Commonwealth Numbered Acts

[Index] [Table] [Search] [Search this Act] [Notes] [Noteup] [Previous] [Next] [Download] [Help]

CORPORATIONS ACT 2001 No. 50, 2001 - SECT 440J

Administration not to trigger liability of director or relative under guarantee of company's liability

(1) During the administration of a company:

(a)
a guarantee of a liability of the company cannot be enforced, as against:

(i)
a director of the company who is a natural person; or
(ii)
a spouse, de facto spouse or relative of such a director; and
(b)
without limiting paragraph (a), a proceeding in relation to such a guarantee cannot be begun against such a director, spouse, de facto spouse or relative;

except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.

(2) While subsection (1) prevents a person ( the creditor ) from:

(a)
enforcing as against another person ( the guarantor ) a guarantee of a liability of a company; or

(b)
beginning a proceeding against another person ( the guarantor ) in relation to such a guarantee;

section 1323 applies in relation to the creditor and the guarantor as if:

(c)
a civil proceeding against the guarantor had begun under this Act; and

(d)
the creditor were the only person of a kind referred to in that section as an aggrieved person.

Note: Under section 1323 the Court can make a range of orders to ensure that a person can meet the person's liabilities.

(3) The effect that section 1323 has because of a particular application of subsection (2) is additional to, and does not prejudice, the effect the section otherwise has. (4) In this section:

"guarantee", in relation to a liability of a company, includes a relevant agreement (as defined in section 9) because of which a person other than the company has incurred, or may incur, whether jointly with the company or otherwise, a liability in respect of the liability of the company.

"liability" means a debt, liability or other obligation.


AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback