THE CORPORATIONS LAW

CHAPTER 7 - SECURITIES

PART 7.10 - THE NATIONAL GUARANTEE FUND

Division 9 - General provisions relating to claims

SECTION 970B   EFFECT OF SET-OFF ON CLAIM  

970B(1)  [Effect of set-off]  

If:

(a)  SEGC allows a claim by a person (in this section called the ``claimant'' ) in respect of a liability of another person (in this section called the ``defaulter'' ); and

(b)  the liability of the defaulter to the claimant has been reduced, by an amount of money or a number of securities (in this section called the ``set-off reduction'' ), because of:

(i) the exercise by the claimant or the defaulter of a right of set-off, whether under an agreement or otherwise; or

(ii) the operation of an agreement so far as it provides for the automatic set-off of liabilities; and

(c)  but for this section, the reduction of the defaulter's liability would not be taken into account when working out the obligations of SEGC in respect of the claim;

this section applies for the purposes of working out those obligations.

970B(2)  [Claim and set-off in money]  

If:

(a)  SEGC is required to satisfy the claim by paying an amount; and

(b)  the set-off reduction consists of an amount;

the amount SEGC must pay in respect of the claim is reduced by the amount of the set-off reduction.

970B(3)  [Claim in money, set-off in securities]  

If:

(a)  SEGC is required to satisfy the claim by paying an amount; and

(b)  the set-off reduction consists of a number of securities;

then:

(c)  the Board must work out the value of the securities; and

(d)  the amount SEGC must pay in respect of the claim is reduced by the value worked out under paragraph (c).

970B(4)  [Claim and set-off in securities of same kind]  

If:

(a)  SEGC is required to satisfy the claim by transferring securities of a particular kind; and

(b)  the set-off reduction consists of a number of securities of that kind;

the number of securities that SEGC must transfer in respect of the claim is reduced by the number referred to in paragraph (b).

970B(5)  [Claim and set-off in securities of different kinds]  

If:

(a)  SEGC is required to satisfy the claim by transferring securities of a particular kind; and

(b)  the set-off reduction consists of a number of securities that are not of that kind;

then:

(c)  the Board must work out:

(i) the value of the securities that constitute the set-off reduction; and

(ii) the number of securities of the kind referred to in paragraph (a) that are equal in value to the value worked out under subparagraph (i); and

(d)  the number of securities that SEGC is required to transfer in respect of the claim is reduced by the number worked out under subparagraph (c)(ii).

970B(6)  [Claim in securities, set-off in money]  

If:

(a)  SEGC is required to satisfy the claim by transferring securities of a particular kind; and

(b)  the set-off reduction consists of an amount of money;

then:

(c)  the Board must work out the number of securities of that kind that are equal in value to that amount; and

(d)  the number of securities that SEGC must transfer in respect of the claim is reduced by the number worked out under paragraph (c).