Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

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

Note: This Part applies to a sub-fund of a CCIV in a modified form: see Division 3 of Part 8B.6 (for provisions relating to Division 2B ), Division 5 of Part 8B.6 (for provisions relating to Divisions 2 and 2A ) and Division 6 of Part 8B.6 (for provisions relating to Divisions 3 , 4 , 5 and 6 ).

Division 2 - Voidable transactions  

Subdivision B - Voidable transactions  

SECTION 588FE   VOIDABLE TRANSACTIONS  

588FE(1)    

If a company is being wound up:

(a)    a transaction of the company may be voidable because of any one or more of subsections (2) to (6) if the transaction was entered into on or after 23 June 1993; and

(b)    a transaction of the company may be voidable because of subsection (6A) if the transaction was entered into on or after the commencement of the Corporations Amendment (Repayment of Directors ' Bonuses) Act 2003 ; and

(c)    

a transaction of the company may be voidable because of subsection (6B) if the transaction was entered into on or after the commencement of that subsection.

588FE(2)    
The transaction is voidable if:

(a)    it is an insolvent transaction of the company; and

(b)    it was entered into, or an act was done for the purpose of giving effect to it:

(i) during the 6 months ending on the relation-back day; or

(ii) after that day but on or before the day when the winding up began.

588FE(2A)    

The transaction is voidable if:

(a)    the transaction is:

(i) an uncommercial transaction of the company; or

(ii) an unfair preference given by the company to a creditor of the company; or

(iii) an unfair loan to the company; or

(iv) an unreasonable director-related transaction of the company; and

(b)    the company was under administration immediately before:

(i) the company resolved by special resolution that it be wound up voluntarily; or

(ii) the Court ordered that the company be wound up; and

(c)    the transaction was entered into, or an act was done for the purpose of giving effect to it, during the period beginning at the start of the relation-back day and ending:

(i) when the company made the special resolution that it be wound up voluntarily; or

(ii) when the Court made the order that the company be wound up; and

(d)    the transaction, or the act done for the purpose of giving effect to it, was not entered into, or done, on behalf of the company by, or under the authority of, the administrator of the company.

588FE(2B)    

The transaction is voidable if:

(a)    the transaction is:

(i) an uncommercial transaction of the company; or

(ii) an unfair preference given by the company to a creditor of the company; or

(iii) an unfair loan to the company; or

(iv) an unreasonable director-related transaction of the company; and

(b)    the company was subject to a deed of company arrangement immediately before:

(i) the company resolved by special resolution that it be wound up voluntarily; or

(ii) the Court ordered that the company be wound up; and

(c)    the transaction was entered into, or an act was done for the purpose of giving effect to it, during the period beginning at the start of the relation-back day and ending:

(i) when the company made the special resolution that it be wound up voluntarily; or

(ii) when the Court made the order that the company be wound up; and

(d)    the transaction, or the act done for the purpose of giving effect to it, was not entered into, or done, on behalf of the company by, or under the authority of:

(i) the administrator of the deed; or

(ii) the administrator of the company.

588FE(2C)    

The transaction is voidable if:

(a)    the transaction is:

(i) an uncommercial transaction of the company; or

(ii) an unfair preference given by the company to a creditor of the company; or

(iii) an unfair loan to the company; or

(iv) an unreasonable director-related transaction of the company; and

(b)    the company was under restructuring immediately before:

(i) the company resolved by special resolution that it be wound up voluntarily; or

(ii) the Court ordered that the company be wound up; and

(c)    the transaction was entered into, or an act was done for the purpose of giving effect to it, during the period beginning at the start of the relation-back day and ending:

(i) when the company made the special resolution that it be wound up voluntarily; or

(ii) when the Court made the order that the company be wound up; and

(d)    the transaction, or the act done for the purpose of giving effect to it, was not entered into, or done, in the ordinary course of business or by or with the consent of the restructuring practitioner for the company.

588FE(2D)    

The transaction is voidable if:

(a)    the transaction is:

(i) an uncommercial transaction of the company; or

(ii) an unfair preference given by the company to a creditor of the company; or

(iii) an unfair loan to the company; or

(iv) an unreasonable director-related transaction of the company; and

(b)    the company was subject to a restructuring plan immediately before:

(i) the company resolved by special resolution that it be wound up voluntarily; or

(ii) the Court ordered that the company be wound up; and

(c)    the transaction was entered into, or an act was done for the purpose of giving effect to it, during the period beginning at the start of the relation-back day and ending:

(i) when the company made the special resolution that it be wound up voluntarily; or

(ii) when the Court made the order that the company be wound up; and

(d)    the transaction, or the act done for the purpose of giving effect to it, was not entered into, or done:

(i) in the ordinary course of business, or by or with the consent of the restructuring practitioner for the company; or

(ii) on behalf of the company by or under the authority of the restructuring practitioner for the plan.

588FE(3)    
The transaction is voidable if:

(a)    it is an insolvent transaction, and also an uncommercial transaction, of the company; and

(b)    it was entered into, or an act was done for the purpose of giving effect to it, during the 2 years ending on the relation-back day.

588FE(4)    
The transaction is voidable if:

(a)    it is an insolvent transaction of the company; and

(b)    a related entity of the company is a party to it; and

(c)    it was entered into, or an act was done for the purpose of giving effect to it, during the 4 years ending on the relation-back day.

588FE(5)    
The transaction is voidable if:

(a)    it is an insolvent transaction of the company; and

(b)    the company became a party to the transaction for the purpose, or for purposes including the purpose, of defeating, delaying, or interfering with, the rights of any or all of its creditors on a winding up of the company; and

(c)    the transaction was entered into, or an act done was for the purpose of giving effect to the transaction, during the 10 years ending on the relation-back day.

588FE(6)    
The transaction is voidable if it is an unfair loan to the company made at any time on or before the day when the winding up began.

588FE(6A)    

The transaction is voidable if:

(a)    it is an unreasonable director-related transaction of the company; and

(b)    it was entered into, or an act was done for the purposes of giving effect to it:

(i) during the 4 years ending on the relation-back day; or

(ii) after that day but on or before the day when the winding up began.

588FE(6B)    

The transaction is voidable if:

(a)    it is a creditor-defeating disposition of property of the company; and

(b)    at least one of the following applies:

(i) the transaction was entered into, or an act was done for the purposes of giving effect to it, when the company was insolvent, during the 12 months ending on the relation-back day or both after that day and on or before the day when the winding up began;

(ii) the company became insolvent because of the transaction or an act done for the purposes of giving effect to the transaction during the 12 months ending on the relation-back day or both after that day and on or before the day when the winding up began;

(iii) less than 12 months after the transaction or an act done for the purposes of giving effect to the transaction, the start of an external administration (as defined in Schedule 2 ) of the company occurs as a direct or indirect result of the transaction or act; and

(c)    

the transaction, or the act done for the purpose of giving effect to it, was not entered into, or done:

(i) under a compromise or arrangement approved by a Court under section 411 ; or

(ii) under a deed of company arrangement executed by the company; or

(iii) by an administrator of the company; or

(iiia) by a restructuring practitioner for the company; or

(iiib) under a restructuring plan made by the company; or

(iv) by a liquidator of the company; or

(v) by a provisional liquidator of the company.

588FE(7)    
A reference in this section to doing an act includes a reference to making an omission.