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Health Legislation Amendment Bill (No. 3) 1999
Schedule 2 The prudential regulation of registered organizations

Part 1 Main amendments

National Health Act 1953

1  Subsection 4(1)

Insert:

new prudential standards day means the day on which the Council establishes:

                     (a)  a solvency standard for the purposes of Division 3A of Part VI of this Act; and

                     (b)  a capital adequacy standard for the purposes of Division 3B of that Part.

2  After section 6A

Insert in Part I:

7   Application of provisions of Corporations Law—general matters

             (1)  For the purposes of this section:

                     (a)  an application provision is a provision of this Act:

                              (i)  that provides for the application of a provision, or a group of provisions (including a Chapter, Part, Division or Subdivision), of the Corporations Law; or

                             (ii)  that refers to a provision, or group of provisions, of the Corporations Law as so applied; and

                     (b)  an applied Corporations Law provision is a provision, or a provision in a group of provisions, of the Corporations Law that is applied as mentioned in subparagraph (a)(i).

             (2)  A reference in an application provision to an applied Corporations Law provision, or a group of applied Corporations Law provisions, includes (unless the contrary intention appears) a reference to any regulations or other instruments in force for the purposes of that provision, or any of those provisions, of the Corporations Law.

Note:          So, for example, a provision of this Act that applies a particular provision of the Corporations Law also applies any regulations that have effect for the purposes of that provision (unless a contrary intention appears).

             (3)  If an application provision contains a power for regulations to modify an applied Corporations Law provision:

                     (a)  the power extends to modifying any regulations or other instruments in force for the purposes of that provision of the Corporations Law, being regulations or other instruments that are applied as a result of subsection (2); and

                     (b)  the modifications (whether of the applied Corporations Law provision or of regulations or instruments referred to in paragraph (a)) that may be made include omissions, additions and substitutions.

             (4)  The fact that provision is made in this Act for a specific modification of one or more applied Corporations Law provisions does not imply that further modifications of that provision, or any of those provisions, consistent with that specific modification, should not be made by the regulations.

             (5)  An applied Corporations Law provision, or a provision of regulations or another instrument that is applied as a result of subsection (2), is (as so applied) to be interpreted in accordance with the same definitions and interpretation principles that apply to the provision as it has effect in or under the Corporations Law, unless a contrary intention appears in an application provision or in modifying regulations.

             (6)  If an applied Corporations Law provision allows something to be done in or by regulations, then:

                     (a)  regulations may be made under this Act to do that thing for the purposes of the applied Corporations Law provision; and

                     (b)  if regulations are so made, any regulations or instruments that are applied as a result of subsection (2) are ineffective, for the purposes of this Act, to the extent that they are inconsistent with the regulations so made.

3  Sections 73BAB and 73BAC

Repeal the sections.

4  After Division 3 of Part VI

Insert:

Division 3A The solvency standard for registered organizations

73BCA   Purpose of Division

                   The purpose of this Division is to establish, and require registered organizations to comply with, standards of solvency in order to ensure that the health benefits fund conducted by each such organization remains solvent.

73BCB   Council to establish solvency standards

             (1)  The Council must, as soon as practicable but, in any case, not later than 1 January 2001, establish, in writing, a solvency standard for the purposes of this Division.

             (2)  The solvency standard may be expressed:

                     (a)  to set different standards of solvency:

                              (i)  for health benefits funds conducted by different registered organizations; or

                             (ii)  for different classes of health benefits funds; or

                     (b)  to apply to a health benefits fund only in circumstances specified in the standard.

             (3)  The Council must, before establishing a solvency standard, consult with the Australian Government Actuary concerning that standard.

             (4)  If, in establishing a standard, the Council decides:

                     (a)  not to adopt advice concerning a standard from the Australian Government Actuary; or

                     (b)  to adopt advice concerning a standard from the Australian Government Actuary with variations;

the Council must publish in the Gazette a statement that sets out the Council’s reasons for not adopting, or for varying, that advice.

             (5)  A solvency standard is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .

73BCC   Purpose of solvency standard

                   The purpose of the solvency standard is to ensure, as far as practicable, that at any time the financial position of the health benefits fund conducted by a registered organization is such that the organization will be able, out of the assets of the fund, to meet all liabilities referable to the health insurance business of the organization as those liabilities become due.

73BCD   Registered organizations to comply with solvency standards

             (1)  Subject to subsection (2), every registered organization must comply with the solvency standard as it applies in respect of that organization.

             (2)  The Council may declare, by notice in writing, that the solvency standard does not apply to a particular registered organization, or does not apply in particular circumstances, or for a particular period, specified in the notice.

             (3)  The Council may:

                     (a)  in a declaration under subsection (2); or

                     (b)  by a separate notice in writing;

impose conditions to be complied with by any organization that is to get the benefit of the declaration.

             (4)  If an organization fails to comply with a condition referred to in subsection (3), the declaration is taken to cease to apply to the organization.

             (5)  If the Council is satisfied that a declaration under subsection (2), or a condition referred to in subsection (3), is no longer required or should be varied, the Council must, by notice in writing, revoke or vary the declaration or condition accordingly.

             (6)  If a registered organization requests the Council, in writing, to revoke or vary a declaration under subsection (2), or a condition referred to in subsection (3), the Council must, within 28 days after receiving the request:

                     (a)  if the Council is satisfied that the declaration or condition is no longer necessary or should be varied—revoke or vary the declaration or condition; or

                     (b)  in any other case—refuse to revoke or vary the declaration or condition.

             (7)  If the Council does not, within the 28 days referred to in subsection (6), either revoke or vary or refuse to revoke or vary the declaration or condition concerned, the Council is to be taken, for the purposes of this Act, to have refused to revoke or vary the declaration or condition at the end of that period.

             (8)  The Council must give to the registered organization written notice of a decision made under subsection (6) and, if the Council refuses to revoke or vary the declaration or condition concerned, provide a statement of reasons for so refusing.

             (9)  In this section, a reference to a declaration or condition includes a reference to a declaration or condition as varied.

73BCE   Council may give solvency directions

             (1)  If, having regard to:

                     (a)  the nature and value of the assets in the health benefits fund of a registered organization; or

                     (b)  the nature and extent of the liabilities that are referable to that health benefits fund; or

                     (c)  any other matters that the Council considers relevant;

the Council is satisfied that there are reasonable grounds for believing that the organization may not be able to meet, out of the assets of the fund, all liabilities referable to the business of the fund as they become due, the Council may give written directions ( solvency directions ) to the organization.

             (2)  Solvency directions are directions that, in the opinion of the Council, are reasonably necessary to ensure, as far as practicable, that a registered organization will be able to meet the liabilities of the health benefits fund conducted by the organization out of the assets of the fund as they become due.

             (3)  The Council may give a solvency direction to a registered organization even if, when the direction is given, the organization meets the requirements of the solvency standard applicable to that organization in respect of the fund and there are reasonable grounds to believe that the organization will meet that standard at all times while the direction is in force.

             (4)  A registered organization must comply with a solvency direction given to it under subsection (1).

             (5)  Subject to subsections (6) and (7), a solvency direction remains in force for a period specified in the direction, not exceeding 3 years, commencing on the day when the direction is given. However, nothing prevents the Council from issuing a further solvency direction in the same terms to take effect immediately after the expiration of a previous direction.

             (6)  If the Council is satisfied that a particular solvency direction is no longer required or should be varied, the Council must, by written notice given to the registered organization, revoke or vary the direction accordingly

             (7)  If a registered organization to which a solvency direction has been given requests the Council, in writing, to revoke or vary the direction, the Council must, within 28 days after receiving the request:

                     (a)  if the Council is satisfied that the direction is no longer necessary or should be varied—revoke or vary the direction; or

                     (b)  in any other case—refuse to revoke or vary the direction.

             (8)  If the Council does not, within the 28 days referred to in subsection (7), either revoke or vary or refuse to revoke or vary the solvency direction concerned, the Council is to be taken, for the purposes of this Act, to have refused to revoke or vary the direction at the end of that period.

             (9)  The Council must give to the registered organization written notice of a decision made under subsection (7) and, if the Council refuses to revoke or vary the direction concerned, provide a statement of reasons for so refusing.

           (10)  In this section, a reference to a solvency direction includes a reference to a solvency direction as varied.

Division 3B The capital adequacy standard for registered organizations

73BCF   Purpose of Division

                   The purpose of this Division is to establish, and require registered organizations to comply with, a standard in order to maintain the capital adequacy of the health benefits funds they conduct.

73BCG   Council to establish capital adequacy standard

             (1)  The Council must, on the same day as it establishes a solvency standard under section 73BCB, establish, in writing, a capital adequacy standard for the purposes of this Division.

             (2)  The capital adequacy standard may be expressed:

                     (a)  to set different standards of capital adequacy:

                              (i)  for health benefits funds conducted by different registered organizations; or

                             (ii)  for different classes of health benefits funds; or

                     (b)  to apply to a health benefits fund only in circumstances specified in the standard.

             (3)  The Council must, before establishing a capital adequacy standard, consult with the Australian Government Actuary concerning that standard.

             (4)  A capital adequacy standard is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .

73BCH   Purpose of capital adequacy standard

                   The purpose of the capital adequacy standard is to ensure, as far as practicable, that there are sufficient assets in the health benefits fund conducted by each registered organization to provide adequate capital for the conduct of the health insurance business in accordance with this Act and in the interests of the contributors to the fund.

73BCI   Registered organization to comply with capital adequacy standard

             (1)  Subject to subsection (2), every registered organization must comply with the capital adequacy standard as it applies in respect of that organization.

             (2)  The Council may declare, by notice in writing, that the capital adequacy standard does not apply to a particular registered organization, or does not apply in particular circumstances, or for a particular period, specified in the notice.

             (3)  The Council may:

                     (a)  in a declaration under subsection (2); or

                     (b)  by a separate notice in writing;

impose conditions to be complied with by any organization that is to get the benefit of the declaration.

             (4)  If an organization fails to comply with a condition referred to in subsection (3), the declaration is taken to cease to apply to the organization.

             (5)  If the Council is satisfied that a declaration under subsection (2), or a condition referred to in subsection (3), is no longer required or should be varied, the Council must, by notice in writing, revoke or vary the declaration or condition accordingly.

             (6)  If a registered organization requests the Council, in writing, to revoke or vary a declaration under subsection (2), or a condition referred to in subsection (3), the Council must, within 28 days after receiving the request:

                     (a)  if the Council is satisfied that the declaration or condition is no longer necessary or should be varied—revoke or vary the declaration or condition; or

                     (b)  in any other case—refuse to revoke or vary the declaration or condition.

             (7)  If the Council does not, within the 28 days referred to in subsection (6), either revoke or vary or refuse to revoke or vary the declaration or condition concerned, the Council is to be taken, for the purposes of this Act, to have refused to revoke or vary the declaration or condition at the end of that period.

             (8)  The Council must give to the registered organization written notice of a decision made under subsection (6) and, if the Council refuses to revoke or vary the declaration or condition concerned, provide a statement of reasons for so refusing.

             (9)  In this section, a reference to a declaration or condition includes a reference to a declaration or condition as varied.

73BCJ   Council may give capital adequacy directions

             (1)  If, having regard to:

                     (a)  the nature of the business of a health benefits fund conducted by a registered organization; or

                     (b)  the nature or value of the assets of the fund; or

                     (c)  any other matter that the Council considers relevant;

the Council is satisfied that there are reasonable grounds for believing that the assets of the fund will not provide adequate capital for the conduct of the health insurance business in accordance with this Act and in the interests of the contributors to the fund, the Council may give written directions ( capital adequacy directions ) to the organization.

             (2)  Capital adequacy directions are directions that, in the opinion of the Council, are reasonably necessary to ensure, as far as practicable, that the assets of the health benefits fund conducted by a registered organization will provide adequate capital for the purposes described in subsection (1).

             (3)  The Council may give a capital adequacy direction to a registered organization even if, when the direction is given, the organization meets the requirements of the capital adequacy standard applicable to that organization in respect of the fund and there are reasonable grounds to believe that the organization will meet that standard at all times while the direction is in force.

             (4)  A registered organization must comply with a capital adequacy direction given to it under subsection (1).

             (5)  Subject to subsections (6) and (7), a capital adequacy direction remains in force for a period specified in the direction, not exceeding 3 years, commencing on the day on which the direction is given. However, nothing prevents the Council from giving a further direction in the same terms to take effect immediately after the expiry of a previous direction.

             (6)  If the Council is satisfied that a particular capital adequacy direction is no longer required or that it should be varied, the Council must, by written notice given to the registered organization, revoke or vary the direction accordingly.

             (7)  If a registered organization to which a capital adequacy direction has been given requests the Council, in writing, to revoke or vary the direction, the Council must, within 28 days after receiving the request:

                     (a)  if the Council is satisfied that the direction is no longer necessary or should be varied—revoke or vary the direction; and

                     (b)  in any other case—refuse to revoke or vary the direction.

             (8)  If the Council does not, within the 28 days referred to in subsection (7), either revoke or vary or refuse to revoke or vary the direction concerned, the Council is to be taken, for the purposes of this Act, to have refused to revoke or vary the direction at the end of that period.

             (9)  The Council must give to the registered organization written notice of its decision under subsection (7) and, if the Council refuses to revoke or vary the direction concerned, provide a statement of the reasons for so refusing.

           (10)  In this section, a reference to a capital adequacy direction includes a reference to a capital adequacy direction as varied.

5  Subsection 73BEB(1)

Omit “or served under subsection 73BAC(2)”.

6  After section 82B

Insert:

82BA  Purposes of Council

             (1)  The Council is established for the following purposes:

                     (a)  to regulate registered organizations in accordance with this Act, other laws of the Commonwealth and any directions given by the Minister;

                     (b)  to develop policies about the performance of its regulatory functions.

