SECTION 588FGAB   CONTENT AND COPIES OF ORDERS  

Reasons

588FGAB(1)    
An order under subsection 588FGAA(3) must include written reasons for the making of the order (including why ASIC is satisfied section 588FGAA applies).

Orders for payment

588FGAB(2)    
An order under paragraph 588FGAA(3)(b) (requiring a person to pay a company an amount) may require the amount to be paid at a time or within a period set out in the order.

Liquidator to be given copies of orders etc.

588FGAB(3)    
If ASIC makes an order under subsection 588FGAA(3) relating to a company, ASIC must give the company ' s liquidator a copy of the order, and of any revocation or amendment of the order.

SECTION 588FGAC  

588FGAC   COMPLIANCE WITH ORDERS GENERALLY  

A person must not engage in conduct if the conduct contravenes an order under subsection 588FGAA(3) .

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

SECTION 588FGAD   COMPLIANCE WITH ORDERS FOR PAYMENT  

Enforcement of order for payment generally

588FGAD(1)    
An amount payable by a person to a company under an order made under paragraph 588FGAA(3)(b) is recoverable by the company as a debt by action against the person in a court of competent jurisdiction.

Court order for payment if person convicted of offence

588FGAD(2)    
If a court convicts a person of an offence based on section 588FGAC relating to a contravention by the person or someone else of an order made under paragraph 588FGAA(3)(b) , the court may (in addition to imposing a penalty on the person for the offence) order the person to pay the company an amount not exceeding the amount involved in the contravention.

Complying with order for payment by transferring property

588FGAD(3)    
A person ordered under paragraph 588FGAA(3)(b) to pay a company the value of any property may comply with the order by transferring the property to the company.

SECTION 588FGAE   COURT MAY SET ASIDE ORDER BY ASIC  

588FGAE(1)    
The person subject to an order under subsection 588FGAA(3) or any other person interested in such an order may apply to a Court within the period described in subsection (2) to have the order set aside.

588FGAE(2)    
The period is 60 days after the day the applicant was given the order or otherwise became aware of it.

588FGAE(3)    
The Court may set the order aside if satisfied, on the basis of the written reasons for the order, that section 588FGAA did not apply.

588FGAE(4)    
If the order is set aside, it is taken never to have been made.

Subdivision E - Various rules about voidable transactions  

SECTION 588FGA   DIRECTORS TO INDEMNIFY COMMISSIONER OF TAXATION IF CERTAIN PAYMENTS SET ASIDE  

588FGA(1)    

This section applies if the court makes an order under section 588FF , or ASIC makes an order under section 588FGAA , against the Commissioner of Taxation because of the payment of an amount in respect of a liability:

(a) underany of the following provisions:

(i) former section 220AAE , 220AAM or 220AAR of the Income Tax Assessment Act 1936 ;

(ii) former section 221F (except subsection 221F(12) ), former section 221G (except subsection 221G(4A) ) or former section 221P of the Income Tax Assessment Act 1936 ;

(iii) former subsection 221YHDC(2) of the Income Tax Assessment Act 1936 ;

(iv) former subsection 221YHZD(1) or (1A) of the Income Tax Assessment Act 1936 ;

(v) former subsection 221YN(1) of the Income Tax Assessment Act 1936 ;

(vi) section 222AHA of the Income Tax Assessment Act 1936 ;

(vii) Subdivision 16-B in Schedule 1 to the Taxation Administration Act 1953 ; or

(b) to pay the amount of an estimate of unpaid superannuation guarantee charge under Division 268 in Schedule 1 to the Taxation Administration Act 1953 .

588FGA(2)    
Each person who was a director of the company when the payment was made is liable to indemnify the Commissioner in respect of any loss or damage resulting from the order.

588FGA(3)    
An amount payable to the Commissioner under subsection (2):

(a) is a debt due to the Commonwealth and payable to the Commissioner; and

(b) may be recovered in a court of competent jurisdiction by the Commissioner, or a Deputy Commissioner of Taxation, suing in his or her official name.

588FGA(4)    
The court may, in the proceedings in which it made the order against the Commissioner, order a person to pay to the Commissioner an amount payable by the person under subsection (2).

588FGA(5)    
A person who pays an amount under subsection (2) has the same rights:

(a) whether by way of indemnity, subrogation, contribution or otherwise; and

(b) against the company or anyone else;

as if the payment had been made under a guarantee:

(c) of the liability referred to in subsection (1); and

(d) under which the person and every other person who was a director of the company as mentioned in subsection (2) were jointly and severally liable as guarantors.

SECTION 588FGB   DEFENCES IN PROCEEDINGS UNDER SECTION 588FGA  

588FGB(1)    
This section has effect for the purposes of:

(a)    proceedings to recover from a person an amount payable under subsection 588FGA(2) ; and

(b)    proceedings under subsection 588FGA(5) against a person of the kind referred to in paragraph 588FGA(5)(d) .

588FGB(2)    
The time when the payment referred to in subsection 588FGA(1) was made is called the payment time .

588FGB(3)    
It is a defence if it is proved that, at the payment time, the person had reasonable grounds to expect, and did expect, that the company was solvent at that time and would remain solvent even if it made the payment.

588FGB(4)    
Without limiting the generality of subsection (3), it is a defence if it is proved that, at the payment time, the person:

(a)    had reasonable grounds to believe, and did believe:

(i) that a competent and reliable person ( the other person ) was responsible for providing to the first-mentioned person adequate information about whether the company was solvent; and

(ii) that the other person was fulfilling that responsibility; and

(b)    expected, on the basis of information provided to the first-mentioned person by the other person, that the company was solvent at that time and would remain solvent even if it made the payment.

588FGB(4A)    

Subsections (3) and (4) of this section do not apply if the order mentioned in subsection 588FGA(1) was made wholly or partly because the condition in 588FE(6B)(b)(iii) was met.

588FGB(5)    
It is a defence if it is proved that, because of illness or for some other good reason, the person did not take part in the management of the company at the payment time.

588FGB(6)    
It is a defence if it is proved that:

(a)    the person took all reasonable steps to prevent the company from making the payment; or

(b)    there were no such steps the person could have taken.

588FGB(7)    
In determining whether a defence under subsection (6) has been proved, the matters to which regard is to be had include, but are not limited to:

(a)    

any action the person took with a view to appointing an administrator of the company or a restructuring practitioner for the company; and

(b)    when that action was taken; and

(c)    the results of that action.

