Corporations Act 2001

SCHEDULE 2 - INSOLVENCY PRACTICE SCHEDULE (CORPORATIONS)  

Note: See section 600K .

PART 3 - GENERAL RULES RELATING TO EXTERNAL ADMINISTRATIONS  

Division 55 - Introduction  

SECTION 55-1   SIMPLIFIED OUTLINE OF THIS PART  

Division 60 - Remuneration and other benefits received by external administrators  

Subdivision A - Introduction  

SECTION 60-1   SIMPLIFIED OUTLINE OF THIS DIVISION  

Subdivision B - Remuneration of external administrators - general rules  

SECTION 60-2  

60-2   APPLICATION OF THIS SUBDIVISION  
This Subdivision applies in relation to an external administrator of a company other than:

(a) a provisional liquidator; or

(b) a liquidator appointed by ASIC under section 489EC (winding up by ASIC); or

(c) a restructuring practitioner for a company; or

(d) a restructuring practitioner for a restructuring plan.

Note: For the remuneration of provisional liquidators, see Subdivision C of this Division. For the remuneration of liquidators appointed by ASIC under section 489EC , see Subdivision D of this Division.

SECTION 60-5   EXTERNAL ADMINISTRATOR ' S REMUNERATION  
Remuneration in accordance with remuneration determinations

60-5(1)    
An external administrator of a company is entitled to receive remuneration for necessary work properly performed by the external administrator in relation to the external administration, in accordance with the remuneration determinations (if any) for the external administrator (see section 60-10 ).

Remuneration for external administrators if no remuneration determination made

60-5(2)    
If no remuneration determination is made in relation to necessary work properly performed by the external administrator of a company in relation to the external administration, the administrator is entitled to receive reasonable remuneration for the work. However, that remuneration must not exceed the maximum default amount.

SECTION 60-10   REMUNERATION DETERMINATIONS  
Remuneration determinations

60-10(1)    
A determination, specifying remuneration that an external administrator of a company (other than an external administrator in a members ' voluntary winding up) is entitled to receive for necessary work properly performed by the external administrator in relation to the external administration, may be made:

(a) by resolution of the creditors; or

(b) if there is a committee of inspection and a determination is not made under paragraph (a) - by the committee of inspection; or

(c) if a determination is not made under paragraph (a) or (b) - by the Court.

Note: For determinations made by the Court, see also section 60-12 (matters to which the Court must have regard).

60-10(2)    
A determination, specifying remuneration that an external administrator of a company in a members ' voluntary winding up is entitled to receive for necessary work properly performed by the external administrator in relation to the external administration, may be made:

(a) by resolution of the company at a general meeting; or

(b) if a determination is not made under paragraph (a) - by the Court.

Note: For determinations made by the Court, see also section 60-12 (matters to which the Court must have regard).

60-10(3)    
A determination under this section may specify remuneration that the external administrator is entitled to receive in either or both of the following ways:

(a) by specifying an amount of remuneration;

(b) by specifying a method for working out an amount of remuneration.

Remuneration on a time-cost basis

60-10(4)    
If a determination under this section specifies that the external administrator is entitled to receive remuneration worked out wholly or partly on a time-cost basis, the determination must include a cap on the amount of remuneration worked out on a time-cost basis that the external administrator is entitled to receive.

More than one remuneration determination may be made

60-10(5)    
To avoid doubt, more than one determination under this section may be made in relation to a particular external administrator of a company and a particular external administration of a company.

SECTION 60-11   REVIEW OF REMUNERATION DETERMINATIONS  
Review on application

60-11(1)    
Any of the following may apply to the Court for a review of a remuneration determination for an external administrator of a company:

(a) ASIC;

(b) a person with a financial interest in the external administration of the company;

(c) an officer of the company.

60-11(2)    
Paragraph (1)(c) has effect despite section 198G .

Note: Section 198G deals with powers of officers etc. while a company is under external administration.

60-11(3)    
On application under subsection (1), the Court may, if it considers it appropriate to do so, review the remuneration determination.

Note: See also section 60-12 (matters to which the Court must have regard).

Court must affirm, vary or set aside remuneration determination

60-11(4)    
After reviewing the remuneration determination, the Court must:

(a) affirm the remuneration determination; or

(b) vary the remuneration determination; or

(c) set aside the remuneration determination and substitute another remuneration determination.

Exception

60-11(5)    
Subsection (1) does not apply to a remuneration determination made by the Court.

SECTION 60-12  

60-12   MATTERS TO WHICH THE COURT MUST HAVE REGARD  
In making a remuneration determination under paragraph 60-10(1)(c) or (2)(b) , or reviewing a remuneration determination under section 60-11 , the Court must have regard to whether the remuneration is reasonable, taking into account anyor all of the following matters:

(a) the extent to which the work by the external administrator was necessary and properly performed;

(b) the extent to which the work likely to be performed by the external administrator is likely to be necessary and properly performed;

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

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

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

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

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

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

(i) the number, attributes and conduct, or the likely number, attributes and conduct, of the creditors;

(j) if the remuneration is worked out wholly or partly on a time-cost basis - the time properly taken, or likely to be properly taken, by the external administrator in performing the work;

(k) whether the external administrator was, or is likely to be, required to deal with one or more controllers, or one or more managing controllers;

(l) if:

(i) a review has been carried out under Subdivision C of Division 90 (review by another registered liquidator) into a matter that relates to the external administration; and

(ii) the matter is, or includes, remuneration of the external administrator;

the contents of the report on the review that relate to that matter;

(m) any other relevant matters.

SECTION 60-15   MAXIMUM DEFAULT AMOUNT  
Maximum default amount

60-15(1)    
The maximum default amount for an external administrator of a company is an amount (exclusive of GST) worked out as follows:

(a) if the external administrator is appointed in relation to the external administration of the company during the financial year beginning on 1 July 2016 - $5,000;

(b) if the external administrator is appointed in relation to the external administration of the company during a financial year beginning on or after 1 July 2017 - the greater of:

(i) the amount worked out by multiplying the indexation factor for the financial year (worked out under subsections (3) and (4)) by the maximum default amount for an external administrator appointed during the previous financial year; and

(ii) the amount (if any) prescribed for the purposes of this subparagraph.

Rounding

60-15(2)    
Amounts worked out under subsection (1) must be rounded to the nearest whole dollar (rounding 50 cents upwards).

Indexation factor

60-15(3)    
Subject to subsection (4), the indexation factor for a financial year is the number worked out by dividing the index number for the March quarter immediately preceding that financial year by the index number for the March quarter immediately preceding that first-mentioned March quarter.

60-15(4)    
If an indexation factor worked out under subsection (3) would be less than 1, the indexation factor is to be increased to 1.

Changes to CPI index reference period and publication of substituted index numbers

60-15(5)    
In working out the indexation factor:

(a) use only the index numbers published in terms of the most recently published index reference period for the Consumer Price Index; and

(b) disregard index numbers published in substitution for previously published index numbers (except where the substituted numbers are published to take account of changes in the index reference period).

Definition - index number

60-15(6)    
In this section:

index number
, in relation to a quarter, means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Statistician in respect of that quarter.

Subdivision C - Remuneration of provisional liquidators  

SECTION 60-16   REMUNERATION OF PROVISIONAL LIQUIDATORS  

60-16(1)    
A provisional liquidator is entitled to receive such remuneration, by way of percentage or otherwise, as is:

(a) determined by the Court; or

(b) if:

(i) no determination by the Court is in force; and

(ii) there is a committee of inspection;

determined by agreement between the liquidator and the committee of inspection; or

(c) if:

(i) no determination by the Court is in force; and

(ii) there is no committee of inspection or the liquidator and the committee of inspection fail to agree;

determined by resolution of the creditors.

60-16(2)    
Sections 60-11 and 60-12 (Court review) apply in relation to a determination mentioned in this section in the same way as they apply to a remuneration determination made under section 60-10 .

Subdivision D - Remuneration of liquidators in winding up by ASIC  

SECTION 60-17  

60-17   REMUNERATION OF LIQUIDATORS IN WINDING UP BY ASIC  
If ASIC orders under section 489EA that a company be wound up, ASIC may determine the remuneration that the liquidator is entitled to receive.

Subdivision DA - Remuneration of restructuring practitioners  

SECTION 60-18   INSOLVENCY PRACTICE RULES  

60-18(1)    
The Insolvency Practice Rules may provide for and in relation to the remuneration of:

(a)    a restructuring practitioner for a company; and

(b)    a restructuring practitioner for a restructuring plan.

60-18(2)    
Without limiting subsection (1), the Insolvency Practice Rules may provide for the remuneration of a restructuring practitioner for a restructuring plan that has been made in relation to a company to be dealt with wholly or partly under the restructuring plan.

Subdivision E - Duties of external administrators relating to remuneration and benefits etc.  

SECTION 60-20   EXTERNAL ADMINISTRATOR MUST NOT DERIVE PROFIT OR ADVANTAGE FROM THE ADMINISTRATION OF THE COMPANY  
Deriving profit or advantage from the company

60-20(1)    
An external administrator of a company must not directly or indirectly derive any profit or advantage from the external administration of the company.

Circumstances in which profit or advantage is taken to be derived

60-20(2)    
To avoid doubt, an external administrator of a company is taken to derive a profit or advantage from the external administration of the company if:

(a) the external administrator directly or indirectly derives a profit or advantage from a transaction (including a sale or purchase) entered into for or on account of the company; or

(b) the external administrator directly or indirectly derives a profit or advantage from a creditor or member of the company; or

(c) a related entity of the external administrator directly or indirectly derives a profit or advantage from the external administration of the company.

Exceptions

60-20(3)    
Subsection (1) does not apply to the extent that:

(a) another provision of this Act, or of another law, requires or permits the external administrator to derive the profit or advantage; or

(b) the Court gives leave to the external administrator to derive the profit or advantage.

Note: Subsection (1) would not, for example, prevent the external administrator from recovering remuneration for necessary work properly performed by the external administrator in relation to the external administration of the company, as the external administrator is permitted to do so under other provisions of this Act.

