Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.3A - ADMINISTRATION OF A COMPANY ' S AFFAIRS WITH A VIEW TO EXECUTING A DEED OF COMPANY ARRANGEMENT  

Note: This Part does not apply to a CCIV or a sub-fund of a CCIV: see Division 4 of Part 8B.6 .

Division 1 - Preliminary  

SECTION 435A  

435A   OBJECT OF PART  

The object of this Part, and Schedule 2 to the extent that it relates to this Part, is to provide for the business, property and affairs of an insolvent company to be administered in a way that:

(a) maximises the chances of the company, or as much as possible of its business, continuing in existence; or

(b) if it is not possible for the company or its business to continue in existence - results in a better return for the company's creditors and members than would result from an immediate winding up of the company.

Note: Schedule 2 contains additional rules about companies under external administration.

SECTION 435B  

435B   MEANING OF PROPERTY AND RECEIVER  

In this Part:

property
of a company includes any PPSA retention of title property of the company.

Note: See sections 9 (definition of property ) and 51F (PPSA retention of title property). An extended definition of property applies in subsection 444E(3) : see subsection 444E(4) .

receiver
includes a receiver and manager.

SECTION 435C   WHEN ADMINISTRATION BEGINS AND ENDS  

435C(1)    
The administration of a company:

(a) begins when an administrator of the company is appointed under section 436A , 436B or 436C ; and

(b) ends on the happening of whichever event of a kind referred to in subsection (2) or (3) happens first after the administration begins.

435C(2)    
The normal outcome of the administration of a company is that:

(a) a deed of company arrangement is executed by both the company and the deed ' s administrator; or

(b) the company ' s creditors resolve under paragraph 439C(b) that the administration should end; or

(c) the company ' s creditors resolve under paragraph 439C(c) that the company be wound up.

435C(3)    
However, the administration of a company may also end because:

(a) the Court orders, under section 447A or otherwise, that the administration is to end, for example, because the Court is satisfied that the company is solvent; or

(b) the convening period, as fixed by subsection 439A(5) , for a meeting of the company ' s creditors ends:

(i) without the meeting being convened in accordance with section 439A ; and

(ii) without an application being made for the Court to extend under subsection 439A(6) the convening period for the meeting; or

(c) an application for the Court to extend under subsection 439A(6) the convening period for such a meeting is finally determined or otherwise disposed of otherwise than by the Court extending the convening period; or

(d) the convening period, as extended under subsection 439A(6) , for such a meeting ends without the meeting being convened in accordance with section 439A ; or

(e) such a meeting convened under section 439A ends (whether or not it was earlier adjourned) without a resolution under section 439C being passed at the meeting; or

(f) the company contravenes subsection 444B(2) by failing to execute a proposed deed of company arrangement; or

(g) the Court appoints a provisional liquidator of the company, or orders that the company be wound up; or

(h) if the company is a general insurer (within the meaning of the Insurance Act 1973 ) - management of the general insurer vests in a judicial manager of the company appointed by the Federal Court under Part VB of the Insurance Act 1973 ; or

(i) if the company is a life company (within the meaning of the Life Insurance Act 1995 ) - management of the life company vests in a judicial manager of the life company appointed by the Federal Court under Part 8 of the Life Insurance Act 1995 .

435C(4)    
During the administration of a company, the company is taken to be under administration.

Division 2 - Appointment of administrator and first meeting of creditors  

SECTION 436A   COMPANY MAY APPOINT ADMINISTRATOR IF BOARD THINKS IT IS OR WILL BECOME INSOLVENT  

436A(1)   [ How company may appoint administrator]  

A company may, by writing, appoint an administrator of the company if the board has resolved to the effect that:

(a) in the opinion of the directors voting for the resolution, the company is insolvent, or is likely to become insolvent at some future time; and

(b) an administrator of the company should be appointed.

436A(2)   [ Limitation]  

Subsection (1) does not apply to a company if a person holds an appointment as liquidator, or provisional liquidator, of the company.

SECTION 436B   LIQUIDATOR MAY APPOINT ADMINISTRATOR  

436B(1)   [ Appointment in writing]  

A liquidator or provisional liquidator of a company may by writing appoint an administrator of the company if he or she thinks that the company is insolvent, or is likely to become insolvent at some future time.

436B(2)   [ Conditions for appointment]  

A liquidator or provisional liquidator of a company must not appoint any of the following persons under subsection (1):

(a) himself or herself;

(b) if he or she is a partner of a partnership - a partner or employee of the partnership;

(c) if he or she is an employee - his or her employer;

(d) if he or she is an employer - his or her employee;

(e) if he or she is a director, secretary, employee or senior manager of a corporation - a director, secretary, employee or senior manager of the corporation;

unless:

(f) at a meeting of the company ' s creditors, the company ' s creditors pass a resolution approving the appointment; or

(g) the appointment is made with the leave of the Court.

436B(3)    

(Repealed by No 132 of 2007, s 3, Sch 4, Pt 1 [ 3] (effective 31 December 2007).)

SECTION 436C   SECURED PARTY MAY APPOINT ADMINISTRATOR  

436C(1)    

A person who is entitled to enforce a security interest in the whole, or substantially the whole, of a company ' s property may by writing appoint an administrator of the company if the security interest has become, and is still, enforceable.

436C(1A)    

Subsection (1) applies in relation to a PPSA security interest only if the security interest is perfected within the meaning of the Personal Property Securities Act 2009 .

436C(2)    

Subsection (1) does not apply to a company if a person holds an appointment as liquidator, or provisional liquidator, of the company.

SECTION 436D  

436D   COMPANY ALREADY UNDER ADMINISTRATION  
An administrator cannot be appointed under section 436A, 436B or 436C if the company is already under administration.

SECTION 436DA   DECLARATIONS BY ADMINISTRATOR - INDEMNITIES AND RELEVANT RELATIONSHIPS  

Scope

436DA(1)    
This section applies to an administrator appointed under section 436A , 436B or 436C .

Declaration of relationships and indemnities

436DA(2)    
As soon as practicable after being appointed, the administrator must make:

(a)    a declaration of relevant relationships; and

(b)    a declaration of indemnities.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

Notification of creditors

436DA(3)    
The administrator must:

(a)    give a copy of each declaration under subsection (2) to as many of the company ' s creditors as reasonably practicable; and

(b)    do so at the same time as the administrator gives those creditors notice of the meeting referred to in section 436E .

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

436DA(4)    
The administrator must table a copy of each declaration under subsection (2) at the meeting referred to in section 436E .

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

436DA(4A)    

As soon as practicable after making a declaration under subsection (2) , the administrator must lodge a copy of the declaration with ASIC.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

Updating of declaration

436DA(5)    
If:

(a)    at a particular time, the administrator makes:

(i) a declaration of relevant relationships; or

(ii) a declaration of indemnities;

under subsection (2) or this subsection; and

(b)    at a later time:

(i) the declaration has become out-of-date; or

(ii) the administrator becomes aware of an error in the declaration;

the administrator must, as soon as practicable, make:

(c)    if subparagraph (a)(i) applies - a replacement declaration of relevant relationships; or

(d)    if subparagraph (a)(ii) applies - a replacement declaration of indemnities.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

436DA(6)    
The administrator must table a copy of a replacement declaration under subsection (5) :

(a)    

if:

(i) there is a committee of inspection; and

(ii) the next meeting of the committee of inspection occurs before the next meeting of the company ' s creditors;

at the next meeting of the committee of inspection; or

(b)    in any other case - at the next meeting of the company ' s creditors.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

436DA(6A)    
As soon as practicable after making a replacement declaration under subsection (5) , the administrator must lodge a copy of the replacement declaration with ASIC.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

Defence

436DA(7)    
In a prosecution for an offence constituted by a failure to include a particular matter in a declaration under this section, it is a defence if the defendant proves that:

(a)    the defendant made reasonable enquiries; and

(b)    after making these enquiries, the defendant had no reasonable grounds for believing that the matter should have been included in the declaration.

SECTION 436E   PURPOSE AND TIMING OF FIRST MEETING OF CREDITORS  

436E(1)    
The administrator of a company under administration must convene a meeting of the company ' s creditors in order to determine:

(a) whether to appoint a committee of inspection; and

(b) if so, who are to be the committee ' s members.

436E(2)    

The meeting must be held within 8 businessdays after the administration begins.

436E(3)    

The administrator must convene the meeting by:

(a) giving written notice of the meeting to as many of the company ' s creditors as reasonably practicable; and

(b) causing a notice setting out the prescribed information about the meeting to be published in the prescribed manner;

at least 5 business days before the meeting.

436E(3A)    

A notice under paragraph (3)(b) that relates to a company may be combined with a notice under paragraph 450A(1)(b) that relates to the company.

436E(4)    

At the meeting, the company ' s creditors may also pass a resolution:

(a) removing the administrator from office; and

(b) appointing someone else as administrator of the company.

SECTION 436F  

436F   FUNCTIONS OF COMMITTEE OF CREDITORS  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 104] (effective 1 March 2017).)

SECTION 436G  

436G   MEMBERSHIP OF COMMITTEE  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 104] (effective 1 March 2017).)

Division 3 - Administrator assumes control of company's affairs  

SECTION 437A   ROLE OF ADMINISTRATOR  

437A(1)    
While a company is under administration, the administrator:

(a) has control of the company ' s business, property and affairs; and

(b) may carry on that business and manage that property and those affairs; and

(c) may terminate or dispose of all or part of that business, and may dispose of any of that property; and

(d) may perform any function, and exercise any power, that the company or any of its officers could perform or exercise if the company were not under administration.

437A(2)    
Nothing in subsection (1) limits the generality of anything else in it.

Note: A PPSA security interest in property of a company that is unperfected (within the meaning of the Personal Property Securities Act 2009 ) immediately before an administrator of the company is appointed vests in the company at the time of appointment, subject to certain exceptions (see section 267 of that Act).

SECTION 437B  

437B   ADMINISTRATOR ACTS AS COMPANY'S AGENT  
When performing a function, or exercising a power, as administrator of a company under administration, the administrator is taken to be acting as the company's agent.

SECTION 437C  

437C   POWERS OF OTHER OFFICERS SUSPENDED  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 104] (effective 1 March 2017).)

SECTION 437D   ONLY ADMINISTRATOR CAN DEAL WITH COMPANY'S PROPERTY  

437D(1)   [ Transaction affecting company property]  

This section applies where:

(a) a company under administration purports to enter into; or

(b) a person purports to enter into, on behalf of a company under administration;

a transaction or dealing affecting property of the company.

437D(2)   [ Transaction void]  

The transaction or dealing is void unless:

(a) the administrator entered into it on the company's behalf; or

(b) the administrator consented to it in writing before it was entered into; or

(c) it was entered into under an order of the Court.

437D(3)   [ Exempt payments]  

Subsection (2) does not apply to a payment made:

(a) by an Australian ADI out of an account kept by the company with the ADI; and

(b) in good faith and in the ordinary course of the ADI's banking business; and

(c) after the administration began and on or before the day on which:

(i) the administrator gives to the ADI (under subsection 450A(3) or otherwise) written notice of the appointment that began the administration; or

(ii) the administrator complies with paragraph 450A(1) (b) in relation to that appointment;

whichever happens first.

437D(4)   [ Court order]  

Subsection (2) has effect subject to an order that the Court makes after the purported transaction or dealing.

437D(5)   [ Contravention by officer or employee]  

If, because of subsection (2), the transaction or dealing is void, or would be void apart from subsection (4), an officer or employee of the company who:

(a) purported to enter into the transaction or dealing on the company's behalf; or

(b) was in any other way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the transaction or dealing;

contravenes this subsection.

SECTION 437E   ORDER FOR COMPENSATION WHERE OFFICER INVOLVED IN VOID TRANSACTION  

437E(1)    
Where:

(a)    

a court finds a person guilty of an offence constituted by a contravention of subsection 437D(5) (including such an offence that is taken to have been committed because of section 11.2 of the Criminal Code ); and

(b)    the court is satisfied that the company or another person has suffered loss or damage because of the act or omission constituting the offence;

the court may (whether or not it imposes a penalty) order the first-mentioned person to pay compensation to the company or other person, as the case may be, of such amount as the order specifies.

Note: Section 73A defines when a court is taken to find a person guilty of an offence.

437E(2)    
An order under subsection (1) may be enforced as if it were a judgment of the court.

437E(3)    
The power of a court under section 1318 to relieve a person from liability as mentioned in that section extends to relieving a person from liability to be ordered under this section to pay compensation.

SECTION 437F   EFFECT OF ADMINISTRATION ON COMPANY'S MEMBERS  

437F(1)   Transfer of shares.  

