Commonwealth Consolidated Acts

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CORPORATIONS ACT 2001 - SECT 415F

Order for rights to be enforceable only with leave of the Court

Orders

             (1)  The Court may order that one or more rights under a contract, agreement or arrangement are enforceable against a body only:

                     (a)  with the leave of the Court; and

                     (b)  in accordance with such terms (if any) as the Court imposes.

Example:    The order could be sought for a right to terminate for convenience.

             (2)  The Court may make the order (the stay order ) if:

                     (a)  the body is the subject of any of the following:

                              (i)  an announcement referred to in paragraph 415D(1)(a);

                             (ii)  an application under section 411 (the section 411 application );

                            (iii)  a compromise or arrangement approved under this Part as a result of a section 411 application; and

                     (b)  the Court is satisfied that:

                              (i)  the rights are being exercised; or

                             (ii)  the rights are likely to be exercised; or

                            (iii)  there is a threat to exercise the rights;

                            because of one or more reasons referred to in paragraphs 415D(1)(a) to (f); and

                     (c)  an application for the stay order is:

                              (i)  if the body has made an announcement referred to in paragraph 415D(1)(a), but not yet a section 411 application--made by the body; or

                             (ii)  if the body has made a section 411 application, but a resulting compromise or arrangement is yet to be approved under this Part--included in the section 411 application; or

                            (iii)  if a compromise or arrangement has been approved under this Part as a result of the section 411 application--made by the person appointed to administer the compromise or arrangement; and

                     (d)  in a case where the body has made a section 411 application--the section 411 application states it is being made for the purpose of the body avoiding being wound up in insolvency.

             (3)  A stay order must specify the period for which it applies. In working out the period, the Court must have regard to:

                     (a)  subsections 415D(2), (3) and (4); and

                     (b)  the interests of justice.

             (4)  Subsection (1) does not apply to a right referred to in subsection 415D(6) or (8).

Interim orders

             (5)  Before deciding an application for a stay order, the Court may grant an interim order for one or more rights under a contract, agreement or arrangement not to be enforced against a body.

             (6)  The Court must not require an applicant for a stay order to give an undertaking as to damages as a condition of granting an interim order.



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