SECTION 588FH   LIQUIDATOR MAY RECOVER FROM RELATED ENTITY BENEFIT RESULTING FROM INSOLVENT TRANSACTION  

588FH(1)    
This section applies where a company is being wound up and a transaction of the company:

(a) is an insolvent transaction of the company; and

(b) is voidable under section 588FE ; and

(c) has had the effect of discharging, to the extent of a particular amount, a liability (whether under a guarantee or otherwise and whether contingent or otherwise) of a related entity of the company.

588FH(2)    
The company ' s liquidator may recover from the related entity, as a debt due to the company, an amount equal to the amount referred to in paragraph (1)(c).

588FH(3)    

In deciding what orders (if any) to make under section 588FF or 588FGAA on an application relating to the transaction, a court or ASIC must take into account any amount recovered under subsection (2) of this section.

588FH(4)    
If the liquidator recovers an amount under subsection (2) from the related entity, the related entity has the same rights:

(a) whether by way of indemnity, subrogation, contribution or otherwise; and

(b) against the company or anyone else;

as if the related entity had paid the amount in discharging, to the extent of that amount, the liability referred to in paragraph (1)(c).

SECTION 588FI   CREDITOR WHO GIVES UP BENEFIT OF UNFAIR PREFERENCE MAY PROVE FOR PREFERRED DEBT  

588FI(1)    
This section applies where:

(a) a transaction is an unfair preference given by a company to a creditor of the company after 23 June 1993; and

(b) at the request of the company ' s liquidator, because of an order under section 588FF or 588FGAA , or for any other reason, the creditor has put the company in the same position as if the transaction had not been entered into.

588FI(2)    
A court must not make under section 588FF , on an application relating to the transaction, an order prejudicing a right or interest of the creditor.

588FI(2A)    

ASIC must not make an order under section 588FGAA that relates to the transaction and prejudices a right or interest of the creditor.

588FI(3)    
The creditor may prove in the winding up as if the transaction had not been entered into.

SECTION 588FJ   CIRCULATING SECURITY INTEREST CREATED WITHIN 6 MONTHS BEFORE RELATION-BACK DAY  

588FJ(1)    
This section applies if:

(a) a company is being wound up in insolvency; and

(b) the company created a circulating security interest in property of the company at a particular time that is at or after 23 June 1993 and:

(i) during the 6 months ending on the relation-back day; or

(ii) after that day but on or before the day when the winding up began.

588FJ(2)    

The circulating security interest is void, as against the company ' s liquidator, except so far as it secures:

(a) an advance paid to the company, or at its direction, at or after that time and as consideration for the circulating security interest; or

(b) interest on such an advance; or

(c) the amount of a liability under a guarantee or other obligation undertaken at or after that time on behalf of, or for the benefit of, the company; or

(d) an amount payable for property or services supplied to the company at or after that time; or

(e) interest on an amount so payable.

588FJ(3)    
Subsection (2) does not apply if it is proved that the company was solvent immediately after that time.

588FJ(4)    
Paragraphs (2)(a) and (b) do not apply in relation to an advance so far as it was applied to discharge, directly or indirectly, an unsecured debt, whether contingent or otherwise, that the company owed to:

(a) the secured party; or

(b) if the secured party was a body corporate - a related entity of the body.

588FJ(5)    
Paragraphs (2)(d) and (e) do not apply in relation to an amount payable as mentioned in paragraph (2)(d) in so far as the amount exceeds the market value of the property or services when supplied to the company.

588FJ(6)    

If, during the 6 months ending on the relation-back day, or after that day but on or before the day when the winding up began, a debt secured by the circulating security interest was discharged, out of the company ' s money or property, to the extent of a particular amount (in this subsection called the realised amount ), the liquidator may, by proceedings in a court of competent jurisdiction, recover from the secured party, as a debt due to the company, the amount worked out in accordance with the formula:

Unsecured amount − Realisation costs

where:

realisation costs
means so much (if any) of the costs and expenses of enforcing the security interest as is attributable to realising the realised amount.

unsecured amount
means so much of the realised amount as does not exceed so much of the debt as would, if the debt had not been so discharged, have been unsecured, as against the liquidator, because of subsection (2).

Division 2A - Vesting of PPSA security interests if not continuously perfected  

SECTION 588FK   INTERPRETATION AND APPLICATION  

588FK(1)    
A word or expression used in this Division (other than the expression PPSA security interest) has the same meaning as in the Personal Property Securities Act 2009 .

Note 1: As a result of this section, in this Division, company has the same meaning as in the Personal Property Securities Act 2009 .

Note 2: For PPSA security interest , see section 9 .

588FK(2)    
Subsection (1) applies despite any other provision of this Act.

588FK(3)    
For the purposes of this Division, whether or not a person has acquired actual or constructive knowledge of a circumstance is to be determined in accordance with sections 297 to 300 of the Personal Property Securities Act 2009 .

SECTION 588FL   VESTING OF PPSA SECURITY INTERESTS IF COLLATERAL NOT REGISTERED WITHIN TIME  

Scope

588FL(1)    
This section applies if:

(a)    

any of the following events occurs:

(i) an order is made, or a resolution is passed, for the winding up of a company;

(ii) an administrator of a company is appointed under section 436A , 436B or 436C ;

(iii) a company executes a deed of company arrangement under Part 5.3A ;

(iv) a restructuring practitioner for the company is appointed under section 453B ;

(v) a company makes a restructuring plan under Division 3 of Part 5.3B ;

(vi) section 842A , or Subdivision C of Division 9 of Part 7.3B , begins to apply to a body corporate; and

(b)    

a PPSA security interest granted by the company in collateral is covered by subsection (2) .

Note: A security interest granted by a company in relation to which paragraph (a) applies that is unperfected at the critical time may vest in the company under section 267 or 267A of the Personal Property Securities Act 2009 .

588FL(2)    
This subsection covers a PPSA security interest if:

(a)    at the critical time, or, if the security interest arises after the critical time, when the security interest arises:

(i) the security interest is enforceable against third parties under the law of Australia; and

(ii) the security interest is perfected by registration, and by no other means; and

(b)    the registration time for the collateral is after the latest of the following times:

(i) 6 months before the critical time;

(ii) the time that is the end of 20 business days after the security agreement that gave rise to the security interest came into force, or the time that is the critical time, whichever time is earlier;

(iii) if the security agreement giving rise to the security interest came into force under the law of a foreign jurisdiction, but the security interest first became enforceable against third parties under the law of Australia after the time that is 6 months before the critical time - the time that is the end of 56 days after the security interest became so enforceable, or the time that is the critical time, whichever time is earlier;

(iv) a later time ordered by the Court under section 588FM .