60-20(4)    
Despite paragraph (2)(c), subsection (1) does not apply to the extent that:

(a) the external administrator employs or engages a person to provide services in connection with the external administration of the company; and

(b) a related entity of the external administrator directly or indirectly derives a profit or advantage as a result of that employment or engagement; and

(c) one of the following is satisfied:

(i) the external administrator does not know, and could not reasonably be expected to know, that the related entity would derive that profit or advantage;

(ii) the creditors, by resolution, agree to the related entity deriving the profit or advantage;

(iii) it is not reasonably practicable in all the circumstances to obtain the agreement, by resolution, of the creditors to the related entity deriving the profit or advantage and the cost of employing or engaging the person to provide the services is reasonable in all the circumstances.

60-20(4A)    

Despite paragraph (2)(c), subsection (1) does not apply to the extent that a related entity of the external administrator directly or indirectly derives a profit or advantage:

(a) from remuneration paid to the external administrator in accordance with section 60-5 of this Schedule; or

(b) from a profit or advantage covered by subsection (4).

60-20(5)    
Subsection (1) does not apply to the extent that the profit or advantage is a payment that:

(a) is made to the external administrator by or on behalf of the Commonwealth or an agency or authority of the Commonwealth; and

(b) is of a kind prescribed.

Offence

60-20(6)    
A person commits an offence of strict liability if:

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

(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matters in subsections (3), (4) and (5) (see subsection 13.3(3) of the Criminal Code ).

Effect of contravention of this section

60-20(7)    
A transaction or any other arrangement entered into in contravention of this section may be set aside by the Court.

Division 65 - Funds handling  

SECTION 65-1   SIMPLIFIED OUTLINE OF THIS DIVISION  

SECTION 65-5   EXTERNAL ADMINISTRATOR MUST PAY ALL MONEY INTO AN ADMINISTRATION ACCOUNT  
External administrator must pay money into the administration account

65-5(1)    
The external administrator of a company must pay all money received by the external administrator on behalf of, or in relation to, the company into an administration account for the company within 5 business days after receipt.

Exception

65-5(2)    
If the Court gives a direction that is inconsistent with subsection (1), that subsection does not apply to the extent of the inconsistency.

Offence

65-5(3)    
A person commits an offence of strict liability if:

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

(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

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

SECTION 65-10   ADMINISTRATION ACCOUNTS  

65-10(1)    
A bank account is an administration account for a company if:

(a) the account is maintained in relation to the external administration of the company; and

(b) if any requirements are prescribed in relation to the administration accounts of companies under external administration, the account complies with those requirements.

65-10(2)    
A bank account is an administration account for a member of a pooled group of companies if:

(a) the account is maintained in relation to the external administration of the pooled group of companies; and

(b) if any requirements are prescribed in relation to the administration accounts of companies under external administration, the account complies with those requirements.

SECTION 65-15   EXTERNAL ADMINISTRATOR MUST NOT PAY OTHER MONEY INTO THE ADMINISTRATION ACCOUNT  

External administrator must not pay other money into the administration account

65-15(1)    
The external administrator of a company must not pay any money into an administration account for the company if it is not received by the external administrator on behalf of, or in relation to:

(a) the company; or

(b) if the company is a member of a pooled group - another member of the pooled group.

Exception

65-15(2)    
If the Court gives a direction that is inconsistent with subsection (1), that subsection does not apply to the extent of the inconsistency.

Offence

65-15(3)    
A person commits an offence of strict liability if:

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

(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

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

SECTION 65-20   CONSEQUENCES FOR FAILURE TO PAY MONEY INTO ADMINISTRATION ACCOUNT  

Application of this section

65-20(1)    
This section applies if:

(a) an external administrator of a company:

(i) is subject to a requirement under subsection 65-5(1) (paying money into administration account); and

(ii) fails to comply with the requirement in relation to an amount of money; and

(b) the amount exceeds:

(i) $50; or

(ii) if another amount is prescribed - that other amount.

Exception

65-20(2)    
Subsection (1) does not apply if, on the application of the external administrator of the company, the Court is satisfied that the external administrator had sufficient reason for failing to comply with the requirement in relation to the amount.

External administrator must pay penalty on excess

65-20(3)    
The external administrator must, as a penalty, pay interest to the Commonwealth on the excess, worked out:

(a) at the rate of 20% per year; or

(b) if another rate is prescribed - at that other rate;

for the period during which the external administrator fails to comply with the requirement.

65-20(4)    
The external administrator is personally liable for, and is not entitled to be reimbursed out of the property of the company in relation to, the payment of that interest.

SECTION 65-25   PAYING MONEY OUT OF ADMINISTRATION ACCOUNT  

Money only to be paid out of administration account in accordance with this Act etc.

65-25(1)    
An external administrator of a company must not pay any money out of the administration account for the company otherwise than:

(a) for purposes related to the external administration of the company; or

(b) in accordance with this Act; or

(c) in accordance with a direction of the Court.

Offence

65-25(2)    
A person commits an offence of strict liability if:

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

(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

SECTION65-40   HANDLING SECURITIES  

Securities must be deposited with administration account bank

65-40(1)    
An external administrator of a company must deposit in a bank:

(a) the negotiable instruments; and

(b) any other securities;

payable to the company or the external administrator as soon as practicable after they are received by the external administrator.

Exception

65-40(2)    
If the Court gives a direction that is inconsistent with subsection (1), that subsection does not apply to the extent of the inconsistency.

Offence

65-40(3)    
A person commits an offence of strict liability if:

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

(b) the person fails to comply with the requirement.

Penalty: 20 penalty units.

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

Delivery of securities

65-40(4)    
The negotiable instruments or other security must be delivered out on the signed request of the external administrator.

SECTION 65-45   HANDLING OF MONEY AND SECURITIES - COURT DIRECTIONS  

65-45(1)    
The Court may, on application, give directions regarding the payment, deposit or custody of:

(a) money; and

(b) negotiable instruments and other securities;

that are payable to, or held by, an external administrator of a company.

65-45(2)    
The Court may, on application, give directions authorising the external administrator of a company to make payments into and out of a special bank account.

65-45(3)    
Without limiting subsection (2), the Court may:

(a) authorise the payments for the time and on the terms it thinks fit; and

(b) if the Court thinks the account is no longer required - at any time order it to be closed.

65-45(4)    
A copy of an order under paragraph (3)(b) must be served by the external administrator on the bank with which the special bank account was opened.

65-45(5)    
An application under this section may be made by:

(a) any person with a financial interest in the external administration of the company; or

(b) an officer of the company.

65-45(6)    
Paragraph (5)(b) has effect despite section 198G .

Note: Section 198G deals with powers of officers etc. while a company is under external administration.

SECTION 65-50  

65-50   RULES IN RELATION TO CONSEQUENCES FOR FAILURE TO COMPLY WITH THIS DIVISION  

The Insolvency Practice Rules may provide for and in relation to:

(a) the payment by an external administrator of a company of interest at such rate, on such amount and in respect of such period as is prescribed; and

(b) disallowance of all or of such part as is prescribed of the remuneration of an external administrator of a company; and

(c) the removal from office of an external administrator of a company by the Court; and

(d) the payment by an external administrator of a company of any expenses occasioned by reason of his or her default;

in cases where an external administrator contravenes or fails to comply with this Division (including Insolvency Practice Rules made under this Division).

Division 70 - Information  

Subdivision A - Introduction  

SECTION 70-1   SIMPLIFIED OUTLINE OF THIS DIVISION  

Subdivision B - Administration returns  

SECTION 70-5   ANNUAL ADMINISTRATION RETURN  

Application of this section

70-5(1)    
This section applies if a person is the external administrator of a company during all or part of an administration return year for the external administrator for the company.

70-5(2)    
However, this section does not apply if:

(a) the external administration of the company ends during the administration return year; and

(b) the person is the external administrator of the company when the external administration of the company ends.

Note: If a person is the external administrator of a company when theexternal administration of the company ends, the person must instead lodge a return under section 70-6 .

Annual administration return to be lodged

70-5(3)    
The person must lodge a return in relation to the external administration of the company by the person during the year or part of the year (as the case requires).

70-5(4)    
The return must:

(a) be in the approved form; and

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

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

Meaning of administration return year

70-5(5)    
Each of the following is an administration return year for an external administrator for a company:

(a) the period of 12 months beginning on the day on which the person first began to be an external administrator of the company;

(b) each subsequent period of 12 months.

Notice of lodgement to be given

70-5(6)    
The person must give notice that the return has been lodged:

(a) in a members ' voluntary winding up - to the members of the company; and

(b) in a creditors ' voluntary winding up - to the creditors; and

(c) in a court-ordered winding up - to the creditors; and

(d) if the external administrator is appointed as a provisional liquidator - to the Court; and

(e) if the company is under administration or has executed a deed of company arrangement - to the company; and

(f) if the company is under restructuring or has made a restructuring plan - to the company;

when next forwarding any report, notice of meeting, notice of call or dividend.

Returns for pooled groups

70-5(7)    
If 2 or more companies are members of a pooled group, then the returns under subsection (3) for those companies may be set out in the same document.

SECTION 70-6   END OF ADMINISTRATION RETURN  

Application of this section

70-6(1)    
This section applies if the external administration of a company ends.

End of administration return to be lodged

70-6(2)    
The person who is the external administrator of the company when the external administration of the company ends (the last external administrator ) must lodge a return in relation to the external administration of the company.

70-6(3)    
The return must:

(a) be in the approved form; and

(b) be lodged with ASIC within 1 month after the end of the external administration of the company.

Note 1: Fees for lodging documents and late lodgement fees may be imposed under the Corporations (Fees) Act 2001 .

Note 2: ASIC must deregister the company 3 months after the end of administration return is lodged (see section 509 ).

Notice of lodgement to be given

70-6(4)    

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

70-6(5)    
The persons who may request such a notice are:

(a) in a members ' voluntary winding up - the members of the company; and

(b) in a creditors ' voluntary winding up - the creditors; and

(c) in a court-ordered winding up - the creditors; and

(d) if the external administrator is appointed as a provisional liquidator - the Court; and

(e) if the company is under administration or has executed a deed of company arrangement - the company; and

(f) if the company is under restructuring or has made a restructuring plan - the company.

Returns for pooled groups

70-6(6)    
If 2 or more companies are members of a pooled group, then the returns under subsection (2) for those companies may be set out in the same document.

