Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.6 - WINDING UP GENERALLY  

Note: This Part applies to a sub-fund of a CCIV in a modified form: see Division 5 of Part 8B.6 .

Division 1 - Preliminary  

SECTION 513  

513   APPLICATION OF PART  
Except so far as the contrary intention appears, the provisions of this Act about winding up apply in relation to the winding up of a company whether in insolvency, by the Court or voluntarily.

SECTION 513AA  

513AA   MEANING OF PROPERTY  

In this Part:

property
of a company includes PPSA retention of title property, if the security interest in the property is vested in the company because of the operation of any of the following provisions:

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

(b) section 588FL of this Act (collateral not registered within time).

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

Division 1A - When winding up taken to begin  

SECTION 513A  

513A   WINDING UP ORDERED BY THE COURT  
If the Court orders under section 233 , 459A , 459B or 461 that a company be wound up, the winding up is taken to have begun or commenced:

(a)    if, when the order was made, a winding up of the company was already in progress - when the last-mentioned winding up is taken because of this Division to have begun or commenced; or

(b)    if, immediately before the order was made, the company was under administration - on the section 513C day in relation to the administration; or

(c)    if:

(i) when the order was made, a provisional liquidator of the company was acting; and

(ii) immediately before the provisional liquidator was appointed, the company was under administration;

on the section 513C day in relation to the administration; or

(d)    if, immediately before the order was made, a deed of company arrangement had been executed by the company and had not yet terminated - on the section 513C day in relation to the administration that ended when the deed was executed; or

(da)    

if, immediately before the order was made, the company was under restructuring - on the section 513CA day in relation to the restructuring; or

(db)    

if:

(i) when the order was made, a provisional liquidator of the company was acting; and

(ii) immediately before the provisional liquidator was appointed, the company was under restructuring;

on the section 513CA day in relation to the restructuring; or

(dc)    

if, immediately before the order was made, a restructuring plan had been made by the company and had not yet terminated - on the section 513CA day in relation to the restructuring that ended when the plan was made; or

(e)    otherwise - on the day when the order was made.

SECTION 513B  

513B   VOLUNTARY WINDING UP  
Where a company resolves by special resolution that it be wound up voluntarily, the winding up is taken to have begun or commenced:

(a)    if, when the resolution was passed, a winding up of the company was already in progress - when the last-mentioned winding up is taken because of this Division to have begun or commenced; or

(b)    if, immediately before the resolution was passed, the company was under administration - on the section 513C day in relation to the administration; or

(c)    if, immediately before the resolution was passed, a deed of company arrangement had been executed by the company but had not yet terminated - on the section 513C day in relation to the administration that ended when the deed was executed; or

(d)    if the resolution is taken to have been passed because the company ' s creditors:

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

(ii) also resolved under section 445E that the company be wound up;

on the section 513C day in relation to the administration that ended when the deed was executed; or

(da)    if the resolution is taken to have been passed under section 446AA because of:

(i) the making of an order undersection 445D by the Court terminating a deed of company arrangement executed by the company; or

(ii) the existence of circumstances that are specified in a deed of company arrangement executed by the company to be circumstances in which the deed is to terminate and the company is to be wound up;

on the section 513C day in relation to the administration that ended when the deed was executed; or

(db)    

if, immediately before the resolution was passed, the company was under restructuring - on the section 513CA day in relation to the restructuring; or

(dc)    

if, immediately before the resolution was passed, a restructuring plan had been made by the company but had not yet terminated - on the section 513CA day in relation to the restructuring that ended when the plan was made; or

(e)    otherwise - on the day on which the resolution was passed.

SECTION 513C  

513C   SECTION 513C DAY IN RELATION TO AN ADMINISTRATION UNDER PART 5.3A  
The section 513C day in relation to the administration of a company is:

(aa)    

if, immediately before the administration began, the company was under restructuring - the day on which the restructuring began; or

(ab)    

if, immediately before the administration began, a restructuring plan had been made by the company but had not yet terminated - the day on which the restructuring that ended when the plan was made began; or

(a)    if, when the administration began, a winding up of the company was in progress - the day on which the winding up is taken because of this Division to have begun; or

(b)    otherwise - the day on which the administration began.

SECTION 513CA  

513CA   MEANING OF SECTION 513CA DAY  

The section 513CA day in relation to the restructuring of a company is the day on which the restructuring of the company began.

SECTION 513D  

513D   VALIDITY OF PROCEEDINGS IN EARLIER WINDING UP  
Where, at the time when:

(a) the Court orders under section 233, 459A, 459B or 461 that a company be wound up; or

(b) a company resolves by special resolution that it be wound up voluntarily;

a winding up of the company is already in progress, all proceedings in the last-mentioned winding up are taken to have been valid, except so far as the Court otherwise orders because fraud or mistake has been proved.

Division 2 - Contributories  

SECTION 514   WHERE DIVISION APPLIES  

514(1)   [ Application]  

This Division applies where a company is wound up.

514(2)   [ Winding up of no liability company]  

This Division does not apply to the winding up of a no liability company.

SECTION 515  

515   GENERAL LIABILITY OF CONTRIBUTORY  
Subject to this Division, a present or past member is liable to contribute to the company's property to an amount sufficient:

(a) to pay the company's debts and liabilities and the costs, charges and expenses of the winding up; and

(b) to adjust the rights of the contributories among themselves.

SECTION 516  

516   COMPANY LIMITED BY SHARES  
Subject to sections 518 and 519, if the company is a company limited by shares, a member need not contribute more than the amount (if any) unpaid on the shares in respect of which the member is liable as a present or past member.

SECTION 517  

517   COMPANY LIMITED BY GUARANTEE  
Subject to sections 518 and 519, if the company is a company limited by guarantee, a member need not contribute more than the amount the member has undertaken to contribute to the company's property if the company is wound up.

SECTION 518  

518   COMPANY LIMITED BOTH BY SHARES AND BY GUARANTEE  
Subject to section 519, if the company is a company limited both by shares and by guarantee, neither of sections 516 and 517 applies but the member need not contribute more than the aggregate of the following:

(a) the amount (if any) unpaid on shares in respect of which the member is liable as a present or past member;

(b) the amount that the member has undertaken to contribute to the company's property if the company is wound up.

SECTION 519  

519   EXCEPTIONS FOR FORMER UNLIMITED COMPANY  
Despite sections 516, 517 and 518, if the company is a limited company and became a limited company by virtue of a change of status, the amount that a member at the time of the change of status, or a person who at that time was a past member, is liable to contribute in respect of the company's debts and liabilities contracted before that time is unlimited.

SECTION 520  

520   PAST MEMBER: LATER DEBTS  
A past member need not contribute in respect of a debt or liability of the company contracted after the past member ceased to be a member.

SECTION 521  

521   PERSON CEASING TO BE A MEMBER A YEAR OR MORE BEFORE WINDING UP  
Subject to section 523, a past member need not contribute if he, she or it was a member at no time during the year ending on the day of the commencement of the winding up.

SECTION 522  

522   PRESENT MEMBERS TO CONTRIBUTE FIRST  
Subject to paragraph 523(b), a past member need not contribute unless it appears to the Court that the existing members are unable to satisfy the contributions they are liable to make under this Act.

SECTION 523  

523   PAST MEMBER OF FORMER UNLIMITED COMPANY  
If an unlimited company changes to a limited company under section 164, a past member who was a member at the time of the change is liable:

(a) despite section 521; and

(b) if no person who was a member at that time is a member at the commencement of the winding up - despite section 522;

to contribute in respect of the company's debts and liabilities contracted before that time.

SECTION 524  

524   PAST MEMBER OF FORMER LIMITED COMPANY  
If a limited company changes to an unlimited company under section 164, a person who, at the time when the company applied for the change, was a past member and did not again become a member after that time need not contribute more than they would have been liable to contribute if the company had not changed type.

SECTION 526  

526   LIABILITY ON CERTAIN CONTRACTS  
Nothing in this Act invalidates a provision, in a policy of insurance or other contract, whereby the liability of individual members on the policy or contract is restricted or whereby the funds of the company are alone made liable in respect of the policy or contract.

SECTION 527  

527   NATURE OF CONTRIBUTORY ' S LIABILITY  

A contributory ' s liability is of the nature of a specialty debt according to the law of the Australian Capital Territory accruing due from the contributory when the contributory ' s liability commenced but payable at the times when calls are made for enforcing the liability.

SECTION 528  

528   DEATH OF CONTRIBUTORY  
If a contributory dies, whether before or after being placed on the list of contributories:

(a) his or her personal representatives are liable in due course of administration to contribute to the company's property in discharge of his or her liability to contribute and are contributories accordingly; and

(b) if his or her personal representatives default in paying any money that they are ordered to pay - proceedings may be taken for administering his or her estate and for compelling payment, out of the assets of that estate, of the money due.

SECTION 529  

529   BANKRUPTCY OF CONTRIBUTORY  
If a contributory becomes an insolvent under administration, or assigns his or her estate for the benefit of his or her creditors, whether before or after being placed on the list of contributories:

(a) his or her trustee is to represent him or her for the purposes of the winding up and is to be a contributory accordingly; and

(b) calls already made, and the estimated value of his or her liability to future calls, may be proved against his or her estate.

Division 3 - Liquidators  

SECTION 530  

530   APPOINTMENT OF 2 OR MORE LIQUIDATORS OF A COMPANY  

If 2 or more persons have been appointed as liquidators of a company:

(a) a function or power of a liquidator 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 order or resolution appointing them otherwise provides; and

(b) a reference in this Act to a liquidator, or to the liquidator, of a company is, in the case of the first-mentioned company, a reference to whichever one or more of those liquidators the case requires.

SECTION 530AA  

530AA   APPOINTMENT OF 2 OR MORE PROVISIONAL LIQUIDATORS OF A COMPANY  

If 2 or more persons have been appointed as provisional liquidators of a company:

(a) a function or power of a provisional liquidator 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 order appointing them otherwise provides; and

(b) a reference in this Act to a provisional liquidator, or to the provisional liquidator, of a company is, in the case of the first-mentioned company, a reference to whichever one or more of those provisional liquidators the case requires.

SECTION 530A   OFFICERS TO HELP LIQUIDATOR  

530A(1)   [ Delivery of books to liquidator]  

As soon as practicable after the Court orders that a company be wound up or appoints a provisional liquidator of a company, or a company resolves that it be wound up, each officer of the company must:

(a) deliver to the liquidator appointed for the purposes of the winding up, or to the provisional liquidator, as the case may be, all books in the officer's possession that relate to the company, other than books possession of which the officer is entitled, as against the company and the liquidator or provisional liquidator, to retain; and

(b) if the officer knows where other books relating to the company are - tell the liquidator or provisional liquidator where those books are.

530A(2)   [ Officers to attend on liquidator]  

Where a company is being wound up, or a provisional liquidator of a company is acting, an officer of the company must:

(a) attend on the liquidator or provisional liquidator at such times; and

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

(c) attend such meetings of the company's creditors or members;

as the liquidator or provisional liquidator reasonably requires.

530A(3)   [ Officer to help liquidator]  

An officer of a company that is being wound up must do whatever the liquidator reasonably requires the officer to do to help in the winding up.

530A(4)   [ Officer to help provisional liquidator]  

An officer of a company must do whatever a provisional liquidator of the company reasonably requires the officer to do to help in the performance or exercise of any of the provisional liquidator's functions and powers.

530A(5)   [ Officer to notify address]  

The liquidator or provisional liquidator of a company may require an officer of the company:

(a) to tell the liquidator the officer's residential address and work or business address; or

(b) to keep the liquidator informed of any change in either of those addresses that happens during the winding up.

530A(6)   [ Failure to comply]  

A person must not fail to comply with subsection (1), (2), (3) or (4), or with a requirement under subsection (5).

530A(6A)   [ Strict liability offence]  

An offence based on subsection (6) is an offence of strict liability.

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

530A(6B)   [ Reasonable excuse]  

Subsection (6) 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 (6B), see subsection 13.3(3) of the Criminal Code .

530A(7)   [ " officer " ]  

For the purposes of this section, officer includes a former officer.

530A(8)    
(Repealed by No 103 of 2004, s 3, Sch 9 [ 44] (effective 1 July 2004).)

530A(9)   [ Generality of section not limited]  

Nothing in this section limits the generality of anything else in it.

SECTION 530B   LIQUIDATOR'S RIGHTS TO COMPANY'S BOOKS  

530B(1)   [ Person cannot retain books]  

A person is not entitled, as against the liquidator of a company:

(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.

530B(2)   [ Secured creditor's possession of books]  

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 liquidator is entitled to inspect, and make copies of, such books at any reasonable time.

530B(3)   [ Hindrance or obstruction of liquidator]  

A person must not engage in conduct that results in the hindering or obstruction of a liquidator of a company in obtaining possession of books of the company.

530B(3A)   [ Limitation]  

Subsection (3) does not apply if the person is entitled, as against the company and the liquidator, to retain possession of the books.

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

530B(4)   [ Liquidator may require production of books]  

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

530B(5)  [ Time to comply with notice]  

A notice under subsection (4) must specify a period of at least 3 days as the period within which the notice must be complied with.

530B(6)   [ Duty to comply with notice]  

A person must comply with a notice under subsection (4).

530B(6A)   [ Limitation]  

Subsection (6) does not apply to the extent that the person is entitled, as against the company and the liquidator, to retain possession of the books.

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

530B(6B)   [ Strict liability offence]  

An offence based on subsection (6) is an offence of strict liability.

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

530B(7)   [ ``liquidator'']  

In this section:

liquidator
includes a provisional liquidator.

SECTION 530C   WARRANT TO SEARCH FOR, AND SEIZE, COMPANY ' S PROPERTY OR BOOKS  

530C(1)    
The Court may issue a warrant under subsection (2) if:

(a)    a company is being wound up or a provisional liquidator of a company is acting; and

(b)    on application by the liquidator or provisional liquidator, as the case may be, or by ASIC, the Court is satisfied that a person:

(i) has concealed or removed property of the company with the result that the taking of the property into the custody or control of the liquidator or provisional liquidator will be prevented or delayed; or

(ii) has concealed, destroyed or removed books of the company or is about to do so.

Note: This section applies to a CCIV in a modified form: see section 1237Z .

530C(2)    
The warrant may authorise a specified person, with such help as is reasonably necessary:

(a)    to search for and seize property or books of the company in the possession of the person referred to in subsection (1) ; and

(b)    to deliver, as specified in the warrant, property or books seized under it.