Note 1: For the meaning of critical time , see subsection (7) .

Note 2: For when a security interest is enforceable against third parties under the law of Australia, see section 20 of the Personal Property Securities Act 2009 .

Note 3: A security interest may become perfected at a particular time by a registration that is made earlier than that time, if the security interest attaches to the collateral at the later time (after registration). See section 21 of the Personal Property Securities Act 2009 .

Note 4: The Personal Property Securities Act 2009 provides for perfection by registration, possession or control, or by force of that Act (see section 21 of that Act).

588FL(3)    
(Repealed by No 35 of 2011, s 3, Sch 1 [ 8].)

Vesting of security interest in company

588FL(4)    
The PPSA security interest vests in the company at the following time, unless the security interest is unaffected by this section because of section 588FN :

(a)    if the security interest first becomes enforceable against third parties at or before the critical time - immediately before the event mentioned in paragraph (1)(a) ;

(b)    if the security interest first becomes enforceable against third parties after the critical time - at the time it first becomes so enforceable.

Note: For the meaning of critical time , see subsection (7) .

Property acquired for new value without knowledge

588FL(5)    
Subsection (4) does not affect the title of a person to personal property if:

(a)    the person acquires the personal property for new value from a secured party, from a person on behalf of a secured party, or from a receiver in the exercise of powers:

(i) conferred by the security agreement providing for the security interest; or

(ii) implied by the general law; and

(b)    

at the time the person acquires the property, the person has no actual or constructive knowledge of the following (as the case requires):

(i) the filing of an application for an order to wind up the company;

(ii) the passing of a resolution to wind up the company;

(iii) the appointment of an administrator of the company under section 436A , 436B or 436C ;

(iv) the execution of a deed of company arrangement by the company under Part 5.3A ;

(v) the appointment of a restructuring practitioner for the company under section 453B ;

(vi) the making of a restructuring plan by the company under Division 3 of Part 5.3B .

Note: For what is actual or constructive knowledge, see sections 297 and 298 of the Personal Property Securities Act 2009 .

588FL(6)    
In a proceeding in Australia under this Act, the onus of proving the fact that a person acquires personal property without actual or constructive knowledge as mentioned in paragraph (5)(b) lies with the person asserting that fact.

588FL(7)    

In this section:

critical time
, in relation to a company, means:

(a) if the company is being wound up - when, on a day, the event occurs by virtue of which the winding up is taken to have begun or commenced on that day under section 513A or 513B ; or

(b) if the company is under administration or is subject to a deed of company arrangement - when, on a day, the event occurs by virtue of which the day is the section 513C day for the company; or

(c) if the company is under restructuring or is subject to a restructuring plan - when, on a day, the event occurs by virtue of which the day is the section 513CA day for the company.

SECTION 588FM   EXTENSION OF TIME FOR REGISTRATION  

588FM(1)    

A company, or any person interested, may apply to the Court (within the meaning of section 58AA ) for an order fixing a later time for the purposes of subparagraph 588FL(2)(b)(iv) .

Note: If an insolvency-related event occurs in relation to a company, paragraph 588FL(2)(b) fixes a time by which a PPSA security interest granted by the company must be registered under the Personal Property Securities Act 2009 , failing which the security interest may vest in the company.

588FM(2)    
On an application under this section, the Court may make the order sought if it is satisfied that:

(a) the failure to register the collateral earlier:

(i) was accidental or due to inadvertence or some other sufficient cause; or

(ii) is not of such a nature as to prejudice the position of creditors or shareholders; or

(b) on other grounds, it is just and equitable to grant relief.

588FM(3)    
The Court may make the order sought on any terms and conditions that seem just and expedient to the Court.

SECTION 588FN   PPSA SECURITY INTERESTS UNAFFECTED BY SECTION 588FL  

PPSA security interests arising under certain transactions

588FN(1)    
Subsection 588FL(4) (vesting of security interests in company) does not apply to a PPSA security interest provided for by any of the following transactions, if the interest does not secure the payment or performance of an obligation:

(a) a transfer of an account or chattel paper;

(b) a PPS lease, if paragraph (e) (serial numbered goods) of the definition of PPS lease in subsection 13(1) of the Personal Property Securities Act 2009 applies tothe lease, and none of paragraphs (a) to (d) of that definition applies to the lease;

(c) a commercial consignment.

Example: An example of a PPSA security interest mentioned in paragraph (b) is a PPS lease of goods that does not secure the payment or performance of an obligation, if:

(a) the goods leased may or must be described by serial number in accordance with regulations made for the purposes of the Personal Property Securities Act 2009 ; and

(b) the lease is for a term of between 90 days and 1 year; and

(c) paragraphs (c) and (d) of the definition of PPS lease in subsection 13(1) of the Personal Property Securities Act 2009 do not apply to the lease.

PPSA security interests and subordinated debts

588FN(2)    
Subsection 588FL(4) (vesting of security interests in company) does not apply to a PPSA security interest in an account if all of the following conditions are satisfied:

(a) a person (the obligor ) owes money to another person (the senior creditor );

(b) the obligor also owes money to a third person (the junior creditor );

(c) an agreement between the senior creditor and the junior creditor provides (in substance):

(i) for the postponement or subordination of the obligor ' s debt to the junior creditor, to the obligor ' s debt to the senior creditor; and

(ii) in the event of the obligor ' s debt to the junior creditor being discharged (whether wholly or partly) by the obligor transferring personal property to the junior creditor - for the junior creditor to transfer the property, or proceeds of the property, to the senior creditor to the value of the amount owed by the obligor to the senior creditor; and

(iii) in the event that the property or proceeds are not transferred - for the junior creditor to hold the property or proceeds on trust for the senior creditor to that value; and

(iv) in the event of such a trust arising - for a security interest to be granted by the junior creditor to the senior creditor over the personal property or proceeds securing payment of the obligor ' s debt to the senior creditor;

(d) the security interest is a security interest granted under the agreement, in the circumstances described in subparagraph (c)(iv).

Transfer of collateral subject to PPSA security interests

588FN(3)    

Subsection 588FL(4) (vesting of security interests in company) does not apply to a PPSA security interest if:

(a) before the critical time that applies under section 588FL , the company acquired, by transfer, the collateral in which the PPSA security interest is granted; and

(b) the company did not acquire the collateral free of the security interest; and

(c) the security interest became perfected before the critical time; and

(d) the security interest was continuously perfected by registration during a period covered by subsection (4) that begins before the critical time.