             (2)  In carrying out its purposes, the Council must take all reasonable steps to achieve an appropriate balance between the following objectives:

                     (a)  the objective of fostering an efficient and competitive health insurance industry;

                     (b)  the objective of protecting the interests of consumers;

                     (c)  the objective of minimising the level of health insurance premiums;

                     (d)  the objective of ensuring the prudential safety of individual registered organizations.

7  At the end of section 82D

Add:

             (4)  A person cannot be appointed as a member of the Council if that person is a director, officer or employee of a body regulated by the Council.

8  Paragraph 82G(1)(c)

Repeal the paragraph, substitute:

                     (c)  to establish standards of the following kinds to be complied with by registered organizations:

                              (i)  solvency standards;

                             (ii)  capital adequacy standards;

                            (iii)  uniform standards for reporting to the Council;

9  Before paragraph 82G(1)(e)

Insert:

                    (db)  to appoint, under section 82R, inspectors for the purpose of investigating the affairs of registered organizations under Part VIA and to exercise other related powers and functions under that Part;

10  Paragraphs 82G(1)(f) and (g)

Repeal the paragraphs, substitute:

                      (f)  to appoint, on the basis of a report of an inspector or otherwise, persons as administrators of health benefits funds or of registered organizations and to terminate such appointments;

                     (g)  to receive, under section 82XZC, reports of administrators of health benefits funds or registered organizations concerning the administration of those funds or organizations and to deal with such reports in accordance with section 82XZD;

                    (ga)  to give approvals related to the voluntary winding up of health benefit funds or registered organizations in the circumstances set out in Subdivision 3 or 4 of Division 4 of Part VIA, as the case requires;

                    (gb)  to apply to a court for the winding up of insolvent health benefits funds or insolvent registered organizations in accordance with Subdivision 5 or 6 of Division 4 of Part VIA, as the case requires;

11  Paragraph 82G(1)(q)

Repeal the paragraph.

12  After paragraph 82G(1)(s)

Insert:

                    (sa)  to cooperate with other regulatory agencies on matters affecting registered organizations and the private health insurance industry generally;

13  Before section 82Q

Insert:

Division 1 Preliminary

82QA   Outline of Part

             (1)  Division 1 sets out the purpose of Part VIA and defines concepts used in the Part.

             (2)  Division 2 provides that the Minister or the Council may appoint an inspector to investigate and report on the affairs of a registered organization and sets out the powers and duties of an inspector.

             (3)  Division 3 describes the circumstances in which, and the legal basis on which, a fund or a registered organization can be placed under administration and sets out the duties and powers of an administrator.

             (4)  Division 4 describes the circumstances in which, and the legal basis on which, a fund or a registered organization can be wound up and, to the extent that Commonwealth law affects those circumstances or that manner, sets out the relevant Commonwealth law.

             (5)  Division 5 contains provisions dealing with miscellaneous matters.

82QB   Purpose of the Part

                   The purpose of this Part is:

                     (a)  to provide for the supervision of the business, affairs and property of funds and of registered organizations conducting funds, so as to ensure that the business and affairs are carried on, and the property is managed, in the interests of the contributors to these funds and in accordance with applicable laws, terms and conditions, and directions; and

                     (b)  to provide, either as a consequence of that supervision, or as a voluntary measure instituted by the directors of such funds or organizations, for the administration of such funds or organizations in a manner consistent with the interests of those contributors; and

                     (c)  to provide, as a consequence either of that supervision or administration or as a voluntary measure, for the orderly winding up of such funds or organizations in a manner that:

                              (i)  if it arises out of that supervision or administration—is consistent with the interests of those contributors; or

                             (ii)  if it is a voluntary winding up—is not materially detrimental to the interests of those contributors.

82QC   Limitation on administration and winding up of health benefits funds and registered organizations

             (1)  Despite the provisions of any other law of the Commonwealth or of any law of a State or Territory, the fund conducted by a registered organization, or a registered organization itself, can only be placed under administration, or dealt with as a fund or organization under administration, in accordance with Division 3.

             (2)  Despite the provisions of any other law of the Commonwealth or any other law of a State or Territory, the fund conducted by a registered organization, or a registered organization itself, can only be wound up in accordance with Division 4.

14  Subsection 82Q(1) (definition of affairs )

Repeal the definition.

15  Subsection 82Q(1)

Insert:

appointing authority , in relation to the appointment of an inspector, means the Minister or the Council.

16  Subsection 82Q(1)

Insert:

assets , in relation to the fund, or to the health insurance business, conducted by a registered organization, means the assets of the organization that are, in whole or in part, referable to the fund or business.

17  Subsection 82Q(1)

Insert:

conducting organization , in relation to a fund under administration or being wound up, means the registered organization that conducts that fund.

18  Subsection 82Q(1)

Insert:

contributor , in relation to a fund under administration or being wound up, or to a fund conducted by an organization under administration or being wound up, includes the dependants of the contributor.

19  Subsection 82Q(1)

Insert:

Court means:

                     (a)  subject to paragraph (b), the Federal Court of Australia; or

                     (b)  in relation to an application for, or any proceedings concerning, the winding up of a registered organization (including a registered organization under administration)—the Court that is identified for the purpose in the applicable law referred to in section 82YB as the law governing the winding up of that organization.

20  Subsection 82Q(1)

Insert:

friendly society means a body that is, or is taken to be, registered or incorporated as a friendly society under the law of a State or internal Territory relating to the registration or incorporation of friendly societies.

21  Subsection 82Q(1) (definition of fund )

Repeal the definition, substitute:

fund means a health benefits fund conducted by a registered organization.

22  Subsection 82Q(1)

Insert:

fund under administration means a fund in respect of which an administrator is performing duties under Division 3.

23  Subsection 82Q(1)

Insert:

liabilities , in relation to the fund, or to the health insurance business, conducted by a registered organization, means the liabilities of the organization that are, in whole or in part, referable to the fund or business.

24  Subsection 82Q(1)

Insert:

organization under administration means a registered organization in respect of which an administrator is performing duties under Division 3.

25  Subsection 82Q(1)

Insert:

voluntary deed of arrangement , means:

                     (a)  a deed of arrangement agreed on by creditors in a meeting convened under section 82XZ; or

                     (b)  such a deed as varied in accordance with the terms of a variation agreed on by creditors in a meeting convened in accordance with Subdivision 7 of Division 3.

26  Before section 82 R

Insert:

Division 2 Investigations into affairs of registered organizations

27  Subsection 82R(1)

Omit all the words before paragraph (aa), substitute “If the appointing authority has reason to suspect that:”.

28  Subsection 82R(1)

Omit all the words after paragraph (c), substitute “the appointing authority may, by notice specifying the matter referred to in paragraph (aa), (b) or (c) that the appointing authority suspects and the ground on which the appointing authority suspects the matter, appoint an inspector to investigate the affairs of the registered organization”.

29  Subsection 82R(2)

Repeal the subsection, substitute:

             (2)  The appointment must be in writing and:

                     (a)  if the Minister is the appointing authority—be signed by the Minister; or

                     (b)  if the Council is the appointing authority—be signed by the Commissioner.

30  Subsection 82R(4)

Omit “The Minister”, substitute “The appointing authority”.

31  Subsections 82W(1), (5), (6) and (7)

Omit “Minister” (first occurring), substitute “appointing authority”.

32  Subsection 82W(1)

Omit “Minister” (second and third occurring), substitute “authority”.

33  After subsection 82W(1)

Insert:

          (1A)  If an inspector makes a report to the appointing authority under subsection (1), the inspector must:

                     (a)  if the authority is the Minister—send a copy of the report to the Council; or

                     (b)  if the authority is the Council—send a copy of the report to the Minister.

34  Subsection 82W(3)

Omit “Minister”, substitute “appointing authority”.

35  Subsection 82W(4)

Repeal the subsection.

36  Subsection 82W(5)

Omit “Minister” (second occurring), substitute “authority”.

37  Subsection 82W(6)

Omit “Minister” (second occurring), substitute “authority”.

38  Subsection 82W(7)

Omit “Minister” (second and third occurring), substitute “authority”.

39  After subsection 82W(9)

Insert:

          (9A)  No action or proceeding, either civil or criminal, lies against an inspector:

                     (a)  in respect of the publication to the appointing authority of a report under this section; or

                     (b)  in respect of the inspector’s opinion given to the appointing authority in accordance with subsection (3);

so long as the inspector has acted in good faith.

40  Subsection 82W(10)

After “subsection (9)”, insert “or (9A)”.

41  After section 82W

Insert:

82WA   Minister and Council to inform each other about action taken

             (1)  If, on receipt of a report under subsection 82W(1) or a copy of a report under subsection 82W(1A), the Minister proceeds to take any action under this Act in respect of the registered organization, the Minister must inform the Council of such action.

             (2)  If, on receipt of a report under subsection 82W(1) or a copy of a report under subsection 82W(1A), the Council proceeds to take any action under this Act in respect of the registered organization, the Council must inform the Minister of such action.

42  Section 82X

Renumber as section 82WB.

43  Transitional provision

Any delegation in force under section 82X of the National Health Act 1953 immediately before the commencement of Part 1 of this Schedule has effect, on and after that commencement, as if it were a delegation in force under that section as renumbered.

44  Section 82Y

Renumber as section 82WC.

45  Transitional provision

Any proceedings commenced but not completed under section 82Y of the National Health Act 1953 as in force before the commencement of Part 1 of this Schedule have effect, on and after that commencement, as if they were proceedings that had been commenced under that section as renumbered.

46  Sections 82Z to 82Z M

Repeal the sections, substitute:

Division 3 Administration of funds and registered organizations

Subdivision 1 Preliminary

82XA   Purpose of Division

                   The purpose of this Division is to permit the business, affairs and property of a fund or organization under administration to be administered in a way:

                     (a)  that maximises the chance that the persons who are contributors to the fund under administration, or to the fund of the organization under administration, as the case requires, to continue to be covered for health insurance either by the fund to which they contribute or by another fund to which the business of the fund is transferred; or

                     (b)  if it is not possible for that coverage to be maintained—that, to the extent possible, safeguards the financial interests of those contributors in the event of an eventual winding up of the fund or organization under administration.

82XB   The basis of the law relating to administration

             (1)  Subject to this Act, the provisions of the law of each State or Territory that, but for this section, would relate to the administration of a registered organization, whether it is a company, a friendly society, an incorporated association or an unincorporated entity, cease, by force of this section, to apply to that registered organization.

             (2)  The administration of a registered organization is regulated instead, and the administration of a fund conducted by a registered organization is also regulated:

                     (a)  by the provisions of this Division; and

                     (b)  by the provisions of Divisions 6, 7, 8, 10, 11, 13 and 16 of Part 5.3A of Chapter 5 of the Corporations Law and of Division 7A of Part 5.6 of that Chapter, all applying, so far as they are capable of so doing, subject to such modifications as are set out in this Act or as are prescribed, as a law of the Commonwealth.

             (3)  For the purposes of subsection (2), the reference, in relation to a particular registered organization, to provisions of the Corporations Law that are to be applied, subject to modifications, as a law of the Commonwealth is a reference to those provisions of the Corporations Law of the particular State or internal Territory that is applicable to that registered organization as those provisions are in force from time to time.

             (4)  In the application of the provisions of the Corporations Law referred to in subsection (2) in relation to the administration of a fund, those provisions apply as if:

                     (a)  a reference to the company were a reference to the fund; and

                     (b)  a reference to the administrator were a reference to the administrator of the fund appointed under this Act; and

                     (c)  a reference to the Court were a reference to the Federal Court of Australia.

             (5)  In the application of the provisions of the Corporations Law referred to in subsection (2) in relation to the administration of a registered organization, those provisions apply as if:

                     (a)  a reference to the company were a reference to the registered organization (whether the registered organization is a company under the Corporations Law or not); and

                     (b)  a reference to the administrator were a reference to the administrator of the registered organization appointed under this Act; and

                     (c)  a reference to the Court were a reference to the Federal Court of Australia.

             (6)  The regulations may provide for different modifications according to the nature of the fund or registered organization that is to be, or that is being, administered.

82XC   Definitions

                   In this Division:

administrator , in relation to a fund or a registered organization, means a person appointed as administrator of the fund or organization under section 82XD.

Subdivision 2 Appointment of an administrator

82XD   Council may appoint administrator

                   Subject to sections 82XE and 82XF, the Council may, by written instrument, appoint a person as the administrator:

                     (a)  of the fund conducted by a registered organization; or

                     (b)  of a registered organization;

with effect from a date specified in the instrument of appointment.

82XE   Qualifications for appointment as administrator

             (1)  The Council must not appoint a person as administrator of a fund or of a registered organization unless:

                     (a)  the person is registered, or taken to be registered, as an official liquidator under the Corporations Law; and

                     (b)  the person is not related:

                              (i)  if appointed as administrator of the fund—to the fund; or

                             (ii)  if appointed as administrator of the registered organization—to the organization or to the fund of the organization.

             (2)  Without limiting the generality of the circumstances in which a person will be taken to be related to a fund, a person will be taken to be so related if the person is:

                     (a)  a contributor to the fund; or

                     (b)  an auditor of the fund; or

                     (c)  a chargee of property of the fund; or

                     (d)  an officer of a body corporate that is a chargee of property of the fund.

             (3)  Without limiting the generality of the circumstances in which a person will be taken to be related to a registered organization, a person will be taken to be so related if the person is:

                     (a)  an officer of the organization; or

                     (b)  an auditor of the organization; or

                     (c)  an officer of a body corporate that is related to the organization; or

                     (d)  a chargee of property of the organization; or

                     (e)  an officer of a body corporate that is a chargee of the property of the organization.

