Duties of external administrators relating to remuneration and benefits etc.
Subdivision B Duties of external administrators relating to remuneration and benefits etc.
60‑2 External administrator must not derive profit or advantage from the administration of the company—exceptions
This section is made for the purposes of subsection 60‑20(5) of the Insolvency Practice Schedule (Corporations).
The following payments made to an external administrator by or on behalf of the Commonwealth or an agency or authority of the Commonwealth are prescribed:
a payment from the Assetless Administration Fund administered by ASIC;
a payment made for the purposes of administering claims for financial assistance from the Commonwealth in relation to unpaid employment entitlements.
Division 70—Information
70‑1 Time for complying with reasonable requests
This section is made for the purposes of section 70‑50 of the Insolvency Practice Schedule (Corporations).
Subject to subsections (3) and (5), if the external administrator of a company receives a request for information or a report or document under Division 70 of the Insolvency Practice Schedule (Corporations), the external administrator must send the information, report or document within:
5 business days after receiving the request; or
such later period as agreed with the person or body making the request.
If the external administrator is reasonably satisfied that, due to the nature of the request, an extension of time is required to comply with it, the external administrator may, by written notice, extend the period for compliance.
The notice must:
be given to the person or body making the request; and
specify the period within which the request will be complied with; and
specify the reasons for the extension.
This section does not apply if, under the Act or these Rules, it is not reasonable for the external administrator to comply with the request.
70‑5 Notice requirements for unreasonable requests
This section is made for the purposes of section 70‑50 of the Insolvency Practice Schedule (Corporations) and applies if:
a request for information or a report or document is made to the external administrator under Division 70 of the Insolvency Practice Schedule (Corporations); and
under the Act or these Rules, it is not reasonable for the external administrator to comply with the request.
The external administrator must:
notify the person or body making the request that it is not reasonable for the external administrator to comply with the request, and of the reasons why it is not reasonable; and
make a written record in the books required to be kept under section 70‑10 of the Insolvency Practice Schedule (Corporations) of the fact that the request was not complied with, and of the reasons.
70‑10 Right of creditors to request information etc. from external administrator
This section is made for the purposes of section 70‑40 of the Insolvency Practice Schedule (Corporations).
Unreasonable requests
It is not reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to the creditors if the external administrator, acting in good faith, is of the opinion that:
complying with the request would substantially prejudice the interests of one or more creditors or a third party and that prejudice outweighs the benefits of complying with the request; or
the information, report or document would be privileged from production in legal proceedings on the ground of legal professional privilege; or
disclosure of the information, report or document would found an action by a person for breach of confidence; or
there is not sufficient available property to comply with the request; or
the information, report or document has already been provided; or
the information, report or document is required to be provided under the Corporations legislation within 20 business days of the request being made; or
the request is vexatious.
Without limiting paragraph (2)(g), a request may be taken to be vexatious if the external administrator receives the request within 20 business days of receiving a similar request from the creditors.
Reasonable requests
It is reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to the creditors if subsection (2) does not apply to the request.
Despite paragraph (2)(d), (e) or (f), it is also reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to the creditors if:
the creditors agree to bear the cost of complying with the request; and
if required to do so by the external administrator—security for the cost of complying with the request is given to the external administrator before the request is complied with.
70‑15 Right of individual creditor to request information etc. from external administrator
This section is made for the purposes of section 70‑45 of the Insolvency Practice Schedule (Corporations).
Unreasonable requests
It is not reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to a creditor if the external administrator, acting in good faith, is of the opinion that:
complying with the request would substantially prejudice the interests of one or more creditors or a third party and that prejudice outweighs the benefits of complying with the request; or
the information, report or document would be privileged from production in legal proceedings on the ground of legal professional privilege; or
disclosure of the information, report or document would found an action by a person for breach of confidence; or
there is not sufficient available property to comply with the request; or
the information, report or document has already been provided; or
the information, report or document is required to be provided under the Corporations legislation within 20 business days of the request being made; or
the request is vexatious.
Without limiting paragraph (2)(g), a request may be taken to be vexatious if the external administrator receives the request within 20 business days of receiving a similar request from the creditor.
Reasonable requests
It is reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to a creditor if subsection (2) does not apply to the request.
Despite paragraph (2)(d), (e) or (f), it is also reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to the creditor if:
the creditor agrees to bear the cost of complying with the request; and
if required to do so by the external administrator—security for the cost of complying with the request is given to the external administrator before the request is complied with.
70‑20 Right of members to request information etc. from external administrator in a members’ voluntary winding up
This section is made for the purposes of section 70‑46 of the Insolvency Practice Schedule (Corporations).