588FN(4)    
The period covered by this subsection:

(a) begins at whichever of the following times is applicable:

(i) in a case in which the secured party consented to the transfer - the end of 5 businessdays after the day of the transfer;

(ii) in a case in which the secured party otherwise acquires the actual or constructive knowledge required to perfect the secured party ' s interest by registration (or to re-perfect the interest by an amendment of a registration) - the end of 5 business days after the day the secured party acquires the knowledge; and

(b) ends no earlier than at the critical time that applies under section 588FL .

Note: For what is actual or constructive knowledge, see sections 297 and 298 of the Personal Property Securities Act 2009 .

SECTION 588FO   CERTAIN LESSORS, BAILORS AND CONSIGNORS ENTITLED TO DAMAGES  

Scope

588FO(1)    
This section applies if either of the following PPSA security interests is vested in a company under section 588FL :

(a) a PPSA security interest of a consignor under a commercial consignment;

(b) a PPSA security interest of a lessor or bailor under a PPS lease.

Entitlement to damages and compensation

588FO(2)    
The consignor, lessor or bailor:

(a) is taken to have suffered damage immediately before the PPSA security interest was vested in the company; and

(b) may recover an amount of compensation from the company equal to the greater of the following amounts:

(i) the amount determined in accordance with the consignment, lease or bailment;

(ii) the sum of the market value of the consigned, leased or bailed property immediately before the critical time that applies under section 588FL , and the amount of any other damage or loss resulting from the termination of the consignment, lease or bailment.

Note: The consignor, lessor or bailor may be able to prove the amount of compensation in proceedings related to the winding up of the company.

Division 2B - Security interests in favour of company officers etc.  

SECTION 588FP   SECURITY INTERESTS IN FAVOUR OF AN OFFICER OF A COMPANY ETC. VOID  

General rule

588FP(1)    
A security interest, and any powers purporting to be conferred by the instrument under which the security interest is created, are void, and are taken always to have been void, if:

(a) a company grants the security interest; and

(b) a person covered by subsection (2) is a secured party; and

(c) the secured party purports to take a step to enforce the security interest, within 6 months after the time (the relevant time ) the instrument is made, without the leave of the Court under subsection (4).

588FP(2)    
This subsection covers the following persons:

(a) a person who is an officer (including a local agent of a foreign company) of the company at the relevant time;

(b) a person who has been such an officer of the company at any time within the period of 6 months ending at the relevant time;

(c) a person associated, in relation to the creation of the security interest, with a person of a kind mentioned in paragraph (a) or (b).

588FP(3)    
Without limiting paragraph (1)(c), a secured party takes a step to enforce a security interest if:

(a) the secured party appoints a receiver, or a receiver and manager, under powers conferred by an instrument creating or evidencing the security interest; or

(b) whether directly or by an agent, the secured party enters into possession or assumes control of property of a company for the purposes of enforcing the security interest; or

(c) the secured party seizes the property under section 123 of the Personal Property Securities Act 2009 for the purposes of enforcing the security interest.

Extension of time on application to the Court

588FP(4)    
On application by a secured party, the Court may give leave for a security interest granted by a company to be enforced by the secured party within 6 months after the relevant time, if it is satisfied that:

(a) the company was solvent immediately before the relevant time; and

(b) in all the circumstances of the case, it is just and equitable for the Court to do so.

Exception for security interests in PPSA retention of title property

588FP(5)    
This section does not apply in relation to a PPSA security interest in PPSA retention of title property.

Effect on debts, liabilities, obligations and title

588FP(6)    
A debt, liability or obligation is not affected by the fact that the security interest securing the debt, liability or obligation is void under subsection (1).

588FP(7)    
Subsection (1) does not affect the title of a person to property if:

(a) the person acquires the property for new value (within the meaning of the Personal Property Securities Act 2009 ) from any of the following persons (the seller ):

(i) a person covered by subsection (2);

(ii) another person on behalf of a person covered by subsection (2);

(iii) a receiver, or receiver and manager, appointed under powers conferred by an instrument creating or evidencing the security interest; and

(b) at the time the person acquires the property, the person has no actual or constructive knowledge that the seller is a secured party or acting on behalf of a secured party.

588FP(8)    
Sections 297 to 300 of the Personal Property Securities Act 2009 apply in relation to the determination of whether or not a person has actual or constructive knowledge as mentioned in paragraph (7)(b) of this section.

Onus of proof

588FP(9)    
In a proceeding in Australia under this Act, the onus of proving the fact that a person acquires property without actual or constructive knowledge as mentioned in paragraph (7)(b) lies with the person asserting that fact.

Division 3 - Duties to prevent insolvent trading and creditor-defeating dispositions  

Subdivision A - Director ' s duty to prevent insolvent trading  

SECTION 588G   DIRECTOR ' S DUTY TO PREVENT INSOLVENT TRADING BY COMPANY  

588G(1)    
This section applies if:

(a) a person is a director of a company at the time when the company incurs a debt; and

(b) the company is insolvent at that time, or becomes insolvent by incurring that debt, or by incurring at that time debts including that debt; and

(c) at that time, there are reasonable grounds for suspecting that the company is insolvent, or would so become insolvent, as the case may be; and

(d) that time is at or after the commencement of this Act.

588G(1A)    
For the purposes of this section, if a company takes action set out in column 2 of the following table, it incurs a debt at the time set out in column 3.

When debts are incurred	[ operative table]
	Action of company	When debt is incurred
1	paying a dividend	when the dividend is paid or, if the company has a constitution that provides for the declaration of dividends, when the dividend is declared
2	making a reduction of share capital to which Division 1 of Part 2J.1 applies (other than a reduction that consists only of the cancellation of a share or shares for no consideration)	when the reduction takes effect
3	buying back shares (even if the consideration is not a sum certain in money)	when the buy-back agreement is entered into
4	redeeming redeemable preference shares that are redeemable at its option	when the company exercises the option
5	issuing redeemable preference shares that are redeemable otherwise than at its option	when the shares are issued
6	financially assisting a person to acquire shares (or units of shares) in itself or a holding company	when the agreement to provide the assistance is entered into or, if there is no agreement, when the assistance is provided
7	entering into an uncommercial transaction (within the meaning of section 588FB) other than one that a court orders, or a prescribed agency directs, the company to enter into	when the transaction is entered into

588G(2)    
By failing to prevent the company from incurring the debt, the person contravenes this section if:

(a) the person is aware at that time that there are such grounds for so suspecting; or

(b) a reasonable person in a like position in a company in the company ' s circumstances would be so aware.

Note: This subsection is a civil penalty provision (see section 1317E ).

