cannot be enforced against a corporation for a period because of subsection (1); and

(b) the corporation has a right under a contract, agreement or arrangement against the entity for a new advance of money or credit;

that right of the corporation cannot be enforced during the same period.

Replacement managing controllers

434J(9)    
If a new managing controller of the whole or substantially the whole of the corporation ' s property is appointed to replace an earlier such managing controller, then:

(a) for the purposes of subsections (2) and (5), treat the new managing controller as if it were appointed when the first such managing controller was; and

(b) treat references in subsection (2) to when the managing controller ' s control of the corporation ' s property ends as references to when the last such managing controller ' s control of the corporation ' s property ends.

SECTION 434K   LIFTING THE STAY  

434K(1)    
The Court may order that subsection 434J(1) does not apply for one or more rights against a corporation if the Court is satisfied that this is appropriate in the interests of justice.

434K(2)    
An application for the order may be made by the holder of those rights.

SECTION 434L   ORDER FOR RIGHTS TO BE ENFORCEABLE ONLY WITH LEAVE OF THE COURT  

Orders

434L(1)    
The Court may order that one or more rights under a contract, agreement or arrangement are enforceable against a corporation only:

(a) with the leave of the Court; and

(b) in accordance with such terms (if any) as the Court imposes.

Example: The order could be sought for a right to terminate for convenience.

434L(2)    
The Court may make the order if:

(a) there is a managing controller of the whole or substantially the whole of the corporation ' s property; and

(b) the Court is satisfied that:

(i) the rights are being exercised; or

(ii) the rights are likely to be exercised; or

(iii) there is a threat to exercise the rights;

because of one or more reasons referred to in paragraphs 434J(1)(a) to (d); and

(c) an application for the order is made by the managing controller.

434L(3)    
An order under subsection (1) must specify the period for which it applies. In working out the period, the Court must have regard to:

(a) subsections 434J(2) , (3) and (4) ; and

(b) the interests of justice.

434L(4)    
Subsection (1) does not apply to a right referred to in subsection 434J(5) or (7) .

Interim orders

434L(5)    
Before deciding an application for an order under subsection (1), the Court may grant an interim order for one or more rights under a contract, agreement or arrangement not to be enforced against a corporation.

434L(6)    
The Court must not require an applicant for an order under subsection (1) to give an undertaking as to damages as a condition of granting an interim order.

SECTION 434LA   SELF-EXECUTING PROVISIONS  

434LA(1)    
The object of subsection (2) is to ensure that a self-executing provision:

(a) cannot start to apply against a corporation for certain reasons; and

(b) can be the subject of a Court order providing that the provision can only start to apply against a corporation with the leave of the Court, and in accordance with such terms (if any) as the Court imposes.

434LA(2)    
Sections 434J to 434L also apply in relation to a self-executing provision in a corresponding way to the way they apply in relation to a right. For this purpose, assume those sections apply with such modifications as are necessary, including any prescribed by the regulations for the purposes of this subsection.

Note 1: This subsection achieves the object in subsection (1) by extending the application of all of the outcomes, exceptions and powers in sections 434J to 434L .

Note 2: These modifications include, for example, treating:

(a) a reference that a right cannot be enforced (however described) as including a reference that a self-executing provision cannot start to apply; and

(b) the words " if the right arises for that reason by express provision (however described) of a contract, agreement or arrangement " as being omitted from subsection 434J(1); and

(c) a reference that one or more rights are enforceable as including a reference that one or more self-executing provisions can start to apply; and

(d) paragraph 434L(2)(b) as alternatively providing that the Court is satisfied that one or more reasons referred to in paragraphs 434J(1)(a) to (d) can cause the self-executing provisions to start to apply.

434LA(3)    
In this section:

self-executing provision
means a provision of a contract, agreement or arrangement that can start to apply automatically:

(a) for one or more reasons; and

(b) without any party to the contract, agreement or arrangement making a decision that the provision should start to apply.

SECTION 434M  

434M   WHEN OTHER LAWS PREVAIL - CERTAIN OTHER COMMONWEALTH ACTS  

If there is any inconsistency between sections 434J to 434LA and one of the following Acts, that Act prevails to the extent of the inconsistency:

(a) the Payment Systems and Netting Act 1998 ;

(b) the International Interests in Mobile Equipment (Cape Town Convention) Act 2013 .