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CORPORATIONS ACT 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

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

Division 3 - Director's duty to prevent insolvent trading  

SECTION 588GB  INFORMATION OR BOOKS NOT ADMISSIBLE TO SUPPORT THE SAFE HARBOUR IF FAILURE TO PERMIT INSPECTION ETC.  

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When books or information not admissible for the safe harbour

588GB(1)  

If, at a particular time:


(a) a person fails to permit the inspection of, or deliver, any books of the company in accordance with:


(i) a notice given to the person under subsection 438C(3) , section 477 or subsection 530B(4) ; or

(ii) an order made under section 486 ; or

(iii) subsection 438B(1) , 477(3) or 530A(1) ; or


(b) a warrant is issued under subsection 530C(2) because the Court is satisfied that a person has concealed, destroyed or removed books of the company or is about to do so;

those books, and any secondary evidence of those books, are not admissible in evidence for the person in a relevant proceeding.

Note: For subparagraph (a)(i), a liquidator could give such a notice if this is necessary for winding up the affairs of the company and distributing its property (see paragraph 477(2)(m) ).

588GB(2)  

If, at a particular time, a person fails to give any information about the company in accordance with:


(a) a notice given to the person under section 477 ; or


(b) paragraph 429(2)(b) or (c) or subsection 438B(2) or (3) , 475(1) , 497(4) or 530A(1) or (2) ;

that information is not admissible in evidence for the person in a relevant proceeding.

Exceptions

588GB(3)  

However, subsection (1) or (2) does not apply to a person, and a book or information, if:


(a) the person proves that:


(i) the person did not possess the book or information at any time referred to in that subsection; and

(ii) there were no reasonable steps the person could have taken to obtain the book or information; or


(b) each entity seeking to rely on the notice, order, subsection, paragraph or warrant referred to in that subsection fails to comply with subsection (5) in relation to the person; or


(c) an order applying to the person, and the book or information, is in force under subsection (4).

588GB(4)  

The Court may order that subsection (1) or (2) does not apply to a person, and a book or information, if:


(a) the Court is satisfied that the failures by the person as mentioned in that subsection were due to exceptional circumstances or that it is otherwise in the interests of justice to make the order; and


(b) an application for the order is made by the person.

Notice of effect of this section must be given

588GB(5)  

An entity that seeks to rely on a notice, order, subsection or warrant referred to in subsection (1) or (2) must set out the effect of this section:


(a) for a notice under subsection 438C(3) , section 477 or subsection 530B(4) - in that notice; or


(b) for an order under section 486 or for subsection 438B(3) , 477(3) or 530A(2) - in a written notice given to the person when the entity seeks to rely on that order or subsection; or


(c) for a warrant issued under subsection 530C(2) - in a written notice given to the person when the entity seeks to exercise the warrant.

This subsection does not apply to an entity that seeks to rely on paragraph 429(2)(b) or (c) or subsection 438B(1) or (2) , 475(1) , 497(4) or 530A(1) .

588GB(6)  

A failure to comply with subsection (5) does not affect the validity of the notice, order, subsection or warrant referred to in subsection (5).

Definitions

588GB(7)  

In this section:

relevant proceeding means a proceeding:


(a) for, or relating to, a contravention of subsection 588G(2) ; and


(b) in which a person seeks to rely on subsection 588GA(1) .

Example: A proceeding under section 588M .


 



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