530C(3)    
In order to seize property or books under the warrant, the specified person may break open a building, room or receptacle where the property is or the books are, or where the person reasonably believes the property or books to be.

530C(4)    
A person who has custody of property or a book because of the execution of the warrant must retain it until the Court makes an order for its disposal.

SECTION 531  

531   BOOKS TO BE KEPT BY LIQUIDATOR  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 172] (effective 1 March 2017).)

SECTION 532   DISQUALIFICATION OF LIQUIDATOR  

532(1A)    
In this section:

liquidator
includes a provisional liquidator.

532(1)    
Subject to this section, a person must not consent to be appointed, and must not act, as liquidator of a company unless he or she is a registered liquidator.

532(2)    
Subject to this section, a person must not, except with the leave of the Court, seek to be appointed, or act, as liquidator of a company:

(a) if 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 a body corporate related to the company; or

(b) if the person is, otherwise than in his or her capacity as liquidator, a creditor of the company or of a related body corporate in an amount exceeding $5,000; or

(c) if:

(i) the person is an officer or employee of the company (otherwise than by reason of being a liquidator of the company or of a related body corporate); or

(ii) the person is an officer or employee of any body corporate that is a secured party in relation to property of the company; or

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

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

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

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

532(3)    
For the purposes of paragraph (2)(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.

532(4)    
Subsection (1) and paragraph (2)(c) do not apply to a members ' voluntary winding up of a proprietary company.

532(5)    
Paragraph (2)(c) does not apply to a creditors ' voluntary winding up if, by a resolution of the creditors passed at a meeting of the creditors of which 7 days notice has been given to every creditor stating the purpose of the meeting, it is determined that that paragraph does not so apply.

532(6)    

For the purposes of subsection (2), a person is taken to be an officer, employee or auditor of a company if:

(a) the person is an officer, employee or auditor of a related body corporate; or

(b) except where ASIC, if it thinks fit in the circumstances of the case, directs that this paragraph does not apply in relation to the person - the person has, at any time within the immediately preceding period of 2 years, been an officer, employee, auditor or promoter of the company or of a related body corporate.

532(7)    
(Repealed by No 11 of 2016, s 3, Sch 2[174] (effective 1 March 2017).)

532(8)    
A person must not consent to be appointed, and must not act, as liquidator of a company that is being wound up by order of the Court if the person is not entitled to act as such a liquidator in accordance with the current conditions (if any) imposed on the person.

532(9)    
A person must not be appointed as liquidator of a company unless the person has, before his or her appointment, consented in writing to act as liquidator of the company.

532(10)    

An offence based on subsection (1), (2), (8) or (9) is an offence of strict liability.

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

SECTION 533   REPORTS BY LIQUIDATOR  

533(1)    
If it appears to the liquidator of a company, in the course of a winding up of the company, that:

(a)    

a past or present officer or employee, or a member or contributory, of the company may have been guilty of an offence under a law of the Commonwealth or a State or Territory 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, any money or property of the company; or

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

(c)    the company may be unable to pay its unsecured creditors more than 50 cents in the dollar;

the liquidator must:

(d)    

as soon as practicable, and in any event within 6 months, after it so appears to him or her, lodge a report with respect to the matter and state in the report whether he or she proposes to make an application for an examination or order under section 597 ; and

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

533(2)    
The liquidator may also, if he or she thinks fit, lodge further reports specifying any other matter that, in his or her opinion, it is desirable to bring to the notice of ASIC.

533(3)    
If it appears to the Court, in the course of winding up a company:

(a)    

that a past or present officer or employee, or a contributory or member, of the company has been guilty of an offence under a law referred to in paragraph (1)(a) 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 the company has engaged in conduct referred to in paragraph (1)(b) in relation to the company;

and that the liquidator has not lodged with ASIC a report with respect to the matter, the Court may, on the application of a person interested in the winding up, direct the liquidator so to lodge such a report.

SECTION 534   PROSECUTION BY LIQUIDATOR OF DELINQUENT OFFICERS AND MEMBERS  

534(1)    
Where:

(a) a report has been lodged under section 533 ; and

(b) it appears to ASIC that the matter is not one in respect of which a prosecution ought to be begun;

it must inform the liquidator accordingly, and the liquidator may begin a prosecution for any offence referred to in the report.

534(2)    
ASIC may direct that the whole or a specified part of the costs and expenses properly incurred by a liquidator in proceedings under this section must be paid out of money of ASIC.

534(3)    

Subject to a direction under subsection (2), to any security interests in the property of the company and to any debts to which this Act gives priority, all such costs and expenses are payable out of that property as part of the costs of the winding up.

SECTION 535   WHEN LIQUIDATOR HAS QUALIFIED PRIVILEGE  

535(1)   [ Statements in the course of duty]  

A liquidator has qualified privilege in respect of a statement that he or she makes, whether orally or in writing, in the course of his or her duties as liquidator.

535(2)   [ ``liquidator'']  

In this section:

liquidator
includes a provisional liquidator.

SECTION 536  

536   SUPERVISION OF LIQUIDATORS  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 177] (effective 1 March 2017).)

SECTION 537   NOTICE OF APPOINTMENT AND ADDRESS OF LIQUIDATOR  

537(1A)    
In this section:

liquidator
includes a provisional liquidator.

537(1)    
A liquidator must, within 14 days after his or her appointment, lodge notice in the prescribed form of his or her appointment and of the address of his or her office and, in the event of any change in the situation of his or her office, must, within 14 days after the change, lodge notice in the prescribed form of the change.

537(2)    
A liquidator must, within 14 days after his or her resignation or removal from office, lodge notice of the resignation or removal in the prescribed form.

SECTION 538  

538   REGULATIONS RELATING TO MONEY ETC. RECEIVED BY LIQUIDATOR  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 177] (effective 1 March 2017).)

SECTION 539  

539   LIQUIDATOR ' S ACCOUNTS  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 177] (effective 1 March 2017).)

SECTION 540  

540   LIQUIDATOR TO REMEDY DEFAULTS  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 177] (effective 1 March 2017).)

Division 4 - General  

SECTION 541   NOTIFICATION THAT COMPANY IS IN LIQUIDATION  

541(1)   [ Obligation re ``in liquidation'']  

A company that is being wound up must set out, in every public document, and in every negotiable instrument, of the company, after the name of the company where it first appears, the expression in liquidation .

541(2)   [ 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 542  

542   BOOKS OF COMPANY  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 177] (effective 1 March 2017).)

SECTION 543   INVESTMENT OF SURPLUS FUNDS ON GENERAL ACCOUNT  

543(1)   [ Authorised investments]  

Whenever the cash balance standing to the credit of a company that is in the course of being wound up is in excess of the amount that, in the opinion of the committee of inspection, or, if there is no committee of inspection, of the liquidator, is required for the time being to answer demands in respect of the property of the company, the liquidator, if so directed in writing by the committee of inspection, or, if there is not committee of inspection, the liquidator himself or herself, may, unless the Court on application by any creditor thinks fit to order otherwise and so orders, invest the sum or any part of the sum:

(a) in any manner in which trustees are for the time being authorised by law to invest trust funds; or

(b) on deposit with an eligible money market dealer; or

(c) on deposit at interest with any bank;

and any interest received in respect of that money so invested forms part of the property of the company.

543(2)   [ Sale or realisation of securities]  

Whenever any part of the money so invested is, in the opinion of the committee of inspection, or, if there is no committee of inspection, of the liquidator, required to answer any demands in respect of the property of the company, the committee of inspection may direct, or, if there is no committee of inspection, the liquidator may arrange for, the sale or realisation of such part of the securities as is necessary.

SECTION 544   UNCLAIMED MONEY TO BE PAID TO ASIC  

544(1)   [ Payment to ASIC]  

Where a liquidator of a company has in his or her hands or under his or her control:

(a) any amount being a dividend or other money that has remained unclaimed for more than 6 months after the day when the dividend or other money became payable; or

(b) after making a final distribution, any unclaimed or undistributed amount of money arising from the property of the company;

he or she must forthwith pay that money to ASIC to be dealt with under Part 9.7.

544(1A)   [ Company with no members]  

If a liquidator has, or has control of, the money of a company that has no members, the liquidator must pay it to ASIC as soon as practicable for it to be dealt with under Part 9.7.

544(2)   [ Court's powers]  

The Court may at any time, on the application of ASIC:

(a) order a liquidator of a company to submit to it an account, verified by affidavit, of any unclaimed or undistributed funds, dividends or other money in his or her hands or under his or her control; and

(b) direct an audit of accounts submitted to it in accordance with paragraph (a); and

(c) direct a liquidator of a company to pay any money referred to in paragraph (a) to ASIC to be dealt with under Part 9.7.

544(3)   [ Receipt]  

Where a liquidator of a company pays money to ASIC pursuant to subsection (1) or (1A) or an order of the Court made under paragraph (2)(c), the liquidator is entitled to a receipt for the money so paid and the giving of that receipt discharges the liquidator from any liability in respect of the money.

544(4)   [ Court's ancillary powers]  

For the purposes of this section the Court may exercise all the powers conferred by this Act with respect to the discovery and realisation of the property of a company and the provisions of this Act with respect to the exercise of those powers apply, with such adaptations as are prescribed, to proceedings under this section.

544(5)   [ Operation of section]  

The provisions of this section do not, except as expressly declared in this Act, deprive a person of any other right or remedy to which the person is entitled against the liquidator or another person.

SECTION 545   EXPENSES OF WINDING UP WHERE PROPERTY INSUFFICIENT  

545(1)    
Subject to this section, a liquidator is not liable to incur any expense in relation to the winding up of a company unless there is sufficient available property.

545(2)    
The Court or ASIC may, on the application of a creditor or a contributory, direct a liquidator to incur a particular expense on condition that the creditor or contributory indemnifies the liquidator in respect of the recovery of the amount expended and, if the Court or ASIC so directs, gives such security to secure the amount of the indemnity as the Court or ASIC thinks reasonable.

545(3)    
Nothing in this section is taken to relieve a liquidator of any obligation to lodge a document (including a report) with ASIC under any provision of this Act by reason only that he or she would be required to incur expense in order to perform that obligation.

SECTION 546  

546   RESOLUTIONS PASSED AT ADJOURNED MEETINGS OF CREDITORS AND CONTRIBUTORIES  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 177] (effective 1 March 2017).)

SECTION 547  

547   MEETINGS TO ASCERTAIN WISHES OF CREDITORS OR CONTRIBUTORIES  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 177] (effective 1 March 2017).)

Division 5 - Committees of inspection  

Division 6 - Proof and ranking of claims  

Subdivision A - Admission to proof of debts and claims  

SECTION 553   DEBTS OR CLAIMS THAT ARE PROVABLE IN WINDING UP  

553(1)    

Subject to this Division and Division 8, in every winding up, all debts payable by, and all claims against, the company (present or future, certain or contingent, ascertained or sounding only in damages), being debts or claims the circumstances giving rise to which occurred before the relevant date, are admissible to proof against the company.

553(1A)    
Even though the circumstances giving rise to a debt payable by the company, or a claim against the company, occur on or after the relevant date, the debt or claim is admissible to proof against the company in the winding up if:

(a)    

both of the following are satisfied:

(i) the circumstances occur at a time when the company is under a deed of company arrangement;

(ii) the company is under the deed immediately before the resolution or court order that the company be wound up; or

(b)    

both of the following are satisfied:

(i) the circumstances occur at a time when the company is under restructuring;

(ii) the company is under restructuring immediately before the resolution or court order that the company be wound up; or

(c)    

both of the following are satisfied:

(i) the circumstances occur at a time when the company is under a restructuring plan;

(ii) the company is under the plan immediately before the resolution or court order that the company be wound up.

This subsection has effect subject to the other sections in this Division.

Note 1: See Division 10 of Part 5.3A for provisions dealing with deeds of company arrangement and regulations made under Division 3 of Part 5.3B for provisions dealing with restructuring plans.

Note 2: See paragraph 513A(d) for deeds that are followed immediately by court ordered winding up. See paragraphs 513B(c) , (d) and (da) for deeds that are followed immediately by voluntary winding up. Subsections 446A(2) and 446AA(2) and section 446B provide that companies are taken in certain circumstances to have passed resolutions that they be wound up.

Note 3: A debt or claim admissible to proof under paragraph (1A)(a) will only be covered by paragraph 556(1)(a) if the administrator of the deed is personally liable for the debt or claim (see subsection 556(1AA) ).

Note 4: A debt or claim admissible to proof under paragraph (1A)(b) will only be covered by paragraph 556(1)(a) if the restructuring practitioner for the company is personally liable for the debt or claim (see subsection 556(1AAA) ).

Note 5: A debt or claim admissible to proof under subsection (1A)(c) will only be covered by paragraph 556(1)(a) if the restructuring practitioner for the plan is personally liable for the debt or claim (see subsection 556(1AAB) ).

553(1B)    

For the purposes of applying the other sections of this Division, the relevant date for the debt or claim is:

(a)    if it is a debt or claim that is admissible to proof under paragraph (1A)(a) - the date on which the deed terminates; and

(b)    if it is a debt or claim that is admissible to proof under paragraph (1A)(b) - the date on which the restructuring ends; and

(c)    if it is a debt or claim that is admissible to proof under paragraph (1A)(c) - the date on which the plan terminates.

553(2)    
Where, after the relevant date, an order is made under section 91 of the ASIC Act against a company that is being wound up, the amount that, pursuant to the order, the company is liable to pay is admissible to proof against the company.

SECTION 553A  

553A   MEMBER CANNOT PROVE DEBT UNLESS CONTRIBUTIONS PAID  
A debt owed by a company to a person in the person's capacity as a member of the company, whether by way of dividends, profits or otherwise, is not admissible to proof against the company unless the person has paid to the company or the liquidator all amounts that the person is liable to pay as a member of the company.

SECTION 553AA  

553AA   SELLING SHAREHOLDER CANNOT PROVE DEBT UNLESS DOCUMENTS GIVEN  
The selling shareholder in a share buy-back may claim in a winding up of the company but is not entitled to a distribution of money or property unless the shareholder has discharged the shareholder's obligations to give documents in connection with the buy-back.

Note: The selling shareholder's claim ranks after those of non-member creditors and before those of other member creditors (see section 563AA).

SECTION 553AB   SUPERANNUATION CONTRIBUTION DEBTS NOT ADMISSIBLE TO PROOF  

553AB(1)   Whole of superannuation contribution debt.  