             (4)  The question whether a body corporate is related to a registered organization that is itself a body corporate is to be determined in accordance with the principles set out in section 50 of the Corporations Law.

             (5)  A person is not to be taken to be an officer of a registered organization for the purposes of this section simply because a person is appointed as administrator of that organization.

82XF   Grounds of appointment of an administrator

             (1)  The Council may appoint an administrator to a fund if, and only if, the Council believes that the appointment of an administrator to the fund is, in the circumstances, in the interests of the contributors to the fund, and:

                     (a)  the Council is satisfied, on reasonable grounds, that:

                              (i)  on or after the new prudential standards day there has been a breach of section 73BCD by the conducting organization in its conduct of the fund; or

                             (ii)  on or after the new prudential standards day there has been a breach of section 73BCI by the conducting organization in its conduct of the fund; or

                            (iii)  the conducting organization has, in its conduct of the fund, contravened any applicable rule, condition or direction within the meaning of subsection (2); or

                     (b)  a request for administration of the fund is made to the Council:

                              (i)  if the conducting organization is a company under the Corporations Law—by a resolution of the board of directors of the company; or

                             (ii)  if the conducting organization is a friendly society—by a resolution of the board of directors of the friendly society; or

                            (iii)  if the conducting organization is an incorporated association—by a resolution of the members of the committee of management of the association; or

                            (iv)  if the conducting organization is an unincorporated entity—by a resolution of the members of the governing body of the entity; or

                     (c)  a report has been received from a liquidator under section 82YJ; or

                     (d)  a ground specified in regulations made for the purpose of this subsection applies in respect of the fund.

             (2)  For the purposes of subparagraph (1)(a)(iii), an applicable rule, condition or direction , in relation to the conducting organization of a fund, means:

                     (a)  a provision of this Act or of the regulations that applies to that organization; or

                     (b)  a term or condition of registration imposed upon that organization by or under this Act; or

                     (c)  a direction given to that organization by the Minister under section 73BE or, on or after the new prudential standards day, by the Council under section 73BCE or 73BCJ; or

                     (d)  a rule of the Council made under paragraph 82G(1)(r).

             (3)  The Council may appoint an administrator of a registered organization if, and only if:

                     (a)  grounds exist under subsection (1) for the appointment of an administrator of the fund conducted by the organization, and the Council is satisfied, on reasonable grounds, that:

                              (i)  the conduct of that fund is the primary business of the organization; or

                             (ii)  property of the fund conducted by the organization may have been invested in, or transferred to, any other business conducted by the organization; or

                            (iii)  because of the nature of, or the manner of conducting, either the business or affairs of the fund conducted by the organization or the business or affairs of the organization generally, or because of the ownership of the property of the fund conducted by the organization and of the other property of the organization, it is necessary or convenient for the administrator to administer all of the business, affairs and property of the registered organization; or

                     (b)  a request for administration of the organization is made to the Council:

                              (i)  if the organization is a company under the Corporations Law—by a resolution of the board of directors of the company; or

                             (ii)  if the organization is a friendly society—by a resolution of the board of directors of the friendly society; or

                            (iii)  if the organization is an incorporated association—by a resolution of the members of the committee of management of the association; or

                            (iv)  if the organization is an unincorporated entity—by a resolution of the members of the governing body of the entity; or

                     (c)  a report has been received from a liquidator under section 82YN; or

                     (d)  a ground specified in regulations made for the purpose of this subsection applies in respect of the registered organization.

             (4)  In forming the requisite state of mind for the purpose of paragraph (1)(a) or subparagraph (3)(a)(i), (ii) or (iii), or of any regulations made for the purposes of subsection (1) or (3) that require a particular mental state, the Council can have regard:

                     (a)  to any information in its own records; and

                     (b)  to any report or return made to it, including any report received from an inspector under section 82W.

82XG   Council may give directions to administrator

             (1)  The Council may give an administrator written directions concerning the exercise of the powers that are vested in the administrator.

             (2)  The directions given to the administrator will ordinarily be of a general nature but may, where appropriate, take into account specific circumstances relevant to the particular fund or organization under administration.

             (3)  The Council may also give directions to the administrator concerning the provision to the Council, from time to time, of interim reports relating to the business of the fund or organization under administration.

82XH   Remuneration of administrator

             (1)  The Council may, by written instrument, determine:

                     (a)  the remuneration and allowances that the administrator is to receive; and

                     (b)  who is to pay that remuneration and those allowances, if they are not to be paid as mentioned in subsection (2).

             (2)  Unless the Council determines otherwise, the remuneration and allowances are to be paid out of the assets of the fund under administration or the organization under administration, as the case requires.

82XI   Administrator to displace management of fund or registered organization

             (1)  If a person is appointed as administrator of a fund, then, for so long as the fund is under administration:

                     (a)  the management of the fund vests in the administrator; and

                     (b)  any officer of the conducting organization vested with the management of the fund immediately before the appointment of the administrator is, by force of this subsection, divested of that management; and

                     (c)  the administrator is taken to be the public officer of the conducting organization in relation to the fund; and

                     (d)  the person who was the public officer of the conducting organization immediately before that appointment ceases to be the public officer of that organization.

             (2)  If a person is appointed as administrator of a registered organization, then, for so long as the organization is under administration:

                     (a)  the management of the organization vests in the administrator; and

                     (b)  any person vested with the management of the organization immediately before the appointment of the administrator is, by force of this subsection, divested of that management; and

                     (c)  the administrator is taken to be the public officer of the organization in relation to the fund of the organization; and

                     (d)  the person who was the public officer of the organization immediately before that appointment ceases to be the public officer of the organization.

82XJ   Administrator of fund may recommend whole organization be placed under administration

             (1)  A person appointed as the administrator of a fund may, at any time while that person is so appointed, recommend to the Council that an administrator should be appointed instead to administer the business, affairs and property of the conducting organization.

             (2)  A recommendation under subsection (1) must be in writing and must indicate the reasons why, in the opinion of the administrator, it is advisable to place the conducting organization under administration.

             (3)  If, having regard to the recommendation of the administrator and to the terms of subsection 82XF(3), the Council considers it appropriate to do so, the Council may appoint a person under section 82XD as administrator of the conducting organization.

             (4)  If a person who was appointed as administrator of a fund is subsequently appointed, in accordance with this section, as administrator of the conducting organization, all things properly done, and all decisions properly made, by the person in his or her capacity as administrator of the fund continue to have effect as if they had been done or made by the person in his or her capacity as administrator of the conducting organization.

82XK   Termination of appointment of administrator

             (1)  The Council may, at any time, by written notice given to an administrator, terminate the appointment of the administrator with effect from a date specified in the instrument of termination.

             (2)  If the Council terminates the appointment of an administrator, it may appoint another administrator (the replacement administrator ) to carry on the administration.

             (3)  Subject to subsection (4), the replacement administrator is taken to be appointed on the same terms and conditions, and to be subject to the same directions, as the previous administrator.

             (4)  Subsection (3) does not imply that the Council may not vary the remuneration or other terms and conditions applicable, or vary or add to the directions applicable, to the replacement administrator.

             (5)  If the Council terminates the appointment of an administrator of a fund or registered organization but does not appoint a replacement administrator, then, with effect from the termination:

                     (a)  the first-mentioned administrator is divested of the power:

                              (i)  to control the business, affairs and property of the fund or organization; and

                             (ii)  to carry on the business, and to manage the affairs and property, of the fund or organization;

                            and those powers vest once again in the officers of the conducting organization, or of the organization under administration, as the case requires; and

                     (b)  the administrator ceases to be the public officer of the conducting organization or of the organization under administration, as the case requires, and that responsibility vests again in the public officer of that organization; and

                     (c)  all of the other powers of the administrator in relation to the fund or organization cease.

             (6)  The Council must not, on the termination of the appointment of an administrator, fail to appoint a replacement administrator unless the Council is satisfied that it is, in the circumstances, in the interests of the contributors to the fund that was under administration, or the contributors to the health benefits fund of the organization that was under administration, not to appoint a replacement administrator.

Subdivision 3 Duties and powers of the administrator

82XL   Main duties of administrator

                   The main duties of the administrator of a fund or of a registered organization are:

                     (a)  to examine the business, affairs and property of the fund or organization; and

                     (b)  to form an opinion as to which course of action referred to in section 82XZC is, in the circumstances, in the best interests of contributors to the fund, or to the fund conducted by the organization; and

                     (c)  to make a final written report to the Council, in accordance with Subdivision 6, recommending that course of action.

82XM   Day-to-day duties of administrator

             (1)  In the day-to-day administration of a fund or of a registered organization, it is the duty of the administrator to administer the fund or organization as efficiently and economically as possible.

             (2)  If the administrator has been appointed to administer a fund, it is the duty of the administrator, as part of the administration:

                     (a)  to ascertain the assets and liabilities of the fund; and

                     (b)  if the business of the fund has been mixed with other business of the conducting organization—to apportion the assets and liabilities as between the fund and that other business; and

                     (c)  to determine, as between themselves, the respective rights and interests of the contributors to the fund.

             (3)  If the administrator has been appointed to administer a registered organization, it is the duty of the administrator, as a part of the administration:

                     (a)  to ascertain the assets and liabilities of the fund of the organization and of the other business of the organization; and

                     (b)  if the other business of the organization has been mixed with the business of the fund—to apportion the assets and liabilities as between the fund and that other business; and

                     (c)  to determine, as between themselves, the respective rights and interests of the contributors to the fund.

82XN   Powers of administrator

             (1)  While a fund or organization is under administration, the administrator has power, in the interests of the contributors to the fund under administration or of contributors to the fund conducted by the organization under administration, as the case requires:

                     (a)  to control the business, affairs and property of the fund or of the organization, as the case requires; and

                     (b)  to carry on the business of the fund or of the organization, and to manage the affairs and property of the fund or of the organization, as the case requires; and

                     (c)  to terminate or dispose of all or any part of the business, and to dispose of all or any part of the property, of the fund or of the organization, as the case requires; and

                     (d)  to perform any other function and exercise any other power:

                              (i)  if it is the fund under administration—that the conducting organization or any of its officers could perform or exercise in relation to the conduct of the fund; or

                             (ii)  if it is the organization under administration—that the organization or any of its officers could perform or exercise;

                            if the fund or organization, as the case requires, were not under administration.

             (2)  Without limiting subsection (1), the administrator of a fund also has the power to execute a document, bring or defend proceedings, or do any other thing, in the name of the conducting organization, for the purposes of the business of the fund.

             (3)  Without limiting subsection (1), the administrator of a registered organization also has power to do any of the following:

                     (a)  to remove from office an officer of the organization;

                     (b)  to appoint a person as an officer of the organization;

                     (c)  to execute a document, bring or defend proceedings, or do any other thing, in the name of the organization, for the purposes of the business of the organization.

82XO   Powers of other officers of registered organization suspended

             (1)  If, while a fund is under administration, a person (other than the administrator) performs or exercises, or purports to perform or exercise, a function or power of an officer of the conducting organization, without the administrator’s written approval, that person is guilty of an offence against this subsection.

Maximum penalty:    Imprisonment for 6 months.

             (2)  If, while a registered organization is under administration, a person (other than the administrator) performs or exercises, or purports to perform or exercise, a function or power of an officer of the organization, without the administrator’s written approval, that person is guilty of an offence against this subsection.

Maximum penalty:    Imprisonment for 6 months.

             (3)  Neither subsection (1) nor (2) implies that an officer of the organization is removed from his or her office.

             (4)  Section 82XI does not limit the generality of subsection (1) or (2).

             (5)  In this section:

officer includes:

                     (a)  in relation to a fund under administration—a receiver, or receiver and manager, of any of the assets of the fund; and

                     (b)  in relation to an organization under administration—a receiver, or receiver and manager, of any of the assets of the organization.

             (6)  A person is not an officer of a registered organization for the purposes of this section merely because he or she is an employee of the registered organization.

82XP   Administrator taken to act as agent of organization

             (1)  When exercising a power as administrator of a fund, the administrator is taken to be acting as the agent of the conducting organization.

             (2)  When exercising a power as administrator of a registered organization, the administrator is taken to be acting as the agent of the organization.

82XQ   Additional powers of the administrator

             (1)  In the application of the provisions of Division 8 of Part 5.3A of Chapter 5 of the Corporations Law, for the purpose of conferring further powers on the administrator of a fund or of a registered organization and, where appropriate, qualifying the exercise of those powers, the provisions of that Division are taken not to include section 442A or subsection 442D(1).

             (2)  For the purposes of section 442F of the Corporations Law as so applying, sections 128 and 129 of that Law are also taken to apply, subject to such modifications as are prescribed, as a law of the Commonwealth.

Subdivision 4 Information concerning, and records and property of, funds or organizations under administration

82XR   Directors to help administrator

             (1)  As soon as practicable after the administration of a fund or registered organization begins, each director of the conducting organization or of the organization under administration, as the case requires, must:

                     (a)  deliver to the administrator all records in the director’s possession that relate:

                              (i)  to the health insurance business of the fund under administration; or

                             (ii)  to any business conducted by the organization under administration;

                            as the case requires, other than records that the director is entitled to retain as against the administrator and either the conducting organization or the organization under administration, whichever is appropriate; and

                     (b)  if the director knows of the locality of other records relating to the business of the fund or organization under administration—tell the administrator of that locality.

             (2)  Within 7 days after the administration of a fund or registered organization begins, or such longer period as the administrator allows, the directors of the conducting organization or of the organization under administration, as the case requires, must give to the administrator a statement about the business, property, affairs and financial circumstances of the fund or registered organization. The statement must comply with any requirements of the administrator as to its form and contents.