Subdivision C - Record-keeping  

SECTION 70-10   ADMINISTRATION BOOKS  

External administrator must keep proper books

70-10(1)    
An external administrator of a company must keep proper books in which the external administrator must cause to be made:

(a) entries or minutes of proceedings at meetings relating to the external administration of the company; and

(b) such other entries as are necessary to give a complete and correct record of the external administrator ' s administration of the company ' s affairs.

70-10(2)    
The external administrator must:

(a) ensure that the books are available at the external administrator ' s office for inspection; and

(b) permit a creditor or contributory, or another person acting on the creditor ' s or contributory ' s behalf, to inspect the books at all reasonable times.

Exception

70-10(3)    
Subsections (1) and (2) do not apply if the external administrator has a reasonable excuse.

70-10(3A)    

Subsection (2) does not apply if the company is under restructuring or has made a restructuring plan that has not yet terminated.

Offence

70-10(4)    
A person commits an offence of strict liability if:

(a) the person is subject to a requirement under subsection (1) or (2); and

(b) the person fails to comply with the requirement.

Penalty: 20 penalty units.

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

SECTION 70-15   AUDIT OF ADMINISTRATION BOOKS - ASIC  

ASIC may cause books to be audited

70-15(1)    
ASIC may cause the books referred to in section 70-5 (annual administration return), 70-6 (end of administration return) or 70-10 (administration books) to be audited by a registered company auditor.

Audit on the ASIC ' s initiative or on request

70-15(2)    
The audit may be conducted:

(a) on ASIC ' s own initiative; or

(b) at the request of the company; or

(c) at the request of a creditor; or

(d) at the request of any other person prescribed.

Auditor must prepare a report

70-15(3)    
The auditor must prepare a report on the audit.

ASIC must give a copy of the report

70-15(4)    
If ASIC causes books to be audited under subsection (1):

(a) ASIC must give a copy of the report prepared by the auditor to:

(i) the external administrator of the company; and

(ii) the person who requested the report (if any); and

(b) subsection 1289(5) applies in relation to the report prepared by the auditor as if it were a document required to be lodged.

Costs of an audit

70-15(5)    
The costs of an audit under this section must be determined by ASIC and form part of the expenses of the external administration of the company.

SECTION 70-20   AUDIT OF ADMINISTRATION BOOKS - ON ORDER OF THE COURT  

70-20(1)    
The Court may order that an audit of the books referred to in section 70-5 (annual administration return), 70-6 (end of administration return) or 70-10 (administration books) be conducted by a registered company auditor.

70-20(2)    
The order may be made on application of:

(a) any person with a financial interest in the external administration of the company; or

(b) an officer of the company.

70-20(3)    
Paragraph (2)(b) has effect despite section 198G .

Note: Section 198G deals with powers of officers etc. while a company under external administration.

70-20(4)    
The Court may make such orders in relation to the audit as it thinks fit, including:

(a) the preparation and provision of a report on the audit; and

(b) orders as to the costs of the audit.

SECTION 70-25   EXTERNAL ADMINISTRATOR TO COMPLY WITH AUDITOR REQUIREMENTS  

Application of this section

70-25(1)    
This section applies if books are audited under section 70-15 or 70-20 .

External administrator must give assistance etc.

70-25(2)    
The external administrator must give the auditor such books, information and assistance as the auditor reasonably requires.

Exception

70-25(3)    
Subsection (2) does not apply if the external administrator has a reasonable excuse.

Offence

70-25(4)    
A person commits an offence of strict liability if:

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

(b) the person fails to comply with the requirement.

Penalty: 20 penalty units.

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

SECTION 70-30   TRANSFER OF BOOKS TO NEW ADMINISTRATOR  

Application of this section

70-30(1)    
This section applies if:

(a) a person (the former administrator ) ceases to be the external administrator of a company; and

(b) ASIC has not issued a notice to the former administrator under section 70-31 ; and

(c) a registered liquidator (the new administrator ) is appointed as external administrator of the company instead.

Transfer of books to new administrator

70-30(2)    
The former administrator must transfer to the new administrator, within the handover period, possession or control of any books relating to the external administration of the company that are in the former administrator ' s possession or control.

70-30(3)    
The

handover period
is:

(a) the period of 10 business days beginning on the day after the new administrator is appointed; or

(b) if another period is agreed between the former administrator and the new administrator - that other period.

70-30(4)    
The former administrator may take a copy of any part of the books before transferring possession or control of them to the new administrator.

New administrator must accept the books

70-30(5)    
The new administrator must take possession or accept control of any books relating to the external administration of the company.

New administrator must allow inspection etc.

70-30(6)    
After possession or control of the books is transferred, the new administrator must allow the former administrator to inspect them at any reasonable time and take a copy of any part of the books.

Offence

70-30(7)    
A person commits an offence if:

(a) the person is subject to a requirement under subsection (2), (5) or (6); and

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

Penalty: 50 penalty units.

Lien against books not prejudiced

70-30(8)    
If the new administrator is entitled to take possession or control of the books under this section:

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

(b) such a lien is not otherwise prejudiced.

SECTION 70-31   TRANSFER OF BOOKS TO ASIC ETC.  

Transfer of books to ASIC

70-31(1)    
If a person ceases to be the external administrator of a company, ASIC may, by written notice given to the person, require the person to:

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

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

Offence

70-31(2)    
A person commits an offence if:

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

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

Penalty: 50 penalty units.

ASIC must transfer books to new external administrator

70-31(3)    
If:

(a) possession or control of books relating to an external administration of a company is transferred to ASIC under this section; and

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

(c) a person (the new administrator ) is or becomes the external administrator of the company;

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

ASIC must transfer books to company

70-31(4)    
If:

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

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

(c) the company ceases to be a company under external administration;

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

Lien against books not prejudiced

70-31(5)    
If ASIC is entitled to take possession or control of the books under this section:

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

(b) such a lien is not otherwise prejudiced.

70-31(6)    
If ASIC is required to give possession or control of the books to the new administrator under this section:

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

(b) such a lien is not otherwise prejudiced.

Notice is not a legislative instrument

70-31(7)    
A notice under subsection (1) is not a legislative instrument.

Retention period for books

70-31(8)    
ASIC must retain all books of the company, and of the external administration of the company:

(a) that are relevant to affairs of the company; and

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

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

for a period (the retention period ) of 2 years after the end of the external administration of the company.

Destruction of books at end of retention period

70-31(9)    
ASIC may destroy the books at the end of the retention period.

Relationship with other laws

70-31(10)    
Subsections (8) and (9) do not apply to the extent that ASIC is under an obligation to retain the books, or a part of the books, under another provision of this Act or under any other law.

SECTION 70-35   RETENTION AND DESTRUCTION OF BOOKS  

Retention period for books

70-35(1)    
The last external administrator of a company must retain all books of the company, and of the external administration of the company, that:

(a)    are relevant to affairs of the company; and

(b)    are in the external administrator ' s possession or control at the end of the external administration;

for a period (the retention period ) of 5 years from the end of the external administration.

Exception - reasonable excuse

70-35(2)    
Subsection (1) does not apply if the external administrator has a reasonable excuse.

Exception - consent of ASIC etc.

70-35(3)    
Despite subsection (1) , the books may be destroyed within the retention period:

(a)    in the case of a members ' voluntary winding up - as the company by resolution directs; and

(b)    in the case of a creditor ' s voluntary winding up or a court-ordered winding up:

(i) if there is a committee of inspection - as the committee directs; and

(ii) otherwise - as the creditors by resolution direct; and

(c)    if the external administrator is appointed as a provisional liquidator - as the Court directs;

if ASIC consents to the destruction.

Note: This subsection does not apply for a winding up of a sub-fund of a CCIV: see section 1237P .

Destruction of books at end of retention period

70-35(4)    
The external administrator may destroy the books at the end of the retention period.

Note: This subsection does not apply for a winding up of a sub-fund of a CCIV: see section 1237P .

Offence

70-35(5)    
A person commits an offence if:

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

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

Penalty: 50 penalty units.

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

Relationship with other laws

70-35(6)    
Subsections (3) and (4) do not apply to the extent that the external administrator is under an obligation to retain the books, or a part of the books, under another provision of this Act or under any other law.

SECTION 70-36  

70-36   BOOKS OF COMPANY IN EXTERNAL ADMINISTRATION - EVIDENCE  

If a company is in external administration, all books of the company, and of the external administrator of the company, that are relevant to affairs of the company at or after the start of the external administration are, as between the contributories of the company, prima facie evidence of the truth of all matters purporting to be recorded in those books.

Subdivision D - Giving information etc. to creditors and others  

SECTION 70-40   RIGHT OF CREDITORS TO REQUEST INFORMATION ETC. FROM EXTERNAL ADMINISTRATOR  

70-40(1)    
The creditors may by resolution request the external administrator of a company to:

(a) give information; or

(b) provide a report; or

(c) produce a document;

to the creditors.

70-40(2)    
The external administrator must comply with the request unless:

(a) the information, report or document is not relevant to the external administration of the company; or

(b) the external administrator would breach his or her duties in relation to the external administration of the company if the external administrator complied with the request; or

(c) it is otherwise not reasonable for the external administrator to comply with the request.

70-40(3)    
The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for an external administrator of a company to comply with a request of a kind mentioned in subsection (1).

SECTION 70-45   RIGHT OF INDIVIDUAL CREDITOR TO REQUEST INFORMATION ETC. FROM EXTERNAL ADMINISTRATOR  

70-45(1)    
A creditor may request the external administrator of a company to:

(a) give information; or

(b) provide a report; or

(c) produce a document;

to the creditor.

70-45(2)    
The external administrator must comply with the request unless:

(a) the information, report or document is not relevant to the external administration of the company; or

(b) the external administrator would breach his or her duties in relation to the external administration of the company if the external administrator complied with the request; or

(c) it is otherwise not reasonable for the external administrator to comply with the request.

70-45(3)    
The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for an external administrator of a company to comply with a request of a kind mentioned in subsection (1).

SECTION 70-46   RIGHT OF MEMBERS TO REQUEST INFORMATION ETC. FROM EXTERNAL ADMINISTRATOR IN A MEMBERS ' VOLUNTARY WINDING UP  

70-46(1)    
This section applies in relation to a members ' voluntary winding up.