In a winding up, the liquidator 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, or by way of a liability to pay the amount of an estimate under Division 268 in Schedule 1 to the Taxation Administration Act 1953 :

(i) has been paid; or

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

(b) the liquidator is satisfied that the superannuation guarantee charge or estimate liability is attributable to the whole of the first-mentioned debt.

553AB(2)    
If the liquidator determines, under subsection (1), that the whole of a debt is not admissible to proof against the company, the whole of the debt is extinguished.

553AB(3)   Part of superannuation contribution debt.  

In a winding up, the liquidator 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, or by way of a liability to pay the amount of an estimate under Division 268 in Schedule 1 to the Taxation Administration Act 1953 :

(i) has been paid; or

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

(b) the liquidator is satisfied that the superannuation guarantee charge or estimate liability is attributable to that part of the first-mentioned debt.

553AB(4)    
If the liquidator determines, under subsection (3), that a part of a debt is not admissible to proof against the company, that part of the debt is extinguished.

553AB(5)   Definition.  

In this section:

superannuation contribution
has the same meaning as in section 556 .

SECTION 553B   INSOLVENT COMPANIES - PENALTIES AND FINES NOT GENERALLY PROVABLE  

553B(1)   [ Penalties and fines not provable]  

Subject to subsection (2), penalties or fines imposed by a court in respect of an offence against a law are not admissible to proof against an insolvent company.

553B(2)   [ Proceeds of Crime Act 1987]  

An amount payable under a pecuniary penalty order, or an interstate pecuniary penalty order, within the meaning of the Proceeds of Crime Act 1987 , is admissible to proof against an insolvent company.

SECTION 553C   INSOLVENT COMPANIES - MUTUAL CREDIT AND SET-OFF  

553C(1)   [ Company insolvent]  

Subject to subsection (2), where there have been mutual credits, mutual debts or other mutual dealings between an insolvent company that is being wound up and a person who wants to have a debt or claim admitted against the company:

(a) an account is to be taken of what is due from the one party to the other in respect of those mutual dealings; and

(b) the sum due from the one party is to be set off against any sum due from the other party; and

(c) only the balance of the account is admissible to proof against the company, or is payable to the company, as the case may be.

553C(2)   [ No set-off where knowledge that company insolvent]  

A person is not entitled under this section to claim the benefit of a set-off if, at the time of giving credit to the company, or at the time of receiving credit from the company, the person had notice of the fact that the company was insolvent.

SECTION 553D   DEBTS OR CLAIMS MAY BE PROVED FORMALLY OR INFORMALLY  

553D(1)   [ Liquidator may require formal proof]  

A debt or claim must be proved formally if the liquidator, in accordance with the regulations, requires it to be proved formally.

553D(2)   [ No formal proof required]  

A debt or claim that is not required to be proved formally:

(a) may be proved formally; or

(b) may be proved in some other way, subject to compliance with the requirements of the regulations (if any) relating to the informal proof of debts and claims.

553D(3)   [ How debt proved formally]  

A debt or claim is proved formally if it satisfies the requirements of the regulations relating to the formal proof of debts and claims.

SECTION 553E  

553E   APPLICATION OF BANKRUPTCY ACT TO WINDING UP OF INSOLVENT COMPANY  

Subject to this Division, in the winding up of an insolvent company the same rules are to prevail and be observed with regard to debts provable as are in force for the time being under the Bankruptcy Act 1966 in relation to the estates of bankrupt persons (except the rules in sections 82 to 94 (inclusive) and 96 of that Act), and all persons who in any such case would be entitled to prove for and receive dividends out of the property of the company may come in under the winding up and make such claims against the company as they respectively are entitled to because of this section.

Subdivision B - Computation of debts and claims  

SECTION 554   GENERAL RULE - COMPUTE AMOUNT AS AT RELEVANT DATE  

554(1)   [ Computation as at relevant date]  

The amount of a debt or claim of a company (including a debt or claim that is for or includes interest) is to be computed for the purposes of the winding up as at the relevant date.

554(2)   [ Exception]  

Subsection (1) does not apply to an amount admissible to proof under subsection 553(2).

SECTION 554A   DETERMINATION OF VALUE OF DEBTS AND CLAIMS OF UNCERTAIN VALUE  

554A(1)   [ Debt admitted with no certain value]  

This section applies where, in the winding up of a company, the liquidator admits a debt or claim that, as at the relevant date, did not bear a certain value.

554A(2)   [ Liquidator's duty]  

The liquidator must:

(a) make an estimate of the value of the debt or claim as at the relevant date; or

(b) refer the question of the value of the debt or claim to the Court.

554A(3)   [ Appeal against liquidator's estimate]  

A person who is aggrieved by the liquidator's estimate of the value of the debt or claim may, in accordance with the regulations, appeal tothe Court against the liquidator's estimate.

554A(4)   [ Court to estimate value]  

If:

(a) the liquidator refers the question of the value of the debt or claim to the Court; or

(b) a person appeals to the Court against the liquidator's estimate of the value of the debt or claim;

the Court must:

(c) make an estimate of the value of the debt or claim as at the relevant date; or

(d) determine a method to be applied by the liquidator in working out the value of the debt or claim as at the relevant date.

554A(5)   [ Method of valuation determined by Court]  

If the Court determines a method to be applied by the liquidator in working out the value of the debt or claim, the liquidator must work out the value of the debt or claim as at the relevant date in accordance with that method.

554A(6)   [ Appeal against application of valuation method]  

If:

(a) the Court has determined a method to be applied by the liquidator in working out the value of the debt or claim as at the relevant date; and

(b) a person is aggrieved by the way in which that method has been applied by the liquidator in working out that value;

the person may, in accordance with the regulations, appeal to the Court against the way in which the method was applied.

554A(7)   [ Court to apply valuation method]  

If:

(a) a person appeals to the Court against the way in which the liquidator, in working out the value of the debt or claim, applied a method determined by the court; and

(b) the Court is satisfied that the liquidator did not correctly apply that method;

the Court must work out the value of the debt or claim as at the relevant date in accordance with that method.

554A(8)   [ Amount of claim admissible to proof]  

For the purposes of this Division, the amount of the debt or claim that is admissible to proof is the value as estimated or worked out under this section.

SECTION 554B  

554B   DISCOUNTING OF DEBTS PAYABLE AFTER RELEVANT DATE  
The amount of a debt that is admissible to proof but that, as at the relevant date, was not payable by the company until an ascertained or ascertainable date (the future date ) after the relevant date is the amount payable on the future date reduced by the amount of the discount worked out in accordance with the regulations.

SECTION 554C   CONVERSION INTO AUSTRALIAN CURRENCY OF FOREIGN CURRENCY DEBTS OR CLAIMS  

554C(1)   [ Claim in foreign currency]  

This section applies if the amount of a debt or claim admissible to proof against a company would, apart from this section, be an amount of foreign currency.

554C(2)   [ Pre-existing agreement]  

If the company and the creditor or claimant have, in an instrument created before the relevant date, agreed on a method to be applied for the purpose of converting the company's liability in respect of the debt or claim into Australian currency, the amount of the debt or claim that is admissible to proof is the equivalent in Australian currency of the amount of foreign currency, worked out as at the relevant date and in accordance with the agreed method.

554C(3)   [ Conversion rate in other cases]  

If subsection (2) does not apply, the amount of the debt or claim that is admissible to proof is the equivalent in Australian currency of the amount of foreign currency, worked out by reference to the opening carded on demand airmail buying rate in relation to the foreign currency available at the Commonwealth Bank of Australia on the relevant date.

Subdivision C - Special provisions relating to secured creditors of insolvent companies  

SECTION 554D   APPLICATION OF SUBDIVISION  

554D(1)   [ Application]  

This Subdivision applies in relation to the proof of a secured debt in the winding up of an insolvent company.

554D(2)   [ Amount of debt calculated as at relevant date]  

For the purposes of the application of this Subdivision in relation to a secured debt of an insolvent company that is being wound up, the amount of the debt is taken to be the amount of the debt as at the relevant date (as worked out in accordance with Subdivision B).

SECTION 554E   PROOF OF DEBT BY SECURED CREDITOR  

554E(1)    
In the winding up of an insolvent company, a secured creditor is not entitled to prove the whole or a part of the secured debt otherwise than in accordance with this section and with any other provisions of this Act or the regulations that are applicable to proving the debt.

554E(2)    
The creditor ' s proof of debt must be in writing.

554E(3)    

If the creditor surrenders the security interest to the liquidator for the benefit of creditors generally, the creditor may prove for the whole of the amount of the secured debt.

554E(4)    

If the creditor realises the security interest, the creditor may prove for any balance due after deducting the net amount realised, unless the liquidator is not satisfied that the realisation has been effected in good faith and in a proper manner.

554E(5)    

If the creditor has not realised or surrendered the security interest, the creditor may:

(a) estimate its value; and

(b) prove for the balance due after deducting the value so estimated.

554E(6)    

If subsection (5) applies, the proof of debt must include particulars of the security interest and the creditor ' s estimate of its value.

SECTION 554F   REDEMPTION OF SECURITY INTEREST BY LIQUIDATOR  

554F(1)    

This section applies where a secured creditor ' s proof of debt is in respect of the balance due after deducting the creditor ' s estimate of the value of the security interest.

554F(2)    

The liquidator may, at any time, redeem the security interest on payment to the creditor of the amount of the creditor ' s estimate of its value.

554F(3)    

If the liquidator is dissatisfied with the amount of the creditor ' s estimate of the value of the security interest, the liquidator may require the property comprised in the security interest to be offered for sale at such times and on such terms and conditions as are agreed on by the creditor and the liquidator or, in default of agreement, as the Court determines.

554F(4)    
If the property is offered for sale by public auction, both the creditor and the liquidator are entitled to bid for, and purchase, the property.

554F(5)    

The creditor may at any time, by notice in writing, require the liquidator to elect whether to exercise the power to redeem the security interest or to require it to be sold and, if the liquidator does not, within 3 months after receiving the notice, notify the creditor, in writing, that the liquidator elects to exercise the power:

(a) the liquidator is not entitled to exercise it; and

(b) subject to subsection (6), any equity of redemption or other interest in the property comprised in the security interest that is vested in the company or the liquidator vests in the creditor; and

(c) the amount of the creditor ' s debt is, for the purposes of this Division, taken to be reduced by the amount of the creditor ' s estimate of the value of the security interest.

554F(6)    
The vesting of an equity of redemption or other interest in property because of paragraph (5)(b) is subject to compliance with any law requiring the transmission of such interests in property to be registered.

SECTION 554G   AMENDMENT OF VALUATION  

554G(1)    

If a secured creditor ' s proof of debt is in respect of the balance due after deducting the creditor ' s estimate of the value of the security interest, the creditor may, at any time, apply to the liquidator or the Court for permission to amend the proof of debt by altering the estimated value.

554G(2)    
If the liquidator or the Court is satisfied:

(a) that the estimate of the value of the security interest was made in good faith on a mistaken basis; or

(b) that the value of the security interest has changed since the estimate wasmade;

the liquidator or the Court may permit the creditor to amend the proof of debt accordingly.

554G(3)    
If the Court permits the creditor to amend the proof of debt, it may do so on such terms as it thinks just and equitable.

SECTION 554H   REPAYMENT OF EXCESS  

554H(1)   [ Excess to be paid to liquidator]  

Where a creditor who has amended a proof of debt under section 554G has received, in the winding up of the debtor company, an amount in excess of the amount to which the creditor would have been entitled under the amended proof of debt, the creditor must, without delay, repay the amount of the excess to the liquidator.

554H(2)   [ Creditor to be paid deficiency where money remaining for distribution]  

Where a creditor who has so amended a proof of debt has received, in the winding up of the debtor company, less than the amount to which the creditor would have been entitled under the amended proof of debt, the creditor is entitled to be paid, out of the money remaining for distribution in the winding up, the amount of the deficiency before any of that money is applied in the payment of future distributions, but the creditor is not entitled to affect a distribution made before the amendment of the proof of debt.

SECTION 554J  

554J   SUBSEQUENT REALISATION OF SECURITY INTEREST  

Where:

(a) a secured creditor ' s proof of debt is in respect of the balance due after deducting the creditor ' s estimate of the value of the security interest; and

(b) subsequently:

(i) the creditor realises the security interest; or

(ii) the security interest is realised under section 554F ;

the net amount realised is to be substituted for the estimated value of the security interest and section 554H applies as if the proof of debt had been amended accordingly under section 554G .

Subdivision D - Priorities  

SECTION 555  

555   DEBTS AND CLAIMS PROVED TO RANK EQUALLY EXCEPT AS OTHERWISE PROVIDED  
Except as otherwise provided by this Act, all debts and claims proved in a winding up rank equally and, if the property of the company is insufficient to meet them in full, they must be paid proportionately.

SECTION 556   PRIORITY PAYMENTS  

556(1)    
Subject to this Division, in the winding up of a company the following debts and claims must be paid in priority to all other unsecured debts and claims:

(a)    first, expenses (except deferred expenses) properly incurred by a relevant authority in preserving, realising or getting in property of the company, or in carrying on the company ' s business;

(b)    if the Court ordered the winding up - next, the costs in respect of the application for the order (including the applicant ' s taxed costs payable under section 466 );

(ba)    

if:

(i) during the period of 12 months ending when the winding up commenced, an application (the first application ) was made under section 459P for the company to be wound up in insolvency; and

(ii) when the first application was made, the company was not under administration or restructuring; and

(iii) the company began to be under administration or restructuring at a time after the first application was made; and

(iv) the first application was not withdrawn or dismissed before the administration or restructuring began; and

(v) the Court did not, in response to the first application, make an order under section 459A that the company be wound up in insolvency;

next, the costs in respect of the first application;

(c)    

next:

(i) the debts for which paragraph 443D(a) or (aa) entitles an administrator of the company to be indemnified (even if the administration ended before the relevant date), except expenses covered by paragraph (a) of this subsection and deferred expenses; and

(ii) the debts for which paragraph 456J(a) or (b) entitles a restructuring practitioner for the company to be indemnified (even if the restructuring ended before the relevant date), except expenses covered by paragraph (a) of this subsection and deferred expenses;

(d) (Repealed)

(da)    if the Court ordered the winding up - next, costs and expenses that are payable under subsection 475(8) out of the company ' s property;

(daa)    

if the company resolved by special resolution that it be wound up voluntarily - next, costs and expenses that are payable under subsection 446C(8) out of the company ' s property;

(db)    

next, costs that form part of the expenses of the winding up because of subsection 539(6) , or subsection 70-15(5) (audit of administration books by ASIC) or section 90-27 (review by another registered liquidator) of Schedule 2 ;

(dc) (Repealed)

(dd)    next, any other expenses (except deferred expenses) properly incurred by a relevant authority;

(de)    next, the deferred expenses;

(df)    if a committee of inspection has been appointed for the purposes of the winding up - next, expenses incurred by a person as a member of the committee;

(e)    

subject to subsection (1A) - next:

(i) wages, superannuation contributions and superannuation guarantee charge payable by the company in respect of services rendered to the company by employees before the relevant date; or

(ii) liabilities to pay the amounts of estimates under Division 268 in Schedule 1 to the Taxation Administration Act 1953 of superannuation guarantee charge mentioned in subparagraph (i);

(f)    next, amounts due in respect of injury compensation, being compensation the liability for which arose before the relevant date;

(g)    subject to subsection (1B) - next, all amounts due:

(i) on or before the relevant date; and

(ii) because of an industrial instrument; and

(iii) to, or in respect of, employees of the company; and

(iv) in respect of leave of absence;

(h)    subject to subsection (1C) - next, retrenchment payments payable to employees of the company.