             (3)  A director of the conducting organization or of the organization under administration, as the case requires, must:

                     (a)  attend on the administrator at such times; and

                     (b)  give the administrator such information about the business, property, affairs and financial circumstances of the fund or organization under administration;

as the administrator reasonably requires.

             (4)  A person who fails, without reasonable excuse, to comply with the requirements of subsection (1), (2) or (3) is guilty of an offence against this section.

Maximum penalty:    Imprisonment for 12 months.

             (5)  In this section:

director , in relation to a conducting organization or an organization under administration, means:

                     (a)  if the organization is a company or friendly society—a director of the company or society; and

                     (b)  if the organization is an incorporated association—a member of the committee of management of that association; and

                     (c)  if the organization is an unincorporated entity—a member of the governing body of that entity.

82XS   Administrator’s rights to certain records

             (1)  A person is not entitled, as against the administrator of a fund or organization under administration:

                     (a)  to retain possession of records of the conducting organization relating to the fund or of records of the organization under administration, as the case requires; or

                     (b)  to claim or enforce a lien on such records;

but such a lien is not otherwise prejudiced.

             (2)  Paragraph (1)(a) does not apply in relation to records of which a secured creditor of the conducting organization of a fund under administration, or of the registered organization under administration, is entitled to possession otherwise than because of a lien, but the administrator is entitled to inspect, and make copies of, such records at any reasonable time.

             (3)  The administrator of a fund or organization under administration may give to a person written notice requiring the person to deliver to the administrator, as specified in the notice, records so specified that are in the person’s possession.

             (4)  A notice under subsection (3) must specify a period of at least 3 days as the period within which the notice must be complied with.

             (5)  A person is guilty of an offence if:

                     (a)  the person receives a notice under subsection (3) from the administrator of a fund or organization under administration; and

                     (b)  the person does not comply with the notice;

except if, in relation to records to which the notice under subsection (3) relates, the person is entitled to retain possession of the records, as against the administrator and also as against either the conducting organization or the organization under administration, whichever is appropriate.

Maximum penalty:    Imprisonment for 12 months.

             (6)  In a prosecution for an offence against subsection (5), the defendant bears the evidential burden of proving the exception set out in that subsection.

82XT   Only administrator can deal with property of fund or organization under administration

             (1)  This section applies where:

                     (a)  in relation to a fund under administration:

                              (i)  the conducting organization purports to enter into; or

                             (ii)  a person purports, on behalf of the fund or the conducting organization, to enter into;

                            a transaction or dealing affecting the property of the fund; or

                     (b)  in relation to an organization under administration;

                              (i)  the organization purports to enter into; or

                             (ii)  a person purports, on behalf of the organization, to enter into;

                            a transaction or dealing affecting the property of the organization.

             (2)  The transaction or dealing referred to in subsection (1) is void unless:

                     (a)  the transaction or dealing has been entered into by the administrator of the fund or organization under administration on behalf of the conducting organization, or of the organization under administration, as the case requires; or

                     (b)  the administrator consented to the transaction or dealing before it was entered into; or

                     (c)  the transaction or dealing was entered into by order of the Court or of the Supreme Court of a State or Territory.

             (3)  Subsection (2) does not apply to a payment made:

                     (a)  by an Australian ADI out of an account kept with the ADI:

                              (i)  by the conducting organization; or

                             (ii)  by the organization under administration; and

                     (b)  in good faith and in the ordinary course of the ADI’s banking business; and

                     (c)  after the administration began but on or before the day on which:

                              (i)  the administrator gives to the ADI written notice of the appointment that began the administration; or

                             (ii)  the administrator notifies the appointment in a national newspaper, or in a newspaper circulating in each jurisdiction where the conducting organization or organization under administration has its registered office or carries on business;

                            whichever first happens.

             (4)  Subsection (2) has effect subject to any order that the Court makes after the purported transaction or dealing.

             (5)  An officer of the conducting organization of a fund under administration, or of an organization under administration, is guilty of an offence if:

                     (a)  the officer:

                              (i)  purported to enter into a transaction or dealing on behalf of the conducting organization or organization under administration; or

                             (ii)  was in any way, by act or omission, directly or indirectly concerned in, or party to, a transaction or dealing; and

                     (b)  the transaction or dealing referred to in paragraph (a) is, because of the operation of subsection (2), void, or would be void apart from subsection (4).

Maximum penalty:    Imprisonment for 6 months.

             (6)  In this section:

Australian ADI means an authorised deposit-taking institution within the meaning of the Banking Act 1959 .

officer includes:

                     (a)  in relation to a fund under administration—a receiver, or receiver and manager, of any of the assets of the fund; and

                     (b)  in relation to an organization under administration—a receiver, or receiver and manager, of any of the assets of the organization.

82XU   Order for compensation where officer involved in void transaction

             (1)  If:

                     (a)  a court finds a person guilty of an offence constituted by a contravention of subsection 82XT(5) (including such an offence that is taken to have been committed because of section 5 of the Crimes Act 1914 ); and

                     (b)  the court is satisfied that:

                              (i)  in the case of a fund under administration—the fund or another person; or

                             (ii)  in the case of an organization under administration—the organization or another person;

has suffered loss or damage because of the act or omission constituting the offence, the court may (whether or not it imposes a penalty) order the first-mentioned person to pay compensation of such amount as the order specifies to the conducting organization, the organization under administration, or the other person, as the case requires.

             (2)  An order under subsection (1) may be enforced as if it were a judgment of the court.

             (3)  If, in proceedings against a person under subsection 82XT(5), it appears to the court that the person is, or might be, liable to pay compensation under subsection (1), but that:

                     (a)  the person has acted honestly; and

                     (b)  having regard to all the circumstances of the case, the person ought fairly to be excused from paying compensation;

the court may relieve the person either wholly or partly from a liability to pay compensation under subsection (2) to which the person would otherwise be subject, or that might otherwise be imposed on the person.

             (4)  If a person thinks that proceedings under subsection 82XT(5) will, or might be, begun against him or her, he or she may apply to the Court for relief.

             (5)  On an application under subsection (4), the Court may grant relief under subsection (3) as if proceedings under subsection 82XT(5) had been begun in the Court.

             (6)  For the purposes of subsection (3) as applying for the purposes of a case tried by a judge with a jury:

                     (a)  a reference in that subsection to the court is a reference to the judge; and

                     (b)  the relief that may be granted includes withdrawing the case in whole or in part from the jury and directing judgment to be entered for the defendant on such terms as to costs as the judge thinks appropriate.

82XV   Effect of administration on the members of a registered organization

                   A transfer of shares in the conducting organization of a fund under administration, or in an organization that is itself under administration, or an alteration in the status of the members of such an organization, that is made during the administration of the fund or organization is void except so far as the Court otherwise orders.

82XW   Protection of property during administration

             (1)  In the application of the provisions of Division 6 of Part 5.3A of Chapter 5 of the Corporations Law in relation to the protection, during the administration of a fund or of a registered organization, of the property of the fund or organization, the provisions of that Division are taken not to include section 440A.

             (2)  In determining, for the purposes of section 440D of the Corporations Law as so applying, whether the administrator should consent to, or the Court should give leave for, a person’s beginning or continuing legal proceedings, the administrator or the Court must have regard to whether:

                     (a)  the proceedings do, or do not, relate to any property of the fund under administration or of the fund of the organization under administration, as the case requires; and

                     (b)  the proceedings would, or would not, be materially detrimental to the interests of contributors to the fund referred to in paragraph (a).

82XX   Rights of chargee, owner or lessor of property of fund or organization under administration

             (1)  In the application of the provisions of Division 7 of Part 5.3A of Chapter 5 of the Corporations Law in relation to the property of a fund or organization under administration:

                     (a)  the provisions of that Division are taken not to include section 441A; and

                     (b)  subsection 441D(1) is taken not to include the words following paragraph 441D(1)(b).

             (2)  Nothing in that Division as so applying prevents:

                     (a)  the administrator of a fund or organization under administration giving written consent; or

                     (b)  the Court giving leave;

for the enforcement of a charge, subject to any condition specified by the administrator or by the Court, as the case requires, if the administrator or the Court is satisfied:

                     (c)  that the charge does not relate to the property of the fund under administration, or of the fund of the organization under administration, as the case requires; and

                     (d)  that the enforcement of the charge will not be materially detrimental to the interests of the contributors to the fund referred to in paragraph (c).

Subdivision 5 Procedure for considering whether to execute voluntary deeds of arrangement

82XY   Definitions

                   In this Subdivision:

creditor , in relation to a fund or organization under administration, includes a contributor to the fund under administration, or to the fund conducted by the organization under administration, as the case requires.

82XZ   Administrator may convene meeting and inform creditors

             (1)  The administrator of a fund or organization under administration may convene a meeting of the creditors of the fund or organization to consider the possibility of the registered organization concerned executing a voluntary deed of arrangement.

             (2)  If the administrator decides to convene such a meeting, the administrator must:

                     (a)  give written notice of the meeting to as many of the creditors of the fund or organization as reasonably practicable; and

                     (b)  cause notice of the meeting to be published:

                              (i)  in a national newspaper; or

                             (ii)  in each jurisdiction in which the business of the fund or organization under administration is carried on—in a daily newspaper that circulates generally in that jurisdiction;

at least 5 business days before the meeting.

             (3)  The notice given to creditors under paragraph (2)(a) must be accompanied by:

                     (a)  a report by the administrator about the business, property, affairs and financial circumstances of the fund or organization under administration; and

                     (b)  a statement setting out details of a proposed voluntary deed of arrangement for the fund or organization under administration; and

                     (c)  a statement setting out the administrator’s opinion as to why it would be in the creditor’s interests for the registered organization concerned to execute such a voluntary deed of arrangement.

             (4)  The regulations may specify particular details that are required to be included in any statement made for the purposes of paragraph (3)(b).

             (5)  Without limiting, by implication, the generality of the matters that may be dealt with in a deed of arrangement, such a deed may:

                     (a)  make provision for the continuance, on terms or conditions set out in the deed, of the business of the fund or organization under administration; or

                     (b)  provide for the transfer to another registered organization, on terms set out in the deed, of the fund under administration or of the health benefits fund conducted by the organization under administration.

82XZA   Conduct of the meeting

             (1)  The administrator is to preside at a meeting convened under section 82XZ.

             (2)  Such a meeting may be adjourned from time to time at the discretion of the administrator but may not be adjourned to a day more than 30 days after the first day on which the meeting was held.

82XZB   What creditors may decide

             (1)  At a meeting convened under section 82XZ, the creditors must resolve whether the conducting organization of a fund under administration, or the registered organization under administration, should or should not execute the deed of arrangement specified in the resolution.

             (2)  The deed specified in the resolution may differ from the deed of arrangement as originally proposed by the administrator.

Subdivision 6 Administrator to report to Council

82XZC   Administrator to give report to Council

             (1)  Subject to subsection (2), as soon as practicable, but not more than 3 months after being appointed as administrator of a fund or registered organization, the administrator must conclude the examination of the business, affairs and property of the fund or organization and make a final written report to the Council.

             (2)  If, on application in writing by the administrator, the Council is satisfied that there exist special circumstances justifying an extension of time, it may notify the administrator, in writing, that subsection (1) has effect as if there were substituted for 3 months (or for any other period taken to be substituted because of a previous application of this subsection) a longer period specified in the notice, and subsection (1) has effect accordingly.

             (3)  If the creditors of the fund or organization under administration have resolved that the conducting organization or the organization under administration execute:

                     (a)  a voluntary deed of arrangement proposed by the administrator; or

                     (b)  a voluntary deed of arrangement in different terms that, in the opinion of the administrator, is, in the circumstances, still protective of the interests of the contributors to the fund concerned;

the administrator must, in the report to the Council and subject to subsection (7), recommend to the Council that it approve the execution of the deed.

             (4)  The administrator must not recommend to the Council the approval of the execution of a deed that limits the rights of a creditor or creditors unless, in the opinion of the administrator, the fund or the organization under administration is insolvent or likely to become insolvent at some future time.

             (5)  For the purposes of subsection (4), and without limiting the generality of circumstances where a deed is taken to limit the rights of a creditor, a deed will be taken to limit those rights if it involves:

                     (a)  removing or limiting the right of a creditor to the payment of a debt or other liability, or removing or limiting a creditor’s entitlement to an asset; or

                     (b)  delaying the right of a creditor to make or enforce a claim for the payment of a debt or other liability, or delaying the right of a creditor to make or enforce the creditor’s entitlement to an asset.

             (6)  For the purposes of subsection (4), and without limiting the generality of circumstances where a fund or registered organization is insolvent, the fund or organization will be taken to be insolvent in any circumstances prescribed by the regulations for the purposes of this section.

             (7)  If:

                     (a)  the administrator has not proposed a voluntary deed of arrangement; or

                     (b)  the administrator has proposed such a deed but:

                              (i)  the creditors of the fund or organization under administration have resolved to reject the deed; or

                             (ii)  the creditors of the fund or organization under administration have resolved to vary it and the administrator is not satisfied that, as so varied, it is, in the circumstances, still protective of the interests of the contributors to the fund concerned; or

                     (c)  the administrator has proposed such a deed but, because of the operation of subsection (4), the administrator must not recommend that the Council approve the execution of the deed;

the administrator must, in the report to the Council:

                     (d)  recommend a course of action listed in subsection (8) that, in the opinion of the administrator, is, in the circumstances, in the best interests of contributors to the fund concerned; and

                     (e)  set out the reasons for that recommendation.