A transfer of shares in a company that is made during the administration of the company is void except if:

(a) both:

(i) the administrator gives written consent to the transfer; and

(ii) that consent is unconditional; or

(b) all of the following subparagraphs apply:

(i) the administrator gives written consent to the transfer;

(ii) that consent is subject to one or more specified conditions;

(iii) those conditions have been satisfied; or

(c) the Court makes an order under subsection (4) authorising the transfer.

437F(2)    
The administrator may only give consent under paragraph (1)(a) or (b) if he or she is satisfied that the transfer is in the best interests of the company ' s creditors as a whole.

437F(3)    
If the administrator refuses to give consent under paragraph (1)(a) or (b) to a transfer of shares in the company:

(a) the prospective transferor; or

(b) the prospective transferee; or

(c) a creditor of the company;

may apply to the Court for an order authorising the transfer.

437F(4)    
If the Court is satisfied, on an application under subsection (3), that the transfer is in the best interests of the company ' s creditors as a whole, the Court may, by order, authorise the transfer.

437F(5)    
If the administrator gives consent under paragraph (1)(b) to a transfer of shares in the company:

(a) the prospective transferor; or

(b) the prospective transferee; or

(c) a creditor of the company;

may apply to the Court for an order setting aside any or all of the conditions to which the consent is subject.

437F(6)    
If the Court is satisfied, on an application under subsection (5), that any or all of the conditions covered by the application are not in the best interests of the company ' s creditors as a whole, the Court may, by order, set aside any or all of the conditions.

437F(7)    
The administrator is entitled to be heard in a proceeding before the Court in relation to an application under subsection (3) or (5).

437F(8)   Alteration in the status of members.  

An alteration in the status of members of a company that is made during the administration of the company is void except if:

(a) both:

(i) the administrator gives written consent to the alteration; and

(ii) that consent is unconditional; or

(b) all of the following subparagraphs apply:

(i) the administrator gives written consent to the alteration;

(ii) that consent is subject to one or more specified conditions;

(iii) those conditions have been satisfied; or

(c) the Court makes an order under subsection (12) authorising the alteration.

Note: An alteration in the status of members of a company that is made during the administration of the company may not be void if it is made for the purposes of the conversion and write-off provisions determined by APRA (see Subdivision B of Division 1A of Part II of the Banking Act 1959 , Division 2 of Part IIIA of the Insurance Act 1973 and Division 1A of Part 10A of the Life Insurance Act 1995 ).

437F(9)    
The administrator may only give consent under paragraph (8)(a) or (b) if he or she is satisfied that the alteration is in the best interests of the company ' s creditors as a whole.

437F(10)    
The administrator must refuse to give consent under paragraph (8)(a) or (b) if the alteration would contravene Part 2F.2 .

437F(11)    
If the administrator refuses to give consent under paragraph (8)(a) or (b) to an alteration in the status of members of a company:

(a) a member of the company; or

(b) a creditor of the company;

may apply to the Court for an order authorising the alteration.

437F(12)    
If the Court is satisfied, on an application under subsection (11), that:

(a) the alteration is in the best interests of the company ' s creditors as a whole; and

(b) the alteration does not contravene Part 2F.2 ;

the Court may, by order, authorise the alteration.

437F(13)    
If the administrator gives consent under paragraph (8)(b) to an alteration in the status of members of a company:

(a) a member of the company; or

(b) a creditor of the company;

may apply to the Court for an order setting aside any or all of the conditions to which the consent is subject.

437F(14)    
If the Court is satisfied, on an application under subsection (13), that any or all of the conditions covered by the application are not in the best interests of the company ' s creditors as a whole, the Court may, by order, set aside any or all of the conditions.

437F(15)    
The administrator is entitled to be heard in a proceeding before the Court inrelation to an application under subsection (11) or (13).

Division 4 - Administrator investigates company's affairs  

SECTION 438A  

438A   ADMINISTRATOR TO INVESTIGATE AFFAIRS AND CONSIDER POSSIBLE COURSES OF ACTION  
As soon as practicable after the administration of a company begins, the administrator must:

(a) investigate the company's business, property, affairs and financial circumstances; and

(b) form an opinion about each of the following matters:

(i) whether it would be in the interests of the company's creditors for the company to execute a deed of company arrangement;

(ii) whether it would be in the creditors' interests for the administration to end;

(iii) whether it would be in the creditors' interests for the company to be wound up.

SECTION 438B   DIRECTORS TO HELP ADMINISTRATOR  

438B(1)    
As soon as practicable after the administration of a company begins, each director must:

(a)    deliver to the administrator all books in the director ' s possession that relate to the company, other than books that the director is entitled, as against the company and the administrator, to retain; and

(b)    if the director knows where other books relating to the company are - tell the administrator where those books are.

438B(2)    

Within 5 business days after the administration of a company begins or such longer period as the administrator allows, the directors must give to the administrator a report in the prescribed form about the company ' s business, property, affairs and financial circumstances.

438B(2A)    
The administrator must, within 5 business days after receiving a report under subsection (2) , lodge a copy of the report.

438B(3)    
A director of a company under administration must:

(a)    attend on the administrator at such times; and

(b)    give the administrator such information about the company ' s business, property, affairs and financial circumstances;

as the administrator reasonably requires.

438B(4)    

A person must not fail to comply with subsection (1) , (2) , (2A) or (3) .

438B(5)    

An offence based on subsection (4) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

438B(6)    

Subsection (4) does not apply to the extent that the person has a reasonable excuse.

Note: A defendant bears an evidential burden in relation to the matter in subsection (6) , see subsection 13.3(3) of the Criminal Code .

SECTION 438C   ADMINISTRATOR'S RIGHTS TO COMPANY'S BOOKS  

438C(1)   [ Books, etc, may not be retained]  

A person is not entitled, as against the administrator of a company under administration:

(a) to retain possession of books of the company; or

(b) to claim or enforce a lien on such books;

but such a lien is not otherwise prejudiced.

438C(2)   [ Secured creditors]  

Paragraph (1)(a) does not apply in relation to books of which a secured creditor of the company is entitled to possession otherwise than because of a lien, but the administrator is entitled to inspect, and make copies of, such books at any reasonable time.

438C(3)   [ Books to be delivered to administrator]  

The administrator of a company under administration may give to a person a written notice requiring the person to deliver to the administrator, as specified in the notice, books so specified that are in the person's possession.

438C(4)   [ Time for compliance]  

A notice under subsection (3) must specify a period of at least 3 business days as the period within which the notice must be complied with.

438C(5)   [ Entitlement to retain possession of books]  

A person must comply with a notice under subsection (3).

438C(6)   [ Limitation]  

Subsection (5) does not apply to the extent that the person is entitled, as against the company and the administrator, to retain possession of the books.

Note: A defendant bears an evidential burden in relation to the matter in subsection (6), see subsection 13.3(3) of the Criminal Code .

438C(7)   [ Strict liability offence]  

An offence based on subsection (5) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

SECTION 438D   REPORTS BY ADMINISTRATOR  

438D(1)    
If it appears to the administrator of a company under administration that:

(a)    

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

(b)    

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

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

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

the administrator must:

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

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

438D(2)    
The administrator may also lodge further reports specifying any other matter that, in his or her opinion, it is desirable to bring to ASIC ' s notice.

438D(3)    
If it appears to the Court:

(a)    

that a past or present officer or employee, or a member, of a company under administration has been guilty of an offence in relation to the company; or

(b)    

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

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

SECTION 438E  

438E   ADMINISTRATOR ' S ACCOUNTS  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 108] (effective 1 March 2017).)

Division 5 - Meeting of creditors decides company's future  

SECTION 439A   ADMINISTRATOR TO CONVENE MEETING AND INFORM CREDITORS  

439A(1)    
The administrator of a company under administration must convene a meeting of the company ' s creditors within the convening period as fixed by subsection (5) or extended under subsection (6).

Note: For body corporate representatives ' powers at a meeting of the company ' s creditors, see section 250D.

439A(2)    

The meeting must be held within 5 business days before, or within 5 business days after, the end of the convening period.

439A(3)    
(Repealed by No 11 of 2016, s 3, Sch 2 [ 109] (effective 1 March 2017).)

439A(4)    
(Repealed by No 11 of 2016, s 3, Sch 2 [ 109] (effective 1 March 2017).)

439A(5)    
The convening period is:

(a) if the day after the administration begins is in December, or is less than 25 business days before Good Friday - the period of 25 business days beginning on:

(i) that day; or

(ii) if that day is not a business day - the next business day; or

(b) otherwise - the period of 20 business days beginning on:

(i) the day after the administration begins; or

(ii) if that day is not a business day - the next business day.

439A(6)    

The Court may extend the convening period on an application made during or after the period referred to in paragraph (5)(a) or (b), as the case requires.

439A(7)    
If an application is made under subsection (6) after the period referred to in paragraph (5)(a) or (b), as the case may be, the Court may only extend the convening period if the Court is satisfied that it would be in the best interests of the creditors if the convening period were extended in accordance with the application.

439A(8)    

If an application is made under subsection (6) after the period referred to in paragraph (5)(a) or (b), as the case may be, then, in making an order about the costs of the application, the Court must have regard to:

(a) the fact that the application was made after that period; and

(b) any other conduct engaged in by the administrator; and

(c) any other relevant matters.

SECTION 439B  

439B   CONDUCT OF MEETING  
(Repealed by No 11 of 2016, s 3, Sch 2[110] (effective 1 March 2017).)

SECTION 439C  

439C   WHAT CREDITORS MAY DECIDE  
At a meeting convened under section 439A , the creditors may resolve:

(a) that the company execute a deed of company arrangement specified in the resolution (even if it differs from the proposed deed (if any) details of which accompanied any notice of meeting); or

(b) that the administration should end; or

(c) that the company be wound up.

Division 6 - Protection of company's property during administration  

SECTION 440A   WINDING UP COMPANY  

440A(1)    

A company under administration cannot be wound up voluntarily, except as provided by section 446A or 446AA .

440A(2)    
The Court is to adjourn the hearing of an application for an order to wind up a company if the company is under administration and the Court is satisfied that it is in the interests of the company ' s creditors for the company to continue under administration rather than be wound up.

440A(3)    
The Court is not to appoint a provisional liquidator of a company if the company is under administration and the Court is satisfied that it is in the interests of the company ' s creditors for the company to continue under administration rather thanhave a provisional liquidator appointed.

SECTION 440B   RESTRICTIONS ON EXERCISE OF THIRD PARTY PROPERTY RIGHTS  

General rule

440B(1)    
During the administration of a company, the restrictions set out in the table at the end of this section apply in relation to the exercise of the rights of a person (the third party ) in property of the company, or other property used or occupied by, or in the possession of, the company, as set out in the table.

Note: The property of the company includes any PPSA retention of title property of the company (see section 435B ).

Exception - consent of administrator or leave of court

440B(2)    
The restrictions set out in the table at the end of this section do not apply in relation to the exercise of a third party ' s rights in property if the rights are exercised:

(a) with the administrator ' s written consent; or

(b) with the leave of the Court.

Possessory security interests - continued possession

440B(3)    
If a company ' s property is subject to a possessory security interest, and the property is in the lawful possession of the secured party, the secured party may continue to possess the property during the administration of the company.

Restrictions on exercise of third party rights
Item	If the third party is …	then …
1	a secured party in relation to property of the company, and is not otherwise covered by this table	the third party cannot enforce the security interest.
2	a secured party in relation to a possessory security interest in the property of the company	the third party cannot sell the property, or otherwise enforce the security interest.
3	a lessor of property used or occupied by, or in the possession of, the company, including a secured party (a PPSA secured party ) in relation to a PPSA security interest in goods arising out of a lease of the goods	the following restrictions apply:
		(a)	distress for rent must not be carried out against the property;
		(b)	the third party cannot take possession of the property or otherwise recover it;
		(c)	if the third party is a PPSA secured party - the third party cannot otherwise enforce the security interest.
4	an owner (other than a lessor) of property used or occupied by, or in the possession of, the company, including a secured party (a PPSA secured party ) in relation to a PPSA security interest in the property	the following restrictions apply:
		(a)	the third party cannot take possession of the property or otherwise recover it;
		(b)	if the third party is a PPSA secured party - the third party cannot otherwise enforce the security interest.

SECTION 440BA  

440BA   LIENS AND PLEDGES  
(Repealed by No 96 of 2010, s 3, Sch 1, Pt 8 [ 156] (effective 30 January 2012).)

SECTION 440BB  

440BB   DISTRESS FOR RENT MUST NOT BE CARRIED OUT  
(Repealed by No 96 of 2010, s 3, Sch 1, Pt 8 [ 156] (effective 30 January 2012).)