556(1AA)    

Paragraph (1)(a) does not apply to expenses:

(a)    incurred by the administrator of a deed of company arrangement; and

(b)    

relating to a debt or claim admissible to proof under paragraph 553(1A)(a) ;

unless the administrator is personally liable for the expenses.

556(1AAA)    

Paragraph (1)(a) does not apply to expenses:

(a)    incurred by the restructuring practitioner for a company; and

(b)    relating to a debt or claim admissible to proof under paragraph 553(1A)(b) ;

unless the restructuring practitioner is personally liable for the expenses.

556(1AAB)    

Paragraph (1)(a) does not apply to expenses:

(a)    incurred by the restructuring practitioner for a restructuring plan; and

(b)    relating to a debt or claim admissible to proof under paragraph 553(1A)(c) ;

unless the restructuring practitioner is personally liable for the expenses.

Superannuation guarantee charge

556(1A)    
The amount or total paid under paragraph (1)(e) to, or in respect of, an excluded employee of the company must be such that so much (if any) of it as is attributable to non-priority days does not exceed $2,000.

556(1AB)    

For the purposes of paragraph (1)(e), if:

(a)    the company has a superannuation guarantee shortfall for a quarter; and

(b)    the shortfall relates to one or more employees; and

(c)    the quarter ends before the relevant date;

superannuation guarantee charge in respect of the quarter is taken to be payable by the company in respect of services rendered to the company by those employees before the relevant date.

556(1AC)    

If:

(a)    the company has a superannuation guarantee shortfall for a quarter; and

(b)    the shortfall relates to one or more employees; and

(c)    the relevant date occurs during the quarter; and

(d)    the relevant date is not the first day of the quarter;

then:

(e)    for the purposes of paragraph (1)(e), so much of the superannuation guarantee charge in respect of the quarter as is attributable to the period before the relevant date is taken to be payable by the company in respect of services rendered to the company by those employees before the relevant date; and

(f)    the remainder of the superannuation guarantee charge in respect of the quarter is taken:

(i) to be an expense referred to in paragraph (1)(a); and

(ii) not to be an amount of superannuation guarantee charge referred in paragraph (1)(e).

556(1AD)    

If:

(a)    the company has a superannuation guarantee shortfall for a quarter; and

(b)    the shortfall relates to one or more employees; and

(c)    the relevant date is the first day of the quarter;

the superannuation guarantee charge in respect of the quarter is taken:

(d)   to be an expense referred to in paragraph (1)(a); and

(e)    not to be an amount of superannuation guarantee charge referred in paragraph (1)(e).

556(1AE)    

For the purposes of paragraph (1)(e), if:

(a)    the company has a superannuation guarantee shortfall for a quarter; and

(b)    the shortfall relates to one or more employees; and

(c)    the quarter begins after the relevant date; and

(d)    one or more payments were made by the company during the quarter on account of wages payable to those employees in respect of services rendered to the company by those employees before the relevant date; and

(e)    those payments were made as a result of an advance of money by a person after the relevant date for the purpose of making those payments;

then:

(f)    for the purposes of paragraph (1)(e), so much of the superannuation guarantee charge in respect of the quarter as is attributable to those payments is taken to be payable by the company in respect of services rendered to the company by those employees before the relevant date; and

(g)    the remainder of the superannuation guarantee charge in respect of the quarter is taken:

(i) to be an expense referred to in paragraph (1)(a); and

(ii) not to be an amount of superannuation guarantee charge referred in paragraph (1)(e).

556(1AF)    

If:

(a)    the company has a superannuation guarantee shortfall for a quarter; and

(b)    the shortfall relates to one or more employees; and

(c)    the relevant date occurs during the quarter; and

(d)    one or more payments were made by the company during the quarter on account of wages payable to those employees in respect of services rendered to the company by those employees before the relevant date; and

(e)    those payments were made as a result of an advance of money by a person after the relevant date for the purpose of making those payments;

then:

(f)    for the purposes of paragraph (1)(e), so much of the superannuation guarantee charge in respect of the quarter as is attributable to either or both of the following:

(i) those payments;

(ii) the period before the relevant date;

is taken to be payable by the company in respect of services rendered to the company by those employees before the relevant date; and

(g)    the remainder of the superannuation guarantee charge in respect of the quarter is taken:

(i) to be an expense referred to in paragraph (1)(a); and

(ii) not to be an amount of superannuation guarantee charge referred in paragraph (1)(e); and

(h)    subsections (1AC) and (1AD) do not apply to the superannuation guarantee charge in respect of the quarter.

556(1AG)    

Subsections (1AC) to (1AF) apply to a liability to pay the amount of an estimate of superannuation guarantee charge for a quarter in the same way as they apply to superannuation guarantee charge payable for the quarter.

Leave amounts

556(1B)    
The amount or total paid under paragraph (1)(g) to, or in respect of, an excluded employee of the company must be such that so much (if any) of it as is attributable to non-priority days does not exceed $1,500.

Retrenchment payments

556(1C)    
A payment under paragraph (1)(h) to an excluded employee of the company must not include an amount attributable to non-priority days.

Definitions

556(2)    

In this section:

company
means a company that is being wound up.

deferred expenses
, in relation to a company, means expenses properly incurred by a relevant authority, in so far as they consist of:

(a) remuneration, or fees for services, payable to the relevant authority; or

(b) expenses incurred by the relevant authority in respect of the supply of services to the relevant authority by:

(i) a partnership of which the relevant authority is a member; or

(ii) an employee of the relevant authority; or

(iii) a member or employee of such a partnership; or

(c) expenses incurred by the relevant authority in respect of the supply to the relevant authority of services that it is reasonable to expect could have instead been supplied by:

(i) the relevant authority; or

(ii) a partnership of which the relevant authority is a member; or

(iii) an employee of the relevant authority; or

(iv) a member or employee of such a partnership.

employee
, in relation to a company, means a person:

(a) who has been or is an employee of the company, whether remunerated by salary, wages, commission or otherwise; and

(b) whose employment by the company commenced before the relevant date.

excluded employee
, in relation to a company, means:

(a) an employee of the company who has been:

(i) at any time during the period of 12 months ending on the relevant date; or

(ii) at any time since the relevant date;

or who is, a director of the company;

(b) an employee of the company who has been:

(i) at any time during the period of 12 months ending on the relevant date; or

(ii) at any time since the relevant date;

or who is, the spouse of an employee of the kind referred to in paragraph (a); or

(c) an employee of the company who is a relative (other than a spouse) of an employee of the kind referred to in paragraph (a).

non-priority day
, in relation to an excluded employee of a company, means a day on which the employee was:

(a) if paragraph (a) of the definition of excluded employee applies - a director of the company; or

(b) if paragraph (b) of that definition applies - a spouse of an employee of the kind referred to in paragraph (a) of that definition; or

(c) if paragraph (c) of that definition applies - a relative (other than a spouse) of an employee of the kind referred to in paragraph (a) of that definition;

even if the day was more than 12 months before the relevant date.

official manager
(Repealed by No 132 of 2007, s 3, Sch 5 [ 12].)

quarter
has the same meaning as in the Superannuation Guarantee (Administration) Act 1992 .

relevant authority
, in relation to a company, means any of the following:

(a) in any case - a liquidator or provisional liquidator of the company;

(b) (Repealed)

(c) in any case - an administrator of the company, even if the administration ended before the winding up began;

(d) in any case - an administrator of a deed of company arrangement executed by the company, even if the deed terminated before the winding up began;

(e) in any case - a restructuring practitioner for the company, even if the restructuring ended before the winding up began;

(f) in any case - a restructuring practitioner for a restructuring plan made by the company, even if the plan terminated before the winding up began.

retrenchment payment
, in relation to an employee of a company, means an amount payable by the company to the employee, by virtue of an industrial instrument, in respect of the termination of the employee ' s employment by the company, whether the amount becomes payable before, on or after the relevant date.

spouse
(Repealed by No 144 of 2008, s 3, Sch 14, Pt 3 [ 148].)

superannuation contribution
, in relation to a company, means a contribution by the company to a fund or scheme for the purposes of making provision for, or obtaining, superannuation benefits (including defined benefits) for an employee of the company, or for dependants of such an employee.

SECTION 558   DEBTS DUE TO EMPLOYEES  

558(1)   [ Date of termination of employment]  

Where a contract of employment with a company being wound up was subsisting immediately before the relevant date, the employee under the contract is, whether or not he or she is a person referred to in subsection (2), entitled to payment under section 556 as if his or her services with the company had been terminated by the company on the relevant date.

558(2)   [ Deemed employment after relevant date]  

Where, for the purposes of the winding up of a company, a liquidator employs a person whose services with the company had been terminated by reason of the winding up, that person is, for the purpose of calculating any entitlement to payment for leave of absence, or any entitlement to a retrenchment amount in respect of employment, taken, while the liquidator employs him or her for those purposes, to be employed by the company.

558(3)   [ Long service leave]  

Subject to subsection (4), where, after the relevant date, an amount in respect of long service leave or extended leave, or a retrenchment amount, becomes payable to a person referred to in subsection (2) in respect of the employment so referred to, the amount is a cost of the winding up.

558(4)   [ Length of qualifying service]  

Where, at the relevant date, the length of qualifying service of a person employed by a company that is being wound up is insufficient to entitle him or her to any amount in respect of long service leave or extended leave, or to any retrenchment amount in respect of employment by the company, but, by the operation of subsection (2) he or she becomes entitled to such an amount after that date, that amount:

(a) is a cost of the winding up to the extent of an amount that bears to that amount the same proportion as the length of his or her qualifying service after that relevant date bears to the total length of his or her qualifying service; and

(b) is, to the extent of the balance of that amount, taken, for the purposes of section 556, to be an amount referred to in paragraph 556(1)(g), or a retrenchment payment payable to the person, as the case may be.

558(5)   [ ``retrenchment amount'']  

In this section, retrenchment amount , in relation to employment of a person, means an amount payable to the person, by virtue of an industrial instrument, in respect of termination of the employment.

SECTION 559  

559   DEBTS OF A CLASS TO RANK EQUALLY  
The debts of a class referred to in each of the paragraphs of subsection 556(1) rank equally between themselves and must be paid in full, unless the property of the company is insufficient to meet them, in which case they must be paid proportionately.

SECTION 560  

560   ADVANCES FOR COMPANY TO MAKE PRIORITY PAYMENTS IN RELATION TO EMPLOYEES  

If:

(a) a payment has been made by a company:

(i) on account of wages; or

(ii) on account of superannuation contributions (within the meaning of section 556 ); or

(iii) in respect of leave of absence, or termination of employment, under an industrial instrument; and

(b) the payment was made as a result of an advance of money by a person (whether before, on or after the relevant date) for the purpose of making the payment;

then:

(c) the person by whom the money was advanced has the same rights under this Chapter as a creditor of the company; and

(d) subject to paragraph (e), the person by whom the money was advanced has, in the winding up of the company, the same right of priority of payment in respect of the money so advanced and paid as the person who received the payment would have had if the payment had not been made; and

(e) the right of priority conferred by paragraph (d) is not to exceed the amount by which the sum in respect of which the person who received the payment would have been entitled to priority in the winding up has been diminished by reason of the payment.

SECTION 561  

561   PRIORITY OF EMPLOYEES ' CLAIMS OVER CIRCULATING SECURITY INTERESTS  

So far as the property of a company available for payment of creditors other than secured creditors is insufficient to meet payment of:

(a) any debt referred to in paragraph 556(1)(e), (g) or (h); and

(b) any amount that pursuant to subsection 558(3) or (4) is a cost of the winding up, being an amount that, if it had been payable on or before the relevant date, would have been a debt referred to in paragraph 556(1)(e), (g) or (h); and

(c) any amount in respect of which a right of priority is given by section 560;

payment of that debt or amount must be made in priority over the claims of a secured party in relation to a circulating security interest created by the company and may be made accordingly out of any property comprised in or subject to the circulating security interest.

SECTION 562   APPLICATION OF PROCEEDS OF CONTRACTS OF INSURANCE  

562(1)   [ Priority of third parties to insurance moneys]  

Where a company is, under a contract of insurance (not being a contract of reinsurance) entered into before the relevant date, insured against liability to third parties, then, if such a liability is incurred by the company (whether before or after the relevant date) and an amount in respect of that liability has been or is received by the company or the liquidator from the insurer, the amount must, after deducting any expenses of or incidental to getting in that amount, be paid by the liquidator to the third party in respect of whom the liability was incurred to the extent necessary to discharge that liability, or any part of that liability remaining undischarged, in priority to all payments in respect of the debts mentioned in section 556.

562(2)   [ Right to shortfall]  

If the liability of the insurer to the company is less than the liability of the company to the third party, subsection (1) does not limit the rights of the third party in respect of the balance.

562(3)   [ Agreement to contrary]  

This section has effect notwithstanding any agreement to the contrary.

SECTION 562A   APPLICATION OF PROCEEDS OF CONTRACTS OF REINSURANCE  

562A(1)   [ Application]  

This section applies where:

(a) a company is insured, under a contract of reinsurance entered into before the relevant date, against liability to pay amounts in respect of a relevant contract of insurance or relevant contracts of insurance; and

(b) an amount in respect of that liability has been or is received by the company or the liquidator under the contract of reinsurance.