70-46(2)    
The members of the company may by resolution request the external administrator of the company to:

(a) give information; or

(b) provide a report; or

(c) produce a document;

to the members.

70-46(3)    
The external administrator must comply with the request unless:

(a) the information, report or document is not relevant to the external administration of the company; or

(b) the external administrator would breach his or her duties in relation to the external administration of the company if the external administrator complied with the request; or

(c) it is otherwise not reasonable for the external administrator to comply with the request.

70-46(4)    
The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for an external administrator of a company to comply with a request of a kind mentioned in subsection (2).

SECTION 70-47   RIGHT OF INDIVIDUAL MEMBER TO REQUEST INFORMATION ETC. FROM EXTERNAL ADMINISTRATOR IN A MEMBERS ' VOLUNTARY WINDING UP  

70-47(1)    
This section applies in relation to a members ' voluntary winding up.

70-47(2)    
A member of the company may request the external administrator of a company to:

(a) give information; or

(b) provide a report; or

(c) produce a document;

to the member.

70-47(3)    
The external administrator must comply with the request unless:

(a) the information, report or document is not relevant to the external administration of the company; or

(b) the external administrator would breach his or her duties in relation to the external administration of the company if the external administrator complied with the request; or

(c) it is otherwise not reasonable for the external administrator to comply with the request.

70-47(4)    
The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for an external administrator of a company to comply with a request of a kind mentioned in subsection (2).

SECTION 70-50   REPORTING TO CREDITORS AND MEMBERS  

70-50(1)    
The Insolvency Practice Rules may provide for and in relation to the obligations of external administrators of companies:

(a) to give information; and

(b) to provide reports; and

(c) to produce documents;

to creditors or members.

70-50(2)    
Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to:

(a) other circumstances in which the external administrator of a company must give information, provide a report or produce a document to a creditor or member; and

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

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

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

70-50(3)    
The Insolvency Practice Rules may:

(a) make different provision in relation to different kinds of external administration; and

(b) provide that specified requirements imposed under the Insolvency Practice Rules may be replaced or modified, by resolution, by:

(i) the creditors; or

(ii) the members; or

(iii) if there is a committee of inspection - the committee.

Subdivision E - Other requests for information etc.  

SECTION 70-55   COMMONWEALTH MAY REQUEST INFORMATION ETC.  

Application of this section

70-55(1)    
This section applies if either:

(a) a former employee of a company under external administration has made a claim for financial assistance from the Commonwealth in relation to unpaid employment entitlements; or

(b) the Commonwealth considers that such a claim is likely to be made.

Commonwealth may request information etc.

70-55(2)    
The Commonwealth may request the external administrator of the company to provide specified information, reports or documents in relation to the external administration.

70-55(3)    
The external administrator must comply with the request.

70-55(4)    
The Insolvency Practice Rules may provide for and in relation to who is to bear the cost of providing the information, reports or documents.

Subdivision F - Reporting to ASIC  

SECTION 70-60   INSOLVENCY PRACTICE RULES MAY PROVIDE FOR REPORTING TO ASIC  

70-60(1)    
The Insolvency Practice Rules may provide for and in relation to the obligations of an external administrator of a company:

(a) to give information; and

(b) to provide reports; and

(c) to produce documents;

to ASIC.

70-60(2)    
Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to:

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

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

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

70-60(3)    
The Insolvency Practice Rules may make different provision in relation to different kinds of external administration.

Note: A failure to give information, provide a report or produce a document to ASIC in accordance with the Insolvency Practice Rules may lead to disciplinary action under Subdivision B of Division 40 of Part 2 of this Schedule.

Subdivision G - External administrator may be compelled to comply with requests for information etc.  

SECTION 70-65   APPLICATION OF THIS SUBDIVISION  

70-65(1)    
This Subdivision applies if the external administrator of a company refuses a request made by a person under:

(a) Subdivision D; or

(b) a rule made under section 70-50 ;

(c) Subdivision E; or

(d) section 80-40 ;

to give information, provide a report or produce a document.

70-65(2)    
In this Subdivision:

(a) the information, report or document is referred to as the relevant material ; and

(b) the request is referred to as the request for relevant material ; and

(c) giving the information, providing the report or producing the document is referred to as giving the relevant material.

SECTION 70-70   ASIC MAY DIRECT EXTERNAL ADMINISTRATOR TO COMPLY WITH THE REQUEST FOR RELEVANT MATERIAL  

70-70(1)    
ASIC may, in writing, direct the external administrator to give all or part of the relevant material to the person or persons who made the request for the relevant material within 5 business days after the direction is given.

70-70(2)    
A direction under subsection (1) is not a legislative instrument.

SECTION 70-75   ASIC MUST NOTIFY EXTERNAL ADMINISTRATOR BEFORE GIVING A DIRECTION UNDER SECTION 70-70  

70-75(1)    
Before giving the external administrator a direction under section 70-70 , ASIC must give the external administrator notice in writing:

(a) stating that ASIC proposes to give the external administrator a direction under that section; and

(b) identifying:

(i) the relevant material, or the part of the relevant material, that ASIC proposes to direct be given; and

(ii) the person or persons to whom ASIC proposes to direct that the relevant material, or that part of the relevant material, be given; and

(c) inviting the external administrator to make a written submission to ASIC within 10 business days after the notice is given, stating:

(i) whether the external administrator has any objection to giving the relevant material, or that part of the relevant material, to a person or persons as proposed; and

(ii) if the external administrator has such an objection - the reasons for that objection.

70-75(2)    
If the external administrator objects to giving the relevant material, or part of the relevant material, to a person, ASIC must take into account the reasons for that objection when deciding whether to direct that the relevant material, or that part of the relevant material, be given to the person.

70-75(3)    
A notice under subsection (1) is not a legislative instrument.

SECTION 70-80  

70-80   ASIC MUST NOT DIRECT EXTERNAL ADMINISTRATOR TO GIVE THE RELEVANT MATERIAL IF EXTERNAL ADMINISTRATOR ENTITLED NOT TO COMPLY WITH THE REQUEST  

ASIC must not give a direction under section 70-70 to give the relevant material, or part of the relevant material, to a person if ASIC is satisfied that the external administrator was entitled, under a provision of this Act or any other law, not to comply with the request for the relevant material, or that partof the relevant material, to the person.

SECTION 70-85   ASIC MAY IMPOSE CONDITIONS ON USE OF THE RELEVANT MATERIAL  

ASIC may, by notice, impose conditions

70-85(1)    
ASIC may, by notice in writing to the person or persons to whom the relevant material is to be given, impose conditions on the use and disclosure of the relevant material, or part of the relevant material, by the person or persons.

Offence

70-85(2)    
A person commits an offence if:

(a) ASIC directs that the relevant material, or part of the relevant material, be given to the person; and

(b) ASIC has given the person notice under subsection (1) imposing a condition in relation to the use or disclosure of that material by the person; and

(c) the person does not comply with the condition.

Penalty: 3 months imprisonment.

Notice is not a legislative instrument

70-85(3)    
A notice under subsection (1) is not a legislative instrument.

SECTION 70-90   COURT MAY ORDER RELEVANT MATERIAL TO BE GIVEN  

70-90(1)    
The person or persons who made the request for the relevant material may apply to the Court for an order that the external administrator give the person or persons all or part of the relevant material.

70-90(2)    
If:

(a) ASIC gives the external administrator a direction under section 70-70 in relation to all or part of the relevant material; and

(b) the external administrator does not comply with the direction;

ASIC may apply to the Court for an order that the external administrator comply with the direction.

70-90(3)    
On application under subsection (1) or (2), the Court may:

(a) order the external administrator to give the person, or any or all of the persons, who made the request for the relevant material all or part of that material; and

(b) make such other orders, including orders as to costs, as it thinks fit.

Division 75 - Meetings  

SECTION 75-1   SIMPLIFIED OUTLINE OF THIS DIVISION  

SECTION 75-5  

75-5   OTHER OBLIGATIONS TO CONVENE MEETINGS NOT AFFECTED  

Nothing in this Division limits the operation of any other provision of this Act, or any other law, imposing an obligation to convene a meeting in relation to a company, or the external administration of a company.

SECTION 75-10  

75-10   EXTERNAL ADMINISTRATOR MAY CONVENE MEETINGS  

The external administrator of a company may convene:

(a) a meeting of the creditors; or

(b) in the case of a members ' voluntary winding up - a general meeting of the company;

at any time.

SECTION 75-15   EXTERNAL ADMINISTRATOR MUST CONVENE MEETING IN CERTAIN CIRCUMSTANCES  

75-15(1)    
The external administrator of a company must convene a meeting of the creditors if:

(a) where there is a committee of inspection - the committee of inspection directs the external administrator to do so; or

(b) the creditors direct the external administrator to do so by resolution; or

(c) at least 25% in value of the creditors direct the external administrator to do so in writing; or

(d) both of the following are satisfied:

(i) less than 25%, but more than 10%, in value of the creditors direct the external administrator to do so in writing;

(ii) security for the cost of holding the meeting is given to the external administrator before the meeting is convened; or

(e) all of the following are satisfied:

(i) the company is being wound up under a creditors ' voluntary winding up;

(ii) less than 25%, but more than 5%, in value of the creditors direct the external administrator to do so in writing;

(iii) none of the creditors who give the direction is a related entity in relation to the company;

(iv) the direction is given no more than 20 business days after the resolution for the voluntary winding up of the company is passed.

75-15(2)    
However, the external administrator need not comply with the direction if the direction is not reasonable.

75-15(3)    
The Insolvency Practice Rules may prescribe circumstances in which a direction is, or is not, reasonable.

75-15(4)    
For the purposes of paragraphs (1)(c), (d) and (e), the value of the creditors is to be worked out by reference to the value of the creditors ' claims against the company that are known at the time the direction is given.

75-15(5)    
This section does not apply if:

(a) the external administrator is a provisional liquidator of the company; or

(b) the external administrator is the administrator of the company and the company is under administration.

SECTION 75-20   EXTERNAL ADMINISTRATOR MUST CONVENE MEETING IF REQUIRED BY ASIC  

75-20(1)    
ASIC may, in writing, direct an external administrator of a company to convene a meeting of the creditors.

75-20(2)    
ASIC may include in the direction requirements to be complied with by the external administrator in notifying the creditors of the meeting and in conducting the meeting.