SECTION 440C  

440C   OWNER OR LESSOR CANNOT RECOVER PROPERTY USED BY COMPANY  
(Repealed by No 96 of 2010, s 3, Sch 1, Pt 8 [ 156] (effective 30 January 2012).)

SECTION 440D   STAY OF PROCEEDINGS  

440D(1)   [ Proceedings not to be begun or proceeded with]  

During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except:

(a) with the administrator's written consent; or

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

440D(2)   [ Criminal proceedings, etc]  

Subsection (1) does not apply to:

(a) a criminal proceeding; or

(b) a prescribed proceeding.

SECTION 440E  

440E   ADMINISTRATOR NOT LIABLE IN DAMAGES FOR REFUSING CONSENT  
A company's administrator is not liable to an action or other proceeding for damages in respect of a refusal to give an approval or consent for the purposes of this Division.

SECTION 440F  

440F   SUSPENSION OF ENFORCEMENT PROCESS  
During the administration of a company, no enforcement process in relation to property of the company can be begun or proceeded with, except:

(a) with the leave of the Court; and

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

SECTION 440G   DUTIES OF COURT OFFICER IN RELATION TO PROPERTY OF COMPANY  

440G(1)   [ Application]  

This section applies where an officer of a court (in this section called the court officer ), being:

(a) a sheriff; or

(b) the registrar or other appropriate officer of the court;

receives written notice of the fact that a company is under administration.

440G(2)   [ Limits on court officer's powers]  

During the administration, the court officer cannot:

(a) take action to sell property of the company under a process of execution; or

(b) pay to a person (other than the administrator):

(i) proceeds of selling property of the company (at any time) under a process of execution; or

(ii) money of the company seized (at any time) under a process of execution; or

(iii) money paid (at any time) to avoid seizure or sale of property of the company under a process of execution; or

(c) take action in relation to the attachment of a debt due to the company; or

(d) pay to a person (other than the administrator) money received because of the attachment of such a debt.

440G(3)   [ Delivery of property to administrator]  

The court officer must deliver to the administrator any property of the company that is in the court officer's possession under a process of execution (whenever begun).

440G(4)   [ Payment of money to administrator]  

The court officer must pay to the administrator all proceeds or money of a kind referred to in paragraph (2)(b) or (d) that:

(a) are in the court officer's possession; or

(b) have been paid into the court and have not since been paid out.

440G(5)   [ Costs to be a first charge]  

The costs of the execution or attachment are a first charge on property delivered under subsection (3) or proceeds or money paid under subsection (4).

440G(6)   [ Court officer may retain proceeds, etc, to give effect to charge]  

In order to give effect to a charge under subsection (5) on proceeds or money, the court officer may retain, on behalf of the person entitled to the charge, so much of the proceeds or money as the court officer thinks necessary.

440G(7)   [ Power of Court]  

The Court may, if it is satisfied that it is appropriate to do so, permit the court officer to take action, or to make a payment, that subsection (2) would otherwise prevent.

440G(8)   [ Purchaser in good faith]  

A person who buys property in good faith under a sale under a process of execution gets a good title to the property as against the company and the administrator, despite anything else in this section.

SECTION 440H   LIS PENDENS TAKEN TO EXIST  

440H(1)   [ Application]  

This section has effect only for the purposes of a law about the effect of a lis pendens on purchasers or mortgagees.

440H(2)   [ Winding up application]  

During the administration of a company, an application to wind up the company is taken to be pending.

440H(3)   [ Pending application]  

An application that is taken because of subsection (2) to be pending constitutes a lis pendens.

SECTION 440J   ADMINISTRATION NOT TO TRIGGER LIABILITY OF DIRECTOR OR RELATIVE UNDER GUARANTEE OF COMPANY'S LIABILITY  

440J(1)   [ Guarantees unenforceable]  

During the administration of a company:

(a) a guarantee of a liability of the company cannot be enforced, as against:

(i) a director of the company who is a natural person; or

(ii) a spouse or relative of such a director; and

(b) without limiting paragraph (a), a proceeding in relation to such a guarantee cannot be begun against such a director, spouse or relative;

except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.

440J(2)   [ Section 1323]  

While subsection (1) prevents a person ( the creditor ) from:

(a) enforcing as against another person ( the guarantor ) a guarantee of a liability of a company; or

(b) beginning a proceeding against another person ( the guarantor ) in relation to such a guarantee;

section 1323 applies in relation to the creditor and the guarantor as if:

(c) a civil proceeding against the guarantor had begun under this Act; and

(d) the creditor were the only person of a kind referred to in that section as an aggrieved person.

Note: Under section 1323 the Court can make a range of orders to ensure that a person can meet the person's liabilities.

440J(3)   [ Effect of s 1323]  

The effect that section 1323 has because of a particular application of subsection (2) is additional to, and does not prejudice, the effect the section otherwise has.

440J(4)   [ Definitions]  

In this section:

guarantee
, in relation to a liability of a company, includes a relevant agreement (as defined in section 9) because of which a person other than the company has incurred, or may incur, whether jointly with the company or otherwise, a liability in respect of the liability of the company.

liability
means a debt, liability or other obligation.

SECTION 440JA  

440JA   PROPERTY SUBJECT TO A BANKER ' S LIEN - EXEMPTION FROM THIS DIVISION  

If:

(a)    a company is under administration; and

(b)    

property of the company consists of:

(i) cash in the form of notes or coins; or

(ii) a negotiable instrument; or

(iii) a security (as defined by subsection 92(1) ); or

(iv) a derivative; and

(c)    

the property is subject to a possessory security interest; and

(d)    

the secured party is:

(i) an ADI (within the meaning of the Banking Act 1959 ); or

(ii) the operator of a clearing and settlement facility;

this Division does not apply to the property.

Division 7 - Rights of secured party, owner or lessor  

Subdivision A - General  

SECTION 441  

441   APPLICATION OF DIVISION  

Except as expressly provided, nothing in this Division limits the generality of anything else in it.

Subdivision B - Property subject to security interests  

SECTION 441AA  

441AA   APPLICATION OF SUBDIVISION - PPSA SECURITY INTERESTS  

This Subdivision only applies in relation to the enforcement of a PPSA security interest if the security interest is perfected, within the meaning of the Personal Property Securities Act 2009 , at the time the enforcement starts.

SECTION 441A   SECURED PARTY ACTS BEFORE OR DURING DECISION PERIOD  
Scope

441A(1)    
This section applies if:

(a) the whole, or substantially the whole, of the property of a company under administration is subject to a security interest; and

(b) before or during the decision period, the secured party enforced the security interest in relation to all property (including any PPSA retention of title property) of the company subject to the security interest, whether or not the security interest was enforced in the same way in relation to all that property.

441A(2)    
This section also applies if:

(a) a company is under administration; and

(b) the same person is the secured party in relation to each of 2 or more security interests in property (including PPSA retention of title property) of the company; and

(c) the property of the company (the secured property ) subject to the respective security interests together constitutes the whole, or substantially the whole, of the company ' s property; and

(d) before or during the decision period, the secured party enforced the security interests in relation to all the secured property:

(i) whether or not the security interests were enforced in the same way in relation to all the secured property; and

(ii) whether or not any of the security interests was enforced in the same way in relation to all the property of the company subject to that security interest; and

(iii) in so far as the security interests were enforced in relation to property of the company by a receiver or controller appointed for the purposes of Part 5.2 (whether under an instrument relating to the security interest or a court order) - whether or not the same person was appointed in respect of all of the last-mentioned property.

Power of enforcement by secured party, receiver or controller

441A(3)    

Nothing in section 198G , 440B , 440F , 440G or 451E , or in an order under subsection 444F(2) or 451G(1) , prevents any of the following from enforcing the security interest, or any of the security interests:

(a) the secured party;

(b) a receiver or controller appointed for the purposes of Part 5.2 (whether under an instrument relating to the security interest or a court order, and even if appointed after the decision period).

441A(4)    
Section 437D does not apply in relation to a transaction or dealing that affects property of the company and is entered into by:

(a) the secured party in the performance or exercise of a function or power as secured party; or

(b) a receiver or controller mentioned in paragraph (3)(b) of this section, in the performance or exercise of a function or power as such a receiver or controller.

SECTION 441B   WHERE ENFORCEMENT OF SECURITY INTEREST BEGINS BEFORE ADMINISTRATION  

441B(1)    

This section applies if, before the beginning of the administration of a company, a secured party, receiver or other person:

(a) entered into possession, or assumed control, of property of the company; or

(b) entered into an agreement to sell such property; or

(c) made arrangements for such property to be offered for sale by public auction; or

(d) publicly invited tenders for the purchase of such property; or

(e) exercised any other power in relation to such property;

for the purpose of enforcing a security interest in that property.

441B(2)    

Nothing in section 198G , 440B , 440F , 440G or 451E , or in an order under subsection 451G(1) , prevents the secured party, receiver or other person from enforcing the security interest in relation to that property.

441B(3)    
Section 437D does not apply in relation to a transaction or dealing that affects that property and is entered into:

(a) in the exercise of a power of the secured party as secured party; or

(b) in the performance or exercise of a function or power of the receiver or other person;

as the case may be.

SECTION 441C   SECURITY INTEREST IN PERISHABLE PROPERTY  

Scope

441C(1)    
This section applies if perishable property of a company under administration is subject to a security interest.

Power of enforcement by secured party, receiver or controller

441C(2)    

Nothing in section 198G , 440B or 451E , or in an order under subsection 451G(1) , prevents any of the following from enforcing the security interest, so far as it is a security interest in perishable property:

(a) the secured party;

(b) a receiver or controller appointed for the purposes of Part 5.2 (whether under an instrument relating to the security interest or a court order, and even if appointed after the decision period).

441C(3)    
Section 437D does not apply in relation to a transaction or dealing that affects perishable property of the company and is entered into by:

(a) the secured party in the performance or exercise of a function or power as secured party; or

(b) a receiver or controller mentioned in paragraph (2)(b) of this section, in the performance or exercise of a function or power as such a receiver or controller.

SECTION 441D   COURT MAY LIMIT POWERS OF SECURED PARTY ETC. IN RELATION TO SECURED PROPERTY  

441D(1)    
This section applies if:

(a) for the purpose of enforcing a security interest in property of a company, the secured party, or a receiver or other person, does or proposes to do an act of a kind referred to in a paragraph of subsection 441B(1) ; and

(b) the company is under administration when the secured party, receiver or other person does or proposes to do the act, or the company later begins to be under administration;

but does not apply in a case where section 441A applies.

441D(2)    

On application by the administrator, the Court may order the secured party, receiver or other person not to perform specified functions, or exercise specified powers, except as permitted by the order.

441D(3)    

The Court may only make an order if satisfied that what the administrator proposes to do during the administration will adequately protect the secured party ' s interests.

441D(4)    
An order may only be made, and only has effect, during the administration.

441D(5)    
An order has effect despite sections 441B and 441C .

SECTION 441E  

441E   GIVING A NOTICE UNDER A SECURITY AGREEMENT ETC.  

Nothing in section 198G , 440B or 451E , or in an order under subsection 451G(1) , prevents a person from giving a notice under the provisions of an agreement or instrument under which a security interest is created or arises.

SECTION 441EA   SALE OF PROPERTY SUBJECT TO A POSSESSORY SECURITY INTEREST  

Scope

441EA(1)    
This section applies if:

(a) a company is under administration; and

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

(c) the property is in the possession of the secured party; and

(ca) either:

(i) there is no other security interest in the property; or

(ii) there are one or more other security interests in the property, but none of the debts secured by those other security interests has a priority that is equal to or higher than the priority of the debt secured by the possessory security interest; and

(d) the secured party sells the property.

Distribution of proceeds of sale

441EA(2)    
The secured party is entitled to retain proceeds of the sale as follows:

(a) if the net proceeds of sale equals the debt secured by the possessory security interest - the secured party is entitled to retain the net proceeds;

(b) if the net proceeds of sale exceeds the debt secured by the possessory security interest - the secured party is entitled to retain so much of the net proceeds as equals the amount of the debt secured by the security interest, but must pay the excess to the administrator on behalf of the company;

(c) if the net proceeds of sale fall short of the debt secured by the possessory security interest - the secured party is entitled to retain the net proceeds.

Subdivision C - Property not subject to security interests  

SECTION 441EB  

441EB   SCOPE OF SUBDIVISION  

This Subdivision does not apply in relation to the enforcement of a right, or the performance or exercise of a function or power, if the enforcement, performance or exercise is authorised by (or because of) a transaction or dealing that gives rise to a security interest in the property concerned.

Example: An example of a transaction or dealing in relation to which this Subdivision does not apply because of this section is a commercial consignment of personal property. Such a transaction gives rise to a PPSA security interest because of section 12 of the Personal Property Securities Act 2009 . The consigned property is PPSA retention of title property of the company (see sections 51F and 435B ).