562A(2)   [ Amount received in reinsurance exceeds amounts payable by company]  

Subject to subsection (4), if the amount received, after deducting expenses of or incidental to getting in that amount, equals or exceeds the total of all the amounts that are payable by the company under relevant contracts of insurance, the liquidator must, out of the amount received and in priority to all payments in respect of the debts mentioned in section 556 , pay the amounts that are so payable under those contracts of insurance.

562A(3)   [ Calculation where s 562A(2) does not apply]  

Subject to subsection (4), if subsection (2) does not apply, the liquidator must, out of the amount received and in priority to all payments in respect of the debts mentioned in section 556 , pay to each person to whom an amount is payable by the company under a relevant contract of insurance an amount calculated in accordance with the formula:

Particular amount owed Total amount owed

×

Reinsurance payment

where:

particular amount owed
means the amount payable to the person under the relevant contract of insurance.

reinsurance payment
means the amount received under the contract of reinsurance, less any expenses of or incidental to getting in that amount.

total amount owed
means the total of all the amounts payable by the company under relevant contracts of insurance.

562A(4)   [ Court may order payment of different amount]  

The Court may, on application by a person to whom an amount is payable under a relevant contract of insurance, make an order to the effect that subsections (2) and (3) do not apply to the amount received under the contract of reinsurance and that that amount must, instead, be applied by the liquidator in the manner specified in the order, being a manner that the Court considers just and equitable in the circumstances.

562A(5)   [ Matters to be considered by Court]  

The matters that the Court may take into account in considering whether to make an order under subsection (4) include, but are not limited to:

(a) whether it is possible to identify particular relevant contracts of insurance as being the contracts in respect of which the contract of reinsurance was entered into; and

(b) whether it is possible to identify persons who can be said to have paid extra in order to have particular relevant contracts of insurance protected by reinsurance; and

(c) whether particular relevant contracts of insurance include statements to the effect that the contracts are to be protected by reinsurance; and

(d) whether a person to whom an amount is payable under a relevant contract of insurance would be severely prejudiced if subsections (2) and (3) applied to the amount received under the contract of reinsurance.

562A(6)   [ Insured person's rights unaffected]  

If receipt of a payment under this section only partially discharges a liability of the company to a person, nothing in this section affects the rights of the person in respect of the balance of the liability.

562A(7)   [ Agreement to contrary]  

This section has effect despite any agreement to the contrary.

562A(8)   [ " relevant contract of insurance " ]  

In this section:

relevant contract of insurance
means a contract of insurance entered into by the company, as insurer, before the relevant date.

SECTION 563   PROVISIONS RELATING TO INJURY COMPENSATION  

563(1)   [ Injury compensation]  

Notwithstanding anything in section 556, paragraph 556(1)(f) does not apply in relation to the winding up of a company in any case where:

(a) the company is being wound up voluntarily merely for the purpose of reconstruction or of amalgamation with another company and the right to the injury compensation has, on the reconstruction or amalgamation, been preserved to the person entitled to it; or

(b) the company has entered into a contract with an insurer in respect of any liability for injury compensation.

563(2)   [ Periodical payments]  

Where injury compensation is payable by way of periodical payments, the amount of that compensation is, for the purposes of paragraph 556(1)(f), taken to be the lump sum for which those periodical payments could, if redeemable, be redeemed under the law under which the periodical payments are made.

SECTION 563AA   SELLER UNDER A BUY-BACK AGREEMENT  

563AA(1)   [ Seller's debt postponed to other creditors]  

The selling shareholder's claim under a buy-back agreement is postponed until all debts owed to people otherwise than as members of the company have been satisfied.

563AA(2)   [ Section 563A not applicable]  

The shareholder's claim is not a debt owed by the company to the seller in the shareholder's capacity as a member of the company for the purposes of section 563A.

SECTION 563A   POSTPONING SUBORDINATE CLAIMS  

563A(1)   [ Payment of subordinate claims postponed]  

The payment of a subordinate claim against a company is to be postponed until all other debts payable by, and claims against, the company are satisfied.

563A(2)   [ Definitions]  

In this section:

claim
means a claim that is admissible to proof against the company (within the meaning of section 553).

debt
means a debt that is admissible to proof against the company (within the meaning of section 553).

subordinate claim
means:

(a) a claim for a debt owed by the company to a person in the person ' s capacity as a member of the company (whether by way of dividends, profits or otherwise); or

(b) any other claim that arises from buying, holding, selling or otherwise dealing in shares in the company.

SECTION 563AAA   REDEMPTION OF DEBENTURES  

563AAA(1)   Priorities.  

Debentures of a company under a trust deed that are issued in place of debentures under that deed that have been redeemed have the priority that the redeemed debentures would have had if they had never been redeemed.

563AAA(2)   Deposit of debentures to secure advance.  

Debentures of a company are not to be taken to be redeemed merely because:

(a) the debentures secure advances on current account or otherwise; and

(b) the company's account ceases to be in debit while those debentures remain available.

Subdivision E - Miscellaneous  

SECTION 563B   INTEREST ON DEBTS AND CLAIMS FROM RELEVANT DATE TO DATE OF PAYMENT  

563B(1)   [ When interest payable]  

If, in the winding up of a company, the liquidator pays an amount in respect of an admitted debt or claim, there is also payable to the debtor or claimant, as a debt payable in the winding up, interest, at the prescribed rate, on the amount of the payment in respect of the period starting on the relevant date and ending on the day on which the payment is made.

563B(2)   [ Postponement of interest payment]  

Subject to subsection (3), payment of the interest is to be postponed until all other debts and claims in the winding up have been satisfied, other than subordinate claims (within the meaning of section 563A).

563B(3)   [ Limitation]  

If the admitted debt or claim is a debt to which section 554B applied, subsection (2) does not apply to postpone payment of so much of the interest as is attributable to the period starting at the relevant date and ending on the earlier of:

(a) the day on which the payment is made; and

(b) the future date, within the meaning of section 554B.

SECTION 563C   DEBT SUBORDINATION  

563C(1)   [ Where debt subordination enforceable]  

Nothing in this Division renders a debt subordination by a creditor of a company unlawful or unenforceable, except so far as the debt subordination would disadvantage any creditor of the company who was not a party to, or otherwise concerned in, the debt subordination.

563C(2)   [ ``debt subordination'']  

In this section:

debt subordination
means an agreement or declaration by a creditor of a company, however expressed, to the effect that, in specified circumstances:

(a) a specified debt that the company owes the creditor; or

(b) a specified part of such a debt;

will not be repaid until other specified debts that the company owes are repaid to a specified extent.

SECTION 564  

564   POWER OF COURT TO MAKE ORDERS IN FAVOUR OF CERTAIN CREDITORS  
Where in any winding up:

(a) property has been recovered under an indemnity for costs of litigation given by certain creditors, or has been protected or preserved by the payment of money or the giving of indemnity by creditors; or

(b) expenses in relation to which a creditor has indemnified a liquidator have been recovered;

the Court may make such orders, as it deems just with respect to the distribution of that property and the amount of those expenses so recovered with a view to giving those creditors an advantage over others in consideration of the risk assumed by them.

Division 7 - Effect on certain transactions  

SECTION 565   UNDUE PREFERENCE  

565(1)   [ Certain payments, etc, void as preference]  

A settlement, a conveyance or transfer of property, a charge on property, a payment made, or an obligation incurred, before 23 June 1993, by a company that, if it had been made or incurred by a natural person, would, in the event of his or her becoming a bankrupt, be void as against the trustee in the bankruptcy, is, in the event of the company being wound up, void as against the liquidator.

565(2)   [ Relevant date]  

For the purposes of subsection (1), the date that corresponds with the date of presentation of the petition in bankruptcy in the case of a natural person is the relation-back day.

565(3)   [ Date corresponding to date of bankruptcy]  

For the purposes of this section, the date that corresponds with the date on which a person becomes a bankrupt is the relation-back day.

565(4)   [ Void transfers]  

Subject to Part 5.3A, a transfer or assignment by a company of all its property to trustees for the benefit of all its creditors is void.

SECTION 566  

566   EFFECT OF FLOATING CHARGE  
A floating charge on the undertaking or property of the company created before 23 June 1993 and within 6 months before the relation-back day is, unless it is proved that the company immediately after the creation of the charge was solvent, invalid except to the amount of any money paid to the company at the time of or subsequently to the creation of and in consideration for the charge together with interest on that amount at the rate of 8% per annum or at such other rate as is prescribed.

SECTION 567   LIQUIDATOR'S RIGHT TO RECOVER IN RESPECT OF CERTAIN TRANSACTIONS  

567(1)   [ Sales to company at overvalue]  

Where any property, business or undertaking has been acquired by a company for a cash consideration before 23 June 1993 and within 4 years before the relation-back day in relation to a winding up of the company:

(a) from a promoter of the company or a spouse of such a promoter, or from a relative of such a promoter or spouse; or

(b) from a person who was, at the time of the acquisition, a director of the company, from a spouse of such a director, or from a relative of such a person or spouse; or

(c) from a body corporate that was, at the time of the acquisition, related to the company; or

(d) from a person who was, at the time of the acquisition, a director of a body corporate that was related to the company, from a spouse of such a person, or from a relative of such a person or spouse;

the liquidator may recover from the person or body corporate from which the property, business or undertaking was acquired any amount by which the cash consideration for the acquisition exceeded the value of the property, business or undertaking at the time of its acquisition.

567(2)   [ Sales by company at undervalue]  

Where any property, business or undertaking has been sold by a company for a cash consideration before 23 June 1993 and within 4 years before the relation-back day in relation to a winding up of the company:

(a) to a promoter of the company or a spouse of such a promoter, or to a relative of such a promoter or spouse; or

(b) to a person who was, at the time of the sale, a director of the company, to a spouse of such a director, or to a relative of such a person or spouse; or

(c) to a body corporate that was, at the time of the sale, related to the company; or

(d) to a person who was, at the time of the sale, a director of a body corporate that was related to the company, to a spouse of such a director, or to a relative of such a person or spouse;

the liquidator may recover from the person or body corporate to which the property, business or undertaking was sold any amount by which the value of the property, business or undertaking at the time of the sale exceeded the cash consideration.

567(3)   [ Value]  

For the purposes of this section, the value of the property, business or undertaking includes the value of any goodwill, profits or gain that might have been made from the property, business or undertaking.

567(4)   [ ``cash consideration'']  

In this section, cash consideration means any consideration payable otherwise than by the issue of shares in the company.

567(5)   [ Preferences having effect of discharging officer from liability]  

Where:

(a) a disposition of property is made by a company before 23 June 1993 and within 6 months before the relation-back day in relation to a winding up of the company; and

(b) the disposition of property confers a preference upon a creditor of the company; and

(c) the disposition of property has the effect of discharging an officer of the company from a liability (whether under a guarantee or otherwise and whether contingent or otherwise);

the liquidator:

(d) in a case to which paragraph (e) does not apply - may recover from that officer an amount equal to the value of the relevant property, as the case may be; or

(e) where the liquidator has recovered from the creditor in respect of the disposition of the relevant property:

(i) an amount equal to part of the value of the relevant property; or

(ii) part of the relevant property;

may recover from that officer an amount equal to the amount by which the value of the relevant property exceeds the sum of any amounts recovered as mentioned in subparagraph (i) and the amount of the value of any property recovered as mentioned in subparagraph (ii).

567(6)   [ Subsequent recovery from liquidator]  

Where:

(a) a liquidator recovers an amount of money from an officer of a company in respect of a disposition of property to a creditor as mentioned in subsection (5); and

(b) the liquidator subsequently recovers from that creditor an amount equal to the whole or part of the value of the property disposed of;

the officer may recover from the liquidator an amount equal to the amount so recovered or the value of the property so recovered.

Division 7A - Disclaimer of onerous property  

SECTION 568   DISCLAIMER BY LIQUIDATOR; APPLICATION TO COURT BY PARTY TO CONTRACT  

568(1)    
Subject to this section, a liquidator of a company may at any time, on the company ' s behalf, by signed writing disclaim property of the company that consists of:

(a) land burdened with onerous covenants; or

(b) shares; or

(c) property that is unsaleable or is not readily saleable; or

(d) property that may give rise to a liability to pay money or some other onerous obligation; or

(e) property where it is reasonable to expect that the costs, charges and expenses that would be incurred in realising the property would exceed the proceeds of realising the property; or

(f) a contract;

whether or not:

(g) except in the case of a contract - the liquidator has tried to sell the property, has taken possession of it or exercised an act of ownership in relation to it; or

(h) in the case of a contract - the company or the liquidator has tried to assign, or has exercised rights in relation to, the contract or any property to which it relates.

568(1AA)    

This section does not apply to:

(a) an agreement by the company tobuy back its own shares; or

(b) PPSA retention of title property that is taken to form part of the property of the company because of the definition of property in section 513AA .

Note: The definition of property in section 513AA includes PPSA retention of title property of the company, if the security interest in the property has vested in the company in certain situations.

568(1A)    
A liquidator cannot disclaim a contract (other than an unprofitable contract or a lease of land) except with the leave of the Court.

568(1B)    
On an application for leave under subsection (1A), the Court may:

(a) grant leave subject to such conditions; and

(b) make such orders in connection with matters arising under, or relating to, the contract;

as the Court considers just and equitable.

568(8)    
Where:

(a) an application in writing has been made to the liquidator by a person interested in property requiring the liquidator to decide whether he or she will disclaim the property; and

(b) the liquidator has, for the period of 28 days after the receipt of the application, or for such extended period as is allowed by the Court, declined or neglected to disclaim the property;

the liquidator is not entitled to disclaim the property under this section and, in the case of a contract, he or she is taken to have adopted it.

568(9)    
The Court may, on the application of a person who is, as against the company, entitled to the benefit or subject to the burden of a contract made with the company, make an order:

(a) discharging the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise, as the Court thinks proper; or

(b) rescinding the contract on such terms as to restitution by or to either party, or otherwise, as the Court thinks proper.

568(10)    
Amounts payable pursuant to an order under subsection (9) may be proved as a debt in the winding up.

568(13)    
For the purpose of determining whether property of a company is of a kind to which subsection (1) applies, the liquidator may, by notice served on a person claiming to have an interest in the property, require the person to give to the liquidator within such period, not being less than 14 days, as is specified in the notice, a statement of the interest claimed by the person and the person must comply with the requirement.

