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CORPORATIONS ACT 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.4B - WINDING UP IN INSOLVENCY OR BY THE COURT  

Division 3 - General powers of Court  

Subdivision A - General powers  

SECTION 486A  COURT MAY MAKE ORDER TO PREVENT OFFICER OR RELATED ENTITY FROM AVOIDING LIABILITY TO COMPANY  

486A(1)  [ Orders]  

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The Court may make one or more of the following:


(a) an order prohibiting, either absolutely or subject to conditions, an officer, employee or related entity of a company from taking or sending out of this jurisdiction, or out of Australia, money or other property of the company or of the officer, employee or related entity;
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(b) an order appointing:

(i) a receiver or trustee, with specified powers, of property of an officer or employee of a company, or of property of a related entity of a company that is a natural person; or

(ii) a receiver, or a receiver and manager, with specified powers, of property of a related entity of a company that is not a natural person;
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(c) an order requiring an officer or employee of a company, or a related entity of a company that is a natural person, to surrender to the Court his or her passport and any other specified documents;
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(d) an order prohibiting an officer or employee of a company, or a related entity of a company that is a natural person, from leaving this jurisdiction, or Australia, without the Court's consent.
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486A(2)  [ Grounds for order]  


The Court may only make an order under subsection (1) if:


(a) the company is being wound up in insolvency or by the Court, or an application has been made for the company to be so wound up; and


(b) the Court is satisfied that there is at least a prima facie case that the officer, employee or related entity is or will become liable:

(i) to pay money to the company, whether in respect of a debt, by way of damages or compensation or otherwise; or

(ii) to account for property of the company; and
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(c) the Court is also satisfied that there is substantial evidence that the officer, employee or related entity:

(i) has concealed or removed money or other property, has tried to do so, or intends to do so; or

(ii) has tried to leave this jurisdiction or Australia, or intends to do so;
in order to avoid that liability or its consequences; and
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(d) the Court thinks it necessary or desirable to make the order in order to protect the company's rights against the officer, employee or related entity.
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486A(2A)  [ Standing]  

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An order under subsection (1) may only be made on the application of:


(a) a liquidator or provisional liquidator of the company; or


(b) ASIC.

486A(3)  [ Applications under s 1323]  

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On hearing an application for an order under subsection (1), the Court must have regard to any relevant application under section 1323 .

486A(4)  [ Interim orders]  

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Before considering an application for an order under subsection (1), the Court may, if in the Court's opinion it is desirable to do so, grant an interim order of the kind applied for that is expressed to have effect until the application is determined.

486A(5)  [ No undertaking as to damages]  

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The Court must not require an applicant for an order under subsection (1) or any other person, as a condition of granting an interim order under subsection (4), to give an undertaking as to damages.

486A(6)  [ Variation or discharge of order]  


On the application of a person who applied for, or is affected by, an order under this section, the Court may make a further order discharging or varying the first-mentioned order.

486A(7)  [ Time limit on order]  


An order under subsection (1) may be expressed to operate for a specified period or until it is discharged by a further order.

486A(8)  [ Intentional or reckless contravention of order]  

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A person must not intentionally or recklessly contravene an order under this section that is applicable to the person.

486A(9)  [ Bankruptcy Act 1966]  


This section has effect subject to the Bankruptcy Act 1966 .

486A(10)  [ Other powers of Court unaffected]  


Nothing in this section affects any other powers of the Court.

 



This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
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