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Tuesday, 12 September 2017
Page: 10005

Consideration of Senate Message

Bill returned from the Senate with amendments.

Ordered that the amendments be considered at a later hour this day.

Senate’s amendments—

(1) Opp (1) [Sheet 8239]

Schedule 1, page 8 (after line 12), after item 3, insert:

3A At the end of Division 3 of Part 5.7B

Add:

588HA Review relating to safe harbour

(1) The Minister must cause an independent review of the following matters to be undertaken as soon as practicable after the last day of the 2 year period commencing on the commencement of this section:

(a) the impact of the availability of the safe harbour to directors of companies on:

(i) the conduct of directors; and

(ii) the interests of creditors and employees of those companies;

(b) any other matters the Minister considers relevant.

(2) The review must be undertaken by 3 persons who, in the Minister's opinion, possess appropriate qualifications to undertake the review.

(3) The persons who undertake the review must give the Minister a written report of the review.

(4) The Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of that House after the day on which the report is given to the Minister.

(5) The report is not a legislative instrument.

(2) Govt (1) [Sheet GZ221]

Schedule 1, item 7, page 10 (lines 8 to 31), omit subsection 415D(1), substitute:

Stay on enforcing rights

(1) A right cannot be enforced against a body for:

(a) the reason that the body, if it is a disclosing entity, has publicly announced that it will be making an application under section 411 for the purpose of avoiding being wound up in insolvency; or

(b) the reason that the body is the subject of an application under section 411; or

(c) the reason that the body is the subject of a compromise or arrangement approved under this Part as a result of an application under section 411; or

(d) the body's financial position, if the body is the subject of such an announcement, application, compromise or arrangement; or

(e) a reason, prescribed by the regulations for the purposes of this paragraph, that relates to:

(i) the making, or possible making, of such an announcement, application, compromise or arrangement about the body; or

(ii) the body's financial position;

if such an announcement, application, compromise or arrangement is later made about the body; or

(f) a reason that, in substance, is contrary to this subsection;

if the right arises for that reason by express provision (however described) of a contract, agreement or arrangement.

Note: This result is subject to subsections (5), (6) and (8), and to any order under section 415E.

Example: A right to terminate a contract will not be enforceable to the extent that those rights are triggered by the body becoming the subject of such an announcement, application, compromise or arrangement.

(3) Govt (2) [Sheet GZ221]

Schedule 1, item 7, page 12 (line 6), at the end of subsection 415D(4), add:

; or (d) is a reason referred to in paragraph (1) (e) or (f).

(4) Govt (3) [Sheet GZ221]

Schedule 1, item 7, page 13 (lines 1 to 5), omit subsection 415D(8), substitute:

(8) If the application under section 411 results in the approval under this Part of a compromise or arrangement, subsection (1) does not apply to the right to the extent that:

(a) the person appointed to administer the compromise or arrangement; or

(b) if a liquidator of the body is appointed after the start of the stay period—the liquidator;

has consented in writing to the enforcement of the right.

(5) Govt (4) [Sheet GZ221]

Schedule 1, item 7, page 14 (lines 19 and 20), omit "a reason referred to in paragraphs 415D(1) (a) to (d)", substitute "one or more reasons referred to in paragraphs 415D(1) (a) to (f)".

(6) Govt (5) [Sheet GZ221]

Schedule 1, item 7, page 15 (after line 15), after section 415F, insert:

415FA Self -executing provisions

(1) The object of subsection (2) is to ensure that a self-executing provision:

(a) cannot start to apply against a body for certain reasons; and

(b) can be the subject of a Court order providing that the provision can only start to apply against a body with the leave of the Court, and in accordance with such terms (if any) as the Court imposes.

(2) Sections 415D to 415F also apply in relation to a self-executing provision in a corresponding way to the way they apply in relation to a right. For this purpose, assume those sections apply with such modifications as are necessary, including any prescribed by the regulations for the purposes of this subsection.

Note 1: This subsection achieves the object in subsection (1) by extending the application of all of the outcomes, exceptions and powers in sections 415D to 415F.