SECTION 568A   LIQUIDATOR MUST GIVE NOTICE OF DISCLAIMER  

568A(1)    
As soon as practicable after disclaiming property, a liquidator must:

(a)    lodge a written notice of the disclaimer; and

(b)    give written notice of thedisclaimer to each person who appears to the liquidator to have, or to claim to have, an interest in the property; and

(c)    if the liquidator has reason to suspect that some person or persons may have, or may claim to have, an interest or interests in the property, but either does not know who, or does not know where, the person is or the persons are - comply with subsection (2) ; and

(d)    if a law of the Commonwealth or of a State or Territory requires the transfer or transmission of the property to be registered - give written notice of the disclaimer to the registrar or other person who has the function under that law of registering the transfer or transmission of the property.

568A(2)    

If paragraph (1)(c) applies, the liquidator must cause a notice setting out the prescribed information about the disclaimer to be published in the prescribed manner.

SECTION 568B   APPLICATION TO SET ASIDE DISCLAIMER BEFORE IT TAKES EFFECT  

568B(1)    
A person who has, or claims to have, an interest in disclaimed property may apply to the Court for an order setting aside the disclaimer before it takes effect, but may only do so within 14 days after:

(a)    if the liquidator gives to the person notice of the disclaimer, because of paragraph 568A(1)(b) , before the end of 14 days after the liquidator lodges such notice - the liquidator gives such notice to the person; or

(b)    if paragraph (a) does not apply but notice of the disclaimer is published under subsection 568A(2) before the end of the 14 days referred to in that paragraph - the last such notice to be so published is so published; or

(c)    otherwise - the liquidator lodges notice of the disclaimer.

568B(2)    
On an application under subsection (1) , the Court:

(a)    may by order set aside the disclaimer; and

(b)    if it does so - may make such further orders as it thinks appropriate.

568B(3)    
However, the Court may set aside a disclaimer under this section only if satisfied that the disclaimer would cause, to persons who have, or claim to have, interests in the property, prejudice that is grossly out of proportion to the prejudice that setting aside the disclaimer would cause to the company ' s creditors.

SECTION 568C   WHEN DISCLAIMER TAKES EFFECT  

568C(1)    
A disclaimer takes effect if, and only if:

(a)    in a case where only one application under section 568B for an order setting aside the disclaimer, or each of 2 or more such applications, is made within the period that that section prescribes for making the application - the application, or each of the applications, is unsuccessful; or

(b)    no such application is so made.

568C(2)    
For the purposes of subsection (1) , an application under section 568B is successful if, and only if, the result of the application, and all appeals (if any) arising out of the application, being finally determined or otherwise disposed of is an order setting aside the disclaimer (whether or not further orders are also made).

568C(3)    
A disclaimer that takes effect because of subsection (1) is taken to have taken effect on the day after:

(a)    if:

(i) the liquidator gave to a person notice of the disclaimer because of paragraph 568A(1)(b) ; or

(ii) notice of the disclaimer was published under subsection 568A(2) ;

before the end of 14 days after the liquidator lodged notice of the disclaimer - the last day when the liquidator so gave such notice or such notice was so published; or

(b)    otherwise - the day when the liquidator lodged notice of the disclaimer.

SECTION 568D   EFFECT OF DISCLAIMER  

568D(1)   [ Effective disclaimer terminates company's rights]  

A disclaimer is taken to have terminated, as from the day on which it is taken because of subsection 568C(3) to take effect, the company's rights, interests, liabilities and property in or in respect of the disclaimer property, but does not affect any other person's rights or liabilities except so far as necessary in order to release the company and its property from liability.

568D(2)   [ Person aggrieved by disclaimer]  

A person aggrieved by the operation of a disclaimer is taken to be a creditor of the company to the extent of any loss suffered by the person because of the disclaimer and may prove such a loss as a debt in the winding up.

SECTION 568E   APPLICATION TO SET ASIDE DISCLAIMER AFTER IT HAS TAKEN EFFECT  

568E(1)   [ Application after disclaimer takes effect]  

With the leave of the Court, a person who has, or claims to have, an interest in disclaimed property may apply to the Court for an order setting aside the disclaimer after it has taken effect.

568E(2)   [ Grounds on which Court can grant leave]  

The Court may give leave only if it is satisfied that it is unreasonablein all the circumstances to expect the person to have applied for an order setting aside the disclaimer before it took effect.

568E(3)   [ Leave subject to conditions]  

The Court may give leave subject to conditions.

568E(4)   [ Court's power on application]  

On an application under subsection (1), the Court:

(a) may by order set aside the disclaimer; and

(b) if it does so - may make such further orders as it thinks appropriate, including orders necessary to put the company, the liquidator or anyone else in the same position, as nearly as practicable, as if the disclaimer had never taken effect.

568E(5)   [ Precondition to setting aside]  

However, the Court may set aside a disclaimer only if satisfied that the disclaimer has caused, or would cause, to persons who have, or claim to have, interests in the property, prejudice that is grossly out of proportion to the prejudice that setting aside the disclaimer (and making any further orders) would cause to:

(a) the company's creditors; and

(b) persons who have changed their position in reliance on the disclaimer taking effect.

SECTION 568F   COURT MAY DISPOSE OF DISCLAIMED PROPERTY  

568F(1)   [ Court order as to vesting of property]  

The Court may order that disclaimed property vest in, or be delivered to:

(a) a person entitled to the property; or

(b) a person in or to whom it seems to the Court appropriate that the property be vested or delivered; or

(c) a person as trustee for a person of a kind referred to in paragraph (a) or (b).

568F(2)   [ Who may apply for vesting order]  

The Court may make an order under subsection (1):

(a) on the application of a person who claims an interest in the property, or is under a liability in respect of the property that this Act has not discharged; and

(b) after hearing such persons as it thinks appropriate.

568F(3)   [ Effect of vesting order]  

Subject to subsection (4), where an order is made under subsection (1) vesting property, the property vests immediately, for the purposes of the order, without any conveyance, transfer or assignment.

568F(4)   [ Effect of other law]  

Where:

(a) a law of the Commonwealth or of a State or Territory requires the transfer of property vested by an order under subsection (1) to be registered; and

(b) that law enables the order to be registered;

the property vests in equity because of the order but does not vest at law until that law has been complied with.

Division 7B - Effect on enforcement process against company's property  

SECTION 569   EXECUTIONS, ATTACHMENTS ETC. BEFORE WINDING UP  

569(1)   [ Amounts received as result of enforcement proceedings]  

Where:

(a) a creditor has issued execution against property of a company, or instituted proceedings to attach a debt due to a company or to enforce a charge or a charging order against property of a company, within 6 months immediately before the commencement of the winding up; and

(b) the company commences to be wound up;

the creditor must pay to the liquidator an amount equal to the amount (if any) received by the creditor as a result of the execution, attachment or enforcement of the charge or the charging order, less an amount in respect of the costs of the execution, attachment or enforcement of the charge or the charging order, being an amount agreed between the creditor and the liquidator or, if no agreement is reached, an amount equal to the taxed cost of that execution, attachment or enforcement.

569(2)   [ Creditor's right to prove]  

Where the creditor has paid to the liquidator an amount in accordance with subsection (1), the creditor may prove in the winding up for the creditor's debt as an unsecured creditor as if the execution or attachment or the enforcement of the charge or the charging order, as the case may be, had not taken place.

569(3)   [ Creditor with notice of proposed winding up]  

Subject to subsections (4) and (5), where a creditor of a company receives:

(a) notice in writing of an application to the Court for the winding up of the company; or

(b) notice in writing of the convening of a meeting of the company to consider a resolution that the company be wound up voluntarily;

it is not competent for the creditor to take any action, or any further action, as the case may be, to attach a debt due to the company or to enforce a charge or a charging order against property of the company.

569(4)   [ Exceptions]  

Subsection (3) does not affect the right of a creditor to take action or further action if:

(a) in a case to which paragraph (3)(a) applies - the application has been withdrawn or dismissed; or

(b) in a case to which paragraph (3)(b) applies - the meeting of the company has refused to pass the resolution.

569(5)   [ Further exception]  

Subsection (3) does not prevent a creditor from performing a binding contract for the sale of property entered into before the creditor received a notice referred to in that subsection.

569(6)   [ Purchaser in good faith]  

Notwithstanding anything contained in this Division, a person who purchases property in good faith:

(a) under a sale by the sheriff in consequence of the issue of execution against property of a company that, after the sale, commences to be wound up; or

(b) under a sale in consequence of the enforcement by a creditor of a charge or a charging order against property of a company that, after the sale, commences to be wound up;

acquires a good title to it as against the liquidator and the company.

569(7)   [ Definitions]  

In this section:

charge
means a charge created by a law upon registration of a judgment in a registry.

charging order
means a charging order made by a court in respect of a judgment.

SECTION 570   DUTIES OF SHERIFF AFTER RECEIVING NOTICE OF APPLICATION  

570(1)   [ Sheriff with notice not competent to sell, etc]  

Subject to this section, where a sheriff:

(a) receives notice in writing of an application to the Court for the winding up of a company; or

(b) receives notice in writing of the convening of a meeting of a company to consider a resolution that the company be wound up voluntarily;

it is not competent for the sheriff to:

(c) take any action to sell property of the company pursuant to any process of execution issued by or on behalf of a creditor; or

(d) pay to the creditor by whom or on whose behalf the process of execution was issued or to any person on the creditor's behalf the proceeds of the sale of property of the company that has been sold pursuant to such a process or any money seized, or paid to avoid seizure or sale of property of the company, under such a process.

570(2)   [ Exceptions]  

Subsection (1) does not affect the power of the sheriff to take any action or make any payment if:

(a) in a case to which paragraph (1)(a) applies - the application has been withdrawn or dismissed; or

(b) in a case to which paragraph (1)(b) applies - the meeting of the company has refused to pass the resolution.

570(3)   [ Court officer with notice]  

Subject to this section, where the registrar or other appropriate officer of a court to which proceeds of the sale of property of a company or other money has been paid by a sheriff pursuant to a process of execution issued by or on behalf of a creditor of the company:

(a) receives notice in writing of an application to the Court for the winding up of the company; or

(b) receives notice in writing of the convening of a meeting of the company to consider a resolution that the company be wound up voluntarily;

any of those proceeds or money not paid out of court must not be paid to the creditor or to any person on behalf of the creditor.

570(4)   [ Exceptions]  

Subsection (3) does not prevent the making of a payment if:

(a) in a case to which paragraph (3)(a) applies - the application has been withdrawn or dismissed; or

(b) in a case to which paragraph (3)(b) applies - the meeting of the company has refused to pass the resolution.

570(5)   [ Notice to sheriff or court officer]  

Where a company is being wound up, the liquidator may serve notice in writing of that fact on a sheriff or the registrar or other appropriate officer of a court.

570(6)   [ Duties on receipt of notice]  

Upon such a notice being so served:

(a) the sheriff must deliver or pay to the liquidator:

(i) any property of the company in the sheriff's possession under a process of execution issued by or on behalf of a creditor; and

(ii) any proceeds of the sale of property of the company or other money in the sheriff's possession, being proceeds of the sale of property sold, whether before or after the commencement of the winding up, pursuant to such a process or money seized, or paid to avoid seizure or sale of property of the company, whether before or after the commencement of the winding up, under such a process; or

(b) the registrar or other officer of the court must pay to the liquidator any proceeds of the sale of property of the company or other money in court, being proceeds of sale or other money paid into court, whether before or after the commencement of the winding up, by a sheriff pursuant to a process of execution issued by or on behalf of a creditor;

as the case requires.

570(7)   [ Costs of execution a first charge]  

Where:

(a) property is, or proceeds of the sale of property or other money are, required by subsection (6) to be delivered or paid to a liquidator; or

(b) a sheriff has, pursuant to subsection (1), refrained from taking action to sell property of a company, being land, and that company is being wound up under an order made on the application referred to in that subsection;

the costs of the execution are a first charge on that property or on those proceeds of sale or other money.

570(8)   [ Sheriff may retain costs for creditor]  

For the purpose of giving effect to the charge referred to in subsection (7), the sheriff, registrar or other officer may retain, on behalf of the creditor entitled to the benefit of the charge, such amount from the proceeds of sale or other money referred to in that subsection as he or she thinks necessary for the purpose.

570(9)   [ Court's powers to permit execution]  

The Court may, if in a particular case it considers it is proper to do so:

(a) permit a sheriff to take action to sell property or make a payment that the sheriff could not, by reason of subsection (1), otherwise validly take; or

(b) permit the making of a payment the making of which would, by reason of subsection (3), otherwise be prohibited.

Division 8 - Pooling  

Subdivision A - Pooling determinations  

SECTION 571   POOLING DETERMINATION  

Making of pooling determination

571(1)    
If the following conditions are satisfied in relation to a group of 2 or more companies:

(a) each company in the group is being wound up;

(b) any of the following subparagraphs applies:

(i) each company in the group is a related body corporate of each other company in the group;

(ii) apart from this section, the companies in the group are jointly liable for one or more debts or claims;

(iii) the companies in the group jointly own or operate particular property that is or was used, or for use, in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group;

(iv) one or more companies in the group own particular property that is or was used, or for use, by any or all of the companies in the group in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group;

the liquidator or liquidators of the companies may, by writing:

(c) determine that the group is a pooled group for the purposes of this section; and

(ca) determine a contact address for the group; and

(d) if the liquidator or liquidators consider that it is just and equitable, as between the various creditors of the companies in the group, to do so - determine that any or all of the following provisions:

(i) subsection (2);

(ii) subsection (3);

(iii) subsection (4);

(iv) subsection (5);

(v) subsection (6);

(vi) subsection (7);

are modified, as set out in the determination, in their application to the companies in the group.

Note 1: Section 9 provides that pooling determination means a determination under subsection (1) of this section.

Note 2: A pooling determination comes into force when it is approved by the eligible unsecured creditors of each of the companies in the group - see section 578 .

Consequences of pooling determination

571(2)    
If a determination under paragraph (1)(c) comes into force in relation to a group of 2 or more companies:

(a) each company in the group is taken to be jointly and severally liable for each debt payable by, and each claim against, each other company in the group; and

(b) each debt payable by a company or companies in the group to any other company or companies in the group is extinguished; and

(c) each claim that a company or companies in the group has against any other company or companies in the group is extinguished.