             (8)  The courses of action that the administrator might recommend that the Council approve are:

                     (a)  subject to the Court’s making an order or orders in relation to the matter:

                              (i)  that the conducting organization or the registered organization, as the case requires, implement a scheme of arrangement (which may involve the execution of a deed in the same terms as the voluntary deed that the creditors rejected) concerning the business of the fund or organization under administration; or

                             (ii)  that the fund or organization under administration be wound up; or

                     (b)  that the administration cease and that the business of the fund or organization under administration be resumed by the conducting organization or the registered organization, as the case requires.

             (9)  Without limiting, by implication, the generality of the matters that may be dealt with in a scheme of arrangement referred to in subparagraph (8)(a)(i), such a scheme may:

                     (a)  make provision for the continuance, on terms or conditions set out in the scheme, of the business of the fund or organization under administration; or

                     (b)  provide for the transfer to another registered organization, on terms set out in the scheme, of the fund under administration or of the fund conducted by the organization under administration.

82XZD   Dealing with the report given to the Council

             (1)  In deciding whether or not to approve a voluntary deed of arrangement recommended under subsection 82XZC(3), or a course of action recommended under subsection 82XZC(7), the Council may:

                     (a)  request the administrator to provide further information on any matter; and

                     (b)  engage any person to assist it in evaluating assessments made, or projections relied on, by the administrator in relation to matters dealt with in the report.

             (2)  If, having regard to the report of the administrator and to any additional information provided by the administrator or by any person engaged to assist the Council, the Council is satisfied that the execution of a voluntary deed of arrangement recommended by the administrator under subsection 82XZC(3) will, in the circumstances, be in the interests of the contributors to the fund, the Council must, by written notice:

                     (a)  inform the administrator that it approves the execution of the deed; and

                     (b)  request the administrator to prepare the deed for execution.

             (3)  If, having regard to the report of the administrator and to any additional information provided by the administrator or by any person engaged to assist the Council, the Council is not satisfied that the execution of a voluntary deed of arrangement recommended by the administrator under subsection 82XZC(3) will, in the circumstances, be in the interests of the contributors to the fund, the Council must, by written notice:

                     (a)  inform the administrator to that effect; and

                     (b)  request that the administrator:

                              (i)  seek another meeting of the creditors to consider a further voluntary deed of arrangement; or

                             (ii)  examine the possible courses of action outlined in subsection 82XZC(8);

                            and, on the basis of that further meeting or of that examination, to make a further report to the Council within a time specified by the Council.

             (4)  If, having regard to the report of the administrator and to any additional information provided by the administrator or by any person engaged to assist the Council, the Council is satisfied that a course of action recommended by the administrator under subsection 82XZC(7) will, in the circumstances, be in the best interests of the contributors to the fund, the Council must, by written notice:

                     (a)  inform the administrator to that effect; and

                     (b)  either:

                              (i)  if the course of action is of a kind specified in subparagraph 82XZC(8)(a)(i)—direct the administrator to make an application in accordance with subsection 82XZE(1) to give effect to the course of action concerned; or

                             (ii)  if the course of action is of a kind specified in subparagraph 82XZC(8)(a)(ii)—direct the administrator to make an application in accordance with subsection 82YP(1) or 82YU(1), as the case requires, to give effect to the course of action concerned.

             (5)  If, having regard to the report of the administrator and to any additional information provided by the administrator or by any person engaged to assist the Council, the Council is not satisfied that a course of action recommended by the administrator under subsection 82XZC(7) will, in the circumstances, be in the best interests of the contributors to the fund, the Council must, by written notice:

                     (a)  inform the administrator to that effect; and

                     (b)  request that the administrator:

                              (i)  seek a meeting of the creditors to consider a voluntary deed of arrangement; or

                             (ii)  examine other possible courses of action outlined in subsection 82XZC(8);

                            and, on the basis of that further meeting or of that examination, to make a further report to the Council within a time specified by the Council.

             (6)  If the administrator provides a further report to the Council under subsection (3) or (5), this section applies in respect of that report as if it were the original report of the administrator.

82XZE   Administrator to seek order of Court in respect of certain courses of action

             (1)  If the Council informs the administrator that it is satisfied that a course of action of a kind specified in subparagraph 82XZC(8)(a)(i) is, in the circumstances, in the best interests of contributors to the fund concerned, the administrator must apply to the Court for an order or orders to give effect to the course of action.

Note:          For what is to happen if the Council informs the administrator that it is satisfied that a course of action of a kind specified in subparagraph 82XZC(8)(a)(ii) is, in the circumstances, in the best interests of contributors to the fund concerned, see subsections 82YP(1) and 82YU(1).

             (2)  On an application for such an order or orders:

                     (a)  the Council and any other person interested are entitled to be heard; and

                     (b)  the Court may make such order or orders in respect of the course of action the subject of the application as it considers to be, in all the circumstances, in the interests of persons who are contributors to the fund concerned.

             (3)  An order under this section:

                     (a)  is binding on all persons; and

                     (b)  takes effect despite anything in the constitution or other rules of the registered organization concerned.

             (4)  For the avoidance of doubt, an order of the Court is not required:

                     (a)  in order to give effect to a voluntary deed of arrangement—if the Council approves the execution of the deed; or

                     (b)  in order to effect a termination of an administration that is recommended under paragraph 82XZC(8)(b)—if the Council accepts the recommendation.

Subdivision 7 Execution, variation, termination and avoidance of voluntary deeds of arrangement

82XZF   Execution of voluntary deeds of arrangement

             (1)  In the application of the provisions of Division 10 of Part 5.3A of Chapter 5 of the Corporations Law in relation to the execution and effect of a voluntary deed of arrangement, those provisions have effect subject to the modifications set out in this section.

             (2)  If the creditors, by resolution under subsection 444A(2) of that Law as so applying, appoint a person other than the administrator to be the administrator of the deed, that resolution has effect only if the Council, by notice in writing, approves the resolution.

             (3)  The obligations:

                     (a)  under subsection 444A(3) of the Corporations Law as so applying, to prepare an instrument setting out the terms of the deed; and

                     (b)  under subsection 444B(2) of that Law as so applying, to execute the deed;

have effect only if, after consideration of the report to it under section 82XZC, the Council, by notice in writing, has approved the execution of the deed.

82XZG   Variation, termination and avoidance of voluntary deeds of arrangement

             (1)  In the application of the provisions of Division 11 of Part 5.3A of Chapter 5 of the Corporations Law in relation to the variation, termination and avoidance of a voluntary deed of arrangement, the provisions of that Division are taken not to include section 445E.

             (2)  At a meeting of creditors convened under section 445F of the Corporations Law as so applying, a resolution may be passed either to terminate or to vary a voluntary deed of arrangement.

Note 1:       If the resolution is to terminate the deed, the deed terminates in accordance with the resolution (see section 445C of the Corporations Law as so applying).

Note 2:       If the resolution is to vary the deed, subsections (3) to (6) apply.

             (3)  If the resolution is a resolution to vary the voluntary deed of arrangement, that resolution takes effect only if:

                     (a)  the administrator recommends to the Council that the Council approve the variation agreed at the meeting of creditors; and

                     (b)  the Council approves the variation accordingly.

             (4)  For the purposes of subsection (3), the administrator must not recommend to the Council the approval of the variation unless the administrator is satisfied that the variation is, in the circumstances, in the interests of the contributors to the fund concerned.

             (5)  The Council must not approve the variation unless it is similarly so satisfied, having regard to the recommendation and to any additional information provided by the administrator, or by any person engaged to assist the Council, under subsection (6).

             (6)  In deciding whether to approve the variation, the Council may:

                     (a)  request the administrator to provide further information relating to the variation or the recommendation; and

                     (b)  engage any person to assist it in evaluating assessments made, or projections relied on, by the administrator in relation to the recommendation.

82XZH   Effect of termination of voluntary deeds of arrangement

             (1)  If a voluntary deed of arrangement is terminated:

                     (a)  by resolution of the creditors in accordance with subsection 82XZG(2); or

                     (b)  by order of the Court under section 445D of the Corporations Law applying as a law of the Commonwealth; or

                     (c)  because it is declared void by the Court in accordance with section 445G of the Corporations Law as so applying; or

                     (d)  in circumstances specified in the deed as circumstances in which the deed is to terminate;

the administration of the fund or organization in place immediately before the deed took effect revives, unless the Council makes a determination under subsection (2).

             (2)  If a voluntary deed of arrangement is terminated in a circumstance referred to in paragraph (1)(a), (b), (c) or (d), the Council may make a determination, in writing, that the administration of the fund or organization in place immediately before the deed took effect does not revive.

             (3)  For the purposes of subsection (1), a revived administration is to be undertaken:

                     (a)  if the administrator of the fund or organization under administration before the deed took effect is available—by that administrator; and

                     (b)  in any other case—by a new administrator appointed by the Council in accordance with Subdivision 2.

             (4)  Section 82XZC applies to an administrator referred to in subsection (3) as if the administrator had been appointed as an administrator of the fund, or of the organization, as the case requires, when the deed was terminated. In particular, the administrator must, in accordance with subsection 82XZC(1), conclude the examination and make the report referred to in that subsection.

             (5)  The requirements of section 82XF are taken to have been satisfied in relation to the appointment of an administrator referred to in paragraph (3)(b).

Subdivision 8 Additional powers of the Court in relation to administration

82XZI   Court may make orders to protect interests of contributors during administration

                   In the application of the provisions of Division 13 of Part 5.3A of Chapter 5 of the Corporations Law, section 447B applies as if:

                     (a)  the power in subsection 447B(1) to make application to the Court were a power conferred on the Council; and

                     (b)  the reference in subsections 447B(1) and (2) to such orders as the Court thinks necessary to protect the interests of creditors while the company is under administration were references to such orders as the Court thinks necessary, in all the circumstances, to protect the interests;

                              (i)  in the case of the fund under administration—of contributors to the fund while the fund is under administration; and

                             (ii)  in the case of an organization under administration—of contributors to the fund conducted by the organization while the organization is under administration.

Subdivision 9 Miscellaneous

82XZJ   When an administration begins and ends

             (1)  The administration of a health benefits fund begins when an administrator is appointed under section 82XD to administer the fund.

             (2)  The administration of a registered organization occurs when an administrator is appointed under section 82XD to administer the organization (whether or not that administration arises out of a consideration of the issues referred to in section 82XJ).

             (3)  The administration of a fund or of an organization under administration ends when:

                     (a)  a voluntary deed of arrangement is executed under section 82XZF; or

                     (b)  the Council, under section 82XK terminates the appointment of the administrator and does not appoint a replacement administrator; or

                     (c)  the Council notifies the administrator, under subsection 82XZD(4), that it has accepted the administrator’s recommendation, made under subsection 82XZC(7), that the administration cease; or

                     (d)  a liquidator is appointed:

                              (i)  in relation to the fund under administration—under section 82YQ; or

                             (ii)  in relation to the organization under administration—under section 82YV; or

                     (e)  the Court makes an order or orders under section 82XZE for a course of action approved by the Council and incorporated in a scheme of arrangement.

82XZK   Indemnity

                   The administrator of a fund or of a registered organization is not subject to any action, claim or demand by, or liable to, any person in respect of anything done or omitted to be done in good faith in, or in connection with, the exercise of the powers conferred on the administrator by this Act.

82XZL   Effect of things done during administration of fund or registered organization

                   A payment made, transaction entered into, or other act or thing done, in good faith, by, or with the consent of, the administrator of a fund or organization under administration:

                     (a)  is valid and effectual for the purposes of this Act and for the purposes of the Corporations Law as it applies in relation to the fund or organization; and

                     (b)  is not liable to be set aside in a winding up of the fund or organization.

82XZM   Time for doing act does not run while act prevented by this Division

                   If:

                     (a)  for any purpose (for example, the purposes of a law, agreement or instrument) an act must or may be done within a particular period or before a particular time; and

                     (b)  this Division prevents the act from being done within that period or before that time;

the period is extended, or the time is deferred, because of this section, according to how long this Division prevented the act from being done.

82XZN   Disclaimer of onerous property

             (1)  In the application of the provisions of Division 7A of Part 5.6 of Chapter 5 of the Corporations Law for the purpose of determining the power of an administrator of a health benefits fund to disclaim property of the fund, those provisions have effect as if:

                     (a)  the administrator were the liquidator of the company that the fund is taken to constitute; and

                     (b)  the references in subsections 568B(3) and 568E(5) to the company’s creditors were references to the contributors to the fund.

             (2)  In the application of the provisions of Division 7A of Part 5.6 of Chapter 5 of the Corporations Law for the purpose of determining the power of an administrator of a registered organization to disclaim property of the organization, those provisions have effect as if:

                     (a)  the administrator were the liquidator of the company that the organization is taken to constitute; and

                     (b)  the references in subsections 568B(3) and 568E(5) to the company’s creditors were a reference to the contributors to the fund conducted by the organization under administration.

             (3)  A disclaimer by an administrator has the same effect, and the administrator is under the same obligations, for the purposes of this Act, as if the disclaimer had been made under Division 7A of Part 5.6 of Chapter 5 of the Corporations Law.

Division 4 Winding up of funds and registered organization s

Subdivision 1 Preliminary

82YA   Purpose of Division

                   The purpose of this Division is to permit the business, affairs and property either of a fund or of a registered organization to be wound up in an orderly manner that is, in the circumstances:

                     (a)  in the case of a voluntary winding up under Subdivision 3 or 4 of this Division—not materially detrimental to the interests of contributors to the fund being wound up or conducted by the organization being wound up; and

                     (b)  in the case of a winding up on application to the Court under Subdivision 5 or 6 of this Division—in the interests of those contributors.

82YB   The basis of the law relating to winding up

             (1)  The winding up of the fund conducted by a registered organization that is not itself to be wound up is to be carried out in accordance with this Division.