Note: Subdivision B (property subject to security interests) may apply in relation to transactions or dealings to which this Subdivision does not apply because of this section. For example, Subdivision B would apply in relation to a commercial consignment of personal property, because such a transaction gives rise to a PPSA security interest.

SECTION 441F   WHERE RECOVERY OF PROPERTY BEGINS BEFORE ADMINISTRATION  

441F(1)    
This section applies if, before the beginning of the administration of a company, a receiver or other person:

(a) entered into possession, or assumed control, of property used or occupied by, or in the possession of, the company; or

(b) exercised any other power in relation to such property;

for the purpose of enforcing a right of the owner or lessor of the property to take possession of the property or otherwise recover it.

441F(2)    

Nothing in section 198G or 440B prevents the receiver or other person from performing a function, or exercising a power, in relation to the property.

441F(3)    
Section 437D does not apply in relation to a transaction or dealing that affects the property and is entered into in the performance or exercise of a function or power of the receiver or other person.

SECTION 441G   RECOVERING PERISHABLE PROPERTY  

441G(1)    

Nothing in section 198G or 440B prevents a person from taking possession of, or otherwise recovering, perishable property.

441G(2)    
Section 437D does not apply in relation to a transaction or dealing that affects perishable property and is entered into for the purpose of enforcing a right of the owner or lessor of the property to take possession of the property or otherwise recover it.

SECTION 441H   COURT MAY LIMIT POWERS OF RECEIVER ETC. IN RELATION TO PROPERTY USED BY COMPANY  

441H(1)   [ Owners or lessors of property used by company]  

This section applies if:

(a) for the purpose of enforcing a right of the owner or lessor of property used or occupied by, or in the possession of, a company to take possession of the property or otherwise recover it, a person:

(i) enters into possession, or assumes control, of the property; or

(ii) exercises any other power in relation to the property; and

(b) the company is under administration when the person does so, or the company later begins to be under administration.

441H(2)   [ Court order]  

On application by the administrator, the Court may order the person not to perform specified functions, or exercise specified powers, in relation to the property, except as permitted by the order.

441H(3)   [ Protection of interests of owner or lessor]  

The Court may only make an order if satisfied that what the administrator proposes to do during the administration will adequately protect the interests of the owner or lessor.

441H(4)   [ Effect of order]  

An order may only be made, and only has effect, during the administration.

441H(5)   [ Paramountcy]  

An order has effect despite sections 441F and 441G.

SECTION 441J  

441J   GIVING A NOTICE UNDER AN AGREEMENT ABOUT PROPERTY  
Nothing in section 198G or 440C prevents a person from giving a notice to a company under an agreement relating to property that is used or occupied by, or is in the possession of, the company.

SECTION 441JA  

441JA   SALE OF PROPERTY SUBJECT TO A LIEN OR PLEDGE  
(Repealed by No 96 of 2010, s 3, Sch 1, Pt 3 [ 41] (effective 30 January 2012).)

SECTION 441K  

441K   EFFECT OF DIVISION  
(Repealed by No 96 of 2010, s 3, Sch 1, Pt 3 [ 41] (effective 30 January 2012).)

Division 8 - Powers of administrator  

SECTION 442A  

442A   ADDITIONAL POWERS OF ADMINISTRATOR  
Without limiting section 437A, the administrator of a company under administration has power to do any of the following:

(a) remove from office a director of the company;

(b) appoint a person as such a director, whether to fill a vacancy or not;

(c) execute a document, bring or defend proceedings, or do anything else, in the company's name and on its behalf;

(d) whatever else is necessary for the purposes of this Part.

SECTION 442B   DEALING WITH PROPERTY SUBJECT TO CIRCULATING SECURITY INTERESTS  

Scope

442B(1)    
This section applies if a security interest in property (the secured property ) of a company under administration was a circulating security interest when the interest arose, but has stopped being a circulating security interest because:

(a)    in the case of a PPSA security interest - the property has stopped being a circulating asset (within the meaning of the Personal Property Securities Act 2009 ); or

(b)    in the case of a security interest that was a floating charge when it arose - the floating charge has since become a fixed or specific charge.

Note 1: A circulating security interest can be either a PPSA security interest to which a circulating asset has attached or a floating charge: see the definition of circulating security interest in section 9 .

Note 2: For the meaning of circulating asset , see section 340 of the Personal Property Securities Act 2009 .

Security interest in circulating asset

442B(2)    
Subject to sections 442C and 442D , in the case of a PPSA security interest, the administrator may deal with any of the secured property in any way the company could deal with the secured property immediately before it stopped being a circulating asset.

Floating charge

442B(3)    
Subject to sections 442C and 442D , in the case of a security interest that was a floating charge when it arose, the administrator may deal with any of the secured property as if the security interest were still a floating charge.

Note: Section 442C deals with the disposal of encumbered property by an administrator. Section 442D makes the administrator ' s functions and powers subject to those of a secured party, receiver or controller.

SECTION 442C   WHEN ADMINISTRATOR MAY DISPOSE OF ENCUMBERED PROPERTY  

442C(1)    
The administrator of a company under administration or of a deed of company arrangement must not dispose of:

(a) property of the company that is subject to a security interest; or

(b) property (other than PPSA retention of title property) that is used or occupied by, or is in the possession of, the company but of which someone else is the owner or lessor.

Note: PPSA retention of title property is subject to a PPSA security interest, and so is covered by paragraph (a) (see definition of PPSA retention of title property in section 51F).

442C(2)    
Subsection (1) does not prevent a disposal:

(a) in the ordinary course of the company ' s business; or

(b) with the written consent of the secured party, owner or lessor, as the case may be; or

(c) with the leave of the Court.

442C(3)    

The Court may only give leave under paragraph (2)(c) if satisfied that arrangements have been made to protect adequately the interests of the secured party, owner or lessor, as the case may be.

442C(4)    

If the administrator proposes to dispose of property under paragraph (2)(a), the Court may, by order, direct the administrator not to carry out that proposal.

442C(5)    

The Court may only make an order under subsection (4) on the application of:

(a) if paragraph (1)(a) applies - the secured party; or

(b) if paragraph (1)(b) applies - the owner or lessor, as the case may be.

442C(6)    

The Court may only make an order under subsection (4) if it is not satisfied that arrangements have been made to protect adequately the interests of the applicant for the order.

442C(7)    

If:

(a) a company is under administration or is subject to a deed of company arrangement; and

(b) property of the company is subject to a security interest; and

(c) the administrator disposes of the property;

the disposal extinguishes the security interest.

442C(8)    

For the purposes of paragraph (2)(a), if:

(a) property is used or occupied by, or is in the possession of, a company; and

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

(c) either:

(i) the property is PPSA retention of title property; or

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

(d) the owner demands the return of the property;

a disposal of the property that occurs after the demand is made does not mean that the disposal is not in the ordinary course of the company ' s business.

SECTION 442CA   PROPERTY SUBJECT TO A POSSESSORY SECURITY INTEREST - INSPECTION OR EXAMINATION BY POTENTIAL PURCHASERS ETC.  

442CA(1)    

If:

(a) a company is under administration; and

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

(c) the administrator is entitled to dispose of the property by way of sale;

the secured party must, if requested to do so by the administrator, give potential purchasers a reasonable opportunity to inspect or examine the property.

442CA(2)    
If:

(a) a company is under administration; and

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

(c) the administrator disposes of the property by way of sale;

the administrator is entitled to obtain possession of the property in order to effect the sale.

SECTION 442CB   PROPERTY SUBJECT TO A SECURITY INTEREST OR TO A RETENTION OF TITLE CLAUSE - ADMINISTRATOR ' S DUTY OF CARE IN EXERCISING POWER OF SALE  

442CB(1)    

If the administrator of a company is entitled to dispose of property of the company by way of sale, and the property is subject to a security interest, the administrator must act reasonably in exercising a power of sale in respect of the property.

Note: A company ' s property includes its PPSA retention of title property (see the definition of property applying to Part 5.3A , in section 435B ).

442CB(2)    
If:

(a) a company is under administration; and

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

(e) the administrator is entitled to dispose of the property by way of sale;

then, in exercising a power of sale in respect of the property, the administrator must act reasonably.

442CB(3)    
Subsections (1) and (2) do not limit section 180 , 181 , 182 , 183 or 184 .

SECTION 442CC   PROCEEDS OF SALE OF PROPERTY  

Property subject to a possessory security interest

442CC(1)    
If:

(a) a company is under administration; and

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

(c) the administrator 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 administrator 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 administrator must set aside the net proceeds; and

(iv) the administrator 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 company as an unsecured debt.

PPSA retention of title property

442CC(1A)    

If the administrator of a company disposes of PPSA retention of title property of the company by way of sale, then the administrator 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 section 9 , definitions of PPSA retention of title property and retention of title clause ). Subsection (2) deals with property that is subject to a retention of title clause.

Property subject to a retention of title clause

442CC(2)    
If:

(a) a company is under administration; and

(b) property is used or occupied by, or is in the possession of, the company; 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 administrator 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 administrator 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 administrator must set aside the net proceeds; and

(iv) the administrator 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 company as an unsecured debt.

Note: Property that is subject to a retention of title clause does not include PPSA retention of title property (see section 9 , definitions of PPSA retention of title property and retention of title clause ). Subsection (1A) deals with PPSA retention of title property.

SECTION 442D   ADMINISTRATOR ' S POWERS SUBJECT TO POWERS OF SECURED PARTY, RECEIVER OR CONTROLLER  

442D(1)    
Where section 441A applies, the administrator ' s functions and powers are subject to the functions and powers of a person as:

(a) the secured party; or

(b) a receiver or controller appointed under Part 5.2 (whether under an instrument relating to the security interest or a court order, and even if appointed after the decision period).

442D(2)    
Where section 441C applies, then, so far as concerns perishable property of the company, the administrator ' s functions and powers are subject to the functions and powers of a person as:

(a) the secured party; or

(b) a receiver or controller appointed under Part 5.2 (whether under an instrument relating to the security interest or a court order, and even if appointed after the decision period).

442D(3)    

Where section 441B , 441F or 441G applies, then, so far as concerns the property referred to in subsection 441B(1) , 441F(1) or 441G(1) , the administrator ' s functions and powers are subject to the functions and powers of the secured party, receiver or controller.

SECTION 442E  

442E   ADMINISTRATOR HAS QUALIFIED PRIVILEGE  
A person who is or has been the administrator of a company under administration has qualified privilege in respect of a statement that he or she has made, whether orally or in writing, in the course of performing or exercising any of his or her functions and powers as administrator of the company.

SECTION 442F   PROTECTION OF PERSONS DEALING WITH ADMINISTRATOR  

442F(1)   [ Indoor management rule]  

Sections 128 and 129 apply in relation to a company under administration as if:

(a) a reference in those sections to the company, or to an officer of the company, included a reference to the administrator; and

(b) a reference in those sections to an assumption referred to in section 129 included a reference to an assumption that the administrator is:

(i) acting within his or her functions and powers as administrator; and

(ii) in particular, is complying with this Act.

442F(2)   [ Application]  

The effect that sections 128 and 129 have because of subsection (1) of this section is additional to, and does not prejudice, the effect that sections 128 and 129 otherwise have in relation to a company under administration.

Division 9 - Administrator's liability and indemnity for debts of administration  

Subdivision A - Liability  

SECTION 443A   GENERAL DEBTS  

443A(1)    
The administrator of a company under administration is liable for debts he or she incurs, in the performance or exercise, or purported performance or exercise, of any of his or her functions and powers as administrator, for:

(a) services rendered; or

(b) goods bought; or

(c) property hired, leased, used or occupied, including property consisting of goods that is subject to a lease that gives rise to a PPSA security interest in the goods; or

(d) the repayment of money borrowed; or

(e) interest in respect of money borrowed; or

(f) borrowing costs.

443A(2)    
Subsection (1) has effect despite any agreement to the contrary, but without prejudice to the administrator ' s rights against the company or anyone else.

SECTION 443B   PAYMENTS FOR PROPERTY USED OR OCCUPIED BY, OR IN THE POSSESSION OF, THE COMPANY  
Scope

443B(1)    

This section applies if, under an agreement made before the administration of a company began, the company continues to use or occupy, or to be in possession of, property of which someone else is the owner or lessor, including property consisting of goods that is subject to a lease that gives rise to a PPSA security interest in the goods.

General rule

443B(2)    

Subject to this section, the administrator is liable for so much of the rent or other amounts payable by the company under the agreement as is attributable to a period:

(a) that begins more than 5 business days after the administration began; and

(b) throughout which:

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

(ii) the administration continues.

