Commonwealth Numbered Acts

CORPORATE LAW REFORM ACT 1992 No. 210 of 1992 - SECT 40

40. After section 419 of the Corporations Law the following section is
inserted: Liability of controller under pre-existing agreement about property
used by corporation

"419A.(1) This section applies if:

   (a)  under an agreement made before the control day in relation to a
        controller of property of a corporation, the corporation continues
        after that day to use or occupy, or to be in possession of, property
        ('the third party property') of which someone else is the owner or
        lessor; and

   (b)  the controller is controller of the third party property.

"(2) Subject to subsections (4) and (7), the controller is liable for so much
of the rent or other amounts payable by the corporation under the agreement as
is attributable to a period:

   (a)  that begins more than 7 days after the control day; and

   (b)  throughout which:

        (i)    the corporation continues to use or occupy, or to be in
               possession of, the third party property; and

        (ii)   the controller is controller of the third party property.

"(3) Within 7 days after the control day, the controller may give to the owner
or lessor a notice that specifies the third party property and states that the
controller does not propose to exercise rights in relation to that property as
controller of the property, whether on behalf of the corporation or anyone
else.

"(4) Despite subsection (2), the controller is not liable for so much of the
rent or other amounts payable by the corporation under the agreement as is
attributable to a period during which a notice under subsection (3) is in
force, but such a notice does not affect a liability of the corporation.

"(5) A notice under subsection (3) ceases to have effect if:

   (a)  the controller revokes it by writing given to the owner or lessor; or

   (b)  the controller exercises, or purports to exercise, a right in relation
        to the third party property as controller of the property, whether on
        behalf of the corporation or anyone else.

"(6) For the purposes of subsection (5), the controller does not exercise, or
purport to exercise, a right as mentioned in paragraph (5)(b) merely because
the controller continues to be in possession, or to have control, of the third
party property, unless the controller:

   (a)  also uses the property; or

   (b)  asserts a right, as against the owner or lessor, so to continue.

"(7) Subsection (2) does not apply in so far as the Court, by order, excuses
the controller from liability, but an order does not affect a liability of the
corporation.

"(8) The controller is not taken because of subsection (2):

   (a)  to have adopted the agreement; or

   (b)  to be liable under the agreement otherwise than as mentioned in
        subsection(2).".