Corporations Act 2001

A right cannot be enforced against a corporation for:

the reason of the appointment or existence of a managing controller of the whole or substantially the whole of the corporation’s property; or

the corporation’s financial position, if there is a managing controller of the whole or substantially the whole of the corporation’s property; or

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

the appointing, or possible appointing, of a managing controller of the whole or substantially the whole of the corporation’s property; or

the corporation’s financial position;

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

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

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

The right cannot be enforced as described in subsection (1) during the period (the stay period) starting at the appointment of the managing controller and ending:

unless paragraph (b) applies—when the managing controller’s control of the corporation’s property ends; or

if one or more orders are made under subsection (3) for the corporation as the result of an application made before the end of the managing controller’s control of the corporation’s property—when the last made of those orders ceases to be in force.

The Court:

may order an extension of the period otherwise applying under subsection (2) for the corporation if the Court is satisfied that the extension is appropriate having regard to the interests of justice; and

before deciding an application for an order under paragraph (a), may grant an interim order, but must not require the applicant to give an undertaking as to damages as a condition for doing so.

The right is unenforceable against the corporation indefinitely after the end of the stay period to the extent that a reason for seeking to enforce the right:

is the corporation’s financial position before the end of the stay period; or

is the appointment or existence of a managing controller of the whole or substantially the whole of the corporation’s property before the end of the stay period; or

is a reason, prescribed by the regulations for the purposes of this paragraph, relating to circumstances in existence during the stay period; or

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

Subsection (1) does not apply to the right if it is:

a right under a contract, agreement or arrangement entered into after the appointment of the managing controller; or

a right contained in a kind of contract, agreement or arrangement:

prescribed by the regulations for the purposes of this subparagraph; or

declared under paragraph (6)(a); or

a right of a kind:

prescribed by the regulations for the purposes of this subparagraph; or

declared under paragraph (6)(b); or

a right of a kind declared under paragraph (6)(c), and the circumstances specified in that declaration exist.

For the purposes of subsection (5), the Minister may, by legislative instrument:

declare kinds of contracts, agreements or arrangements referred to in a specified law of the Commonwealth; or

declare kinds of rights to which subsection (1) does not apply; or

declare kinds of rights to which subsection (1) does not apply in specified circumstances.

Subsection (1) does not apply to the right to the extent that the managing controller has consented in writing to the enforcement of the right.

If:

one or more rights of an entity cannot be enforced against a corporation for a period because of subsection (1); and

the corporation has a right under a contract, agreement or arrangement against the entity for a new advance of money or credit;

If a new managing controller of the whole or substantially the whole of the corporation’s property is appointed to replace an earlier such managing controller, then:

for the purposes of subsections (2) and (5), treat the new managing controller as if it were appointed when the first such managing controller was; and

treat references in subsection (2) to when the managing controller’s control of the corporation’s property ends as references to when the last such managing controller’s control of the corporation’s property ends.