571(3)    
Subsection (2) applies to a debt or claim:

(a) whether present or future; and

(b) whether certain or contingent; and

(c) whether ascertained or sounding only in damages.

571(4)    
Subsection (2) does not apply to a debt payable by, or a claim against, a company in the group unless the debt or claim is admissible to proof against the company.

571(5)    
If a determination under paragraph (1)(c) comes into force in relation to a group of 2 or more companies, the order of priority applicable under sections 556 , 560 and 561 is not altered for a company in the group.

571(6)    
If:

(a) a determination under paragraph (1)(c) comes into force in relation to a group of 2 or more companies; and

(b) a secured creditor of a company in the group surrenders the relevant security interest to the liquidator of the company for the benefit of creditors of the companies in the group generally;

the debt may be recovered as a debt that is jointly and severally payable by the companies in the group.

571(7)    
If:

(a) a determination under paragraph (1)(c) comes into force in relation to a group of 2 or more companies; and

(b) a secured creditor of a company in the group realises the security interest;

so much of the debt as remains after deducting the net amount realised may be recovered as a debt that is jointly and severally payable by the companies in the group.

571(8)    
The following provisions have effect subject to any modifications under paragraph (1)(d):

(a) subsection (2);

(b) subsection (3);

(c) subsection (4);

(d) subsection (5);

(e) subsection (6);

(f) subsection (7).

571(9)    
Subsection (2) does not apply in relation to a secured creditor unless the relevant debt is payable by a company or companies in the group to any other company or companies in the group.

571(10)    
If:

(a) a pooling determination comes into force in relation to a group of 2 or more companies; and

(b) there are one or more eligible employee creditors of a company in the group;

those eligible employee creditors are entitled to a priority at least equal to what they would have been entitled if the determination had not been made.

Section 477 not limited

571(11)    
This section does not limit section 477 .

SECTION 572  

572   VARIATION OF POOLING DETERMINATION  

If a pooling determination is in force in relation to a group of 2 or more companies, the liquidator or liquidators of the companies may, by writing, vary the determination.

Note: A variation of a pooling determination comes into force when it is approved by the creditors of the companies in the group - see section 578 .

SECTION 573   LODGMENT OF COPY OF POOLING DETERMINATION ETC.  

Pooling determination

573(1)    
Within 7 days after a pooling determination comes into force in relation to a group of 2 or more companies, the liquidator or liquidators of the companies in the group must lodge a copy of the determination with ASIC.

Note: A pooling determination comes into force when it is approved by the eligible unsecured creditors of each of the companies in the group - see section 578 .

Variation of pooling determination

573(2)    
Within 7 days after a variation of a pooling determination comes into force in relation to a group of 2 or more companies, the liquidator or liquidators of the companies in the group must lodge a copy of the variation with ASIC.

Note: A variation of a pooling determination comes into force when it is approved by the eligible unsecured creditors of each of the companies in the group - see section 578 .

SECTION 574  

574   ELIGIBLE UNSECURED CREDITORS MUST APPROVE THE MAKING OR VARIATION OF A POOLING DETERMINATION  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 180] (effective 1 March 2017).)

SECTION 575  

575   MEMBERS ' VOLUNTARY WINDING UP - COPY OF NOTICE ETC. TO BE GIVEN TO EACH MEMBER OF THE COMPANY  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 180] (effective 1 March 2017).)

SECTION 576  

576   CONDUCT OF MEETING  
(Repealed by No 11 of 2016, s 3, Sch 2 [ 180] (effective 1 March 2017).)

SECTION 577   ELIGIBLE UNSECURED CREDITORS MAY DECIDE TO APPROVE THE DETERMINATION OR VARIATION  

577(1A)    
Within 5 business days after the liquidator or liquidators of a group of 2 or more companies:

(a) make a pooling determination in relation to the group; or

(b) vary a pooling determination in force in relation to the group;

the liquidator or liquidators must convene separate meetings of the eligible unsecured creditors of each of the companies in the group.

Note: For eligible unsecured creditor , see section 579Q .

577(1)    

At a meeting convened under subsection (1A), the eligible unsecured creditors may resolve to approve the making of the determination or variation.

577(2)    
(Repealed by No 11 of 2016, s 3, Sch 2[184] (effective 1 March 2017).)

577(3)    

If, at a meeting convened under subsection (1A), the eligible unsecured creditors do not resolve to approve the making of the determination or variation:

(a) the determination or variation is cancelled at the end of the meeting; and

(b) if, as at the end of the meeting, a corresponding resolution has not been considered at another meeting convened under subsection (1A) of the eligible unsecured creditors of another company in the group - that other meeting is cancelled.

SECTION 578   WHEN POOLING DETERMINATION COMES INTO FORCE ETC.  

Pooling determination

578(1)    
If:

(a) a pooling determination is made in relation to a group of 2 or more companies; and

(b) meetings are convened under subsection 577(1A) of the eligible unsecured creditors of each company in the group; and

(c) at each meeting, the eligible unsecured creditors pass a resolution, as referred to in section 577 , approving the making of the determination;

then:

(d) if all the resolutions were passed at the same time - the determination comes into force immediately after the resolutions were passed; or

(e) if the resolutions were passed at different times - the determination comes into force immediately after the last of those times.

Note: For eligible unsecured creditor , see section 579Q .

Variation of pooling determination

578(2)    
If:

(a) a pooling determination is in force in relation to a group of 2 or more companies; and

(b) the pooling determination is varied; and

(c) meetings are convened under subsection 577(1A) of the eligible unsecured creditors of each company in the group; and

(d) at each meeting, the eligible unsecured creditors pass a resolution, as referred to in section 577 , approving the making of the variation;

then:

(e) if all the resolutions were passed at the same time - the variation comes into force immediately after the resolutions were passed; or

(f) if the resolutions were passed at different times - the variation comes into force immediately after the last of those times.

Note: For eligible unsecured creditor , see section 579Q .

SECTION 579   DUTIES OF LIQUIDATOR  

579(1)    
This section applies if:

(a) the liquidator or liquidators of a group of 2 or more companies exercise a power conferred by section 571 or subsection 577(1A) ; and

(b) the liquidator or liquidators, in the exercise of that power, acted:

(i) with due care; and

(ii) in good faith; and

(iii) for the benefit of the creditors of the companies in the group, considered as a whole.

579(2)    
The liquidator or liquidators are taken not to be in breach of:

(a) any duty to a company in the group concerned (whether under section 180 , 181 , 182 , 183 or 184 or otherwise and whether of a fiduciary nature or not); or

(b) any duty to the creditors of a company in the group concerned (whether of a fiduciary nature or not);

in connection with the exercise of that power.

SECTION 579A   COURT MAY VARY OR TERMINATE POOLING DETERMINATION  

579A(1)    
If a pooling determination is in force in relation to a group of 2 or more companies, the Court may make an order varying or terminating the pooling determination if the Court is satisfied that:

(a)    information that was about the business, property, affairs or financial circumstances of a company in the group, and that:

(i) was false or misleading; and

(ii) can reasonably be expected to have been material to eligible unsecured creditors of a company in the group in deciding whether to vote in favour of a resolution to approve the making of the pooling determination;

was given to:

(iii) the liquidator of a company in the group; or

(iv) eligible unsecured creditors of a company in the group; or

(b)    

information that was about the business, property, affairs or financial circumstances of a company in the group, and that:

(i) was false or misleading; and

(ii) can reasonably be expected to have been material to eligible unsecured creditors of a company in the group in deciding whether to vote in favour of a resolution to approve the making of the pooling determination;

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 any of those eligible unsecured creditors in deciding whether to vote in favour of a resolution to approve the making of the pooling determination; or

(d)    effect cannot be given to the pooling determination without injustice or undue delay; or

(e)    the pooling determination would materially disadvantage an eligible unsecured creditor who is an applicant for the order; or

(f)    the pooling determination would be oppressive or unfairly prejudicial to, or unfairly discriminatory against, an applicant for the order who is an eligible unsecured creditor of a company in the group; or

(g)    the pooling determination would be contrary to the interests of the creditors of the companies in the group, considered as a whole; or

(h)    in a case where a company in the group is being wound up under a members ' voluntary winding up:

(i) the pooling determination would materially disadvantage a member of the company who is an applicant for the order; or

(ii) the pooling determination would be oppressive or unfairly prejudicial to, or unfairly discriminatory against, one or more such members; or

(iii) the pooling determination would be contrary to the interests of the members of the company as a whole; or

(i)    the pooling determination should be varied or terminated for some other reason.

Note: For eligible unsecured creditor , see section 579Q .

579A(2)    
An order may only be made on the application of:

(a)    a creditor of a company in the group; or

(b)    in a case where a company in the group is being wound up under a members ' voluntary winding up - a member of the company, so long as the member is not a company in the group; or

(c)    any other interested person.

579A(3)    

If the Court makes an order under subsection (1) , the applicant for the order must:

(a)    lodge with ASIC a notice setting out the text of the order; and

(b)    do so within 2 business days after the making of the order.

The notice must be in the prescribed form.

SECTION 579B   COURT MAY CANCEL OR CONFIRM VARIATION  

579B(1)    
If:

(a)    a pooling determination is in force in relation to a group of 2 or more companies; and

(b)    the determination is varied; and

(c)    the variation has come into force;

either of the following persons may apply to the Court for an order cancelling the variation:

(d)    a creditor of a company in the group;

(e)    in a case where a company in the group is being wound up under a members ' voluntary winding up - a member of the company, so long as the member is not a company in the group.

579B(2)    
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.

579B(3)    
If the Court makes an order under subsection (2) , the applicant for the order must:

(a)    lodge with ASIC a notice setting out the text of the order; and

(b)    do so within 2 business days after the making of the order.

The notice must be in the prescribed form.

SECTION 579C   WHEN COURT MAY VOID OR VALIDATE POOLING DETERMINATION  

579C(1)    
If there is doubt, on a specific ground, whether a pooling determination that relates to a group of 2 or more companies:

(a)    was made, varied or approved in accordance with this Division; or

(b)    complies with this Division;

any of the following persons may apply to the Court for an order under this section:

(c)    the liquidator of a company in the group;

(d)    a creditor of a company in the group;

(e)    in a case where a company in the group is being wound up under a members ' voluntary winding up - a member of the company, so long as the member is not a company in the group;

(f)    ASIC.

579C(2)    
On an application, the Court may make an order declaring the pooling determination, 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.

579C(3)    
On an application, the Court may declare the pooling determination, or a provision of it, to be valid, despite a contravention of a provision of this Division, if the Court is satisfied that:

(a)    the provision was substantially complied with; and

(b)    no injustice will result for anyone affected by the pooling determination if the contravention is disregarded.

579C(4)    
If the Court declares a provision of a pooling determination to be void, the Court may, by order, vary the pooling determination.

579C(5)    

If the Court makes an order under subsection (2) , the applicant for the order must:

(a)    lodge with ASIC a notice setting out the text of the order; and

(b)    do so within 2 business days after the making of the order.

The notice must be in the prescribed form.

579C(6)    

If the Court makes a declaration under subsection (3) , the applicant for the declaration must:

(a)    lodge with ASIC a notice setting out the text of the declaration; and

(b)    do so within 2 business days after the making of the declaration.

The notice must be in the prescribed form.

579C(7)    

If the Court makes an order under subsection (4) on the application of a person, the applicant for the order must:

(a)    lodge with ASIC a notice setting out the text of the order; and

(b)    do so within 2 business days after the making of the order.

The notice must be in the prescribed form.

SECTION 579D  

579D   EFFECT OF TERMINATION OR AVOIDANCE  

The termination or avoidance, in whole or in part, of a pooling determination does not affect the previous operation of:

(a) the pooling determination; or

(b) this Division in so far as it relates to the pooling determination.

Subdivision B - Pooling orders  

SECTION 579E   POOLING ORDERS  

Making of pooling order

579E(1)    
If it appears to the Court that the following conditions are satisfied in relation to a group of 2 or more companies:

(a)    each company in the group is being wound up;

(b)    any of the following subparagraphs applies:

(i) each company in the group is a related body corporate of each other company in the group;

(ii) apart from this section, the companies in the group are jointly liable for one or more debts or claims;

(iii) the companies in the group jointly own or operate particular property that is or was used, or for use, in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group;

(iv) one or more companies in the group own particular property that is or was used, or for use, by any or all of the companies in the group in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group;

the Court may, if the Court is satisfied that it is just and equitable to do so, by order, determine that the group is a pooled group for the purposes of this section.

Note 1: Section 9 provides that pooling order means an order under subsection (1) of this section.

Note 2: See also subsection (12) (just and equitable criteria).

Consequences of pooling order

579E(2)    
If a pooling order comes into force in relation to a group of 2 or more companies:

(a)    each company in the group is taken to be jointly and severally liable for each debt payable by, and each claim against, each other company in the group; and

(b)    each debt payable by a company or companies in the group to any other company or companies in the group is extinguished; and

(c)    each claim that a company or companies in the group has against any other company or companies in the group is extinguished.

Note: For exemptions, see paragraph 579G(1)(a) .

579E(3)    
Subsection (2) applies to a debt or claim:

(a)    whether present or future; and

(b)    whether certain or contingent; and

(c)    whether ascertained or sounding only in damages.

579E(4)    
Subsection (2) does not apply to a debt payable by, or a claim against, a company in the group unless the debt or claim is admissible to proof against the company.

579E(5)    
If a pooling order comes into force in relation to a group of 2 or more companies, the order of priority applicable under sections 556 , 560 and 561 is not altered for a company in the group.

579E(6)    
If:

(a)    a pooling order comes into force in relation to a group of 2 or more companies; and

(b)    

a secured creditor of a company in the group surrenders the relevant security interest to the liquidator of the company for the benefit of creditors of the companies in the group generally;

the debt may be recovered as a debt that is jointly and severally payable by the companies in the group.

579E(7)    
If:

(a)    a pooling order comes into force in relation to a group of 2 or more companies; and

(b)    

a secured creditor of a company in the group realises the security interest;

so much of the debt as remains after deducting the net amount realised may be recovered as a debt that is jointly and severally payable by the companies in the group.

579E(8)    
The following provisions have effect subject to any modifications under paragraph 579G(1)(d) :

(a)    subsection (2) ;

(b)    subsection (3) ;

(c)    subsection (4) ;

(d)    subsection (5) ;

(e)    subsection (6) ;

(f)    subsection (7) .

579E(9)    
Subsection (2) does not apply in relation to a secured creditor unless the relevant debt is payable by a company or companies in the group to any other company or companies in the group.