Unreasonable requests
In a members’ voluntary winding up, it is not reasonable for the external administrator of the company to comply with a request to give information, provide a report or produce a document to the members if the external administrator, acting in good faith, is of the opinion that:
complying with the request would substantially prejudice the interests of one or more creditors or a third party and that prejudice outweighs the benefits of complying with the request; or
the information, report or document would be privileged from production in legal proceedings on the ground of legal professional privilege; or
disclosure of the information, report or document would found an action by a person for breach of confidence; or
the information, report or document has already been provided; or
the information, report or document is required to be provided under the Corporations legislation within 20 business days of the request being made; or
the request is vexatious.
Without limiting paragraph (2)(f), a request may be taken to be vexatious if the external administrator receives the request within 20 business days of receiving a similar request from the members.
Reasonable requests
It is reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to the members if subsection (2) does not apply to the request.
Despite paragraph (2)(d) or (e), it is also reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to the members if:
the members agree to bear the cost of complying with the request; and
if required to do so by the external administrator—security for the cost of complying with the request is given to the external administrator before the request is complied with.
70‑25 Right of individual member to request information etc. from external administrator in a members’ voluntary winding up
This section is made for the purposes of section 70‑47 of the Insolvency Practice Schedule (Corporations).
Unreasonable requests
In a members’ voluntary winding up, it is not reasonable for an external administrator of the company to comply with a request to give information, provide a report or produce a document to a member of the company if the external administrator, acting in good faith, is of the opinion that:
complying with the request would substantially prejudice the interests of one or more creditors or a third party and that prejudice outweighs the benefits of complying with the request; or
the information, report or document would be privileged from production in legal proceedings on the ground of legal professional privilege; or
disclosure of the information, report or document would found an action by a person for breach of confidence; or
the information, report or document has already been provided; or
the information, report or document is required to be provided under the Corporations legislation within 20 business days of the request being made; or
the request is vexatious.
Without limiting paragraph (2)(f), a request may be taken to be vexatious if the external administrator receives the request within 20 business days of receiving a similar request from the member.
Reasonable requests
It is reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to the member if subsection (2) does not apply to the request.
Despite paragraph (2)(d) or (e), it is also reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to the member if:
the member agrees to bear the cost of complying with the request; and
if required to do so by the external administrator—security for the cost of complying with the request is given to the external administrator before the request is complied with.
70‑30 Initial information required to be given to creditors in certain administrations
This section:
is made for the purposes of section 70‑50 of the Insolvency Practice Schedule (Corporations); and
applies to companies under administration, windings up by the Court and voluntary windings up; and
does not apply if a provisional liquidator of a company has been appointed.
Information about creditors’ rights to be given
The external administrator must give information about the following to as many creditors of the company as reasonably practicable:
the fact that the external administrator has been appointed in relation to the company;
the right of creditors to request information, reports and documents under sections 70‑40 and 70‑45 of the Insolvency Practice Schedule (Corporations);
other than in the case of a voluntary administration—the right of creditors to direct that a meeting of the creditors be held under section 75‑15 of the Insolvency Practice Schedule (Corporations);
the right of creditors to give directions to the external administrator under section 85‑5 of the Insolvency Practice Schedule (Corporations);
the right of the creditors to appoint a reviewing liquidator under section 90‑24 of the Insolvency Practice Schedule (Corporations);
the right of the creditors to remove and replace the external administrator under section 90‑35 of the Insolvency Practice Schedule (Corporations).
Time for giving information etc.
The information must be given:
in writing; and
in the case of a company under administration—at the same time as notice of a meeting of the creditors referred to in section 436E of the Act is given; and
in the case of a winding up by the Court—within 20 business days after the external administrator is appointed; and
in the case of a voluntary winding up—within 10 business days after the day of the meeting of the company at which the resolution for voluntary winding up is passed.
70‑35 Initial remuneration notice
This section:
is made for the purposes of section 70‑50 of the Insolvency Practice Schedule (Corporations); and
applies if an external administrator intends to seek a remuneration determination in relation to the external administration.
The external administrator of a company must give to as many of the creditors as reasonably practicable a notice (an initial remuneration notice) specifying the following:
the method by which the external administrator seeks to be remunerated;
the rate of remuneration;
an estimate of the expected amount of the external administrator’s remuneration;
the method by which disbursements will be calculated.
The initial remuneration notice must:
include a brief explanation of the types of methods that could be used to calculate remuneration; and
specify the method that the external administrator proposes to use to calculate remuneration; and
explain why the method is appropriate.
If the external administrator proposes to receive remuneration worked out wholly or partly on a time‑cost basis, the notice must include details about the respective rates at which the remuneration of the external administrator and the other persons who will be assisting, or will be likely to assist, the administrator in the performance of his or her duties are to be calculated.
The initial remuneration notice:
must be in writing; and
must be given at the same time as the information mentioned in section 70‑30 is given to the creditors.
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