             (2)  The law governing the winding up of a registered organization varies according to the nature of the registered organization concerned.

             (3)  If a registered organization is a company incorporated, or taken to be incorporated, under the Corporations Law of a particular State or internal Territory, the winding up of the registered organization is, subject to this Division, to be conducted in accordance with the Corporations Law of that State or internal Territory.

             (4)  If a registered organization is, or is taken to be, registered or incorporated as a friendly society under the law of a particular State or internal Territory relating to the registration or incorporation of friendly societies, the winding up of the registered organization is, subject to this Division, to be conducted in accordance with the provisions applicable under that law (including, to the extent that the law applies provisions of the Corporations Law, those provisions as so applied).

             (5)  If a registered organization is, or is taken to be, an association incorporated under the law of a particular State or internal Territory providing for the incorporation of associations, the winding up of that registered organization is, subject to this Division, to be conducted in accordance with the provisions applicable under that law (including, to the extent that the law applies provisions of the Corporations Law, those provisions as so applied).

             (6)  If a registered organization is an unincorporated entity:

                     (a)  it cannot be dissolved except by order of the Court as a part of the procedure for the winding up of the organization; and

                     (b)  the winding up of the organization is, subject to this Division, to be conducted in accordance with Part 5.7 of Chapter 5 of the Corporations Law of a State or internal Territory, being a law under which the entity may be wound up.

82YC   Regulations may modify provisions of this Division for certain purposes

             (1)  If the provisions of this Division do not, in any particular matter, override the law of a State or internal Territory in any matter where it is necessary or convenient to do so, the regulations may provide for modification of those provisions to the extent necessary for that purpose.

             (2)  Modifications set out in regulations for the purposes of subsection (1) cannot:

                     (a)  modify a provision of this Division that creates an offence; or

                     (b)  include new provisions that create offences.

             (3)  This Division has effect subject to any modifications set out in regulations for the purposes of subsection (1).

             (4)  In this section:

modifications includes omissions, additions and substitutions.

82YD   Definitions

             (1)  In this Division:

director , in relation to a registered organization, means:

                     (a)  if the organization is a company or a friendly society—a director of the company or society; and

                     (b)  if the organization is an incorporated association—a member of the committee of management of that association; and

                     (c)  if the organization is an unincorporated entity—a member of the governing body of the entity.

             (2)  A reference in this Act to this Division, or to the provisions of this Division, includes a reference to any regulations that are made for the purposes of this Division.

Subdivision 2 The circumstances in which winding up can occur

82YE   When winding up of funds can occur

             (1)  The fund of a registered organization may be wound up only in the following ways:

                     (a)  by order of the Court on application made to the Court by the Council under secton 82YO;

                     (b)  by order of the Court on application made to the Court by the administrator of the fund under section 82YP;

                     (c)  on the passing of a resolution by the directors of the organization for the voluntary winding up of the fund, and the approval of that resolution by the Council, in accordance with section 82YH.

             (2)  If the Council or an administrator applies to the Court for the winding up of a fund, the Court may make the necessary order or orders for the winding up of that fund or organization only if it considers that such an order or orders are, in the circumstances, in the interests of the contributors to the fund.

82YF   When winding up of registered organizations can occur

             (1)  A registered organization may be wound up only in the following ways:

                     (a)  by order of the Court on application made to the Court by the Council under section 82YT;

                     (b)  by order of the Court on application made to the Court by the administrator of the organization under section 82YU;

                     (c)  in the case of a registered organization other than an unincorporated entity—on the passing of a special resolution of the members of the organization for the voluntary winding up of the organization, and the approval of that resolution by the Council, in accordance with section 82YL.

             (2)  If the Council or an administrator applies to the Court for the winding up of a registered organization, the Court may make the necessary order or orders for the winding up of that organization only if it considers that such an order or orders are, in the circumstances, in the interests of the contributors to the fund conducted by the organization.

             (3)  For the avoidance of doubt, Division 3 of Part 5.5 of Chapter 5 of the Corporations Law, or that Division as applied by another law of a State or internal Territory, does not apply in relation to the winding up of a registered organization.

Subdivision 3 Starting the voluntary winding up of health benefits funds

82YG   Resolution for the voluntary winding up of fund cannot be passed in certain circumstances

                   A registered organization cannot resolve that the fund conducted by it be wound up voluntarily if:

                     (a)  an application for the fund to be wound up has been made to the Court by the Council under section 82YO or by an administrator of the fund under section 82YP; or

                     (b)  an application for the registered organization to be wound up has been made to the Court by the Council under section 82YT or by an administrator of the organization under section 82YU.

82YH   Resolution for the voluntary winding up of fund

             (1)  Subject to section 82YG, the fund of a registered organization may be wound up voluntarily if:

                     (a)  a majority of the directors of the organization resolve that the fund should be voluntarily wound up; and

                     (b)  any additional approval required for the winding up of the fund under or in accordance with:

                              (i)  the fund’s rules (if applicable); and

                             (ii)  the organization’s rules (if applicable); and

                            (iii)  the organization’s constitution (if applicable);

                            has been obtained; and

                     (c)  the Council approves the winding up of the fund.

             (2)  The directors may resolve that the fund be voluntarily wound up only if they are satisfied that:

                     (a)  the assets of the fund will be sufficient to meet the liabilities of the fund within 12 months after the commencement of the winding up; and

                     (b)  the contributors to the fund will not suffer any material detriment, financial or otherwise, as a result of the winding up.

             (3)  If the directors so resolve, as soon as practicable after the resolution has been made, they must provide a copy of that resolution to the Council accompanied by:

                     (a)  a statement as to any additional approval required for the winding up of the fund under or in accordance with:

                              (i)  the fund’s rules (if applicable); and

                             (ii)  the organization’s rules (if applicable); and

                            (iii)  the organization’s constitution (if applicable);

                            in order for the fund of the organization to be lawfully wound up; and

                     (b)  a declaration that states that the directors have satisfied themselves of the matters referred to in paragraphs (2)(a) and (b) and the reasons for their being so satisfied; and

                     (c)  a statement of the affairs of the fund showing, in the prescribed form, the assets of the fund, the total amount expected to be realised from the liquidation of those assets, the liabilities of the fund and the estimated expenses of the winding up.

             (4)  If:

                     (a)  additional approval is required for the winding up of the fund; and

                     (b)  such approval involves a resolution by the members of the organization at a meeting;

the directors must, as soon as practicable, provide those members with a copy of the same information that, in accordance with subsection (3), has been given to the Council.

             (5)  An instrument of appointment of a liquidator setting out the terms and conditions of appointment and such other matters as are prescribed must be provided to the Council:

                     (a)  if no additional approval is required for the winding up of the fund—by the directors as soon as practicable after the resolution referred to in subsection (2); or

                     (b)  if additional approval is required for the winding up of the fund and that additional approval has been obtained—by the directors as soon as practicable after that additional approval is obtained.

             (6)  If the Council:

                     (a)  has satisfied itself in relation to the matters referred to in paragraphs (2)(a) and (b); and

                     (b)  has considered the information provided by directors in accordance with subsection (3); and

                     (c)  has satisfied itself that any additional approval required for the winding up of the fund has been obtained in accordance with:

                              (i)  the fund’s rules (if applicable); and

                             (ii)  the organization’s rules (if applicable); and

                            (iii)  the organization’s constitution (if applicable); and

                     (d)  has considered the instrument of appointment entered into in accordance with subsection (5);

the Council may, by notice in writing, approve the winding up of the fund.

             (7)  With effect from the date of the Council’s approval of the winding up of the fund, or such later date as is specified in the notice, the appointment of the liquidator takes effect and the winding up of the fund commences.

             (8)  For the avoidance of doubt, any delay in the payment of a liability or debt owed to a contributor of the fund does not constitute material detriment for the purpose of paragraph (2)(b).

             (9)  In this section:

winding up , in relation to a fund, includes the dissolution, termination or winding up of the fund.

82YI   Effect of appointing liquidator of fund

             (1)  On the appointment of a liquidator of a fund, the conducting organization must cease to carry on any health insurance business related to the activities of the fund except so far as is, in the opinion of the liquidator, required for the beneficial disposal or winding up of that business.

             (2)  Any transaction that is made without the sanction of the liquidator after the approval of the resolution is void.

             (3)  Subject to subsection (4), on the appointment of a liquidator of a fund, all of the powers of the directors in relation to the health insurance business of the conducting organization cease, except so far as the liquidator approves the continuance of any of those powers.

             (4)  If a vacancy occurs by death, resignation or otherwise, in the office of the liquidator of a fund conducted by a registered organization, the directors may, with the written approval of the Council, fill the vacancy by appointment of a liquidator and fix the remuneration to be paid to him or her.

82YJ   Duty of liquidator where fund turns out to be insolvent

             (1)  If, at any time, the liquidator of a fund forms the opinion that the assets of the fund will not be sufficient to meet the liabilities of the fund within the period of 12 months after the commencement of the winding up, the liquidator must provide a written report to the Council stating that the liquidator is of that opinion, setting out the reasons for that opinion and recommending that the Council either:

                     (a)  apply to the Court for the winding up of the fund; or

                     (b)  appoint a person as administrator of the fund.

             (2)  The report must include a statement of the assets and liabilities of the fund.

             (3)  On receipt of a report by the liquidator under this section, the Council must, having regard to the matters raised in the report and to the interests of the contributors to the fund, either take the action that was recommended in the report or the alternative action that might have been so recommended.

Subdivision 4 Starting the voluntary winding up of registered organizations

82YK   Resolution for the voluntary winding up of organization cannot be passed in certain circumstances

                   Despite section 490 of the Corporations Law, or that section as it is applied in relation to a particular registered organization, a registered organization cannot resolve that it be wound up voluntarily if an application for the organization to be wound up has been made to the Court by the Council under section 82YT or by an administrator of the organization under section 82YU.

82YL   Resolution for the voluntary winding up of registered organization

             (1)  Subject to section 82YK, a registered organization may be wound up voluntarily if:

                     (a)  a majority of the directors of the organization resolve that the question whether it should be voluntarily wound up should be put to its members; and

                     (b)  upon the question being put to the members, those members resolve by special resolution that it should be voluntarily wound up; and

                     (c)  the Council approves the special resolution of the members.

             (2)  The directors may resolve that the question whether the organization should be voluntarily wound up be put to members only if they are satisfied that:

                     (a)  the assets of the organization will be sufficient to meet the liabilities of the organization within 12 months after the commencement of the winding up; and

                     (b)  the contributors to the fund conducted by the organization will not suffer any material detriment, financial or otherwise, as a result of the winding up.

             (3)  If the directors so resolve, they must, in such manner and at such time as the regulations prescribe, invite the members to a meeting to vote on a proposed resolution for the voluntary winding up of the organization and, for the purposes of that meeting, give each member a copy of the proposed resolution accompanied by:

                     (a)  a declaration that states that they have satisfied themselves of the matters referred to in paragraphs (2)(a) and (b) and that sets out the reasons for their being so satisfied; and

                     (b)  a statement of the affairs of the organization showing, in the prescribed form, the assets of the organization, the total amount expected to be realised from the liquidation of those assets, the liabilities of the organization and the estimated expenses of the winding up; and

                     (c)  a proposal for the appointment of a liquidator on specified terms and conditions of appointment, to take effect only if, and when, the members resolve to support the winding up and the Council approves their resolution.

             (4)  The directors must ensure that, as soon as practicable after the invitation to the meeting of members is made, a copy of the proposed resolution for the voluntary winding up of the organization and of the accompanying documents is given to the Council.

             (5)  The members of the organization may, by special resolution, after having regard to the proposed resolution of the directors and to the accompanying documents, resolve that the organization should be voluntarily wound up and, if they do so, may also, by ordinary resolution, appoint a liquidator on the terms proposed by the directors or on such other terms as they consider appropriate.

             (6)  If, having regard to the special resolution of the members and to the documents in support of the proposal for winding up provided by the directors, the Council is satisfied of the matters referred to in paragraphs (2)(a) and (b), the Council may, by notice in writing, approve the special resolution and the ordinary resolution appointing the liquidator.

             (7)  With effect from the date of the Council’s notice in writing, or such later date as is specified in the notice, the appointment of the liquidator takes effect and, in accordance with section 82YZD, the winding up of the organization commences.

             (8)  For the avoidance of doubt, any delay in the payment of a liability or debt owed to a contributor of the fund does not constitute material detriment for the purpose of paragraph (2)(b).

             (9)  For the purposes of this section, special resolution , in relation to the members of a registered organization, means a special resolution made in accordance with:

                     (a)  if the registered organization is a company incorporated, or taken to be incorporated, under the Corporations Law of a particular State or internal Territory—the Corporations Law of that particular State or internal Territory; or

                     (b)  if the registered organization is, or is taken to be, registered or incorporated as a friendly society under the law of a particular State or internal Territory relating to the registration or incorporation of friendly societies—the provisions applicable under that law; or

                     (c)  if the registered organization is, or is taken to be, an association incorporated under the law of a particular State or internal Territory providing for the incorporation of associations—the provisions applicable under that law.

82YM   Effect of appointing liquidator of registered organization

             (1)  On the appointment of a liquidator of a registered organization, the organization must cease to carry on any business of the organization except so far as is, in the opinion of the liquidator, required for the beneficial disposal of the business or the winding up of that organization.

             (2)  Any transaction that is made without the sanction of the liquidator after the approval of the resolution is void.

             (3)  Subject to subsection (4), on the appointment of a liquidator of a registered organization, all of the powers of the directors in relation to the business of the organization cease, except so far as the liquidator approves the continuance of any of those powers.