443B(3)    

Within 5 business days after the beginning of the administration, the administrator may give to the owner or lessor a notice that:

(a) specifies the property; and

(b) states that the company does not propose to exercise rights in relation to the property; and

(c) if the administrator:

(i) knows the location of the property; or

(ii) could, by the exercise of reasonable diligence, know the location of the property;

specifies the location of the property.

443B(3A)    
(Repealed by No 35 of 2011, s 3, Sch 1 [ 6] (effective 30 January 2012).)

443B(4)    
Despite subsection (2), the administrator is not liable for so much of the rent or other amounts payable by the company 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 company.

443B(5)    
A notice under subsection (3) ceases to have effect if:

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

(b) the company exercises, or purports to exercise, a right in relation to the property.

443B(6)    
For the purposes of subsection (5), the company does not exercise, or purport to exercise, a right in relation to the property merely because the company continues to occupy, or to be in possession of, the property, unless the company:

(a) also uses the property; or

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

Restrictions on general rule

443B(7)    
Subsection (2) does not apply in relation to so much of a period as elapses after:

(a) a receiver of the property is appointed; or

(b) under an agreement or instrument under which a security interest in the property is created or arises:

(i) the secured party appoints an agent to enter into possession, or to assume control, of the property; or

(ii) the secured party takes possession, or assumes control, of the property;

(c) (Repealed)

but this subsection does not affect a liability of the company.

443B(8)    
Subsection (2) does not apply in so far as a court, by order, excuses the administrator from liability, but an order does not affect a liability of the company.

443B(9)    
The administrator 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 443BA   CERTAIN TAXATION LIABILITIES  

443BA(1)   [ Taxation liabilities of administrator]  

The administrator of a company is liable to pay to the Commissioner of Taxation:

(a) each amount payable under a remittance provision because of a deduction made by the administrator; and

(b) without limiting paragraph (a), so much of each amount payable under a remittance provision because of a deduction made by the company during the administration as equals so much of the deduction as is attributable to a period throughout which the administration continued;

even if the amount became payable after the end of the administration.

443BA(2)   [ Definitions]  

In this section:

remittance provision
means any of the following former provisions of the Income Tax Assessment Act 1936 :

(aa) section 220AAE, 220AAM or 220AAR;

(a) section 221F (except subsection 221F(12)) or section 221G (except subsection 221G(4A));

(b) subsection 221YHDC(2);

(c) subsection 221YHZD(1) or (1A);

(d) subsection 221YN(1);

and any of the provisions of Subdivision 16-B in Schedule 1 to the Taxation Administration Act 1953 .

unpaid amount
(Repealed by No 79 of 2010, Sch 1, Pt 2 [ 13] (effective 1 July 2010).)

SECTION 443C  

443C   ADMINISTRATOR NOT OTHERWISE LIABLE FOR COMPANY'S DEBTS  
The administrator of a company under administration is not liable for the company's debts except under this Subdivision.

Subdivision B - Indemnity  

SECTION 443D  

443D   RIGHT OF INDEMNITY  

The administrator of a company under administration is entitled to be indemnified out of the company ' s property (other than any PPSA retention of title property subject to a PPSA security interest that is perfected within the meaning of the Personal Property Securities Act 2009 ) for:

(a) debts for which the administrator is liable under Subdivision A or a remittance provision as defined in subsection 443BA(2) ; and

(aa) any other debts or liabilities incurred, or damages or losses sustained, in good faith and without negligence, by the administrator in the performance or exercise, or purported performance or exercise, of any of his or her functions or powers as administrator; and

(b) the remuneration to which he or she is entitled under Division 60 of Schedule 2 (external administrator ' s remuneration).

SECTION 443E   RIGHT OF INDEMNITY HAS PRIORITY OVER OTHER DEBTS  

General rule

443E(1)    
Subject to section 556 , a right of indemnity under section 443D has priority over:

(a) all the company ' s unsecured debts; and

(b) any debts of the company secured by a PPSA security interest in property of the company if, when the administration of the company begins, the security interest is vested in the company because of the operation of any of the following provisions:

(i) section 267 or 267A of the Personal Property Securities Act 2009 (property subject to unperfected security interests);

(ii) section 588FL of this Act (collateral not registered within time); and

(c) subject otherwise to this section - debts of the company secured by a circulating security interest in property of the company.

Debts secured by circulating security interests - receiver appointed before the beginning of administration etc.

443E(2)    
A right of indemnity under section 443D does not have priority over debts of the company under administration that are secured by a circulating security interest in property of the company, except so far as the secured party agrees, if:

(a) before the beginning of the administration, the secured party:

(i) appointed a receiver of property of the company under a power contained in an instrument relating to the security interest; or

(ii) obtained an order for the appointment of a receiver of property of the company for the purpose of enforcing the security interest; or

(iii) entered into possession, or assumed control, of property of the company for that purpose; or

(iv) appointed a person so to enter into possession or assume control (whether as agent for the secured party or for the company); and

(b) the receiver or person is still in office, or the secured party is still in possession or control of the property.

Debts secured by circulating security interests - receiver appointed during administration etc.

443E(3)    
Subsection (4) applies if:

(a) debts of a company under administration are secured by a circulating security interest in property of the company; and

(b) during the administration, the secured party, consistently with this Part:

(i) appoints a receiver of property of the company under a power contained in an instrument relating to the security interest; or

(ii) obtains an order for the appointment of a receiver of property of the company for the purpose of enforcing the security interest; or

(iii) enters into possession, or assumes control, of property of the company for that purpose; or

(iv) appoints a person so to enter into possession or assume control (whether as agent for the secured party or for the company).

443E(4)    

A right of indemnity of the administrator under section 443D has priority over those debts only in so far as it is a right of indemnity for debts incurred, or remuneration accruing, before written notice of the appointment, or of the entering into possession or assuming of control, as the case may be, was given to the administrator.

Debts secured by circulating security interests - priority over right of indemnity in relation to repayment of money borrowed etc.

443E(5)    
A right of indemnity under section 443D does not have priority over debts of the company under administration that are secured by a circulating security interest in property of the company, except so far as the secured party consents in writing, to the extent that the right of indemnity relates to debts incurred for:

(a) the repayment of money borrowed; or

(b) interest in respect of money borrowed; or

(c) borrowing costs.

SECTION 443F   LIEN TO SECURE INDEMNITY  

443F(1)    
To secure a right of indemnity under section 443D , the administrator has a lien on the company ' s property.

443F(2)    

A lien under subsection (1) has priority over another security interest only in so far as the right of indemnity under section 443D has priority over debts secured by the other security interest.

Division 10 - Execution and effect of deed of company arrangement  

SECTION 444A   EFFECT OF CREDITORS' RESOLUTION  

444A(1)   [ Creditors resolve that company execute deed]  

This section applies where, at a meeting convened under section 439A, a company's creditors resolve that the company execute a deed of company arrangement.

444A(2)   [ Administrator of the deed]  

The administrator of the company is to be the administrator of the deed, unless the creditors, by resolution passed at the meeting, appoint someone else to be administrator of the deed.

444A(3)   [ Administrator to prepare deed]  

The administrator of the company must prepare an instrument setting out the terms of the deed.

444A(4)   [ Contents of deed]  

The instrument must also specify the following:

(a) the administrator of the deed;

(b) the property of the company (whether or not already owned by the company when it executes the deed) that is to be available to pay creditors' claims;

(c) the nature and duration of any moratorium period for which the deed provides;

(d) to what extent the company is to be released from its debts;

(e) the conditions (if any) for the deed to come into operation;

(f) the conditions (if any) for the deed to continue in operation;

(g) the circumstances in which the deed terminates;

(h) the order in which proceeds of realising the property referred to in paragraph (b) are to be distributed among creditors bound by the deed;

(i) the day (not later than the day when the administration began) on or before which claims must have arisen if they are to be admissible under the deed.

444A(5)   [ Prescribed provisions]  

The instrument is taken to include the prescribed provisions, except so far as it provides otherwise.

SECTION 444B   EXECUTION OF DEED  

444B(1)    
This section applies where an instrument is prepared under section 444A.

444B(2)    

The company must execute the instrument within:

(a) 15 business days after the end of the meeting of creditors; or

(b) such further period as the Court allows on an application made within those 15 business days.

444B(3)    
The board of the company may, by resolution, authorise the instrument to be executed by or on behalf of the company.

444B(4)    
Subsection (3) has effect despite section 198G , but does not limit the functions and powers of the administrator of the company.

444B(5)    

The proposed administrator of the deed must execute the instrument before, or as soon as practicable after, the company executes it.

444B(6)    

When executed by both the company and the deed's proposed administrator, the instrument becomes a deed of company arrangement.

444B(7)    
Division 12 provides for consequences of the company contravening subsection (2).

SECTION 444C   CREDITOR ETC. NOT TO ACT INCONSISTENTLY WITH DEED BEFORE ITS EXECUTION  

444C(1)   [ Application]  

Where, at a meeting convened under section 439A, a company's creditors resolve that the company execute a deed of company arrangement, this section applies until:

(a) the deed is executed by both the company and the deed's administrator; or

(b) the period within which subsection 444B(2) requires the company to execute the deed ends;

whichever happens sooner.

444C(2)   [ Binding effect of deed before execution]  

In so faras a person would be bound by the deed if it had already been so executed, the person:

(a) must not do anything inconsistent with the deed, except with the leave of the Court; and

(b) is subject to section 444E.

SECTION 444D   EFFECT OF DEED ON CREDITORS  

444D(1)    
A deed of company arrangement binds all creditors of the company, so far as concerns claims arising on or before the day specified in the deed under paragraph 444A(4)(i) .

444D(2)    

Subsection (1) does not prevent a secured creditor from realising or otherwise dealing with the security interest, except so far as:

(a) the deed so provides in relation to a secured creditor who voted in favour of the resolution of creditors because of which the company executed the deed; or

(b) the Court orders under subsection 444F(2) .

444D(3)    
Subsection (1) does not affect a right that an owner or lessor of property has in relation to that property, except so far as:

(a) the deed so provides in relation to an owner or lessor of property who voted in favour of the resolution of creditors because of which the company executed the deed; or

(b) the Court orders under subsection 444F(4) .

444D(3A)    

Subsection (3) does not apply in relation to an owner or lessor of PPSA retention of title property of the company.

Note: Subsection (2) applies in relation to an owner or lessor of PPSA retention of title property of the company. Such an owner or lessor is a secured creditor of the company (see section 51F (meaning of PPSA retention of title property )).

444D(4)    

Section 231 does not prevent a creditor of the company from becoming a member of the company as a result of the deed requiring the creditor to accept an offer of shares in the company.

SECTION 444DA   GIVING PRIORITY TO ELIGIBLE EMPLOYEE CREDITORS  

444DA(1)   [ Priority of employee creditors]  

A deed of company arrangement must contain a provision to the effect that, for the purposes of the application by the administrator of the property of the company coming under his or her control under the deed, any eligible employee creditors will be entitled to a priority at least equal to what they would have been entitled if the property were applied in accordance with sections 556 , 560 and 561 .

444DA(2)   [ Exceptions]  

However, the rule in subsection (1) does not apply if:

(a) at a meeting of eligible employee creditors held before the meeting convened under section 439A , the eligible employee creditors pass a resolution agreeing to the non-inclusion of such a provision; or

(b) the Court makes an order under subsection (5) approving the non-inclusion of such a provision.

444DA(3)   Meeting of eligible employee creditors.  

The administrator of the company must convene a meeting under paragraph (2)(a) by giving written notice of the meeting to as many of the eligible employee creditors as reasonably practicable at least 5 business days before the meeting.

444DA(4)   [ Contents of statement]  

A notice under subsection (3) must be accompanied by a copy of a statement setting out:

(a) the administrator ' s opinion whether the non-inclusion of such a provision would be likely to result in the same or a better outcome for eligible employee creditors as a whole than would result from an immediate winding up of the company; and

(b) his or her reasons for that opinion; and

(c) such other information known to the administrator as will enable the eligible employee creditors to make an informed decision about the matter covered by paragraph (a).

444DA(5)   Court approval.  

The Court may approve the non-inclusion of such a provision if the Court is satisfied that the non-inclusion of the provision would be likely to result in the same or a better outcome for eligible employee creditors as a whole than would result from an immediate winding up of the company.

444DA(6)   [ Who may apply]  

The Court may only make an order under subsection (5) on the application of:

(a) the administrator, or proposed administrator, of the deed; or

(b) an eligible employee creditor; or

(c) any interested person.

444DA(7)   [ When Court may make order]  

The Court may make an order under subsection (5) before or after the meeting convened under section 439A .

