David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

I present a supplementary explanatory memorandum to the bill. I seek leave to move government amendments Nos (1) to (6), as circulated, together.

Leave granted.

I move:

(1)    Schedule 1, page 3 (after line 15), after item 1, insert:

1A  After subsection 411(5)

Insert:

     (5A)    If the compromise or arrangement:

             (a)    involves creditors of the Part 5.1 body with subordinate claims (within the meaning of subsection 563A(2)); and

             (b)    is approved by the Court;

those creditors are also bound by the compromise or arrangement despite the fact that a meeting of those creditors has not been ordered by the Court under subsection (1) or (1A).

(2)    Schedule 1, item 2, page 3 (lines 19 to 27), omit subsections 563A(1) and (2), substitute:

        (1)    The payment of a subordinate claim against a company is to be postponed until all other debts payable by, and claims against, the company are satisfied.

        (2)    In this section:

claim means a claim that is admissible to proof against the company (within the meaning of section 553).

debt means a debt that is admissible to proof against the company (within the meaning of section 553).

subordinate claim means:

             (a)    a claim for a debt owed by the company to a person in the person’s capacity as a member of the company (whether by way of dividends, profits or otherwise); or

             (b)    any other claim that arises from buying, holding, selling or otherwise dealing in shares in the company.

(3)    Schedule 1, page 3 (after line 27), after item 2, insert:

2A  Subsection 563B(2)

Omit “debts owed to members of the company as members of the company (whether by way of dividends, profits or otherwise)”, substitute “subordinate claims (within the meaning of section 563A)”.

(4)    Schedule 1, item 3, page 4 (line 2), before “A person”, insert “(1)”.

(5)    Schedule 1, item 3, page 4 (line 8), after “company,”, insert “at a meeting ordered under subsection 411(1) or”.

(6)    Schedule 1, item 3, page 4 (after line 10), at the end of section 600H, add:

        (2)    In this section:

external administration includes the following:

             (a)    voluntary administration;

             (b)    a compromise or arrangement under part 5.1;

             (c)    administration under a deed of company arrangement;

             (d)    winding up by the Court;

             (e)    voluntary winding up.

This is a matter that has received much consideration from the Senate committee and a number of useful contributions were made to that process, in particular from the Law Council of Australia. The amendments as proposed seek to address some of the technical and drafting matters that have been identified by the Law Council in relation to this bill.

Specifically there are a number of amendments that go to finer technical and drafting considerations but of interest to note to the House are the provisions that relate to those external administrations that would otherwise fall within the terms of a scheme of arrangement. One of the issues that had been raised was the context of a scheme of arrangement where particular creditors or individuals, in this case subordinated interest holders, were not granted the opportunity to be bound by a vote by virtue of these provisions. The intention of these amendments is to ensure that, notwithstanding that, they will be bound by the terms of this process. This is something that was raised by the Law Council and we acknowledge that it is an issue that should be addressed. These amendments seek to address that specifically.

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