75-20(3)    
The external administrator must comply with a direction given under subsection (1), and any requirements included in the direction under subsection (2).

75-20(4)    
A direction given under subsection (1) is not a legislative instrument.

SECTION 75-21   RESTRUCTURING AND RESTRUCTURING PLANS  

75-21(1)    
Sections 75-10 , 75-15 and 75-20 do not apply to:

(a)    a company under restructuring; or

(b)    a company that has made a restructuring plan that has not yet terminated.

75-21(2)    
However, the restructuring practitioner for a company, or for a restructuring plan, may convene a meeting of the creditors if the restructuring practitioner is satisfied that:

(a)    there are exceptional circumstances; and

(b)    it is in the interests of the creditors to do so.

SECTION 75-25   EXTERNAL ADMINISTRATOR ' S REPRESENTATIVE AT MEETINGS  

75-25(1)    
The external administrator of a company may, in writing, appoint a person to represent the external administrator at a meeting.

75-25(2)    
Subsection (1) does not apply to a meeting of a kind prescribed.

75-25(3)    
If the external administrator is not personally present at a meeting, then a reference in a provision of this Act to the external administrator of a company, in respect of matters occurring at or in connection with the meeting, is a reference to a person appointed to represent the external administrator at the meeting.

SECTION 75-30   ASIC MAY ATTEND MEETINGS  

75-30(1)    
ASIC is entitled to attend any meeting of creditors or contributories held under this Act.

75-30(2)    
Subject to any provision of this Act (including any provision in relation to voting), ASIC is entitled to participate in any meeting of creditors held under this Act.

SECTION 75-35   COMMONWEALTH MAY ATTEND CERTAIN MEETINGS ETC.  

Application of this section

75-35(1)    
This section applies if:

(a) a company is under external administration; and

(b) either:

(i) a former employee of the company has made a claim for financial assistance from the Commonwealth in relation to unpaid employment entitlements; or

(ii) the Commonwealth considers that such a claim is likely to be made.

Commonwealth may nominate representative for meetings

75-35(2)    
The Commonwealth is entitled to nominate a representative to attend any meeting of creditors or contributories held in relation to the external administration.

SECTION 75-40   PROPOSALS TO CREDITORS OR CONTRIBUTORIES WITHOUT MEETING  

Proposal by notice to creditors

75-40(1)    
The external administrator of a company may at any time put a proposal to the creditors or contributories by giving notice, in writing, under this section.

Content and service of notice

75-40(2)    
The notice must:

(a) contain a single proposal; and

(b) include a statement of the reasons for the proposal and the likely impact it will have on creditors or contributories, as the case may be (if it is passed); and

(c) be given to each creditor or contributory, as the case may be, who would be entitled to receive notice of a meeting of creditors or contributories, as the case may be; and

(d) invite the creditor or contributory, as the case may be, to either:

(i) vote Yes or No on the proposal; or

(ii) object to the proposal being resolved without a meeting of creditors or contributories, as the case may be; and

(e) specify a reasonable time by which replies must be received by the external administrator (in order to be taken into account).

Evidentiary certificate relating to proposals

75-40(3)    
A certificate signed by the external administrator of the company stating any matter relating to a proposal under this section is prima facie evidence of the matter.

Insolvency Practice Rules relating to proposals

75-40(4)    
The Insolvency Practice Rules may provide for and in relation to proposals without meeting under this section.

75-40(5)    
Without limiting subsection (4), the Insolvency Practice Rules may provide for and in relation to:

(a) the circumstances in which a proposal is taken to be passed; and

(b) whether a proposal, if passed, is to be taken to have been passed as a resolution or a special resolution; and

(c) costs and security for those costs in relation to a proposal.

SECTION 75-41   OUTCOME OF VOTING AT CREDITORS ' MEETING DETERMINED BY RELATED ENTITY - COURT POWERS  

Application of this section

75-41(1)    
This section applies if, on the application of a creditor of a company under external administration, the external administrator of the company or ASIC, the Court is satisfied of the following matters:

(a) a proposal has been voted on by creditors (either at a meeting of the creditors or under section 75-40 without a meeting);

(b) if the vote or votes that a particular related creditor, or particular related creditors, of the company cast on the proposal had been disregarded for the purposes of determining whether or not the proposal was passed, the proposal:

(i) if it was in fact passed - would not have been passed; or

(ii) if in fact it was not passed - would have been passed;

or the question would have had to be decided on a casting vote;

(c) the passing of the proposal, or the failure to pass it, as the case requires:

(i) is contrary to the interests of the creditors as a group or of that class of creditors as a group, as the case may be; or

(ii) has prejudiced, or is reasonably likely to prejudice, the interests of the creditors who voted against the proposal, or for it, as the case may be, to an extent that is unreasonable having regard to the matters in subsection (2).

Unreasonable prejudice to interests of creditors - matters to be taken into account

75-41(2)    
For the purposes of subparagraph (1)(c)(ii), the matters are:

(a) the benefits resulting to the related creditor, or to some or all of the related creditors, from the proposal if passed, or from the failure to pass the proposal, as the case may be; and

(b) the nature of the relationship between the related creditor and the company, or of the respective relationships between the related creditors and the company; and

(c) any other relevant matter.

Court may make orders

75-41(3)    
The Court may make one or more of the following:

(a) an order that the proposal be considered and voted on at a meeting of the creditors convened and held as specified in the order;

(b) an order directing that the related creditor is not, or such of the related creditors as the order specifies are not, entitled to vote on:

(i) the proposal; or

(ii) a resolution to amend or vary the proposal;

(c) if the proposal was passed - an order setting aside the resolution passing the proposal;

(d) such other orders as the Court thinks fit.

Definition - related creditor

75-41(4)    
In this section:

related creditor
, for the purposes of a vote, in relation to a company, means a person who, when the vote was cast, was a related entity, and a creditor, of the company.

SECTION 75-42   CREDITORS ' RESOLUTION PASSED BECAUSE OF CASTING VOTE - COURT REVIEW  

Application of this section

75-42(1)    
This section applies if:

(a) a resolution is passed at a meeting of creditors of a company under external administration; and

(b) the resolution is passed because the person presiding at the meeting exercises a casting vote.

Application to the Court

75-42(2)    
ASIC may apply to the Court for an order setting aside or varying the resolution.

75-42(3)    
A person (other than ASIC) may apply to the Court for an order setting aside or varying the resolution, but only if:

(a) the person voted against the resolution in some capacity (even if the person voted for the resolution in another capacity); or

(b) a person voted against the resolution on the first-mentioned person ' s behalf.

Court may make orders

75-42(4)    
On application under subsection (2) or (3), the Court may:

(a) by order set aside or vary the resolution; and

(b) if it does so - make such further orders, and give such directions, as it thinks fit.

75-42(5)    
On and after the making of an order varying the resolution, the resolution has effect as varied by the order.

SECTION 75-43   PROPOSED CREDITORS ' RESOLUTION NOT PASSED BECAUSE OF CASTING VOTE - COURT ' S POWERS  

Application of this section

75-43(1)    
This section applies if:

(a) a resolution is not passed at a meeting of creditors of a company under external administration; and

(b) the resolution is not passed because the person presiding at the meeting exercises a casting vote, or refuses or fails to exercise such a vote.

Application to the Court

75-43(2)    
ASIC may apply to the Court for an order under subsection (4).

75-43(3)    
A person (other than ASIC) may apply to the Court for an order under subsection (4), but only if:

(a) the person voted for the proposed resolution in some capacity (even if the person voted against the proposed resolution in another capacity); or

(b) a person voted for the proposed resolution on the first-mentioned person ' s behalf.

Court may make orders

75-43(4)    
On application under subsection (2) or (3), the Court may:

(a) order that the proposed resolution is taken to have been passed at the meeting; and

(b) if it does so - make such further orders, and give such directions, as it thinks fit.

75-43(5)    
If an order is made under paragraph (4)(a), the proposed resolution:

(a) is taken for all purposes (other than those of subsection (1)) to have been passed at the meeting; and

(b) is taken to have taken effect:

(i) if the order specifies a time when the proposed resolution is taken to have taken effect - at that time, even if it is earlier than the making of the order; or

(ii) otherwise - on the making of the order.

SECTION 75-44   INTERIM ORDER ON APPLICATION UNDER SECTION 75-41, 75-42 OR 75-43  

75-44(1)    
If:

(a) an application under section 75-41 , 75-42 or 75-43 has not yet been determined; and

(b) the Court is of the opinion that it is desirable to do so;

the Court may make such interim orders as it thinks fit

75-44(2)    
An interim order must be expressed to apply until the application is determined, but may be varied or discharged.

SECTION 75-45  

75-45   ORDER UNDER SECTION 75-41 OR 75-42 DOES NOT AFFECT ACT ALREADY DONE PURSUANT TO RESOLUTION  

An act done pursuant to a resolution as in force before the making, under section 75-41 or 75-42 , of an order setting aside or varying the resolution is as valid and binding on and after the making of the order as if the order had not been made.

SECTION 75-50   RULES RELATING TO MEETINGS  

75-50(1)    
The Insolvency Practice Rules may provide for and in relation to meetings concerning companies under external administration.

75-50(2)    
Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to:

(a) the circumstances in which meetings must or may be convened; and

(b) notice for convening meetings; and

(c) agenda; and

(d) information to be given in connection with meetings; and

(e) who is to preside at meetings; and

(f) the number of creditors or contributories required to constitute a quorum; and

(g) proxies and attorneys; and

(h) motions; and

(i) voting (including casting votes); and

(j) the circumstances in which a resolution must or may be put to creditors or contributories in a meeting; and

(k) the circumstances in which a resolution or a special resolution put to creditors or contributories in a meeting is passed; and

(l) facilities, including electronic communication facilities, to be available at meetings; and

(m) minutes; and

(n) costs in relation to meetings and security for those costs.

Division 80 - Committees of inspection  

SECTION 80-1   SIMPLIFIED OUTLINE OF THIS DIVISION  

SECTION 80-5   APPLICATION  

Application of whole of Division

80-5(1A)    

This Division does not apply to:

(a)    a company under restructuring; or

(b)    a company that has made a restructuring plan that has not yet terminated.