SECTION 444DB   SUPERANNUATION CONTRIBUTION DEBTS NOT ADMISSIBLE TO PROOF  

444DB(1)   Whole of superannuation contribution debt.  

A deed of company arrangement must contain a provision to the effect that the administrator of the deed must determine that the whole of a debt by way of a superannuation contribution is not admissible to proof against the company if:

(a) a debt by way of superannuation guarantee charge:

(i) has been paid; or

(ii) is, or is to be, admissible to proof against the company; and

(b) the administrator of the deed is satisfied that the superannuation guarantee charge is attributable to the whole of the first-mentioned debt.

444DB(2)   [ Where whole of debt not admissible]  

If the administrator of a deed of company arrangement determines, under a provision covered by subsection (1), that the whole of a debt is not admissible to proof against the company, the whole of the debt is extinguished.

444DB(3)   Part of superannuation contribution debt.  

A deed of company arrangement must contain a provision to the effect that the administrator of the deed must determine that a particular part of a debt by way of a superannuation contribution is not admissible to proof against the company if:

(a) a debt by way of superannuation guarantee charge:

(i) has been paid; or

(ii) is, or is to be, admissible to proof against the company; and

(b) the administrator of the deed is satisfied that the superannuation guarantee charge is attributable to that part of the first-mentioned debt.

444DB(4)   [ Where part of debt not admissible]  

If the administrator of a deed of company arrangement determines, under a provision covered by subsection (3), that a part of a debt is not admissible to proof against the company, that part of the debt is extinguished.

444DB(5)   Definition.  

In this section:

superannuation contribution
has the same meaning as in section 556 .

SECTION 444E   PROTECTION OF COMPANY ' S PROPERTY FROM PERSONS BOUND BY DEED  

444E(1)    
Until a deed of company arrangement terminates, this section applies to a person bound by the deed.

444E(2)    
The person cannot:

(a) make an application for an order to wind up the company; or

(b) proceed with such an application made before the deed became binding on the person.

444E(3)    
The person cannot:

(a) begin or proceed with a proceeding against the company or in relation to any of its property; or

(b) begin or proceed with enforcement process in relation to property of the company;

except:

(c) with the leave of the Court; and

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

444E(4)    

In subsection (3):

property
of a company includes:

(a) any PPSA retention of title property of the company; and

(b) any other property used or occupied by, or in the possession of, the company.

Note: See sections 9 (definition of property ) and 51F (PPSA retention of title property).

SECTION 444F   COURT MAY LIMIT RIGHTS OF SECURED CREDITOR OR OWNER OR LESSOR  

444F(1)    
This section applies where:

(a) at a meeting convened under section 439A , a company ' s creditors have resolved that the company execute a deed of company arrangement; or

(b) a company has executed such a deed.

444F(2)    

Subject to subsection 441A(3), the Court may order a secured creditor of the company not to realise or otherwise deal with the security interest, except as permitted by the order.

444F(3)    
The Court may only make an order under subsection (2) if satisfied that:

(a) for the creditor to realise or otherwise deal with the security interest would have a material adverse effect on achieving the purposes of the deed; and

(b) having regard to:

(i) the terms of the deed; and

(ii) the terms of the order; and

(iii) any other relevant matter;

the creditor ' s interests will be adequately protected.

444F(4)    
The Court may order the owner or lessor of property that is used or occupied by, or is in the possession of, the company not to take possession of the property or otherwise recover it.

444F(4A)    

Subsection (4) does not apply in relation to PPSA retention of title property of the company.

444F(5)    
The Court may only make an order under subsection (4) if satisfied that:

(a) for the owner or lessor to take possession of the property or otherwise recover it would have a material adverse effect on achieving the purposes of the deed; and

(b) having regard to:

(i) the terms of the deed; and

(ii) the terms of the order; and

(iii) any other relevant matter;

the interests of the owner or lessor will be adequately protected.

444F(6)    
An order under this section may be made subject to conditions.

444F(7)    
An order under this section may only be made on the application of:

(a) if paragraph (1)(a) applies - the administrator of the company; or

(b) if paragraph (1)(b) applies - the deed ' s administrator.

SECTION 444G  

444G   EFFECT OF DEED ON COMPANY, OFFICERS AND MEMBERS  
A deed of company arrangement also binds:

(a) the company; and

(b) its officers and members; and

(c) the deed's administrator.

SECTION 444GA   TRANSFER OF SHARES  

444GA(1)   [ Who must approve transfer]  

The administrator of a deed of company arrangement may transfer shares in the company if the administrator has obtained:

(a) the written consent of the owner of the shares; or

(b) the leave of the Court.

444GA(2)   [ Who may oppose]  

A person is not entitled to oppose an application for leave under subsection (1) unless the person is:

(a) a member of the company; or

(b) a creditor of the company; or

(c) any other interested person; or

(d) ASIC.

444GA(3)   [ What Court must consider]  

The Court may only give leave under subsection (1) if it is satisfied that the transfer would not unfairly prejudice the interests of members of the company.

SECTION 444H  

444H   EXTENT OF RELEASE OF COMPANY'S DEBTS  
A deed of company arrangement releases the company from a debt only in so far as:

(a) the deed provides for the release; and

(b) the creditor concerned is bound by the deed.

SECTION 444J  

444J   GUARANTEES AND INDEMNITIES  

Section 444H does not affect a creditor ' s rights under a guarantee or indemnity.

Division 11 - Variation, termination and avoidance of deed  

SECTION 445A  

445A   VARIATION OF DEED BY CREDITORS  
A deed of company arrangement may be varied by a resolution passed at a meeting of the company's creditors, but only if the variation is not materially different from a proposed variation set out in the notice of the meeting.

SECTION 445B   COURT MAY CANCEL VARIATION  

445B(1)   [ Cancellation application by creditor]  

Where a deed of company arrangement is varied under section 445A, a creditor of the company may apply to the Court for an order cancelling the variation.

445B(2)   [ Court may cancel variation]  

On an application, the Court:

(a) may make an order cancelling the variation, or confirming it, either wholly or in part, on such conditions (if any) as the order specifies; and

(b) may make such other orders as it thinks appropriate.

SECTION 445C  

445C   WHEN DEED TERMINATES  
A deed of company arrangement terminates when:

(a) the Court makes under section 445D an order terminating the deed; or

(b) the company ' s creditors pass a resolution terminating the deed at a meeting; or

(c) if the deed specifies circumstances in which it is to terminate - those circumstances exist; or

(d) the administrator of the deed executes a notice of termination of the deed in accordance with section 445FA ;

whichever happens first.

SECTION 445CA  

445CA   WHEN CREDITORS MAY TERMINATE DEED  

The creditors are not entitled to pass a resolution under paragraph 445C(b) unless:

(a) there has been a breach of the deed; and

(b) the breach has not been rectified before the resolution is passed.

SECTION 445D   WHEN COURT MAY TERMINATE DEED  

445D(1)    
The Court may make an order terminating a deed of company arrangement if satisfied that:

(a) information about the company's business, property, affairs or financial circumstances that:

(i) was false or misleading; and

(ii) can reasonably be expected to have been material to creditors of the company in deciding whether to vote in favour of the resolution that the company execute the deed;

was given to the administrator of the company or to such creditors; or

(b) such information was contained in a document that accompanied a notice of the meeting at which the resolution was passed; or

(c) there was an omission from such a document and the omission can reasonably be expected to have been material to such creditors in so deciding; or

(d) there has been a material contravention of the deed by a person bound by the deed; or

(e) effect cannot be given to the deed without injustice or undue delay; or

(f) the deed or a provision of it is, an act or omission done or made under the deed was, or an act or omission proposed to be so done or made would be:

(i) oppressive or unfairly prejudicial to, or unfairly discriminatory against, one or more such creditors; or

(ii) contrary to the interests of the creditors of the company as a whole; or

(g) the deed should be terminated for some other reason.

445D(2)    
An order may be made on the application of:

(a) a creditor of the company; or

(b) the company; or

(ba) ASIC; or

(c) any other interested person.

SECTION 445E  

445E   CREDITORS MAY TERMINATE DEED AND RESOLVE THAT COMPANY BE WOUND UP  
Where:

(a) the company ' s creditors pass a resolution at a meeting terminating the deed; and

(b) the notice of the meeting set out a proposed resolution that the company be wound up;

the creditors may also resolve at the meeting that the company be wound up.

SECTION 445F  

445F   MEETING OF CREDITORS TO CONSIDER PROPOSED VARIATION OR TERMINATION OF DEED  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 123] (effective 1 March 2017).)

SECTION 445FA   NOTICE OF TERMINATION OF DEED  

445FA(1)    
If a company is subject to a deed of company arrangement, and:

(a)    the administrator of the deed has applied all of the proceeds of the realisation of the assets available for the payment of creditors; or

(b)    the administrator of the deed has paid to the creditors:

(i) the sum of 100 cents in the dollar; or

(ii) any lesser sum determined by the creditors at a general meeting; or

(c)    all of the following conditions are satisfied:

(i) the company ' s obligations under the deed have been fulfilled;

(ii) the obligations of any other party to the deed have been fulfilled;

(iii) creditors ' claims under the deed have been dealt with in accordance with the deed;

the administrator of the deed must:

(d)    certify to that effect in writing; and

(e)    within 28 days, lodge with ASIC a notice of termination of the deed.

445FA(2)    
The notice of termination must be in the prescribed form.

Note: For termination of the deed, see section 445C .

SECTION 445G   WHEN COURT MAY VOID OR VALIDATE DEED  

445G(1)   [ Doubt about deed]  

Where there is doubt, on a specific ground, whether a deed of company arrangement was entered into in accordance with this Part or complies with this Part, the administrator of the deed, a member or creditor of the company, or ASIC, may apply to the Court for an order under this section.

445G(2)   [ Court may declare deed void]  

On an application, the Court may make an order declaring the deed, or a provision of it, to be void or not to be void, as the case requires, on the ground specified in the application or some other ground.

445G(3)   [ Court may declare deed valid]  

On an application, the Court may declare the deed, or a provision of it, to be valid, despite a contravention of a provision of this Part, if the Court is satisfied that:

(a) the provision was substantially complied with; and

(b) no injustice will result for anyone bound by the deed if the contravention is disregarded.

445G(4)   [ Court may vary deed]  

Where the Court declares a provision of a deed of company arrangement to be void, the Court may by order vary the deed, but only with the consent of the deed's administrator.

SECTION 445H  

445H   EFFECT OF TERMINATION OR AVOIDANCE  
The termination or avoidance, in whole or in part, of a deed of company arrangement does not affect the previous operation of the deed.

Division 11AA - Notification of contravention of deed  

SECTION 445HA   NOTIFICATION OF CONTRAVENTION OF DEED OF COMPANY ARRANGEMENT  

Director to notify administrator

445HA(1)    
If a director of a company that is subject to a deed of company arrangement becomes aware that:

(a) there has been a material contravention of the deed by a person bound by the deed (who may be the director); or

(b) there is likely to be a material contravention of the deed by a person bound by the deed (who may be the director);

the director must, as soon as practicable after becoming aware of the contravention or likely contravention, give notice of the contravention or likely contravention to the administrator of the deed of company arrangement.

Administrator to notify company ' s creditors

445HA(2)    
If the administrator of a deed of company arrangement becomes aware that:

(a) there has been a material contravention of the deed by a person bound by the deed (who may be the administrator); or

(b) there is likely to be a material contravention of the deed by a person bound by the deed (who may be the administrator);

the administrator must, as soon as practicable after becoming aware of the contravention or likely contravention, give notice of the contravention or likely contravention to as many of the company ' s creditors as reasonably practicable. The notice must be lodged with ASIC and must be in the prescribed form (if any).

Division 11A - Deed administrator ' s accounts  

Division 12 - Transition to creditors ' voluntary winding up  

SECTION 446A   ADMINISTRATOR BECOMES LIQUIDATOR IN CERTAIN CASES  

446A(1)    
This section applies if:

(a)    the creditors of a company under administration resolve at a particular time under paragraph 439C(c) that the company be wound up; or

(b)    a company under administration contravenes subsection 444B(2) at a particular time; or

(c)    

the company ' s creditors:

(i) pass a resolution terminating a deed of company arrangement executed by the company; and

(ii) also resolve at a particular time under section 445E that the company be wound up.

446A(2)    
The company is taken:

(a)    to have passed, at the time referred to in paragraph (1)(a) or (b) or subparagraph (1)(c)(ii) , as the case may be, a special resolution under section 491 that the company be wound up voluntarily; and

(b)    to have done so without a declaration having been made and lodged under section 494 .

446A(3)    
Section 497 is taken to have been complied with in relation to the winding up.

446A(4)    
(Repealed by No 132 of 2007, s 3, Sch 1, Pt 2 [ 22].)