Note 2: These modifications include, for example, treating:

(a) a reference that a right cannot be enforced (however described) as including a reference that a self-executing provision cannot start to apply; and

(b) the words "if the right arises for that reason by express provision (however described) of a contract, agreement or arrangement" as being omitted from subsection 415D(1); and

(c) a reference that one or more rights are enforceable as including a reference that one or more self-executing provisions can start to apply; and

(d) paragraph 415F(2) (b) as alternatively providing that the Court is satisfied that one or more reasons referred to in paragraphs 415D(1) (a) to (f) can cause the self-executing provisions to start to apply.

(3) In this section:

self -executing provision means a provision of a contract, agreement or arrangement that can start to apply automatically:

(a) for one or more reasons; and

(b) without any party to the contract, agreement or arrangement making a decision that the provision should start to apply.

(7) Govt (6) [Sheet GZ221]

Schedule 1, item 7, page 15 (line 17), omit "415F", substitute "415FA".

(8) Govt (7) [Sheet GZ221]

Schedule 1, item 8, page 15 (line 27) to page 16 (line 17), omit subsection 434J(1), substitute:

Stay on enforcing rights

(1) A right cannot be enforced against a corporation for:

(a) the reason of the appointment or existence of a managing controller of the whole or substantially the whole of the corporation's property; or

(b) the corporation's financial position, if there is a managing controller of the whole or substantially the whole of the corporation's property; or

(c) a reason, prescribed by the regulations for the purposes of this paragraph, that relates to:

(i) the appointing, or possible appointing, of a managing controller of the whole or substantially the whole of the corporation's property; or

(ii) the corporation's financial position;

if such an appointment is later made for the whole or substantially the whole of the corporation's property; or

(d) a reason that, in substance, is contrary to this subsection;

if the right arises for that reason by express provision (however described) of a contract, agreement or arrangement.

Note: This result is subject to subsections (5) and (7), and to any order under section 434K.

Example: A right to terminate a contract will not be enforceable to the extent that those rights are triggered by the appointment of a managing controller.

(9) Govt (8) [Sheet GZ221]

Schedule 1, item 8, page 17 (line 13), at the end of subsection 434J(4), add:

; or (d) is a reason referred to in paragraph (1) (c) or (d).

(10) Govt (9) [Sheet GZ221]

Schedule 1, item 8, page 19 (line 16), omit "a reason referred to in paragraph 434J(1) (a) or (b)", substitute "one or more reasons referred to in paragraphs 434J(1) (a) to (d)".

(11) Govt (10) [Sheet GZ221]

Schedule 1, item 8, page 20 (after line 3), after section 434L, insert:

434LA Self -executing provisions

(1) The object of subsection (2) is to ensure that a self-executing provision:

(a) cannot start to apply against a corporation for certain reasons; and

(b) can be the subject of a Court order providing that the provision can only start to apply against a corporation with the leave of the Court, and in accordance with such terms (if any) as the Court imposes.

(2) Sections 434J to 434L also apply in relation to a self-executing provision in a corresponding way to the way they apply in relation to a right. For this purpose, assume those sections apply with such modifications as are necessary, including any prescribed by the regulations for the purposes of this subsection.

Note 1: This subsection achieves the object in subsection (1) by extending the application of all of the outcomes, exceptions and powers in sections 434J to 434L.

Note 2: These modifications include, for example, treating:

(a) a reference that a right cannot be enforced (however described) as including a reference that a self-executing provision cannot start to apply; and

(b) the words "if the right arises for that reason by express provision (however described) of a contract, agreement or arrangement" as being omitted from subsection 434J(1); and

(c) a reference that one or more rights are enforceable as including a reference that one or more self-executing provisions can start to apply; and

(d) paragraph 434L(2) (b) as alternatively providing that the Court is satisfied that one or more reasons referred to in paragraphs 434J(1) (a) to (d) can cause the self-executing provisions to start to apply.

(3) In this section:

self -executing provision means a provision of a contract, agreement or arrangement that can start to apply automatically:

(a) for one or more reasons; and

(b) without any party to the contract, agreement or arrangement making a decision that the provision should start to apply.

