Commonwealth Numbered Acts

CORPORATE LAW REFORM ACT 1992 No. 210 of 1992 - SECT 41

41. After section 420 of the Corporations Law the following sections are
inserted: Controller's duty of care in exercising power of sale

"420A.(1) In exercising a power of sale in respect of property of a
corporation, a controller must take all reasonable care to sell the property
for:

   (a)  if, when it is sold, it has a market value - not less than that market
        value; or

   (b)  otherwise - the best price that is reasonably obtainable, having
        regard to the circumstances existing when the property is sold.

"(2) Nothing in subsection (1) limits the generality of anything in section
232. Court may authorise managing controller to dispose of property despite
prior charge

"420B.(1) On the application of a managing controller of property of a
corporation, the Court may by order authorise the controller to sell, or to
dispose of in some other specified way, specified property of the corporation,
even though it is subject to a charge (in this section called the 'prior
charge') that has priority over a charge (in this section called the
'controller's charge') on that property that the controller is enforcing.

"(2) However, the Court may only make an order if satisfied that:

   (a)  apart from the existence of the prior charge, the controller would
        have power to sell, or to so dispose of, the property; and

   (b)  the controller has taken all reasonable steps to obtain the consent of
        the holder of the prior charge to the sale or disposal, but has not
        obtained that consent; and

   (c)  sale or disposal of the property under the order is in the best
        interests of the corporation's creditors and of the corporation; and

   (d)  sale or disposal of the property under the order will not unreasonably
        prejudice the rights or interests of the holder of the prior charge.

"(3) The Court is to have regard to the need to protect adequately the rights
and interests of the holder of the prior charge.

"(4) If the property would be sold or disposed of together with other property
that is subject to the controller's charge, the Court may have regard to:

   (a)  the amount (if any) by which it is reasonable to expect that the net
        proceeds of selling or disposing of that other property otherwise than
        together with the first-mentioned property would be less than so much
        of the net proceeds of selling or disposing of all the property
        together as would be attributable to that other property; and

   (b)  the amount (if any) by which it is reasonable to expect that the net
        proceeds of selling or disposing of the first-mentioned property
        otherwise than together with the other property would be greater than
        so much of the net proceeds of selling or disposing of all the
        property together as would be attributable to the first-mentioned
        property.

"(5) Nothing in subsection (3) or (4) limits the matters to which the Court
may have regard for the purposes of subsection (2).

"(6) An order may be made subject to conditions, for example (but without
limitation):

   (a)  a condition that:

        (i)    the net proceeds of the sale or disposal; and

        (ii)   the net proceeds of the sale or disposal of such other property
               (if any) as is specified in the condition and is subject to the
               controller's charge; or a specified part of those net proceeds,
               be applied in payment of specified amounts secured by the prior
               charge; or

   (b)  a condition that the controller apply a specified amount in payment of
        specified amounts secured by the prior charge. Receiver's power to
        carry on corporation's business during winding up

"420C.(1) A receiver of property of a corporation that is being wound up may:

   (a)  with the written approval of the corporation's liquidator or with the
        approval of the Court, carry on the corporation's business either
        generally or as otherwise specified in the approval; and

   (b)  do whatever is necessarily incidental to carrying on that business
        under paragraph (a).

"(2) Subsection (1) does not:

   (a)  affect a power that the receiver has otherwise than under that
        subsection; or

   (b)  empower the receiver to do an act that he or she would not have power
        to do if the corporation were not being wound up.

"(3) A receiver of property of a corporation who carries on the corporation's
business under subsection (1) does so:

   (a)  as agent for the corporation; and

   (b)  in his or her capacity as receiver of property of the corporation.

"(4) The consequences of subsection (3) include, but are not limited to, the
following:

   (a)  for the purposes of subsection 419(1), a debt that the receiver incurs
        in carrying on the business as mentioned in subsection (3) of this
        section is incurred in the course of the receivership;

   (b)  a debt or liability that the receiver incurs in so carrying on the
        business is not a cost, charge or expense of the winding up.".