THE CORPORATIONS LAW

CHAPTER 5 - EXTERNAL ADMINISTRATION

PART 5.9 - MISCELLANEOUS

Division 3 - Provisions applying to various kinds of external administration

SECTION 600A   POWERS OF COURT WHERE OUTCOME OF VOTING AT CREDITORS' MEETING DETERMINED BY RELATED ENTITY  

600A(1)  [Related entity vote affected passing of resolution]  

Subsection (2) applies where, on the application of a creditor of a company or Part 5.1 body, the Court is satisfied:

(a)  that a proposed resolution has been voted on at:

(i) in the case of a company - a meeting of creditors of the company held:

(A) under Part 5.3A or a deed of company arrangement executed by the company; or

(B) in connection with winding up the company; or

(ii) in the case of a Part 5.1 body - a meeting of creditors, or of a class of creditors, of the body held under Part 5.1; and

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

(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; and

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

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

(ii) has prejudiced, or is reasonably likely to prejudice, the interests of the creditors who voted against the proposed resolution, or for it, as the case may be, to an extent that is unreasonable having regard to:

(A) the benefits resulting to the related creditor, or to some or all of the related creditors, from the resolution, or from the failure to pass the proposed resolution, as the case may be; and

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

(C) any other relevant matter.

600A(2)  [Powers of Court]  

The Court may make one or more of the following:

(a)  if the proposed resolution was passed - an order setting aside the resolution;

(b)  an order that the proposed resolution be considered and voted on at a meeting of the creditors of the company or body, or of that class of creditors, as the case may be, convened and held as specified in the order;

(c)  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 proposed resolution; or

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

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

600A(3)  [``related creditor'']  

In this section:

``related creditor'' , in relation to a company or Part 5.1 body, in relation to a vote, means a person who, when the vote was cast, was a related entity, and a creditor, of the company or body.