588G(3)    
A person commits an offence if:

(a) a company incurs a debt at a particular time; and

(aa) at that time, a person is a director of the company; and

(b) the company is insolvent at that time, or becomes insolvent by incurring that debt, or by incurring at that time debts including that debt; and

(c) the person suspected at the time when the company incurred the debt that the company was insolvent or would become insolvent as a result of incurring that debt or other debts (as in paragraph (1)(b)); and

(d) the person's failure to prevent the company incurring the debt was dishonest.

588G(3A)    

For the purposes of an offence based on subsection (3), absolute liability applies to paragraph (3)(a).

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

588G(3B)    

For the purposes of an offence based on subsection (3), strict liability applies to paragraphs (3)(aa) and (b).

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

588G(4)    
The provisions of Division 4 of this Part are additional to, and do not derogate from, Part 9.4B as it applies in relation to a contravention of this section.

Subdivision B - Duties to prevent creditor-defeating dispositions  

SECTION 588GAA  

588GAA   OBJECT OF THIS SUBDIVISION  

The object of this Subdivision is to deter the practice (which may form part of the activity sometimes called phoenixing) of disposing of a company ' s assets to avoid the company ' s obligations to its creditors.

SECTION 588GAB   OFFICER ' S DUTY TO PREVENT CREDITOR-DEFEATING DISPOSITION  

588GAB(1)    
An officer of a company must not engage in conduct that results in the company making a creditor-defeating disposition of property of the company, if:

(a)    the company is insolvent; or

(b)    the company becomes insolvent because of the disposition or a number of dispositions made at the time of the disposition; or

(c)    less than 12 months after the disposition, the start of an external administration (as defined in Schedule 2 ) of the company occurs as a direct or indirect result of the disposition; or

(d)    less than 12 months after the disposition, the company ceases to carry on business altogether as a direct or indirect result of the disposition.

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

Note 2: Recklessness is the fault element for the result of the company making the creditor-defeating disposition and for paragraphs (1)(a), (b), (c) and (d): see section 5.6 of the Criminal Code .

588GAB(2)    
An officer of a company must not engage in conduct that results in the company making a disposition of property of the company, if:

(a)    one or more of the following applies:

(i) the company is insolvent;

(ii) the company becomes insolvent because of the disposition or a number of dispositions made at the time of the disposition;

(iii) less than 12 months after the disposition, the start of an external administration (as defined in Schedule 2 ) of the company occurs as a direct or indirect result of the disposition;

(iv) less than 12 months after the disposition, the company ceases to carry on business altogether as a direct or indirect result of the disposition; and

(b)    the officer knows, or a reasonable person in the position of the officer would know, that the disposition is a creditor-defeating disposition.

Note 1: This subsection is a civil penalty provision (see section 1317E ).

Note 2: Section 588E provides for presumptions about when a company is insolvent and about matters relevant to whether a disposition is a creditor-defeating disposition.

Exceptions

588GAB(3)    
Subsections (1) and (2) do not apply if the disposition was made:

(a)    under a compromise or arrangement approved by a Court under section 411 ; or

(b)    under a deed of company arrangement executed by the company; or

(ba)    

under a restructuring plan made by the company; or

(c)    by the company ' s liquidator; or

(d)    by a provisional liquidator of the company.

Note: Section 588GA also provides for subsections (1) and (2) of this section not to apply if the disposition was connected with a course of action likely to lead to a better outcome for the company.

SECTION 588GAC   PROCURING CREDITOR-DEFEATING DISPOSITION  

588GAC(1)    
A person must not engage in conduct of procuring, inciting, inducing or encouraging the making by a company of a disposition of property that results in the company making the disposition of the property, if:

(a)    one or more of the following applies:

(i) the company is insolvent;

(ii) the company becomes insolvent because of the disposition or a number of dispositions made at the time of the disposition;

(iii) less than 12 months after the disposition, the start of an external administration (as defined in Schedule 2 ) of the company occurs as a direct or indirect result of the disposition;

(iv) less than 12 months after the disposition, the company ceases to carry on business altogether as a direct or indirect result of the disposition; and

(b)    the disposition is a creditor-defeating disposition.

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

Note 2: Recklessness is the fault element for the result of the company making the disposition and for subparagraphs (1)(a)(i), (ii), (iii) and (iv) and paragraph (1)(b): see section 5.6 of the Criminal Code .

588GAC(2)    
A person must not engage in conduct of procuring, inciting, inducing or encouraging the making by a company of a disposition of property that results in the company making the disposition of the property, if:

(a)    one or more of the following applies:

(i) the company is insolvent;

(ii) the company becomes insolvent because of the disposition or a number of dispositions made at the time of the disposition;

(iii) less than 12 months after the disposition, the start of an external administration (as defined in Schedule 2 ) of the company occurs as a direct or indirect result of the disposition;

(iv) less than 12 months after the disposition, the company ceases to carry on business altogether as a direct or indirect result of the disposition; and

(b)    the person knows, or a reasonable person in the position of the person would know, that the disposition is a creditor-defeating disposition.

Note 1: This subsection is a civil penalty provision (see section 1317E ).

Note 2: Section 588E provides for presumptions about when a company is insolvent and about matters relevant to whether a disposition is a creditor-defeating disposition.

Exceptions

588GAC(3)    
Subsections (1) and (2) do not apply if the disposition was made:

(a)    under a compromise or arrangement approved by a Court under section 411 ; or

(b)    under a deed of company arrangement executed by the company; or

(ba)    

under a restructuring plan made by the company; or

(c)    by the company ' s liquidator; or

(d)    by a provisional liquidator of the company.

Note: Section 588GA also provides for subsections (1) and (2) of this section not to apply if the disposition was connected with a course of action likely to lead to a better outcome for the company.

Subdivision C - Safe harbour from breach of duties  

SECTION 588GA   SAFE HARBOUR - TAKING COURSE OF ACTION REASONABLY LIKELY TO LEAD TO A BETTER OUTCOME FOR THE COMPANY  

Safe harbour

588GA(1)    

Subsection 588G(2) does not apply in relation to a person and a debt, and subsections 588GAB(1) and (2) and 588GAC(1) and (2) do not apply in relation to a person and a disposition, if:

(a)    at a particular time after the person starts to suspect the company may become or be insolvent, the person starts developing one or more courses of action that are reasonably likely to lead to a better outcome for the company; and

(b)    

the debt is incurred, or the disposition is made:

(ia) directly or indirectly in connection with any such course of action; or

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

during the period starting at that time, and ending at the earliest of any of the following times:

(i) if the person fails to take any such course of action within a reasonable period after that time - the end of that reasonable period;

(ii) when the person ceases to take any such course of action;

(iii) when any such course of action ceases to be reasonably likely to lead to a better outcome for the company;

(iv) the appointment of an administrator, or liquidator, of the company.