446A(5)    
The liquidator must:

(a)    

within 5 business days after the day on which the company is taken to have passed the resolution, lodge with the Registrar a written notice stating that the company is taken because of this section to have passed such a resolution and specifying that day; and

(b)    

cause the notice to be published, within the period ascertained in accordance with the regulations, in the prescribed manner.

446A(6)    
Section 482 applies in relation to the winding up as if it were a winding up in insolvency or by the Court.

Note: Section 482 empowers the Court to stay or terminate a winding up and give consequential directions.

446A(7)    
An application under section 482 as applying because of subsection (6) may be made:

(a)    

despite section 198G (exercise of powers while company under external administration), by the company pursuant to a resolution of the board; or

(b)    by the liquidator; or

(c)    by a creditor; or

(d)    by a contributory.

446A(8)    

A lodgement under paragraph (5)(a) must meet any requirements of the data standards.

Note: See also section 499 (appointment of liquidator).

SECTION 446AA   ADMINISTRATOR BECOMES LIQUIDATOR - ADDITIONAL CASES  
Scope

446AA(1)    
This section applies if a company has executed a deed of company arrangement and:

(a)    the Court, at a particular time, makes an order under section 445D terminating the deed of company arrangement; or

(b)    both:

(i) the deed of company arrangement specifies circumstances in which the deed is to terminate and the company is to be wound up; and

(ii) those circumstances exist at a particular time.

Resolution that company be wound up voluntarily

446AA(2)    
The company is taken:

(a)    to have passed, at the time referred to in paragraph (1)(a) or subparagraph (1)(b)(ii), as the case may be, a special resolution under section 491 that the company be wound up voluntarily; and

(b)    to have done so without a declaration having been made and lodged under section 494 .

Information about company ' s affairs

446AA(3)    
Section 497 is taken to have been complied with in relation to the winding up.

Notice of resolution

446AA(4)    
The liquidator must:

(a)    within 5 business days after the day on which the company is taken to have passed the resolution, lodge with ASIC a written notice in the prescribed form:

(i) stating that the company is taken because of this section to have passed such a resolution; and

(ii) specifying that day; and

(b)    cause the notice to be published, within 5 business days after that day, in the prescribed manner.

Power to stay or terminate winding up

446AA(5)    
Section 482 applies in relation to the winding up as if it were a winding up in insolvency or by the Court.

Note: Section 482 empowers the Court to stay or terminate a winding up and give consequential directions.

446AA(6)    
An application under section 482 as applying because of subsection (5) may be made:

(a)    despite section 198G (exercise of directors ' powers while company under external administration), by the company pursuant to a resolution of the board; or

(b)    by the liquidator; or

(c)    by a creditor; or

(d)    by a contributory.

Note: See also section 499 (appointment of liquidator).

SECTION 446B   REGULATIONS MAY PROVIDE FOR TRANSITION IN OTHER CASES  

446B(1)    
The regulations may prescribe cases where:

(a) a company under administration; or

(b) a company that has executed a deed of company arrangement (even if the deed has terminated);

is taken to have passed a special resolution under section 491 that the company be wound up voluntarily.

446B(2)    

The regulations may provide for Part 5.5 or Schedule 2 to apply with prescribed modifications in cases prescribed for the purposes of subsection (1).

446B(3)    
Without limiting subsection (2), the regulations may provide, in relation to such cases, for matters of a kind provided for by any of subsections 446A(2) to (7) and 446AA(2) to (6) , inclusive.

446B(4)    
Regulations in force for the purposes of this section have effect accordingly.

SECTION 446C   LIQUIDATOR MAY REQUIRE SUBMISSION OF A REPORT ABOUT THE COMPANY ' S AFFAIRS  

Scope

446C(1)    
This section applies if:

(a)    at a particular time (the liquidation time ), a company resolves by special resolution that it be wound up voluntarily; and

(b)    immediately before the liquidation time:

(i) the company was under administration; or

(ii) the company was subject to a deed of company arrangement.

Report

446C(2)    
The liquidator may, by written notice given to a person who is or has been an officer of the company, require the person to:

(a)    give the liquidator a report containing such information as is specified in the notice about:

(i) the affairs of the company, as at a date specified in the notice; or

(ii) if one or more of the affairs of the company are specified in the notice - those affairs, as at a date specified in the notice; and

(b)    verify the report by a statement in writing in the prescribed form.

446C(3)    
The following provisions have effect:

(a)    if subparagraph (1)(b)(i) applies - the date specified in the subsection (2) notice must not be earlier than the beginning of the administration;

(b)    if subparagraph (1)(b)(ii) applies - the date specified in the subsection (2) notice must not be earlier than the beginning of the administration that ended when the deed was executed.

Deadline for giving report to liquidator

446C(4)    
If a person is given a notice under subsection (2) , the person must give the liquidator the report required by the notice:

(a)    within 14 days after the notice was given; or

(b)    if the liquidator, by written notice given to the person, allows a longer period - within that longer period.

446C(5)    
The liquidator may allow a longer period under paragraph (4)(b) only on written application made within the period of 14 days mentioned in paragraph (4)(a) .

446C(6)    
The liquidator may allow a longer period under paragraph (4)(b) only if the liquidator believes there are special reasons for doing so.

Report to be lodged with ASIC

446C(7)    
The liquidator must, within 7 days after receiving a report under subsection (2) , lodge a copy of the report with ASIC.

Cost of preparation of report

446C(8)    

If:

(a)    a person is required to give a report under subsection (2) ; and

(b)    the person incurs costs or expenses in relation to the preparation or giving of the report;

the person is entitled to be paid by the liquidator out of the property of the company (other than its PPSA retention of title property), so much of those costs and expenses as the liquidator considers reasonable.

Reasonable excuse

446C(9)    
Subsection (4) does not apply to the extent that the person has a reasonable excuse.

Note: A defendant bears an evidential burden in relation to the matter in subsection (9) , see subsection 13.3(3) of the Criminal Code .

Strict liability

446C(10)    
An offence against subsection 1311(1) that relates to subsection (4) of this section is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

Division 13 - Powers of Court  

SECTION 447A   GENERAL POWER TO MAKE ORDERS  

447A(1)   [ General powers of Court]  

The Court may make such order as it thinks appropriate about how this Part is to operate in relation to a particular company.

447A(2)   [ Example of Court order]  

For example, if the Court is satisfied that the administration of a company should end:

(a) because the company is solvent; or

(b) because provisions of this Part are being abused; or

(c) for some other reason;

the Court may order under subsection (1) that the administration is to end.

447A(3)   [ Order subject to conditions]  

An order may be made subject to conditions.

447A(4)   [ Who may apply for order]  

An order may be made on the application of:

(a) the company; or

(b) a creditor of the company; or

(c) in the case of a company under administration - the administrator of the company; or

(d) in the case of a company that has executed a deed of company arrangement - the deed's administrator; or

(e) ASIC; or

(f) any other interested person.

SECTION 447B   ORDERS TO PROTECT CREDITORS DURING ADMINISTRATION  

447B(1)   [ ASIC may apply]  

On the application of ASIC, the Court may make such order as it thinks necessary to protect the interests of a company's creditors while the company is under administration.

447B(2)   [ Creditor may apply]  

On the application of a creditor of a company, the Court may make such order as it thinks necessary to protect the creditor's interests while the company is under administration.

447B(3)   [ Order subject to conditions]  

An order may be made subject to conditions.

SECTION 447C   COURT MAY DECLARE WHETHER ADMINISTRATOR VALIDLY APPOINTED  

447C(1)   [ Doubt about appointment]  

If there is doubt, on a specific ground, about whether a purported appointment of a person as administrator of a company, or of a deed of company arrangement, is valid, the person, the company or any of the company's creditors may apply to the Court for an order under subsection (2).

447C(2)   [ Court may declare appointment valid or invalid]  

On an application, the Court may make an order declaring whether or not the purported appointment was valid on the ground specified in the application or on some other ground.

SECTION 447D  

447D   ADMINISTRATOR MAY SEEK DIRECTIONS  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 128] (effective 1 March 2017).)

SECTION 447E  

447E   SUPERVISION OF ADMINISTRATOR OF COMPANY OR DEED  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 128] (effective 1 March 2017).)

SECTION 447F  

447F   EFFECT OF DIVISION  
Nothing in this Division limits the generality of anything else in it.

Division 14 - Qualifications of administrators  

SECTION 448A  

448A   APPOINTEE MUST CONSENT  
A person cannot be appointed as administrator of a company or of a deed of company arrangement unless:

(a) the person has consented in writing to the appointment; and

(b) as at the time of the appointment, the person has not withdrawn the consent.

SECTION 448B   ADMINISTRATOR MUST BE REGISTERED LIQUIDATOR  

448B(1)   [ Prohibition against appointment]  

A person must not consent to be appointed, and must not act, as administrator of a company or of a deed of company arrangement.

448B(2)   [ Limitation]  

Subsection (1) does not apply if the person is a registered liquidator.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2), see subsection 13.3(3) of the Criminal Code .

448B(3)   [ Strict liability offence]  

An offence based on subsection (1) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

SECTION 448C   DISQUALIFICATION OF PERSON CONNECTED WITH COMPANY  

448C(1)    
Subject to this section, a person must not, except with the leave of the Court, seek or consent to be appointed as, or act as, administrator of a company or of a deed of company arrangement if:

(a)    the person, or a body corporate in which the person has a substantial holding, is indebted in an amount exceeding $5,000 to the company or to a body corporate related to the company; or

(b)    

the person is, otherwise than in a capacity as:

(i) administrator of the company or a related body corporate; or

(ii) administrator of a deed of company arrangement executed by the company or a related body corporate; or

(iii) restructuring practitioner for the company or a related body corporate; or

(iv) restructuring practitioner for a restructuring plan made by the company or a related body corporate; or

(v) liquidator of the company or a related body corporate;

a creditor of the company or of a related body corporate in an amount exceeding $5,000; or

(c)    

the person is a director, secretary, senior manager or employee of the company; or

(d)    

the person is a director, secretary, senior manager or employee of a body corporate that is a secured party in relation to property of the company; or

(e)    the person is an auditor of the company; or

(f)    the person is a partner or employee of an auditor of the company; or

(g)    the person is a partner, employer or employee of an officer of the company; or

(h)    the person is a partner or employee of an employee of an officer of the company.

448C(1A)    

An offence based on subsection (1) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

448C(2)    
For the purposes of paragraph (1)(a), disregard a debt owed by a natural person to a body corporate if:

(a)    

the body corporate is:

(i) an Australian ADI; or

(ii) a body corporate registered under section 21 of the Life Insurance Act 1995 ; and

(b)    the debt arose because of a loan that the body corporate or entity made to the person in the ordinary course of its ordinary business; and

(c)    the person used the amount of the loan to pay the whole or part of the purchase price of premises that the person uses as their principal place of residence.

448C(3)    

For the purposes of this section, a person is taken to be a director, secretary, senior manager, employee or auditor of a company if:

(a)    the person is or has, within the last 2 years, been a director, secretary, senior manager, employee, auditor or promoter of the company or a related body corporate; and

(b)    ASIC has not directed that the person not be taken to be a director, secretary, senior manager, employee or auditor for the purposes of this section.

ASIC may give a direction under paragraph (b) only if it thinks fit in the circumstances of the case.

448C(4)    

For the purposes of paragraphs (1)(g) and (h), officer does not include liquidator.

SECTION 448D  

448D   DISQUALIFICATION OF INSOLVENT UNDER ADMINISTRATION  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 128] (effective 1 March 2017).)

Division 15 - Removal and replacement of administrator  

SECTION 449A  

449A   APPOINTMENT OF ADMINISTRATOR CANNOT BE REVOKED  
The appointment of a person as administrator of a company or of a deed of company arrangement cannot be revoked.

SECTION 449B  

449B   COURT MAY REMOVE ADMINISTRATOR  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 130] (effective 1 March 2017).)

SECTION 449C   VACANCY IN OFFICE OF ADMINISTRATOR OF COMPANY  

449C(1)    
Where the administrator of a company under administration:

(a) dies; or

(b) becomes prohibited from acting as administrator of the company; or

(c) resigns by notice in writing given to his or her appointer and to the company;

his or her appointer may appoint someone else as administrator of the company.

449C(2)    

In subsection (1):

appointer
, in relation to the administrator of a company under administration, means:

(a) if the administrator was appointed by the Court under Division 90 of Schedule 2 (review of the external administration of a company) or subsection (6) of this section - the Court; or

(b) otherwise:

(i) if the administration began because of an appointment under section 436A - the company; or

(ii) if the administration began because of an appointment under section 436B - a liquidator or provisional liquidator of the company; or

(iii) if the administration began because of an appointment under section 436C - a person who is entitled, or would apart from section 440B or 441D be entitled, to enforce the security interest.