             (4)  If a vacancy occurs by death, resignation or otherwise in the office of the liquidator of a registered organization, any of the members may convene a general meeting for the purpose of appointing a replacement liquidator and, at that meeting, the members may, with the written approval of the Council, fill the vacancy and fix the remuneration to be paid to the replacement liquidator.

82YN   Duty of liquidator where registered organization turns out to be insolvent

             (1)  If, at any time, the liquidator forms the opinion that the assets of a registered organization will not be sufficient to meet its liabilities within the period of 12 months after the commencement of the winding up, the liquidator must provide a written report to the Council stating that the liquidator is of that opinion, setting out the reasons for that opinion and recommending that the Council either:

                     (a)  apply to the Court for the winding up of the organization; or

                     (b)  appoint a person as administrator of the organization.

             (2)  The report must include a statement of the assets and liabilities of the registered organization.

             (3)  On receipt of a report by the liquidator under this section, the Council must, having regard to the matters raised in the report and to the interests of the contributors to the fund conducted by the organization, either take the action that was recommended in the report or the alternative action that might have been so recommended.

             (4)  This section applies to the exclusion of any duties imposed on the liquidator by section 496 of the Corporations Law or that section as it is applied in relation to a particular registered organization.

Subdivision 5 Starting the winding up of insolvent funds

82YO   Application by Council to the Court for winding up a fund

             (1)  The Council may apply to the Court for the winding up of a fund if, and only if, the Council believes that such an application is, in the circumstances, in the interests of contributors to the fund, and:

                     (a)  the Council is satisfied, on reasonable grounds, that:

                              (i)  on or after the new prudential standards day there has been a breach of section 73BCD by the conducting organization in its conduct of the fund; or

                             (ii)  on or after the new prudential standards day there has been a breach of section 73BCI by the conducting organization in its conduct of the fund; or

                            (iii)  the conducting organization has, in its conduct of the fund, contravened any applicable rule, condition or direction within the meaning of subsection (2); or

                     (b)  a request for the winding up of the fund is made to the Council:

                              (i)  if the conducting organization is a company under the Corporations Law—by a resolution of the board of directors of the company; or

                             (ii)  if the conducting organization is a friendly society—by a resolution of the board of directors of the friendly society; or

                            (iii)  if the conducting organization is an incorporated association—by a resolution of the members of the committee of management of the association; or

                            (iv)  if the conducting organization is an unincorporated entity—by a resolution of the members of the governing body of the entity; or

                     (c)  a report has been received from a liquidator under section 82YJ; or

                     (d)  a ground specified in regulations made for the purpose of this subsection applies in respect of the fund.

             (2)  For the purposes of subparagraph (1)(a)(iii), an applicable rule, condition or direction , in relation to the conducting organization of a fund, means:

                     (a)  a provision of this Act or of the regulations that applies to that organization; or

                     (b)  a term or condition of registration imposed upon that organization by or under this Act; or

                     (c)  a direction given to that organization by the Minister under section 73BE or, on or after the new prudential standards day, by the Council under section 73BCE or 73BCJ; or

                     (d)  a rule of the Council made under paragraph 82G(1)(r).

             (3)  In forming the requisite state of mind for the purpose of paragraph (1)(a), or of any regulations made for the purposes of subsection (1) that require a particular mental state, the Council can have regard:

                     (a)  to any information in its own records; and

                     (b)  to any report or return made to it, including any report received:

                              (i)  from an inspector under section 82W; or

                             (ii)  from an administrator under section 82XZC or subsection 82XG(3).

             (4)  The conducting organization and any other person likely to be affected by the winding up of the fund are entitled to be heard on the application.

82YP   Application by administrator to the Court for winding up of a fund under administration

             (1)  If the Council informs the administrator of a fund, in writing, that it is satisfied that a course of action of a kind specified in subparagraph 82XZC(8)(a)(ii) is, in the circumstances, in the best interests of contributors to the fund concerned, the administrator must apply to the Court for the winding up of the fund.

             (2)  The Council and any other person likely to be affected by the winding up of the fund are entitled to be heard on such an application.

82YQ   Orders made on applications for winding up

                   The Court may make an order for the winding up of a fund on an application under this Subdivision, and any related orders, only if it considers the orders to be, in the circumstances, in the interests of contributors to the fund.

82YR   Scheme for winding up of fund to be prepared by liquidator

             (1)  If an order for the winding up of a fund is made by the Court on an application under section 82YO or 82YP, the liquidator appointed by the Court must:

                     (a)  prepare a scheme for the winding up of the fund; and

                     (b)  when the scheme has been prepared—apply to the Court for orders to give effect to the scheme.

             (2)  The conducting organization, the Council and any other person likely to be affected by the winding up of the fund are entitled to be heard on an application made by the Court under this section.

82YS   Binding nature of Court orders

                   Any orders made by the Court under section 82YQ or 82YR:

                     (a)  are binding on all persons; and

                     (b)  take effect despite anything in the constitution or rules of the conducting organization.

Subdivision 6 Starting the winding up of insolvent registered organizations

82YT   Application by Council to the Court for winding up of a registered organization

             (1)  The Council may apply to the Court for the winding up of a registered organization if, and only if:

                     (a)  grounds exist under paragraph 82YO(1)(a) or (c) for an application to be made to the Court for the winding up of the fund conducted by that organization and the Council is satisfied, on reasonable grounds, that:

                              (i)  the conduct of the fund is the primary business of the organization; or

                             (ii)  property of the fund may have been invested in, or transferred to, any other business conducted by the organization; or

                            (iii)  because of the nature of, or the manner of conducting, either the business or affairs of the fund or the business or affairs of the organization generally, or because of the ownership of the property of the fund and of the other property of the organization, it is necessary or convenient to wind up the registered organization; or

                     (b)  a request for the winding up of the organization is made to the Council:

                              (i)  if the organization is a company under the Corporations Law—by a resolution of the board of directors of the company; or

                             (ii)  if the organization is a friendly society—by a resolution of the board of directors of the friendly society; or

                            (iii)  if the organization is an incorporated association—by a resolution of the members of the committee of management of the association; or

                            (iv)  if the organization is an unincorporated entity—by a resolution of the members of the governing body of the entity; or

                     (c)  a report has been received from a liquidator under section 82YN; or

                     (d)  a ground specified in regulations made for the purpose of this subsection applies in respect of the registered organization.

             (2)  In forming the requisite state of mind for the purpose of subparagraph (1)(a)(i), (ii) or (iii), or of any regulations made for the purposes of subsection (1) that require a particular mental state, the Council can have regard:

                     (a)  to any information in its own records; and

                     (b)  to any report or return made to it, including any report received:

                              (i)  from an inspector under section 82W; or

                             (ii)  from an administrator under section 82XZC or subsection 82XG(3).

             (3)  The organization and any other person likely to be affected by the winding up of the organization are entitled to be heard on the application.

82YU   Application by administrator to the Court for winding up of a registered organization under administration

             (1)  If the Council informs the administrator of a registered organization, in writing, that it is satisfied that a course of action of a kind specified in subparagraph 82XZC(8)(a)(ii) is, in the circumstances, in the best interests of contributors to the fund conducted by the organization, the administrator must apply to the Court for the winding up of the organization.

             (2)  The Council and any other person likely to be affected by the winding up of the organization are entitled to be heard on such an application.

82YV   Orders made on applications for winding up

                   The Court may make an order for the winding up of a registered organization on an application under this Subdivision, and any related orders, only if it considers the orders to be, in the circumstances, in the interests of contributors to the fund concerned.

82YW   Scheme for winding up of a registered organization to be prepared by liquidator

             (1)  If an order for the winding up of a registered organization is made by the Court on an application under section 82YT or 82YU, the liquidator appointed by the Court must:

                     (a)  prepare a scheme for the winding up of the organization; and

                     (b)  when the scheme has been prepared—apply to the Court for orders giving effect to the scheme.

             (2)  The registered organization, the Council or any other person likely to be affected by the winding up of the organization are entitled to be heard on an application made under this section.

82YX   Binding nature of orders

                   Orders of the Court made for the purposes of section 82YV or 82YW:

                     (a)  are binding on all persons; and

                     (b)  take effect despite anything in the constitution or other rules of the registered organization concerned.

Subdivision 7 Procedural provisions relating to winding up of funds or registered organizations

82YY   Notification provisions

             (1)  If the liquidator of a fund or of a registered organization proposes to make an application to the Court for a direction in relation to the winding up of that fund or of that organization, the liquidator must give the Council written notice specifying:

                     (a)  its intention to make that application; and

                     (b)  the details of the proposed application.

             (2)  The Council may appear before the Court and be heard on the liquidator’s application.

             (3)  Subject to subsection (4), the Council may, at any time during the winding up of a fund or registered organization, apply to the Court for directions in relation to any matter relating to the winding up.

             (4)  Before the Council makes such an application, it must give the liquidator of the fund or organization concerned written notice specifying:

                     (a)  its intention to make that application; and

                     (b)  the details of the proposed application.

             (5)  The liquidator is entitled to appear before the Court and be heard on the Council’s application.

82YZ   Council may require liquidator to provide information

             (1)  The Council may, at any time, by notice in writing given to the liquidator of a fund or of a registered organization, require the liquidator to provide information in writing about any aspect of the winding up of the fund or organization.

             (2)  The information required to be provided in a notice under subsection (1) must be provided by the liquidator within the period that is specified for the purpose in the notice or such longer period as the Council, in special circumstances, allows.

82YZA   Liquidator of fund or registered organization to determine amounts owed to contributors

             (1)  For the purposes both of this Act in respect of a winding up of a fund or a registered organization and of the provisions of the Corporations Law as they apply or are applied in relation to the winding up of a fund or a registered organization, the liquidator of a fund or organization is to determine the liability of the fund or of the organization in relation to contributors in accordance with this section.

             (2)  For the purposes of winding up a fund, the liquidator must, having regard to the records of the registered organization that conducted the fund:

                     (a)  determine the identity of each person who, according to those records, appears to be a contributor to the fund; and

                     (b)  determine whether the registered organization has a liability to that person in his or her capacity as a contributor to the fund; and

                     (c)  if the registered organization has such a liability—determine the amount of that liability.

             (3)  For the purposes of winding up a registered organization, the liquidator must, having regard to the records of the registered organization:

                     (a)  determine the identity of each person who, according to those records, appears to be a contributor to the fund conducted by the organization; and

                     (b)  determine whether the organization has a liability to that person in his or her capacity as a contributor to that fund; and

                     (c)  if the organization has such a liability—determine the amount of that liability.

             (4)  A determination by the liquidator under subsection (2) or (3) must be made in accordance with the regulations (if any) that are made for the purpose of this section.

             (5)  The liquidator must notify each person of an amount determined under this section to be the liability of the registered organization to that person in his or her capacity as a contributor to the fund that is being wound up or that is conducted by an organization that is being wound up.

             (6)  If the liquidator determines an amount, then, for the purposes of winding up the fund or the registered organization:

                     (a)  the fund or the organization, as the case requires, is taken to have a liability to the person in his or her capacity as a contributor in the amount determined by the liquidator; and

                     (b)  subject to subsection (7), the person is bound by the liquidator’s determination.

             (7)  A person who is notified of an amount under this section may dispute the amount:

                     (a)  in accordance with the applicable rules of Court; or

                     (b)  as the Court otherwise directs in a particular case.

82YZB   Application of the assets of funds in winding up situations

             (1)  Subject to this section, in the winding up of a fund, section 556 of the Corporations Law applies as a law of the Commonwealth, but subject to such modifications as the regulations provide, and the assets of the fund must first be applied in meeting the debts and claims identified in subsection 556(1) of that Law as so applied that constitute liabilities of the fund, in the order provided for in that subsection.

             (2)  Subject to this section, in the winding up of a registered organization, the assets of the fund conducted by the organization must first be applied:

                     (a)  if the organization is a company—in accordance with subsection 556(1) of the Corporations Law; or

                     (b)  if the organization is not a company—in accordance with that subsection as it is applied under the applicable law in relation to the organization concerned;

in meeting the debts and claims identified in that subsection, or that subsection as applied, that constitute liabilities of the fund, in the order provided for in that subsection.

             (3)  If any assets of a fund remain after the application of subsection (1) to the winding up of the fund, or of subsection (2) to the winding up of the registered organization conducting the fund, those assets of the fund must be applied according to the following rules:

                     (a)  those assets are to be applied first in discharging liabilities to contributors to the fund concerned;

                     (b)  if any of those assets remain, they are to be applied in discharging other liabilities of the fund;

                     (c)  if, after the application of those assets according to paragraphs (a) and (b), any of those assets remain, they are to be applied:

                              (i)  if the winding up is a voluntary winding up—in accordance with subsection (4); and

                             (ii)  if the winding up takes place on application to the Court—in such a manner as the Court directs.

             (4)  For the purposes of the application of any of the assets of the fund that remain in the circumstances set out in subparagraph (3)(c)(i):

                     (a)  if the fund is being wound up:

                              (i)  those assets are to be applied in accordance with the provisions (if any) in the constitution and rules of the registered organization conducting the fund that deal with the application of assets of the fund on the winding up, dissolution or termination of the fund; and

                             (ii)  if any of those assets remain after compliance with subparagraph (i), those remaining assets are to be transferred to the general assets of the registered organization; or

                     (b)  if the registered organization conducting the fund is itself being wound up:

                              (i)  those assets are to be applied in accordance with the provisions (if any) in the constitution and rules of the registered organization conducting the fund that deal with the application of assets of the fund on the winding up of the organization; and

                             (ii)  if any of those assets remain after compliance with subparagraph (i), those remaining assets are to be applied in the discharge of the other liabilities of the organization.