Note 1: The person bears an evidential burden in relation to the matter in this subsection (see subsection (3)).

Note 2: For subsection (1) to be available, certain matters must be being done or be done (see subsections (4) and (5)).

Working out whether a course of action is reasonably likely to lead to a better outcome

588GA(2)    

For the purposes of (but without limiting) subsection (1) , in working out whether a course of action is reasonably likely to lead to a better outcome for the company, regard may be had to whether:

(a)    

the person is properly informing himself or herself of the company ' s financial position; or

(b)    

the person is taking appropriate steps to prevent any misconduct by officers or employees of the company that could adversely affect the company ' s ability to pay all its debts; or

(c)    

the person is taking appropriate steps to ensure that the company is keeping appropriate financial records consistent with the size and nature of the company; or

(d)    

the company or the person is obtaining advice from an appropriately qualified entity who was given sufficient information to give appropriate advice; or

(e)    

the person is developing or implementing a plan for restructuring the company to improve its financial position.

588GA(3)    

A person who wishes to rely on subsection (1) in a proceeding for, or relating to, a contravention of subsection 588G(2) , 588GAB(1) or (2) or 588GAC(1) or (2) bears an evidential burden in relation to that matter.

Matters that must be being done or be done

588GA(4)    

Subsection (1) does not apply in relation to a person and either a debt or a disposition if:

(a)    

when the debt is incurred, or the disposition is made, the company is failing to do one or more of the following matters:

(i) pay the entitlements of its employees that are payable;

(ii) give returns, notices, statements, applications or other documents as required by taxation laws (within the meaning of the Income Tax Assessment Act 1997 ); and

(b)    that failure:

(i) amounts to less than substantial compliance with the matter concerned; or

(ii) is one of 2 or more failures by the company to do any or all of those matters during the 12 month period ending when the debt is incurred;

unless an order applying to the person and that failure is in force under subsection (6).

Note: Employee entitlements are defined in subsection 596AA(2) and include superannuation contributions payable by the company.

588GA(5)    

Subsection (1) is taken never to have applied in relation to a person and either a debt or a disposition if:

(a)    

after the debt is incurred, or after the disposition is made, the person fails to comply with paragraph 429(2)(b) , or subsection 438B(2) , 475(1) , 497(4) or 530A(1) , in relation to the company; and

(b)    that failure amounts to less than substantial compliance with the provision concerned;

unless an order applying to the person and that failure is in force under subsection (6).

588GA(6)    
The Court may order that subsection (4) or (5) does not apply to a person and one or more failures if:

(a)    the Court is satisfied that the failures were due to exceptional circumstances or that it is otherwise in the interests of justice to make the order; and

(b)    an application for the order is made by the person.

Definitions

588GA(7)    
In this section:

better outcome
, for the company, means an outcome that is better for the company than the immediate appointment of an administrator, or liquidator, of the company.

evidential burden
, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.

SECTION 588GAAA   SAFE HARBOUR - TEMPORARY RELIEF IN RESPONSE TO THE CORONAVIRUS  

Safe harbour

588GAAA(1)    
Subsection 588G(2) does not apply in relation to a person and a debt incurred by a company if the debt is incurred:

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

(b)    during:

(i) the 6-month period starting on the day this section commences; or

(ii) any longer period that starts on the day this section commences and that is prescribed by the regulations for the purposes of this subparagraph; and

(c)    

before any appointment during that period of an administrator, restructuring practitioner or liquidator of the company.

588GAAA(2)    
A person who wishes to rely on subsection (1) in a proceeding for, or relating to, a contravention of subsection 588G(2) bears an evidential burden in relation to that matter.

When the safe harbour does not apply

588GAAA(3)    
Subsection (1) is taken never to have applied in relation to a person and a debt in the circumstances prescribed by the regulations for the purposes of this subsection.

Definitions

588GAAA(4)    
In this section:

evidential burden
, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.

SECTION 588GAAB   SAFE HARBOUR - COMPANIES UNDER RESTRUCTURING  

Safe harbour

588GAAB(1)    
Subsection 588G(2) does not apply in relation to a person and a debt incurred by a company if the debt is incurred:

(a)    during the restructuring of the company; and

(b)    in the ordinary course of the company ' s business, or with the consent of the restructuring practitioner or by order of the Court.

588GAAB(2)    
A person who wishes to rely on subsection (1) in a proceeding for, or relating to, a contravention of subsection 588G(2) bears an evidential burden in relation to that matter.

When the safe harbour does not apply

588GAAB(3)    
Subsection (1) is taken never to have applied in relation to a person and a debt in the circumstances prescribed by the regulations for the purposes of this subsection.

Definitions

588GAAB(4)    
In this section:

evidential burden
, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.

SECTION 588GAAC   SAFE HARBOUR - TEMPORARY RELIEF FOR COMPANIES LOOKING FOR A RESTRUCTURING PRACTITIONER  

Safe harbour

588GAAC(1)    
Subsection 588G(2) does not apply in relation to a person and a debt incurred by a company if:

(a)    the company is eligible for temporary restructuring relief when the debt is incurred; and

(b)    the debt is incurred in the ordinary course of the company ' s business; and

(c)    the company has taken all reasonable steps to appoint a restructuring practitioner before the debt was incurred.

588GAAC(2)    
A person who wishes to rely on subsection (1) in a proceeding for, or relating to, a contravention of subsection 588G(2) bears an evidential burden in relation to that matter.

When the safe harbour does not apply

588GAAC(3)    
Subsection (1) is taken never to have applied in relation to a person and a debt in circumstances prescribed by the regulations for the purposes of this subsection.

Definitions

588GAAC(4)    
In this section:

evidential burden
, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.

SECTION 588GB   INFORMATION OR BOOKS NOT ADMISSIBLE TO SUPPORT THE SAFE HARBOUR IF FAILURE TO PERMIT INSPECTION ETC.  

When books or information not admissible for the safe harbour

588GB(1)    
If, at a particular time:

(a)    

a person fails to permit the inspection of, or deliver, any books of the company in accordance with:

(i) a notice given to the person under subsection 438C(3) , section 477 or subsection 530B(4) ; or

(ii) an order made under section 486 ; or

(iii) subsection 438B(1) , paragraph 453F(1)(c) , section 453G or subsection 477(3) or 530A(1) ; or

(b)    a warrant is issued under subsection 530C(2) because the Court is satisfied that a person has concealed, destroyed or removed books of the company or is about to do so;

those books, and any secondary evidence of those books, are not admissible in evidence for the person in a relevant proceeding.