Application of sections 80-10 to 80-25

80-5(1)    
The rules in sections 80-10 to 80-25 apply if the external administrator of a company convenes a meeting of creditors for the purpose of determining either or both of the following:

(a) whether there is to be a committee of inspection for the company;

(b) if there is, or is to be, a committee of inspection - who are to be appointed members of the committee.

80-5(2)    
However, those rules do not apply if the company is a member of a pooled group.

Note: Committees of inspection for pooled groups are dealt with in sections 80-26 and 80-27 .

SECTION 80-10  

80-10   COMMITTEE OF INSPECTION - COMPANY NOT A MEMBER OF A POOLED GROUP  

The creditors of a company may, by resolution, determine that there is to be a committee of inspection in relation to the external administration of the company.

SECTION 80-15   APPOINTMENT AND REMOVAL OF MEMBERS OF COMMITTEE OF INSPECTION BY CREDITORS GENERALLY  

80-15(1)    
The creditors of a company may, by resolution, appoint members of a committee of inspection in relation to the external administration of the company.

80-15(2)    
The creditors of a company may by resolution:

(a) remove a person appointed as a member of the committee under this section; and

(b) appoint another person to fill a vacancy in the office of a member of the committee of inspection appointed under this section.

80-15(3)    
A person is not entitled to vote on a resolution to appoint or remove a member of a committee of inspection under this section if:

(a) the person, acting either alone or with others, appoints a person as a member of the committee under section 80-20 ; or

(b) the person, acting either alone or with others, appoints a person as a member of the committee under section 80-25 .

SECTION 80-20   APPOINTMENT OF COMMITTEE MEMBER BY LARGE CREDITOR  

80-20(1)    
A creditor representing at least 10% in value of the creditors, or a group of creditors who together represent at least 10% in value of the creditors, of a company may appoint a person as a member of a committee of inspection in relation to the external administration of the company.

80-20(2)    
If a creditor or a group of creditors appoints a person as a member of a committee of inspection under this section, the creditor or group of creditors may:

(a) remove the person as a member of the committee; and

(b) appoint another person to fill a vacancy in the office of that member of the committee.

80-20(3)    
A creditor, acting either alone or with others, is not entitled to appoint a person as a member of a committee of inspection under subsection (1) if:

(a) the creditor votes on a resolution to appoint or remove a member of the committee under section 80-15 ; or

(b) the creditor, acting either alone or with others, appoints a member of the committee under subsection 80-25(1) ; or

(c) the creditor, acting either alone or with others, has already appointed a member of the committee under subsection (1) of this section.

SECTION 80-25   APPOINTMENT OF COMMITTEE MEMBER BY EMPLOYEES  

80-25(1)    
Either:

(a) an employee of the company; or

(b) employees of the company;

representing at least 50% in value of entitlements owed to or in respect of employees by the company may appoint a person as a member of the committee of inspection to represent the employees.

80-25(2)    
If an employee or a group of employees appoints a person as a member of a committee of inspection under this section, the employee or group of employees may:

(a) remove the person as a member of the committee; and

(b) appoint another person to fill a vacancy in the office of that member of the committee.

80-25(3)    
An employee, acting either alone or with others, is not entitled to appoint a person as a member of a committee of inspection under subsection (1) if:

(a) the employee votes on a resolution to appoint or remove a member of the committee under section 80-15 ; or

(b) the employee, acting either alone or with others, appoints a member of the committee under subsection 80-20(1) ; or

(c) the employee, acting either alone or with others, has already appointed a member of the committee under subsection (1) of this section.

80-25(4)    
In this section:

employee
of a company has the same meaning as in Part 5.8A .

entitlements
of an employee of a company has the same meaning as in Part 5.8A .

SECTION 80-26   COMMITTEE OF INSPECTION - POOLED GROUPS  

Application of this section

80-26(1)    
This section applies if each company that is a member of a pooled group is being wound up.

Meeting to form a committee of inspection for a pooled group

80-26(2)    
The external administrator or external administrators must, if directed to do so under section 80-27 , convene a meeting, on a consolidated basis, of the creditors of all of the companies for the purposes of determining either or both of the following:

(a) whether there is to be a committee of inspection for the pooled group;

(b) if there is, or is to be, a committee of inspection for the pooled group - who are to be appointed members of the committee.

Committee of inspection for a pooled group becomes the committee of inspection for each member of the pooled group

80-26(3)    
A committee of inspection for a pooled group is taken to be a committee of inspection for each company that is a member of the pooled group.

Existing committee of inspection for a member of a pooled group ceases to exist

80-26(4)    
If:

(a) at the meeting, it is resolved that there is to be a committee of inspection for the pooled group; and

(b) immediately before the meeting, a committee of inspection was in existence for a company that is a member of the pooled group;

the committee mentioned in paragraph (b) ceases to exist when the resolution mentioned in paragraph (a) is passed.

Rules relating to companies under external administration who are members of a pooled group

80-26(5)    
The Insolvency Practice Rules may provide for and in relation to meetings in relation to the external administration of companies that are members of a pooled group ( pooled group meetings ).

80-26(6)    
Without limiting subsection (5), the Insolvency Practice Rules may provide for and in relation to:

(a) other circumstances in which pooled group meetings must or may be convened; and

(b) voting (including casting votes) at pooled group meetings; and

(c) the circumstances in which a resolution or a special resolution put to creditors or contributories in a pooled group meeting is passed; and

(d) costs in relation to pooled group meetings and security for those costs.

SECTION 80-27   EXTERNAL ADMINISTRATOR MUST CONVENE MEETING IN CERTAIN CIRCUMSTANCES  

80-27(1)    
The external administrator, or the external administrators, of the members of a pooled group must convene a meeting under section 80-26 if:

(a) where there is a committee of inspection for a member of the pooled group - the committee of inspection directs the external administrator, or external administrators, to do so; or

(b) the creditors of one of the members of the pooled group direct the external administrator, or external administrators, to do so, by resolution; or

(c) at least 25% in value of the creditors of one of the members of the pooled group, direct the external administrator, or external administrators, to do so in writing; or

(d) both of the following are satisfied:

(i) less than 25%, but more than 10%, in value of the creditors of one of the members of the pooled group direct the external administrator, or external administrators, to do so in writing;

(ii) security for the cost of holding the meeting is given to the external administrator, or external administrators, before the meeting is convened; or

(e) all of the following are satisfied:

(i) the members of the pooled group are each being wound up under a creditors ' voluntary winding up;

(ii) less than 25%, but more than 5%, in value of the creditors of one of the members of the pooled group direct the external administrator, or external administrators, to do so in writing;

(iii) none of the creditors who give the direction is a related entity in relation to that member of the pooled group;

(iv) the direction is given no more than 20 business days after the last resolution for the voluntary winding up of the members of the pooled group is passed.

80-27(2)    
However, the external administrator, or external administrators, need not comply with the direction if the direction is not reasonable.

80-27(3)    
The Insolvency Practice Rules may prescribe circumstances in which a direction is, or is not, reasonable.

80-27(4)    
For the purposes of paragraphs (1)(c), (d) and (e), the value of the creditors is to be worked out by reference to the value of the creditors ' claims (that are known at the time the direction is given) against the member of the pooled group.

80-27(5)    
This section does not apply if:

(a) one of the external administrators is a provisional liquidator of a member of the pooled group; or

(b) one of the external administrators is the administrator of a member of the pooled group and the member is under administration.

SECTION 80-30   COMMITTEES OF INSPECTION - PROCEDURES ETC.  

80-30(1)    
Subject to subsection (2), a committee of inspection is to determine its own procedures.

80-30(2)    
The Insolvency Practice Rules may provide for and in relation to committees of inspection.

80-30(3)    
Without limiting subsection (2), the Insolvency Practice Rules may provide for and in relation to:

(a) eligibility to be appointed as a member of a committee of inspection; and

(b) the convening of, conduct of, and procedure and voting at, meetings; and

(c) resignation and removal of members; and

(d) vacancies in membership.

SECTION 80-35   FUNCTIONS OF COMMITTEE OF INSPECTION  

80-35(1)    
A committee of inspection has the following functions:

(a) to advise and assist the external administrator of the company;

(b) to give directions to the external administrator of the company;

(c) to monitor the conduct of the external administration of the company;

(d) such other functions as are conferred on the committee by this Act;

(e) to do anything incidental or conducive to the performance of any of the above functions.

80-35(2)    
An external administrator of a company must have regard to any directions given to the external administrator by the committee of inspection, but the external administrator is not required to comply with such directions.

80-35(3)    
If an external administrator of a company does not comply with a direction, the external administrator must make a written record of that fact, along with the external administrator ' s reasons for not complying with the direction.

SECTION 80-40   COMMITTEE OF INSPECTION MAY REQUEST INFORMATION ETC.  

80-40(1)    
A committee of inspection may request the external administrator of a company to:

(a) give information; or

(b) provide a report; or

(c) produce a document;

to the committee.

80-40(2)    
The external administrator must comply with the request unless:

(a) the information, report or document is not relevant to the external administration of the company; or

(b) the external administrator would breach his or her duties in relation to the external administration of the company if the external administrator complied with the request; or

(c) it is otherwise not reasonable for the external administrator to comply with the request.

80-40(3)    
The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for an external administrator of a company to comply with a request of a kind mentioned in subsection (1).

SECTION 80-45   REPORTING TO COMMITTEE OF INSPECTION  

80-45(1)    
The Insolvency Practice Rules may provide for and in relation to the obligations of external administrators of companies:

(a) to give information; and

(b) to provide reports; and

(c) to produce documents;

to committees of inspection.

80-45(2)    
Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to:

(a) other circumstances in which the external administrator of a company must give information, provide a report or produce a document to a committee of inspection; and

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

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

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

80-45(3)    
The Insolvency Practice Rules may:

(a) make different provision in relation to different classes of company or external administration of a company; and

(b) provide that specified requirements imposed under the Insolvency Practice Rules may be replaced or modified, by resolution, by:

(i) the creditors; or

(ii) the committee of inspection.

SECTION 80-50   COMMITTEE OF INSPECTION MAY OBTAIN SPECIALIST ADVICE OR ASSISTANCE  

80-50(1)    
A committee of inspection may resolve that a member of the committee obtain, on behalf of the committee, such advice or assistance as the committee considers desirable in relation to the conduct of the external administration.