449C(3)    
An appointment under subsection (1) by the company under administration must be made pursuant to a resolution of the board.

449C(4)    
Within 5 business days after being appointed under subsection (1) as administrator of a company otherwise than by the Court, a person must convene a meeting of the company ' s creditors so that they may:

(a) determine whether to remove the person from office; and

(b) if so, appoint someone else as administrator of the company.

449C(5)    
(Repealed by No 11 of 2016, s 3, Sch 2 [ 132] (effective 1 March 2017).)

449C(6)    
Where a company is under administration, but for some reason no administrator is acting, the Court may appoint a person as administrator on the application of ASIC or of an officer, member or creditor of the company.

449C(7)    

Subsections (3) and (6) have effect despite section 198G .

SECTION 449CA   DECLARATIONS BY ADMINISTRATOR - INDEMNITIES AND RELEVANT RELATIONSHIPS  

Scope

449CA(1)    
This section applies to an administrator appointed under subsection 449C(1) otherwise than by the Court.

Declaration of relationships and indemnities

449CA(2)    
As soon as practicable after being appointed, the administrator must make:

(a)    a declaration of relevant relationships; and

(b)    a declaration of indemnities.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

Notification of creditors

449CA(3)    
The administrator must:

(a)    give a copy of each declaration under subsection (2) to as many of the company ' s creditors as reasonably practicable; and

(b)    do so at the same time as the administrator gives those creditors notice of the meeting convened under subsection 449C(4) .

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

449CA(4)    
The administrator must table a copy of each declaration under subsection (2) at the meeting convened under subsection 449C(4) .

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

449CA(4A)    
As soon as practicable after making a declaration under subsection (2) , the administrator must lodge a copy of the declaration with ASIC.

Note: Failure to comply with this subsection isan offence (see subsection 1311(1) ).

Updating of declaration

449CA(5)    
If:

(a)    at a particular time, the administrator makes:

(i) a declaration of relevant relationships; or

(ii) a declaration of indemnities;

under subsection (2) or this subsection; and

(b)    at a later time:

(i) the declaration has become out-of-date; or

(ii) the administrator becomes aware of an error in the declaration;

the administrator must, as soon as practicable, make:

(c)    if subparagraph (a)(i) applies - a replacement declaration of relevant relationships; or

(d)    if subparagraph (a)(ii) applies - a replacement declaration of indemnities.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

449CA(6)    
The administrator must table a copy of a replacement declaration under subsection (5) :

(a)    

if:

(i) there is a committee of inspection; and

(ii) the next meeting of the committee of inspection occurs before the next meeting of the company ' s creditors;

at the next meeting of the committee of inspection; or

(b)    in any other case - at the next meeting of the company ' s creditors.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

449CA(6A)    

As soon as practicable after making a replacement declaration under subsection (5) , the administrator must lodge a copy of the replacement declaration with ASIC.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

Defence

449CA(7)    
In a prosecution for an offence constituted by a failure to include a particular matter in a declaration under this section, it is a defence if the defendant proves that:

(a)    the defendant made reasonable enquiries; and

(b)    after making these enquiries, the defendant had no reasonable grounds for believing that the matter should have been included in the declaration.

SECTION 449D  

449D   VACANCY IN OFFICE OF ADMINISTRATOR OF DEED OF COMPANY ARRANGEMENT  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 135] (effective 1 March 2017).)

SECTION 449E  

449E   REMUNERATION OF ADMINISTRATOR  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 135] (effective 1 March 2017).)

Division 16 - Notices about steps taken under Part  

SECTION 450A   APPOINTMENT OF ADMINISTRATOR  

450A(1)    
Wherean administrator of a company is appointed under section 436A , 436B or 436C , the administrator must:

(a)    lodge a notice of the appointment before the end of the next business day after the appointment; and

(b)    

cause a notice setting out the prescribed information about the appointment to be published, within the period ascertained in accordance with the regulations, in the prescribed manner.

450A(1A)    

A notice under paragraph (1)(b) that relates to a company may be combined with a notice under paragraph 436E(3)(b) that relates to the company.

450A(2)    
As soon as practicable, and in any event before the end of the next business day, after appointing an administrator of a company under section 436C , a person must give to the company a written notice of the appointment.

450A(3)    
As soon as practicable, and in any event before the end of the next business day, after an administrator of a company is appointed under section 436A , 436B or 436C , he or she must give a written notice of the appointment to:

(a)    

each person who holds a security interest in the whole, or substantially the whole, of the company ' s property; and

(b)    

each person who holds 2 or more security interests in property of the company where the property of the company subject to the respective security interests together constitutes the whole, or substantially the whole, of the company ' s property.

450A(4)    
An administrator need not give a notice under subsection (3) to the person who appointed the administrator.

SECTION 450B  

450B   EXECUTION OF DEED OF COMPANY ARRANGEMENT  
As soon as practicable after a deed of company arrangement is executed, the deed ' s administrator must:

(a)    send to each creditor of the company a written notice of the execution of the deed; and

(b)    

lodge notice in the prescribed form with ASIC of the execution of the deed.

(c) (Repealed)

SECTION 450C  

450C   FAILURE TO EXECUTE DEED OF COMPANY ARRANGEMENT  
As soon as practicable after a company contravenes subsection 444B(2) , the deed ' s administrator must:

(a)    lodge a notice that the company has failed to execute the instrument within the required period; and

(b)    

send such a notice to each of the company ' s creditors.

SECTION 450D  

450D   TERMINATION OF DEED OF COMPANY ARRANGEMENT  
Where a deed of company arrangement terminates because of paragraph 445C(b) , the deed ' s administrator must:

(a)    lodge a notice of the termination; and

(b)    

send such a notice to each of the company ' s creditors.

(c) (Repealed by No 132 of 2007)

SECTION 450E   NOTICE IN PUBLIC DOCUMENTS ETC. OF COMPANY  

450E(1)   [ ``(`administrator appointed')'']  

A company under administration must set out, in every public document, and in every negotiable instrument, of the company, after the company's name where it first appears, the expression (``administrator appointed'').

450E(2)   [ ``(`subject to deed of company arrangement')'']  

Except with the leave of the Court, until a deed of company arrangement terminates, the company must set out, in every public document, and in every negotiable instrument, of the company, after the company's name where it first appears, the expression (``subject to deed of company arrangement'').

450E(3)   [ Strict liability offence]  

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

Note: For strict liability , see section 6.1 of the Criminal Code .

450E(4)   [ Standing to apply for leave]  

The Court may only grant leave under subsection (2) on the application of:

(a) the administrator of the deed of company arrangement; or

(b) any interested person.

450E(5)   [ Conditions for granting leave]  

The Court may only grant leave under subsection (2) if it is satisfied that the granting of leave will not result in any significant risk to the interests of the company ' s creditors (including contingent or prospective creditors) as a whole.

SECTION 450F  

450F   EFFECT OF CONTRAVENTION OF THIS DIVISION  
A contravention of this Division does not affect the validity of anything done or omitted under this Part, except so far as the Court otherwise orders.

Division 17 - Miscellaneous  

SECTION 451A   APPOINTMENT OF 2 OR MORE ADMINISTRATORS OF COMPANY  

451A(1)   [ Two or more persons may be appointed]  

Where a provision of this Act provides for an administrator of a company to be appointed, 2 or more persons may be appointed as administrators of the company.

451A(2)   [ How two or more administrators to exercise powers, etc]  

Where, because of subsection (1), there are 2 or more administrators of a company:

(a) a function or power of an administrator of the company may be performed or exercised by any one of them, or by any 2 or more of them together, except so far as the instrument or resolution appointing them otherwise provides; and

(b) a reference in this Act to an administrator, or to the administrator, of a company is, in the case of the first-mentioned company, a reference to whichever one or more of those administrators the case requires.

SECTION 451B   APPOINTMENT OF 2 OR MORE ADMINISTRATORS OF DEED OF COMPANY ARRANGEMENT  

451B(1)   [ Two or more persons may be appointed]  

Where a provision of this Act provides for an administrator of a deed of company arrangement to be appointed, 2 or more persons may be appointed as administrators of the deed.

451B(2)   [ How two or more administrators to exercise powers, etc]  

Where, because of subsection (1), there are 2 or more administrators of a deed of company arrangement:

(a) a function or power of an administrator of the deed may be performed or exercised by any one of them, or by any 2 or more of them together, except so far as the deed, or the resolution or instrument appointing them, otherwise provides; and

(b) a reference in this Act to an administrator, or to the administrator, of a deed of company arrangement is, in the case of the first-mentioned deed, a reference to whichever one or more of those administrators the case requires.

SECTION 451C  

451C   EFFECT OF THINGS DONE DURING ADMINISTRATION OF COMPANY  
A payment made, transaction entered into, or any other act or thing done, in good faith, by, or with the consent of, the administrator of a company under administration:

(a) is valid and effectual for the purposes of this Act; and

(b) is not liable to be set aside in a winding up of the company.

SECTION 451D  

451D   TIME FOR DOING ACT DOES NOT RUN WHILE ACT PREVENTED BY THIS PART  
Where:

(a) for any purpose (for example, the purposes of a law, agreement or instrument) an act must or may be done within a particular period or before a particular time; and

(b) this Part prevents the act from being done within that period or before that time;

the period is extended, or the time is deferred, because of this section, according to how long this Part prevented the act from being done.

SECTION 451E   STAY ON ENFORCING RIGHTS MERELY BECAUSE THE COMPANY IS UNDER ADMINISTRATION ETC.  

Stay on enforcing rights

451E(1)    
A right cannot be enforced against a company for:

(a) the reason that the company has come or is under administration; or

(b) the company ' s financial position, if the company is under administration; or

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

(i) the company coming, or possibly coming, under administration; or

(ii) the company ' s financial position;

if the company later comes under administration; 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 451F .

Example: A right to terminate a contract will not be enforceable to the extent that those rights are triggered by the company coming under administration.

Period of the stay

451E(2)    
The right cannot be enforced as described in subsection (1) during the period (the stay period ) starting when the company comes under administration and ending at the latest of the following:

(a) when the administration ends;

(b) if one or more orders are made under subsection (3) for the company as the result of an application made before the administration ends - when the last made of those orders ceases to be in force;

(c) if the administration ends because of a resolution or order for the company to be wound up - when the company ' s affairs have been fully wound up.

451E(3)    
The Court:

(a) may order an extension of the period otherwise applying under subsection (2) for the company 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

451E(4)    
The right is unenforceable against the company indefinitely after the end of the stay period to the extent that a reason for seeking to enforce the right:

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

(b) is the company having come or been under administration 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

451E(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 company comes under administration; 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.

Note: Subsection (1) also does not apply to certain secured creditors (see Subdivision B of Division 7).

451E(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.

451E(7)    
Subsection (1) does not apply to the right to the extent that:

(a) the administrator of the company; or

(b) if a liquidator of the company is appointed after the administration ends - the liquidator;

has consented in writing to the enforcement of the right.

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

451E(8)    
If:

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

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

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

SECTION 451F   LIFTING THE STAY  

451F(1)    
The Court may order that subsection 451E(1) does not apply for one or more rights against a company if the Court is satisfied that this is appropriate in the interests of justice.

451F(2)    
An application for the order may be made by the holder of those rights.

SECTION 451G   ORDER FOR RIGHTS TO BE ENFORCEABLE ONLY WITH LEAVE OF THE COURT  

Orders

451G(1)    
The Court may order that one or more rights under a contract, agreement or arrangement are enforceable against a company 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.

451G(2)    
The Court may make the order if:

(a) the company is under administration; 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 451E(1)(a) to (d); and

(c) an application for the order is made by the administrator of the company.

451G(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 451E(2) , (3) and (4) ; and

(b) the interests of justice.

451G(4)    
Subsection (1) does not apply to a right referred to in subsection 451E(5) or (7) .

Note: An order under subsection (1) also does not restrict certain secured creditors (see Subdivision B of Division 7 ).

Interim orders

451G(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 company.

451G(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 451GA   SELF-EXECUTING PROVISIONS  

451GA(1)    
The object of subsection (2) is to ensure that a self-executing provision:

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

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

451GA(2)    
Sections 451E to 451G 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 451E to 451G .

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 omittedfrom subsection 451E(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 451G(2)(b) as alternatively providing that the Court is satisfied that one or more reasons referred to in paragraphs 451E(1)(a) to (d) can cause the self-executing provisions to start to apply.

451GA(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 451H  

451H   WHEN OTHER LAWS PREVAIL - CERTAIN OTHER COMMONWEALTH ACTS  

If there is any inconsistency between sections 451E to 451GA 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 .