Note: For subparagraph (a)(i), a liquidator could give such a notice if this is necessary for winding up the affairs of the company and distributing its property (see paragraph 477(2)(m) ).

588GB(2)    
If, at a particular time, a person fails to give any information about the company in accordance with:

(a)    a notice given to the person under section 477 ; or

(b)    

paragraph 429(2)(b) , subsection 438B(2) or (3) , paragraph 453F(1)(b) or subsection 475(1) , 497(4) or 530A(1) or (2) ;

that information is not admissible in evidence for the person in a relevant proceeding.

Exceptions

588GB(3)    
However, subsection (1) or (2) does not apply to a person, and a book or information, if:

(a)    the person proves that:

(i) the person did not possess the book or information at any time referred to in that subsection; and

(ii) there were no reasonable steps the person could have taken to obtain the book or information; or

(b)    each entity seeking to rely on the notice, order, subsection, paragraph or warrant referred to in that subsection fails to comply with subsection (5) in relation to the person; or

(c)    an order applying to the person, and the book or information, is in force under subsection (4).

588GB(4)    
The Court may order that subsection (1) or (2) does not apply to a person, and a book or information, if:

(a)    the Court is satisfied that the failures by the person as mentioned in that subsection were due to exceptional circumstances or that it is otherwise in the interests of justice to make the order; and

(b)    an application for the order is made by the person.

Notice of effect of this section must be given

588GB(5)    

An entity that seeks to rely on a notice, order, subsection or warrant referred to in subsection (1) or (2) must set out the effect of this section:

(a)    for a notice under subsection 438C(3) , section 477 or subsection 530B(4) - in that notice; or

(b)    for an order under section 486 or for subsection 438B(3) , 477(3) or 530A(2) - in a written notice given to the person when the entity seeks to rely on that order or subsection; or

(c)    for a warrant issued under subsection 530C(2) - in a written notice given to the person when the entity seeks to exercise the warrant.

This subsection does not apply to an entity that seeks to rely on paragraph 429(2)(b) , subsection 438B(1) or (2) , paragraph 453F(1)(c) , section 453G or subsection 475(1) , 497(4) or 530A(1) .

588GB(6)    
A failure to comply with subsection (5) does not affect the validity of the notice, order, subsection or warrant referred to in subsection (5).

Definitions

588GB(7)    

In this section:

relevant proceeding
means a proceeding:

(a) for, or relating to, a contravention of subsection 588G(2) or 588GAB(1) or (2) or 588GAC(1) or (2) ; and

(b) in which a person seeks to rely on subsection 588GA(1) or 588GAAA(1) .

Example: A proceeding under section 588M .

SECTION 588H   DEFENCES ABOUT REASONABLE GROUNDS, ILLNESS OR REASONABLE STEPS  
Application

588H(1)    

This section has effect for the purposes of:

(a) proceedings for a contravention of subsection 588G(2) relating to the incurring of a debt at a time (the key time ); and

(b) proceedings for a contravention of subsection 588GAB(2) or 588GAC(2) relating to the disposition of a company ' s property at a time (the key time ); and

(c) proceedings under section 588M relating to the incurring of the debt or the disposition of the property.

Expectations and belief about company ' s solvency

588H(2)    

It is a defence if it is proved that, at the key time, the person had reasonable grounds to expect, and did expect, that the company was solvent at that time and would remain solvent despite all its debts incurred, and dispositions of its property made, at that time.

588H(3)    

Without limiting the generality of subsection (2), it is a defence if it is proved that, at the key time, the person:

(a) had reasonable grounds to believe, and did believe:

(i) that a competent and reliable person (the other person ) was responsible for providing to the first-mentioned person adequate information about whether the company was solvent; and

(ii) that the other person was fulfilling that responsibility; and

(b) expected, on the basis of information provided to the first-mentioned person by the other person, that the company was solvent at that time and would remain solvent despite all its debts incurred, and dispositions of its property made, at that time.

588H(3A)    

Subsections (2) and (3) do not apply for the purposes of proceedings relating to the disposition of the company ' s property if the key time was less than 12 months before:

(a) the start of an external administration (as defined in Schedule 2) of the company that occurred as a direct or indirect result of the disposition; or

(b) the company ceased to carry on business altogether as a direct or indirect result of the disposition.

Director who did not take part in management

588H(4)    

If the person was a director of the company at the key time, it is a defence if it is proved that, because of illness or for some other good reason, he or she did not take part at that time in the management of the company.

Reasonable steps taken to prevent debt or disposition

588H(5)    

It is a defence if it is proved that the person took all reasonable steps to prevent the company from incurring the debt or making the disposition of its property.

588H(6)    

In determining whether a defence under subsection (5) has been proved, the matters to which regard is to be had include, but are not limited to:

(a) any action the person took with a view to appointing an administrator of the company or a restructuring practitioner for the company; and

(b) when that action was taken; and

(c) the results of that action.

This subsection does not apply to a defence in proceedings relating to a disposition of the company ' s property.

SECTION 588HA   REVIEW RELATING TO SAFE HARBOUR  

588HA(1)    
The Minister must cause an independent review of the following matters to be undertaken as soon as practicable after the last day of the 2 year period commencing on the commencement of this section:

(a) the impact of the availability of the safe harbour described in subsection 588GA(1) to directors of companies on:

(i) the conduct of directors; and

(ii) the interests of creditors and employees of those companies;

(b) any other matters the Minister considers relevant.

588HA(2)    
The review must be undertaken by 3 persons who, in the Minister ' s opinion, possess appropriate qualifications to undertake the review.

588HA(3)    
The persons who undertake the review must give the Minister a written report of the review.

588HA(4)    
The Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of that House after the day on which the report is given to the Minister.

588HA(5)    
The report is not a legislative instrument.

Division 4 - Director liable to compensate company  

Subdivision A - Proceedings against director  

SECTION 588J   ON APPLICATION FOR CIVIL PENALTY ORDER, COURT MAY ORDER COMPENSATION  

588J(1)    
Where, on an application for a civil penalty order against a person in relation to a contravention of subsection 588G(2) , the Court is satisfied that:

(a) the person committed the contravention in relation to the incurring of a debt by a company; and

(b) the debt is wholly or partly unsecured; and

(c) the person to whom the debt is owed has suffered loss or damage in relation to the debt because of the company ' s insolvency;

the Court may (whether or not it makes a pecuniary penalty order under section 1317G or an order under section 206C disqualifying a person from managing corporations) order the first-mentioned person to pay to the company compensation equal to the amount of that loss or damage.