(12) Govt (11) [Sheet GZ221]

Schedule 1, item 8, page 20 (line 5), omit "434L", substitute "434LA".

(13) Govt (12) [Sheet GZ221]

Schedule 1, item 14, page 21 (lines 3 to 19), omit subsection 451E(1), substitute:

Stay on enforcing rights

(1) A right cannot be enforced against a company for:

(a) the reason that the company has come or is under administration; or

(b) the company's financial position, if the company is under administration; or

(c) a reason, prescribed by the regulations for the purposes of this paragraph, that relates to:

(i) the company coming, or possibly coming, under administration; or

(ii) the company's financial position;

if the company later comes under administration; or

(d) a reason that, in substance, is contrary to this subsection;

if the right arises for that reason by express provision (however described) of a contract, agreement or arrangement.

Note: This result is subject to subsections (5) and (7), and to any order under section 451F.

Example: A right to terminate a contract will not be enforceable to the extent that those rights are triggered by the company coming under administration.

(14) Govt (13) [Sheet GZ221]

Schedule 1, item 14, page 22 (line 18), at the end of subsection 451E(4), add:

; or (d) is a reason referred to in paragraph (1) (c) or (d).

(15) Govt (14) [Sheet GZ221]

Schedule 1, item 14, page 23 (lines 7 to 9), omit subsection 451E(7), substitute:

(7) Subsection (1) does not apply to the right to the extent that:

(a) the administrator of the company; or

(b) if a liquidator of the company is appointed after the administration ends—the liquidator;

has consented in writing to the enforcement of the right.

(16) Govt (15) [Sheet GZ221]

Schedule 1, item 14, page 24 (lines 7 and 8), omit "a reason referred to in paragraph 451E(1) (a) or (b)", substitute "one or more reasons referred to in paragraphs 451E(1) (a) to (d)".

(17) Govt (16) [Sheet GZ221]

Schedule 1, item 14, page 24 (after line 26), after section 451G, insert:

451GA Self -executing provisions

(1) The object of subsection (2) is to ensure that a self-executing provision:

(a) cannot start to apply against a company for certain reasons; and

(b) can be the subject of a Court order providing that the provision can only start to apply against a company with the leave of the Court, and in accordance with such terms (if any) as the Court imposes.

(2) Sections 451E to 451G also apply in relation to a self-executing provision in a corresponding way to the way they apply in relation to a right. For this purpose, assume those sections apply with such modifications as are necessary, including any prescribed by the regulations for the purposes of this subsection.

Note 1: This subsection achieves the object in subsection (1) by extending the application of all of the outcomes, exceptions and powers in sections 451E to 451G.

Note 2: These modifications include, for example, treating:

(a) a reference that a right cannot be enforced (however described) as including a reference that a self-executing provision cannot start to apply; and

(b) the words "if the right arises for that reason by express provision (however described) of a contract, agreement or arrangement" as being omitted from subsection 451E(1); and

(c) a reference that one or more rights are enforceable as including a reference that one or more self-executing provisions can start to apply; and

(d) paragraph 451G(2) (b) as alternatively providing that the Court is satisfied that one or more reasons referred to in paragraphs 451E(1) (a) to (d) can cause the self-executing provisions to start to apply.

(3) In this section:

self -executing provision means a provision of a contract, agreement or arrangement that can start to apply automatically:

(a) for one or more reasons; and

(b) without any party to the contract, agreement or arrangement making a decision that the provision should start to apply.

(18) Govt (17) [Sheet GZ221]

Schedule 1, item 14, page 24 (line 28), omit "451G", substitute "451GA".

(19) Govt (18) [Sheet GZ221]

Schedule 1, item 15, page 25 (line 4), omit "415D to 415F, 434J to 434L,", substitute "415D to 415FA, 434J to 434LA,".

(20) Govt (19) [Sheet GZ221]

Schedule 1, item 16, page 25 (line 7), omit "451E to 451G,", substitute "451E to 451GA,".

(21) Govt (20) [Sheet GZ221]

Schedule 1, item 17, page 25 (line 10), after "under", insert ", or self-executing provisions of,".