New South Wales Consolidated Acts

LOAN FUND COMPANIES ACT 1976 - SECT 25

25 Powers of company with respect to fees and penalties

(1) Subject to this section, a loan fund company may, if authorised by its articles of association to do so, impose a penalty:

(a) on any member for the non-payment of calls or instalments due with respect to shares, whether qualifying shares or loan entitlement shares or shares of any other description, in the company, or

(b) on any person who is the holder of an option to acquire loan entitlement shares in the company for failure to comply with the terms subject to which the option was granted, or was deemed to have been granted, by the company,

but no penalty exceeding 0.1 penalty unit, or such larger amount as may be prescribed, shall be imposed until written notice of intention to impose the penalty and of the reason therefor has been transmitted to that member or person and the member or person has had an opportunity of sending to the company a written statement for the purpose of showing cause why the penalty should not be imposed.

(2) The regulations may fix a maximum amount that a loan fund company may, if authorised by its articles of association to do so:

(a) charge as a fee for or with respect to any prescribed matter, or

(b) impose as a penalty on any member, or on any person who holds an option to acquire loan entitlement shares in the company, for or with respect to any prescribed matter.

(3) A loan fund company shall not:

(a) charge a fee which exceeds the maximum amount fixed under subsection (2) (a) for or with respect to any prescribed matter, or

(b) impose on a member, or on any person who holds an option to acquire loan entitlement shares in the company, a penalty which exceeds the maximum amount fixed under subsection (2) (b) for or with respect to any prescribed matter.

Maximum penalty: 2 penalty units.

(4) Where a loan fund company:

(a) imposes a penalty without complying with subsection (1), or

(b) charges a fee, or imposes a penalty, in excess of the maximum amount fixed under subsection (2) (a) or (b) for or with respect to any prescribed matter,

that penalty or, as the case may be, that fee or penalty, to the extent that it exceeds the amount so fixed, shall not be enforceable against or be recoverable from the member or person in respect of whom it was charged or imposed or, if the penalty or fee has been paid to the company, shall be recoverable in a court of competent jurisdiction by the person who made the payment as a debt due from the company.