80-50(2)    
The committee of inspection must obtain the approval of the external administrator of the company or the Court before expenses are incurred in obtaining the advice or assistance.

80-50(3)    
To avoid doubt, an expense incurred under subsection (2) is to be taken to be an expense incurred by a person as a member of the committee, unless the Court orders otherwise.

SECTION 80-55   OBLIGATIONS OF MEMBERS OF COMMITTEE OF INSPECTION  
Deriving profit or advantage from the company

80-55(1)    
A member of a committee of inspection must not directly or indirectly derive any profit or advantage from the external administration of the company.

Circumstances in which profit or advantage is taken to be derived

80-55(2)    
To avoid doubt, a member of a committee of inspection is taken to derive a profit or advantage from the external administration of the company if:

(a) the member directly or indirectly derives a profit or advantage from a transaction (including a sale or purchase) entered into for or on account of the company; or

(b) the member directly or indirectly derives a profit or advantage from a creditor of the company; or

(c) a related entity of the member directly or indirectly derives a profit or advantage from the external administration of the company.

Exceptions

80-55(3)    
Subsection (1) does not apply if the creditors resolve otherwise.

80-55(4)    
The member of the committee is not entitled to vote on the resolution referred to in subsection (3).

80-55(5)    
Subsection (1) does not apply to the extent that:

(a) another provision of this Act, or of another law, requires or permits the member of the committee of inspection to derive the profit or advantage; or

(b) the Court gives leave to the member of the committee to derive the profit or advantage.

Note: Subsection (1) would not, for example, prevent a creditor from recovering debts proved in a winding up, as this is permitted under Part 5.6 of Chapter 5 .

80-55(6)    
Despite paragraph (2)(c), subsection (1) does not apply to the extent that:

(a) the profit or advantage arises because the external administrator employs or engages a person to provide services in connection with the external administration of the company; and

(b) the person is a related entity of a member of the committee of inspection; and

(c) one of the following applies:

(i) the member does not know, and could not reasonably be expected to know, that the external administrator has employed or engaged a related entity of the member;

(ii) the creditors, by resolution, agree to the related entity being employed or engaged.

Offence

80-55(7)    
A person commits an offence of strict liability if:

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

(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matters in subsections (3), (5) and (6) (see subsection 13.3(3) of the Criminal Code ).

Effect of contravention of this section

80-55(8)    
A transaction or any other arrangement entered into in contravention of this section may be set aside by the Court.

SECTION 80-60   OBLIGATIONS OF CREDITOR APPOINTING A MEMBER OF COMMITTEE OF INSPECTION  
Application of this section

80-60(1)    
This section applies if a creditor representing at least 10% in value of the creditors of a company appoints a person under section 80-20 as a member of a committee of inspection in relation to the external administration of the company.

80-60(2)    
The creditor must not directly or indirectly become the purchaser of any part of the property of the company.

Exceptions

80-60(3)    
Subsection (2) does not apply if the creditors resolve otherwise.

80-60(4)    
The creditor is not entitled to vote on the resolution referred to in subsection (3).

80-60(5)    
Subsection (2) does not apply to the extent that:

(a) another provision of this Act, or of another law, requires or permits the creditor to purchase the property; or

(b) the Court gives leave to the creditor to purchase the property.

Offence

80-60(6)    
A person commits an offence of strict liability if:

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

(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matters in subsections (3) and (5) (see subsection 13.3(3) of the Criminal Code ).

Effect of contravention of this section

80-60(7)    
A transaction or any other arrangement entered into in contravention of this section may be set aside by the Court.

SECTION 80-65  

80-65   ASIC MAY ATTEND COMMITTEE MEETINGS  
ASIC is entitled to attend any meeting of a committee of inspection.

SECTION 80-70  

80-70   THE COURT MAY INQUIRE INTO CONDUCT OF THE COMMITTEE  
The Court may inquire into the conduct of a committee of inspection and make such orders as it thinks fit to ensure the proper conduct of the committee.

Division 85 - Directions by creditors  

SECTION 85-1   SIMPLIFIED OUTLINE OF THIS DIVISION  

SECTION 85-5   EXTERNAL ADMINISTRATOR TO HAVE REGARD TO DIRECTIONS GIVEN BY CREDITORS  

85-5(1)    
The creditors of a company under external administration (other than a members ' voluntary winding up) may, by resolution, give directions to the external administrator of the company in relation to the external administration.

85-5(2)    
An external administrator of a company must have regard to any directions mentioned in subsection (1), but the external administrator is not required to comply with such directions.

85-5(3)    
If the external administrator does not comply with a direction, the external administrator must make a written record of that fact, along with the external administrator ' s reasons for not complying with the direction.

85-5(4)    
If there is a conflict between directions given by the creditors under subsection (1) and by the committee of inspection under section 80-35 , directions given by the creditors override any directions given by the committee.

Division 90 - Review of the external administration of a company  

Subdivision A - Introduction  

SECTION 90-1   SIMPLIFIED OUTLINE OF THIS DIVISION  

Subdivision B - Court powers to inquire and make orders  

SECTION 90-5   COURT MAY INQUIRE ON OWN INITIATIVE  

90-5(1)    
The Court may, on its own initiative during proceedings before the Court, inquire into the external administration of a company.

90-5(2)    
The Court may, for the purposes of such an inquiry, require a person who is or has at any time been the external administrator of the company to:

(a) give information; or

(b) provide a report; or

(c) produce a document;

to the Court in relation to the external administration of the company.

90-5(3)    
This section does not limit the Court ' s powers under any other provision of this Act, or under any other law.

SECTION 90-10   COURT MAY INQUIRE ON APPLICATION OF CREDITORS ETC.  

90-10(1)    
The Court may, on the application of a person mentioned in subsection (2), inquire into the external administration of a company.

90-10(2)    
Each of the following persons may make an application for an inquiry:

(a) a person with a financial interest in the external administration of the company;

(b) an officer of the company;

(c) if the committee of inspection (if any) so resolves - a creditor, on behalf of the committee;

(d) ASIC.

90-10(3)    
Paragraph (2)(b) has effect despite section 198G .

Note: Section 198G deals with powers of officers etc. while a company is under external administration.

90-10(4)    
The Court may, for the purposes of such an inquiry, require a person who is or has at any time been the external administrator of the company to:

(a) give information; or

(b) provide a report; or

(c) produce a document;

to the Court in relation to the external administration of the company.

90-10(5)    
If an application is made by a person referred to in paragraph (2)(c), the reasonable expenses associated with the application are to be taken to be expenses incurred by a person as a member of the committee unless otherwise ordered by the Court.

90-10(6)    
This section does not limit the Court ' s powers under any other provision of this Act, or under any other law.

SECTION 90-15   COURT MAY MAKE ORDERS IN RELATION TO EXTERNAL ADMINISTRATION  
Court may make orders

90-15(1)    
The Court may make such orders as it thinks fit in relation to the external administration of a company.

Orders on own initiative or on application

90-15(2)    
The Court may exercise the power under subsection (1):

(a) on its own initiative, during proceedings before the Court; or

(b) on application under section 90-20 .

Examples of orders that may be made

90-15(3)    
Without limiting subsection (1), those orders may include any one or more of the following:

(a) an order determining any question arising in the external administration of the company;

(b) an order that a person cease to be the external administrator of the company;

(c) an order that another registered liquidator be appointed as the external administrator of the company;

(d) an order in relation to the costs of an action (including court action) taken by the external administrator of the company or another person in relation to the external administration of the company;

(e) an order in relation to any loss that the company has sustained because of a breach of duty by the external administrator;

(f) an order in relation to remuneration, including an order requiring a person to repay to a company, or the creditors of a company, remuneration paid to the person as external administrator of the company.

Matters that may be taken into account

90-15(4)    
Without limiting the matters which the Court may take into account when making orders, the Court may take into account:

(a) whether the liquidator has faithfully performed, or is faithfully performing, the liquidator ' s duties; and

(b) whether an action or failure to act by the liquidator is in compliance with this Act and the Insolvency Practice Rules; and

(c) whether an action or failure to act by the liquidator is in compliance with an order of the Court; and

(d) whether the company or any other person has suffered, or is likely to suffer, loss or damage because of an action or failure to act by the liquidator; and

(e) the seriousness of the consequences of any action or failure to act by the liquidator, including the effect of that action or failure to act on public confidence in registered liquidators as a group.

Costs orders

90-15(5)    
Without limiting subsection (1), an order mentioned in paragraph (3)(d) in relation to the costs of an action may include an order that:

(a) the external administrator or another person is personally liable for some or all of those costs; and

(b) the external administrator or another person is not entitled to be reimbursed by the company or its creditors in relation to some or all of those costs.

Orders to make good loss sustained because of a breach of duty

90-15(6)    
Without limiting subsection (1), an order mentioned in paragraph (3)(e) in relation to a loss may include an order that:

(a) the external administrator is personally liable to make good some or all of the loss; and

(b) the external administrator is not entitled to be reimbursed by the company or creditors in relation to the amount made good.

Section does not limit Court ' s powers

90-15(7)    
This section does not limit the Court ' s powers under any other provision of this Act, or under any other law.

SECTION 90-20   APPLICATION FOR COURT ORDER  

90-20(1)    
Each of the following persons may apply for an order under section 90-15 :

(a) a person with a financial interest in the external administration of the company;

(b) if the committee of inspection (if any) so resolves - a creditor, on behalf of the committee;

(c) ASIC;

(d) an officer of the company;

(e) if the application is in relation to a company that is a friendly society within the meaning of the Life Insurance Act 1995 and which may be wound up voluntarily under subsection 180(2) of that Act - APRA.

90-20(2)    
Paragraph (1)(d) has effect despite section 198G .

Note: Section 198G deals with powers of officers etc. while a company is under external administration.

90-20(3)    
If an application is made by a person referred to in paragraph (1)(b), the reasonable expenses associated with the application are to be taken to be expenses incurred by a person as a member of the committee.

SECTION 90-21   MEETINGS TO ASCERTAIN WISHES OF CREDITORS OR CONTRIBUTORIES  

90-21(1)    
The Court may, as to all matters relating to the external administration of a company, have regardto the wishes of the creditors or contributories as proved to it by any sufficient evidence.