588J(1A)    

If, on an application for a civil penalty order against a person for a contravention of subsection 588GAB(2) or 588GAC(2) relating to a disposition of property of a company, the Court is satisfied that:

(a) the person contravened the subsection; and

(b) one or more creditors of the company suffered loss or damage because of the disposition and the company ' s insolvency;

the Court may order the person to pay the company compensation equal to the loss or damage (whether or not the Court makes a pecuniary penalty order under section 1317G or an order under section 206C disqualifying the person from managing corporations).

588J(2)    

A company ' s liquidator may intervene in an application for a civil penalty order against a person in relation to a contravention of subsection 588G(2) , 588GAB(2) or 588GAC(2) relating to the company.

588J(3)    
A company ' s liquidator who so intervenes is entitled to be heard:

(a) only if the Court is satisfied that the person committed the contravention; and

(b) only on the question whether the Court should order the person to pay compensation to the company.

SECTION 588K   CRIMINAL COURT MAY ORDER COMPENSATION  

588K(1)    
If:

(a) a court finds a person guilty of an offence under subsection 588G(3) in relation to the incurring of a debt by a company; and

(b) the court is satisfied that:

(i) the debt is wholly or partly unsecured; and

(ii) the person to whom the debt is owed has suffered loss or damage in relation to the debt because of the company's insolvency;

the court may (whether or not it imposes a penalty) order the first-mentioned person to pay to the company compensation equal to the amount of that loss or damage.

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

588K(2)    

If:

(a) a court finds a person guilty of an offence based on subsection 588GAB(1) or 588GAC(1) relating to disposition of property by a company; and

(b) the court is satisfied that one or more creditors of the company suffered loss or damage because of the disposition and the company ' s insolvency;

the court may order the person to pay the company compensation equal to the loss or damage (whether or not the court imposes a penalty for the offence).

SECTION 588L  

588L   ENFORCEMENT OF ORDER UNDER SECTION 588J OR 588K  
An order to pay compensation that a court makes under section 588J or 588K may be enforced as if it were a judgment of the court.

SECTION 588M   RECOVERY OF COMPENSATION FOR LOSS RESULTING FROM INSOLVENT TRADING  

588M(1)    
This section applies where:

(a) a person (in this section called the director ) has contravened subsection 588G(2) or (3) in relation to the incurring of a debt by a company; and

(b) the person (in this section called the creditor ) to whom the debt is owed has suffered loss or damage in relation to the debt because of the company ' s insolvency; and

(c) the debt was wholly or partly unsecured when the loss or damage was suffered; and

(d) the company is being wound up;

whether or not:

(e) the director has been convicted of an offence in relation to the contravention; or

(f) a civil penalty order has been made against the director in relation to the contravention.

588M(1A)    

This section also applies if:

(a) a person (the director ) has contravened subsection 588GAB(1) or (2) or 588GAC(1) or (2) relating to disposition of property by a company; and

(b) one or more creditors of the company have suffered loss or damage because of the disposition and the company ' s insolvency; and

(c) the company is being wound up.

This section applies whether or not the director has been convicted of an offence relating to the contravention or a civil penalty order has been made against the director for the contravention.

588M(2)    
The company ' s liquidator may recover from the director, as a debt due to the company, an amount equal to the amount of the loss or damage.

588M(3)    
The creditor may, as provided in Subdivision B but not otherwise, recover from the director, as a debt due to the creditor, an amount equal to the amount of the loss or damage.

588M(4)    
Proceedings under this section may only be begun within 6 years after the beginning of the winding up.

SECTION 588N  

588N   AVOIDING DOUBLE RECOVERY  

An amount recovered in proceedings under section 588M in relation to the incurring of a debt, or the disposition of property, by a company is to be taken into account in working out the amount (if any) recoverable in:

(a) any other proceedings under that section in relation to the incurring of the debt or the disposition of the property; and

(b) proceedings under section 596ACA in relation to a contravention of subsection 596AC(1) , (2) , (3) or (4) that is linked to the incurring of the debt or the disposition of the property.

SECTION 588P  

588P   EFFECT OF SECTIONS 588J, 588K AND 588M  
Sections 588J, 588K and 588M:

(a) have effect in addition to, and not in derogation of, any rule of law about the duty or liability of a person because of the person's office or employment in relation to a company; and

(b) do not prevent proceedings from being instituted in respect of a breach of such a duty or in respect of such a liability.

SECTION 588Q  

588Q   CERTIFICATES EVIDENCING CONTRAVENTION  
For the purposes of this Part, a certificate that:

(a) purports to be signed by the Registrar or other proper officer of an Australian court; and

(b) states:

(i) that that court has declared that a specified person has, by failing to prevent a specified company from incurring a specified debt, contravened subsection 588G(3) in relation to the company; or

(ii) that a specified person was convicted by that court for an offence constituted by a contravention of section 588G in relation to the incurring of a specified debt by a specified company; or

(iii) that a specified person charged before that court with such an offence was found in that court to have committed the offence but that the court did not proceed to convict the person of the offence; or

(iv) that that court has declared that a specified person has contravened subsection 588GAB(2) or subsection 588GAC(2) in relation to a specified disposition of property by a specified company; or

(v) that a specified person was convicted by that court for an offence constituted by a contravention of subsection 588GAB(1) or 588GAC(1) in relation to a specified disposition of property by a specified company; or

(vi) that a specified person charged before that court with an offence described in subparagraph (v) was found in that court to have committed the offence but that the court did not proceed to convict the person of the offence;

is, unless it is proved that the declaration, conviction or finding was set aside, quashed or reversed, conclusive evidence:

(c) that the declaration was made, that the person was convicted of the offence, or that the person was so found, as the case may be; and

(d) that the person committed the contravention.

Subdivision B - Proceedings by creditor  

SECTION 588R   CREDITOR MAY SUE FOR COMPENSATION WITH LIQUIDATOR'S CONSENT  

588R(1)    
A creditor of a company that is being wound up may, with the written consent of the company's liquidator, begin proceedings under section 588M in relation to the incurring by the company of a debt that is owed to the creditor.

588R(1A)    

If section 588M applies in relation to a company because of subsection 588M(1A) , a creditor described in that subsection may begin proceedings under that section with the written consent of the company ' s liquidator.

588R(2)     View history reference