579E(10)    
The Court must not make a pooling order in relation to a group of 2 or more companies if:

(a)    both:

(i) the Court is satisfied the order would materially disadvantage an eligible unsecured creditor of a company in the group; and

(ii) the eligible unsecured creditor has not consented to the making of the order; or

(b)    all of the following conditions are satisfied:

(i) a company in the group is being wound up under a members ' voluntary winding up;

(ii) the Court is satisfied that the order would materially disadvantage a member of that company;

(iii) the member is not a company in the group;

(iv) the member has not consented to the making of the order.

Note: For eligible unsecured creditor , see section 579Q .

Standing

579E(11)    
The Court may only make a pooling order on the application of the liquidator or liquidators of the companies in the group.

Just and equitable criteria

579E(12)    
In determining whether it is just and equitable to make a pooling order, the Court must have regard to all of the following matters:

(a)    the extent to which:

(i) a company in the group; and

(ii) the officers or employees of a company in the group;

were involved in the management or operations of any of the other companies in the group;

(b)    the conduct of:

(i) a company in the group; and

(ii) the officers or employees of a company in the group;

towards the creditors of any of the other companies in the group;

(c)    the extent to which the circumstances that gave rise to the winding up of any of the companies in the group are directly or indirectly attributable to the acts or omissions of:

(i) any of the other companies in the group; or

(ii) the officers or employees of any of the other companies in the group;

(d)    the extent to which the activities and business of the companies in the group have been intermingled;

(e)    the extent to which creditors of any of the companies in the group may be advantaged or disadvantaged by the making of the order;

(f)    any other relevant matters.

Lodgment of pooling order

579E(13)    
A pooling order must be lodged with ASIC.

SECTION 579F   VARIATION OF POOLING ORDERS  

579F(1)    
The Court may, by order, vary a pooling order if the Court is of the opinion that it is just and equitable to do so.

579F(2)    
A pooling order may only be varied on the application of:

(a)    the liquidator of a company in the group; or

(b)    a creditor of a company in the group; or

(c)    in a case where a company in the group is being wound up under a members ' voluntary winding up - a member of the company, so long as the member is not a company in the group.

Lodgment of order

579F(3)    
An order under subsection (1) must be lodged with ASIC.

SECTION 579G   COURT MAY MAKE ANCILLARY ORDERS ETC.  

579G(1)    
If the Court makes a pooling order in relation to a group of 2 or more companies, the Court may, if the Court is of the opinion that it is just and equitable to do so, do any or all of the following things:

(a)    by order, exempt:

(i) a specified debt or claim; or

(ii) a specified class of debts or claims;

from the application of subsection 579E(2) to the group;

(b)    by order, transfer, or direct the transfer, of:

(i) specified property; or

(ii) a specified class of property;

from a company in the group to another company in the group;

(c)    by order, transfer, or direct the transfer, of liability for:

(i) a specified debt or claim; or

(ii) a specified class of debts or claims;

from a company in the group to another company in the group;

(d)    by order, modify the application of this Act in relation to the winding up of the companies in the group;

(e)    make such other orders, and give such directions, in relation to the winding up of the companies in the group, as the Court thinks fit.

Standing

579G(2)    
An order or direction under subsection (1) may only be made or given on the application of:

(a)    the liquidator of a company in the group; or

(b)    a creditor of a company in the group; or

(c)    in a case where a company in the group is being wound up under a members ' voluntary winding up - a member of the company, so long as the member is not a company in the group.

Conditional orders etc.

579G(3)    
An order or direction under subsection (1) may be made or given subject to conditions.

579G(4)    
An order or direction under subsection (1) may provide for different returns for different creditors or classes of creditors.

579G(5)    
An order or direction under subsection (1) may provide for the subordination of the debts and claims of specified creditors or classes of creditors to those of other creditors.

579G(6)    
Subsections (4) and (5) do not limit subsection (1) or (3) .

Rights of secured creditors

579G(7)    
An order or direction under subsection (1) does not affect the rights of a secured creditor, unless the relevant debt is payable by a company or companies in the group to any other company or companies in the group.

Lodgment of order or direction

579G(8)    
An order or direction under subsection (1) must be lodged with ASIC.

SECTION 579H   VARIATION OF ANCILLARY ORDERS ETC.  

Variation of ancillary order

579H(1)    
The Court may, by order, vary an order made under subsection 579G(1) if the Court is of the opinion that it is just and equitable to do so.

579H(2)    
An order made under subsection 579G(1) may only be varied on the application of:

(a)    the liquidator of a company in the group; or

(b)    a creditor of a company in the group, so long as the creditor is not a company in the group; or

(c)    in a case where a company in the group is being wound up under a members ' voluntary winding up - a member of the company, so long as the member is not a company in the group.

Variation of direction

579H(3)    
The Court may vary a direction given under subsection 579G(1) if the Court is of the opinion that it is just and equitable to do so.

579H(4)    
A direction given under subsection 579G(1) may only be varied on the application of:

(a)    the liquidator of a company in the group; or

(b)    a creditor of a company in the group; or

(c)    in a case where a company in the group is being wound up under a members ' voluntary winding up - a member of the company, so long as the member is not a company in the group.

Lodgment of order or direction

579H(5)    
An order under subsection (1) must be lodged with ASIC.

579H(6)    
A variation of a direction given under subsection 579G(1) must be lodged with ASIC.

SECTION 579J   NOTICE OF APPLICATION FOR POOLING ORDER ETC.  

579J(1)    
If the liquidator or liquidators of the companies in a group apply for a pooling order, the liquidator or liquidators must give written notice of:

(a) the application; or

(b) a website where persons can view a copy of the application;

to:

(c) each eligible unsecured creditor of each company in the group; and

(d) in a case where a company in the group is being wound up under a members ' voluntary winding up - each member of the company, so long as the member is not a company in the group; and

(e) such other persons (if any) as the Court directs.

Note: For eligible unsecured creditor , see section 579Q .

579J(2)    
If:

(a) a pooling order is made in relation to a group of 2 or more companies; and

(b) the liquidator of a company in the group applies for:

(i) an order under subsection 579F(1) ; or

(ii) an order under subsection 579G(1) ; or

(iii) an order under subsection 579H(1) ; or

(iv) a direction under subsection 579G(1) ; or

(v) a variation of a direction given under subsection 579G(1) ;

the liquidator must give written notice of:

(c) the application; or

(d) a website where persons can view a copy of the application;

to:

(e) each eligible unsecured creditor of each company in the group; and

(f) in a case where a company in the group is being wound up under a members ' voluntary winding up -each member of the company, so long as the member is not a company in the group; and

(g) such other persons (if any) as the Court directs.

Note: For eligible unsecured creditor , see section 579Q .

SECTION 579K   NOTICE OF POOLING ORDER ETC.  

Notice of pooling order

579K(1)    
If a pooling order is made in relation to a group of 2 or more companies, the liquidator or liquidators of the companies in the group must:

(a) give each eligible unsecured creditor of each company in the group a written notice setting out:

(i) the order; and

(ii) a summary description of the order; or

(b) give each eligible unsecured creditor of each company in the group a written notice of a website where persons can view a copy of:

(i) the order; and

(ii) a summary description of the order.

Note: For eligible unsecured creditor , see section 579Q .

579K(2)    
If:

(a) a pooling order is made in relation to a group of 2 or more companies; and

(b) a company in the group is being wound up under a members ' voluntary winding up;

the liquidator or liquidators of the companies in the group must:

(c) give each member of that company a written notice setting out:

(i) the order; and

(ii) a summary description of the order;

so long as the member is not a company in the group; or

(d) give each member of that company a written notice of a website where persons can view a copy of:

(i) the order; and

(ii) a summary description of the order;

so long as the member is not a company in the group.

Notice of application by liquidator

579K(3)    
If:

(a) a pooling order is made in relation to a group of 2 or more companies; and

(b) the Court does any of the following on the application of a liquidator of a company in the group:

(i) makes an order under subsection 579F(1) ;

(ii) makes an order under subsection 579G(1) ;

(iii) makes an order under subsection 579H(1) ;

(iv) gives a direction under subsection 579G(1) ;

(v) varies a direction given under subsection 579G(1) ;

the liquidator must:

(c) give each eligible unsecured creditor of each company in the group a written notice setting out:

(i) the order, direction or variation; and

(ii) a summary description of the order, direction or variation; or

(d) give each eligible unsecured creditor of each company in the group a written notice of a website where persons can view a copy of:

(i) the order, direction or variation; and

(ii) a summary description of the order, direction or variation.

Note: For eligible unsecured creditor , see section 579Q .

579K(4)    
If:

(a) a pooling order is made in relation to a group of 2 or more companies; and

(b) the Court does any of the following on the application of a liquidator of a company in the group:

(i) makes an order under subsection 579F(1) ;

(ii) makes an order under subsection 579G(1) ;

(iii) makes an order under subsection 579H(1) ;

(iv) gives a direction under subsection 579G(1) ;

(v) varies a direction given under subsection 579G(1) ; and

(c) a company in the group is being wound up under a members ' voluntary windingup;

the liquidator must:

(d) give each member of that company a written notice setting out:

(i) the order, direction or variation; and

(ii) a summary description of the order, direction or variation;

so long as the member is not a company in the group; or

(e) give each member of that company a written notice of a website where persons can view a copy of:

(i) the order, direction or variation; and

(ii) a summary description of the order, direction or variation;

so long as the member is not a company in the group.

SECTION 579L   CONSOLIDATED MEETINGS OF CREDITORS  

579L(1)    
If:

(a) either:

(i) a pooling determination is in force in relation to a group of 2 or more companies; or

(ii) a pooling order is in force in relation to a group of 2 or more companies; and

(b) each company in the group is being wound up;

then, unless the Court otherwise orders:

(c) instead of convening separate meetings under or for the purposes of a particular provision of this Act, the liquidator or liquidators may convene a meeting under or for the purposes of that provision, on a consolidated basis, of the creditors of the companies in the group; and

(d) a resolution passed at a consolidated meeting by those creditors is taken to have been passed by the creditors of each of the companies in the group; and

(e) if there are 2 or more liquidators - one of those liquidators is to preside at a consolidated meeting; and

(f) notice of a consolidated meeting may be given by the liquidator or liquidators.

Note: See also Division 80 (committees of inspection) of Schedule 2 .

579L(2)    
The regulations may make provision for or in relation to:

(a) the convening of, conduct of, and procedure and voting at, consolidated meetings of creditors; and

(b) the number of persons required to constitute a quorum at any such meeting; and

(c) the sending of notices of meetings to persons entitled to attend any such meeting; and

(d) the lodging of copies of notices of, and of resolutions passed at, any such meeting; and

(e) generally regulating the conduct of, and procedure at, any such meeting.

Subdivision C - Other provisions  

SECTION 579M  

579M   WHEN DEBTS OR CLAIMS ARE PROVABLE IN WINDING UP  

If a debt or claim becomes a debt payable by, or a claim against, a company under any of the following provisions:

(a) subsection 571(2) (including that subsection as modified by a determination under paragraph 571(1)(d) );

(b) subsection 571(6) (including that subsection as modified by a determination under paragraph 571(1)(d) );

(c) subsection 571(7) (including that subsection as modified by a determination under paragraph 571(1)(d) );

(d) subsection 579E(2) (including that subsection as modified by an order under paragraph 579G(1)(d) );

(e) subsection 579E(6) (including that subsection as modified by an order under paragraph 579G(1)(d) );

(f) subsection 579E(7) (including that subsection as modified by an order under paragraph 579G(1)(d) );

(g) subsection 579G(1) ;

then, in the winding up of the company, the debt or claim is admissible to proof against the company.

SECTION 579N  

579N   GROUP OF COMPANIES  

To avoid doubt, for the purposes of:

(a) this Division; or

(b) any other provision of this Act to the extent to which it relates to this Division;

a group of 2 or more companies need not be associated with each other in any way (other than a way described in paragraph 571(1)(b) or 579E(1)(b) ).

SECTION 579P  

579P   SECURED DEBT MAY BECOME UNSECURED  

For the purposes of this Division, a secured debt becomes an unsecured debt to the extent that the creditor proves for the debt as an unsecured creditor.

SECTION 579Q   ELIGIBLE UNSECURED CREDITOR  

579Q(1)    
Subject to subsection (2), for the purposes of the application of this Division to a group of 2 or more companies, a creditor of a company in the group is an eligible unsecured creditor of that company if:

(a) both:

(i) the creditor ' s debt or claim is unsecured; and

(ii) the creditor is not a company in the group; or

(b) the creditor is specified in the regulations.

Note: For specification by class, see subsection 13(3) of the Legislation Act 2003 .

579Q(2)    
The regulations may provide that, for the purposes of the application of this Division to a group of 2 or more companies, a specified creditor of a company in the group is not an eligible unsecured creditor of that company.

Note: For specification by class, see subsection 13(3) of the Legislation Act 2003 .

Division 9 - Co-operation between Australian and foreign courts in external administration matters  

SECTION 580  

580   DEFINITIONS  
(Repealed by No 76 of 2023, s 3, Sch 2[129] (effective 20 October 2023).)

SECTION 581   COURTS TO ACT IN AID OF EACH OTHER  

581(1)    

All courts having jurisdiction in matters arising under this Act, the judges of those courts and the officers of, or under the control of, those courts must severally act in aid of, and be auxiliary to, each other in all matters ( external administration matters ) relating to:

(a)    winding up, under this Chapter, a company or a Part 5.7 body; or

(b)    winding up, outside Australia, a body corporate or a Part 5.7 body; or

(c)    the insolvency of a body corporate or of a Part 5.7 body.

581(2)    
In all external administration matters, the Court:

(a)    

must act in aid of, and be auxiliary to, the courts of:

(i) (Repealed)

(ii) States that are not in this jurisdiction; and

(iii) countries prescribed for the purposes of this subparagraph; and

(iv) colonies, overseas territories or protectorates of such countries;

that have jurisdiction in external administration matters; and

(b)    may act in aid of, and be auxiliary to, the courts of other countries that have jurisdiction in external administration matters.

581(3)    

Where a letter of request from a court of a country other than Australia requesting aid in an external administration matter is filed in the Court, the Court may exercise such powers with respect to the matter as it could exercise if the matter had arisen in its own jurisdiction.

581(4)    

The Court may request a court of a country other than Australia that has jurisdiction in external administration matters to act in aid of, and be auxiliary to, it in an external administration matter.