90-21(2)    
The Court may, if it thinks fit for the purpose of ascertaining those wishes, direct meetings of the creditors or contributories to be convened, held and conducted in such manner as the Court directs, and may appoint a person to act as chair of any such meeting and to report the result of the meeting to the Court.

90-21(3)    
In the case of creditors, regard is to be had to the value of each creditor ' s debt.

90-21(4)    
In the case of contributories, regard is to be had to the number of votes conferred on each contributory by this Act or the company ' s constitution.

Subdivision C - Review by another registered liquidator  

SECTION 90-22  

90-22   APPLICATION OF THIS SUBDIVISION  
This Subdivision applies in relation to a company that is under external administration, other than a company in relation to which a provisional liquidator has been appointed.

SECTION 90-23   APPOINTMENT OF REVIEWING LIQUIDATOR BY ASIC OR THE COURT  
Appointment by ASIC

90-23(1)    
A registered liquidator may be appointed by ASIC to carry out a review into a matter that relates to the external administration of the company, if ASIC considers it appropriate to do so.

90-23(2)    
ASIC may exercise the power under subsection (1):

(a) on its own initiative; or

(b) on application by a person with a financial interest in the external administration of the company; or

(c) on the application of an officer of the company.

90-23(3)    
An application under paragraph (2)(b) or (c) must be lodged with ASIC in the approved form.

90-23(4)    
Paragraph (2)(c) has effect despite section 198G .

Note: Section 198G deals with powers of officers etc. while a company under external administration.

90-23(5)    
If ASIC appoints a registered liquidator to carry out a review, ASIC must specify:

(a) the matters in relation to the external administration of the company which the liquidator is appointed to review; and

(b) the way in which the cost of carrying out the review is to be determined.

90-23(5A)    

Subsections (1) to (5) do not apply to:

(a)    a company under restructuring; or

(b)    a company that has made a restructuring plan that has not yet terminated.

Appointment by the Court

90-23(6)    
A registered liquidator may be appointed by the Court to carry out a review into a matter that relates to the external administration of the company.

90-23(7)    
The Court may exercise the power under subsection (6):

(a) on application under subsection (8); and

(b) if the Court considers it appropriate to do so.

90-23(8)    
Either of the following may make an application under this subsection:

(a) ASIC;

(b) a person with a financial interest in the external administration of the company.

90-23(9)    
If the Court appoints a registered liquidator to carry out a review, the Court must specify:

(a) the matters in relation to the external administration of the company which the liquidator is appointed to review; and

(b) the way in which the cost of carrying out the review is to be determined.

Appointments by ASIC or by the Court - limit

90-23(10)    
A matter referred to in paragraph (5)(a) or (9)(a) must not relate to remuneration which an external administrator of the company is entitled to receive under subsection 60-5(2) (remuneration if no remuneration determinations made).

SECTION 90-24   APPOINTMENT OF REVIEWING LIQUIDATOR BY CREDITORS ETC.  
Appointment to carry out review

90-24(1)    
A registered liquidator may be appointed to carry out a review into either or both of the following matters:

(a) remuneration of the external administrator of the company;

(b) a cost or expense incurred by the external administrator of the company.

Appointment by resolution

90-24(2)    
The appointment may be made by resolution of:

(a) the creditors; or

(b) if the company is being wound up under a members ' voluntary winding up - the company;

90-24(3)    
If the appointment is made by resolution, the resolution must specify:

(a) the remuneration, costs or expenses which the liquidator is appointed to review; and

(b) the way in which the cost of carrying out the review is to be determined.

Appointment by one or more creditors or members

90-24(4)    
The appointment may be made by:

(a) one or more of the creditors; or

(b) if the company is being wound up under a members ' voluntary winding up - one or more of the members.

90-24(5)    
However, an appointment may only be made under subsection (4) if the external administrator of the company agrees to the appointment.

90-24(6)    
The agreement must:

(a) be in accordance with the Insolvency Practice Rules; and

(b) specify:

(i) the remuneration, costs or expenses which the liquidator is appointed to review; and

(ii) the way in which the cost of carrying out the review is to be determined.

Appointments by creditors etc. - limit

90-24(7)    
Despite subsection (1), a registered liquidator appointed under this section has no power to review the remuneration to which the external administrator of a company is entitled under subsection 60-5(2) (remuneration if no remuneration determinations made).

Restructuring and restructuring plans

90-24(8)    

This section does not apply to:

(a)    a company under restructuring; or

(b)    a company that has made a restructuring plan that has not yet terminated.

SECTION 90-25  

90-25   REVIEWING LIQUIDATOR MUST CONSENT TO APPOINTMENT  
A registered liquidator cannot be appointed under this Subdivision as a reviewing liquidator in relation to a matter unless:

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

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

SECTION 90-26   REVIEW  
Review - general

90-26(1)    
If a reviewing liquidator is appointed under this Subdivision in relation to a matter, the reviewing liquidator must carry out a review into that matter.

Reviews relating to remuneration, costs or expenses

90-26(2)    
If the matter is, or includes, remuneration of the external administrator of the company, the review may (but need not) include an assessment of whether the remuneration is reasonable.

90-26(3)    
If the matter is, or includes, a cost or expense incurred by the external administrator of the company, the review must include an assessment of whether the cost or expense was properly incurred by the external administrator.

Note: Insolvency Practice Rules made under section 90-29 may provide for the meaning of properly incurred .

90-26(4)    
A reviewing liquidator must not review:

(a) remuneration of an external administrator of the company that relates to a period; or

(b) a cost or expenseincurred by the external administrator of the company incurred during a period;

unless the period is:

(c) for a reviewing liquidator appointed by the Court under subsection 90-23(6) or paragraph 90-28(2)(c) or (3)(b) - the period determined by the Court; or

(d) otherwise - the prescribed period.

Report of review

90-26(5)    
A reviewing liquidator must prepare a report on the review.

SECTION 90-27   WHO PAYS FOR A REVIEW?  

90-27(1)    
The cost of carrying out a review under this Subdivision:

(a) in the case of a reviewing liquidator appointed with the agreement of the external administrator of the company under subsection 90-24(5) - is to be borne by the creditors or members referred to in that subsection; or

(b) in any other case - forms part of the expenses of the external administration of the company.

90-27(2)    
Subsection (1) has effect subject to an order of the Court under section 90-28 .

SECTION 90-28   COURT ORDERS IN RELATION TO REVIEW  
Application of this section

90-28(1)    
This section applies if:

(a) a reviewing liquidator has been appointed under this Subdivision in relation to one or more matters; and

(b) the review has not been completed.

Court orders on application by the reviewing liquidator

90-28(2)    
On application by the reviewing liquidator, the Court may make any or all of the following orders in relation to the review:

(a) requiring the external administrator of the company or any other person to provide books, information or assistance to the reviewing liquidator;

(b) requiring the reviewing liquidator to carry out a review of one or more matters that relate to the external administration of the company and that are specified in the order instead of, or in addition to, the matters referred to in paragraph (1)(a);

(c) accepting the resignation of the reviewing liquidator, and appointing another registered liquidator as reviewing liquidator for the matter or matters;

(d) any other order that the Court thinks fit.

Court orders on application by a person with a financial interest

90-28(3)    
On application by a person mentioned in subsection (4), the Court may make any or all of the following orders in relation to the review:

(a)requiring the reviewing liquidator to carry out a review of one or more matters that relate to the external administration and that are specified in the order instead of, or in addition to, the matters referred to in paragraph (1)(a) of this section;

(b) removing from office the reviewing liquidator, and appointing another registered liquidator as reviewing liquidator for the matter or matters;

(c) any other order that the Court thinks fit.

90-28(4)    
The persons who may make an application under subsection (3) are:

(a) a person with a financial interest in the external administration of the company; or

(b) an officer of the company.

90-28(5)    
Paragraph (4)(b) has effect despite section 198G .

Note: Section 198G deals with powers of officers etc. while a company is under external administration.

SECTION 90-29   RULES ABOUT REVIEWS  

90-29(1)    
The Insolvency Practice Rules may provide for and in relation to reviews under this Subdivision.

90-29(2)    
Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to any or all of the following matters:

(a) the giving of notice to the external administrator of a company before appointing, or making an application for the appointment of, a reviewing liquidator under this Subdivision;

(b) the meaning, for the purposes of section 90-26 , of properly incurred in relation to costs or expenses incurred by an external administrator of a company;

(c) the appointment of reviewing liquidators, including requirements as to who may be appointed and the provision of declarations of relevant relationships;

(d) the powers and duties of reviewing liquidators in carrying out a review;

(e) the form and content of reports by reviewing liquidators;

(f) the preparation and provision of reports by reviewing liquidators.

Subdivision D - Removal by creditors  

SECTION 90-30  

90-30   APPLICATION OF THIS SUBDIVISION  
This Subdivision applies in relation to a company that is under external administration, other than a company in relation to which a provisional liquidator has been appointed.

SECTION 90-35   REMOVAL BY CREDITORS  
Creditors may remove external administrator and appoint another

90-35(1)    
The creditors may:

(a) by resolution at a meeting, remove the external administrator of a company; and

(b) by resolution at the same or a subsequent meeting, appoint another person as the external administrator of the company.

Note: For the general rules relating to meetings, see Division 75 .

90-35(2)    
However, the creditors may not do so unless at least 5 business days ' notice of the meeting is given to all persons who are entitled to receive notice of creditors ' meetings.

90-35(3)    
The removal of an external administrator does not take effect until another person is appointed as external administratorof the company.

Former administrator may apply to Court to be reappointed

90-35(4)    
A person (the former administrator ) who has been removed as external administrator of the company by resolution of the creditors may apply to the Court to be reappointed as external administrator of the company.

90-35(5)    
However, if the former administrator makes such an application, the former administrator must:

(a) record all costs incurred by the former administrator and the company in relation to the application; and

(b) do so in a way that separates those costs from the costs incurred by the former administrator and the company in relation to other matters.

90-35(6)    
The Court may order that the former administrator be reappointed as external administrator of the company if the Court is satisfied that the removal of the former administrator was an improper use of the powers of one or more creditors.

90-35(7)    
The Court may make such other orders in relation to the application as it thinks fit including orders in relation to:

(a) the costs of the application; and

(b) the remuneration of the former administrator.