             (5)  Directions for the application of assets given for the purposes of subparagraph (3)(c)(ii) are to be such directions as the Court considers equitable having regard to:

                     (a)  the interests of contributors to the fund concerned; and

                     (b)  if the registered organization conducting the fund is itself being wound up—the interests of any creditors of the organization whose debts have not been discharged; and

                     (c)  the interests of members of the registered organization.

             (6)  In the winding up of a registered organization, any assets of the organization that are not assets of the fund of the organization are to be applied in accordance with the applicable law in relation to the organization concerned.

82YZC   Liquidator to apportion liabilities between health insurance business and other businesses

             (1)  If the liabilities:

                     (a)  of the conducting organization of a fund that is being wound up; or

                     (b)  of a registered organization that is being wound up;

are referable in part to the health insurance business conducted by that registered organization and partly to other businesses conducted by that organization, the liquidator must apportion that liability as between the health insurance business and the other business conducted by the organization.

             (2)  In making an apportionment under subsection (1), the liquidator must comply with any directions of the Court.

Subdivision 8 Miscellaneous

82YZD   When winding up of registered organizations taken to have begun

                   For the purposes of any law of a State or internal Territory that applies, or applies subject to this Division, to the winding up of a registered organization, that winding up is taken to have begun:

                     (a)  if the registered organization, by special resolution, chose to wind itself up in accordance with section 82YL—on the day of the Council’s notice in writing approving the special resolution or such later day as the Council specifies in that notice; and

                     (b)  if the winding up was ordered by the Court in accordance with section 82YT or 82YU—on the day when the order was made.

82YZE   Liability of officers of registered organization for loss to health benefits fund

             (1)  If:

                     (a)  a registered organization contravenes this Act in relation to the health benefits fund conducted by the organization; and

                     (b)  the contravention results in a loss to the fund; and

                     (c)  the Court orders that the fund or the organization be wound up;

the persons who were officers of the organization when the contravention occurred are jointly and severally liable to pay to the organization, for the benefit of the fund, an amount equal to the amount of the loss.

             (2)  A person is not liable under subsection (1) if the person proves that he or she used due diligence to prevent the occurrence of such a contravention.

             (3)  On application by the liquidator of the fund or of the registered organization, the Court may order any person liable under subsection (1) to pay to the organization, for the benefit of the fund that is being wound up, or that is conducted by the organization that is being wound up, the whole or any part of the loss.

82YZF   Actions etc. to be stayed on application for winding up

                   If an application has been made to the Court for the winding up of a fund, all actions and the execution of all writs, summons and other processes against the registered organization conducting the fund that might affect the fund:

                     (a)  are, by force of this section, stayed; and

                     (b)  cannot be proceeded with without the leave of the Court or unless the Court otherwise directs.

Division 5 Miscellaneous

82ZA   Order of Court to be binding on all persons

                   An order of the Court made under this Part, whether relating to the implementation of a scheme of arrangement prepared by the administrator of a fund or registered organization, to the winding up of a fund or registered organization or to any other matter, is binding on all persons and has effect notwithstanding anything in the constitution of a registered organization to which the order may relate or to the rules of a fund to which the order may relate.

82ZB   Compensation for acquisition of property

             (1)  If:

                     (a)  apart from this section, the operation of a provision of this Part would result in the acquisition of property from a person otherwise than on just terms; and

                     (b)  the acquisition would be invalid because of paragraph 51(xxxi) of the Constitution;

the Commonwealth is liable to pay compensation of a reasonable amount to the person in respect of the acquisition.

             (2)  If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in the Federal Court of Australia for the recovery from the Commonwealth of such reasonable amount of compensation as the Court determines.

             (3)  In this section:

acquisition of property has the same meaning as in paragraph 51(xxxi) of the Constitution.

just terms has the same meaning as in paragraph 51(xxxi) of the Constitution.

82ZC   Continued application of other provisions of Act

             (1)  The appointment of a person as administrator of a fund or registered organization does not affect the continued operation of provisions of this Act other than the provisions of Division 3:

                     (a)  in relation to the fund or organization under administration, including, if the organization is under administration, the fund of the organization; or

                     (b)  in relation to the rights and obligations of persons in relation to the conducting organization of the fund under administration or of the organization under administration, as the case requires.

             (2)  The appointment of a person as liquidator of a fund or registered organization does not affect the continued operation of provisions of this Act other than the provisions of Division 4:

                     (a)  in relation to the fund or organization that is being wound up including, if the organization is being wound up, the fund of the organization; or

                     (b)  in relation to the rights and obligations of persons in relation to the fund or organization that is being wound up.

82ZD   Regulations may set out modifications of this Act in relation to funds or organizations under administration or being wound up

             (1)  The regulations may set out modifications of this Act relating to how either or both of the following:

                     (a)  Division 3 of Part VI;

                     (b)  Schedule 1;

apply in relation to funds or registered organizations that are being;

                     (c)  administered in accordance with Division 3; or

                     (d)  wound up in accordance with Division 4.

             (2)  The regulations may provide for different modifications according to the nature of the funds or registered organizations that are being administered or wound up.

             (3)  Modifications set out in regulations for the purposes of subsection (1) cannot:

                     (a)  modify a provision of this Act that creates an offence; or

                     (b)  include new provisions that create offences.

             (4)  This Act has effect subject to any modifications set out in regulations for the purposes of subsection (1).

             (5)  In this section:

modifications includes omissions, additions and substitutions.

82ZE   Jurisdiction of Federal Court of Australia

                   The Federal Court of Australia has jurisdiction to hear and determine applications under this Part and to make any necessary orders in respect of those applications.

82ZF   Regulations dealing with various matters

                   The regulations may:

                     (a)  make provision for, or in relation to, any of the following matters in relation to meetings required or permitted to be held by the provisions of Divisions 3 and 4:

                              (i)  the convening, conduct of, and procedure at, a meeting;

                             (ii)  voting at a meeting (including proxy voting);

                            (iii)  the number of persons that constitutes a quorum at a meeting;

                            (iv)  the sending of notices to persons entitled to attend a meeting;

                             (v)  the lodging of copies of notices of, or resolutions passed at, a meeting; and

                     (b)  make provision relating to the form and contents of any document or instrument required or permitted to be given to the Council or an administrator by a provision of Division 3 or 4.

47  After subsection 105AB(3)

Insert:

          (3A)  An application may be made to the Tribunal for review of:

                     (a)  a decision by the Council to refuse to make a declaration under subsection 73BCD(2); or

                     (b)  a decision by the Council to impose a condition as mentioned in subsection 73BCD(3); or

                     (c)  a decision by the Council under subsection 73BCD(6) to refuse to revoke or vary such a declaration or condition; or

                     (d)  if, under subsection 73BCD(7), the Council is taken to have refused to revoke or vary such a declaration or condition—the decision that the Council is taken to have made.

          (3B)  An application may be made to the Tribunal for review of:

                     (a)  a decision by the Council under subsection 73BCE(7) to refuse to revoke or vary a solvency direction; or

                     (b)  if, under subsection 73BCE(8), the Council is taken to have refused to revoke or vary such a direction—the decision that the Council is taken to have made.

          (3C)  An application may be made to the Tribunal for review of:

                     (a)  a decision by the Council to refuse to make a declaration under subsection 73BCI(2); or

                     (b)  a decision by the Council to impose a condition as mentioned in subsection 73BCI(3); or

                     (c)  a decision by the Council under subsection 73BCI(6) to refuse to revoke or vary such a declaration or condition; or

                     (d)  if, under subsection 73BCI(7), the Council is taken to have refused to revoke or vary such a declaration or condition—the decision that the Council is taken to have made.

          (3D)  An application may be made to the Tribunal for review of:

                     (a)  a decision by the Council under subsection 73BCJ(7) to refuse to revoke or vary a capital adequacy direction; or

                     (b)  if, under subsection 73BCJ(8), the Council is taken to have refused to revoke or vary such a direction—the decision that the Council is taken to have made.

48  Before subsection 105AB(6A)

Insert:

             (6)  An application may be made to the Tribunal for review of a decision by the Council to cancel the registration of a registered organization under subsection 79(7).

       (6AA)  An application may be made to the Tribunal for review of a decision of the Council under section 82XK to terminate the appointment of an administrator.

        (6AB)  An application may be made to the Tribunal for review of a decision by the Council to make, or to refuse to make, a determination under subsection 82XZH(2).

49  Transitional provision relating to persons holding office as administrator under State or Territory law on commencement of item 46

(1)        If a person has been appointed as administrator of a registered organization under a law of a State or Territory and holds office as such an administrator immediately before the commencement of Part 1 of this Schedule, then, despite sections 82QC and 82XB of the National Health Act 1953 as in force after that commencement and subject to subitems (2) and (3), that administrator may continue to conduct the administration as if the law of that State or Territory relating to the administration of that registered organization had not ceased.

(2)        If the Council appoints a person as administrator of a registered organization while an administration to which subitem (1) applies is continuing, then, with effect from the appointment of that person as administrator, the administration to which subitem (1) applies ceases.

(3)        If the Council appoints a person as administrator of a health benefits fund while an administration to which subitem (1) applies is continuing, then, with effect from the appointment of that person as administrator, the administration to which subitem (1) applies has effect as if it were an administration only of such of the business of the conducting organization as relates to matters other than the business of the fund.

50  Transitional provision relating to applications for judicial management or winding up

(1)        If an application has been made under section 82Z of the National Health Act 1953 as in force before the commencement of Part 1 of this Schedule for the judicial management of the fund of a registered organization but the Court has not, before that commencement, appointed a judicial manager, that application lapses with effect from that commencement.

(2)        If, on an application for the judicial management of the fund of a registered organization made under section 82Z of the National Health Act 1953 as in force before the commencement of Part 1 of this Schedule, a person has, before that commencement, been duly appointed by the Court, sections 82Z to 82ZM of the National Health Act 1953 as so in force continue to apply in relation to that judicial management, and to any orders of the Court that may be sought by that judicial manager, on and after the commencement of Part 1 of this Schedule, as if those sections had not been repealed.

(3)        If an application has been made under section 82Z of the National Health Act 1953 as in force immediately before the commencement of Part 1 of this Schedule for the winding up of the fund conducted by a registered organization, sections 82Z to 82ZM of that Act as so in force continue to apply in relation to that winding up, on and after that commencement, as if those sections had not been repealed.

(4)        In this item:

Court means the Federal Court of Australia.

51  Saving provisions relating to new prudential standards

(1)        In this item:

new prudential standards day has the same meaning as in subsection 4(1) of the Principal Act as amended by this Act.

Principal Act means the National Health Act 1953 .

(2)        Despite the repeal of section 73BAB of the Principal Act by item 3:

                     (a)  that section is taken to have continued in force in relation to registered organizations until the new prudential standards day as if it had not been so repealed; and

                     (b)  any regulation or other subordinate instrument made under or for the purposes of that section that was in force immediately before the repeal of the section continues in force until the new prudential standards day unless, before that day, that regulation is disallowed, or that regulation or other instrument is revoked or varied in accordance with the section as so continued in force.

(3)        Despite the repeal of section 73BAC of the Principal Act by item 3:

                     (a)  that section is taken to have continued in force in relation to registered organizations until the new prudential standards day as if it had not been so repealed; and

                     (b)  any exemption under that section that was in force immediately before the repeal of the section continues to have effect, according to its tenor, until the end of the period specified in the exemption or until the new prudential standards day, whichever first occurs, unless that exemption is earlier revoked under the section as so continued in force; and

                     (c)  any application for such an exemption made before the repeal of the section that had not been dealt with before the repeal is to be dealt with, on and after the repeal, in accordance with the section as continued in force.

(4)        Despite:

                     (a)  the amendment of subsection 73BEB(1) of the Principal Act by item 5; and

                     (b)  the repeal of paragraph 82G(1)(c) of the Principal Act by item 8; and

                     (c)  the repeal of paragraph 82G(1)(q) of the Principal Act by item 11;

the Principal Act continues to have effect, until the new prudential standards day, as if that amendment and those repeals had not been made.

(5)        Despite the repeal of paragraphs 82G(1)(f) and (g) of the Principal Act by item 10, the Principal Act continues to have effect until the new prudential standards day as if item 10 had not repealed and replaced those provisions but had provided instead solely for the repeal of subparagraph 82G(1)(g)(ii) and the substitution of the following subparagraph:

     (ii)        to take such action as is appropriate;



 

Part 2 Amendments omitting references to friendly societies

National Health Act 1953

52  Paragraph 73AAB(b)

Omit “a friendly society (within the meaning of Part VIA) or”.

53  Subsection 74A(10) (paragraph (b) of the definition of officer )

Repeal the paragraph.

54  Subsection 82Q(1) (definition of friendly society )

Repeal the definition.

55  Subsection 82XB(1)

Omit “, a friendly society”.

56  Subparagraph 82XF(1)(b)(ii)

Repeal the subparagraph.

57  Subparagraph 82XF(3)(b)(ii)

Repeal the subparagraph.

58  Subsection 82XR(5) (paragraph (a) of the definition of director )

Repeal the paragraph, substitute:

                     (a)  if the organization is a company—a director of the company; and

59  Subsection 82YB(4)

Repeal the subsection.

60  Subsection 82YD(1) (paragraph (a) of the definition of director )

Repeal the paragraph, substitute:

                     (a)  if the organization is a company—a director of the company; and

61  Paragraph 82YL(9)(b)

Repeal the paragraph.

62  Subparagraph 82YO(1)(b)(ii)

Repeal the subparagraph.

63  Subparagraph 82YT(1)(b)(ii)

Repeal the subparagraph.

64  Regulations dealing with transitional etc. matters

The Governor-General may make regulations dealing with matters of a transitional, saving or application nature relating to the amendments and repeals made by this Part.