THE CORPORATIONS LAW

CHAPTER 5 - EXTERNAL ADMINISTRATION

PART 5.7B - RECOVERING PROPERTY OR COMPENSATION FOR THE BENEFIT OF CREDITORS OF INSOLVENT COMPANY

Division 2 - Voidable transactions

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

588FGA(1)  [Order against Commissioner under sec 588FF]  

This section applies if the Court makes an order under section 588FF against the Commissioner of Taxation because of the payment of an amount in respect of a liability under any of the following provisions of the Income Tax Assessment Act 1936:

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

(b)  subsection 221YHDC(2);

(c)  subsection 221YHZD(1) or (1A);

(d)  subsection 221YN(1);

(e)  section 222AHA;

or under a provision of Subdivision 16-B in Schedule 1 to the Taxation Administration Act 1953.

588FGA(2)  [Directors to indemnify Commissioner]  

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

588FGA(3)  [Directors' indemnity is a debt]  

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

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

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

588FGA(4)  [Powers of Court]  

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

588FGA(5)  [Rights of indemnity, subrogation, etc]  

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

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

(b)  against the company or anyone else;

as if the payment had been made under a guarantee:

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

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