THE CORPORATIONS LAW

CHAPTER 2K - CHARGES

PART 2K.2 - REGISTRATION

SECTION 266   CERTAIN CHARGES VOID AGAINST LIQUIDATOR OR ADMINISTRATOR  

266(1)  [Charges void against liquidator or administrator]  

Where:

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

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

(ba)  a company executes a deed of company arrangement;

a registrable charge on property of the company is void as a security on that property as against the liquidator, the administrator of the company, or the deed's administrator, as the case may be, unless:

(c)  a notice in respect of the charge was lodged under section 263 or 264, as the case requires:

(i) within the relevant period; or

(ii) at least 6 months before the critical day;

(d)  in relation to a charge other than a charge to which subsection 263(3) applies - the period within which a notice in respect of the charge (other than a notice under section 268) is required to be lodged, being the period specified in the relevant section or that period as extended by the Court under subsection (4), has not ended at the start of the critical day and the notice is lodged before the end of that period;

(e)  in relation to a charge to which subsection 263(3) applies - the period of 45 days after the chargee becomes aware that the registrable body has been registered as a company under Part 5B.1, or registered under Part 5B.2, has not ended at the start of the critical day and the notice is lodged before the end of that period; or

(f)  in relation to a charge to which section 264 applies - the period of 45 days after the chargee becomes aware that the property charged has been acquired by a company has not ended at the start of the critical day and the notice is lodged before the end of that period.

266(2)  [Relevant period]  

The reference in paragraph (1)(c) to the relevant period shall be construed as a reference to:

(a)  in relation to a charge to which subsection 263(1) applies - the period of 45 days specified in that subsection, or that period as extended by the Court under subsection (4) of this section;

(b)  in relation to a charge to which subsection 263(3) applies - the period of 45 days after the chargee becomes aware that the registrable body has been registered as a company under Part 5B.1 or registered under Part 5B.2; or

(c)  in relation to a charge to which section 264 applies - the period of 45 days after the chargee becomes aware that the property has been acquired by a company.

266(3)  [Notice of variation]  

Where, after there has been a variation in the terms of a registrable charge on property of a company having the effect of increasing the amount of the debt or increasing the liabilities (whether present or prospective) secured by the charge:

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

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

(ba)  a company executes a deed of company arrangement;

the registrable charge is void as a security on that property to the extent that it secures the amount of the increase in that debt or liability unless:

(c)  a notice in respect of the variation was lodged under section 268:

(i) within the period of 45 days specified in subsection 268(2) or that period as extended by the Court under subsection (4) of this section; or

(ii) not later than 6 months before the critical day; or

(d)  the period of 45 days specified in subsection 268(2), or that period as extended by the Court under subsection (4) of this section, has not ended at the start of the critical day and the notice is lodged before the end of that period.

266(4)  [Court may extend period]  

The Court, if it is satisfied that the failure to lodge a notice in respect of a charge, or in respect of a variation in the terms of a charge, as required by any provision of this Part:

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

(b)  is not of a nature to prejudice the position of creditors or shareholders;

or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient, by order, extend the period for such further period as is specified in the order.

266(5)  [Avoidance of certain later charges]  

Where:

(a)  a registrable charge (in this subsection referred to as the ``later charge'') is created before the end of 45 days after the creation of an unregistered registrable charge (in this subsection referred to as the ``earlier charge'');

(b)  the later charge relates to all or any of the property to which the earlier charge related; and

(c)  the later charge is given as a security for the same liability as is secured by the earlier charge or any part of that liability;

the later charge, to the extent to which it is a security for the same liability or part thereof, and so far as it relates to the property comprised in the earlier charge, is void as a security on that property as against a liquidator or administrator of the company, or an administrator of a deed of company arrangement executed by the company, even if a notice in respect of the later charge was lodged under section 263 within a period mentioned in paragraph (1)(c) or (d) of this section, unless it is proved to the satisfaction of the Court that the later charge was given in good faith for the purpose of correcting some material error in the earlier charge or under other proper circumstances and not for the purposes of avoiding or evading the provisions of this Part.

266(6)  [Rights of third parties without notice]  

Nothing in subsection (1) or (3) operates to affect the title of a person to property purchased for value from a chargee or from a receiver appointed by a chargee in the exercise of powers conferred by the charge or implied by law if that person purchased the property in good faith and without notice of:

(a)  the filing of an application for an order for the winding up of the company; or

(b)  the passing of a resolution for the voluntary winding up of the company; or

(c)  an administrator of the company being appointed under section 436A, 436B or 436C; or

(d)  the company executing a deed of company arrangement.

266(7)  [Onus of proof]  

The onus of proving that a person purchased property in good faith and without notice of any of the matters referred to in paragraphs (6)(a), (b), (c) and (d) is on the person asserting that the property was so purchased.

266(8)  [``critical day'']  

In this section:

``critical day'' , in relation to a company, means:

(a)  if the company is being wound up - the day when the winding up began; or

(b)  if the company is under administration - the section 513C day in relation to the administration; or

(c)  if the company has executed a deed of company arrangement - the section 513C day in relation to the administration that ended when the deed was executed.