Corporations (Stay on Enforcing Certain Rights) Declaration 2018

made under subsections 415D(7), 434J(6), 451E(6) and 454N(6) of the

Corporations Act 2001

Compilation No. 1

Compilation date: 1 January 2021

Includes amendments up to: F2020L01682

Registered: 8 January 2021

About this compilation

This compilation

This is a compilation of the Corporations (Stay on Enforcing Certain Rights) Declaration 2018 that shows the text of the law as amended and in force on 1 January 2021 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

Contents

1 Name

3 Authority

4 Interpretation

5 Declaration of kinds of rights

6 Declaration of kinds of rights in specified circumstances—a right to appoint a controller

Endnotes

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

1  Name

  This instrument is the Corporations (Stay on Enforcing Certain Rights) Declaration 2018.

3  Authority

  This instrument is made under subsections 415D(7), 434J(6), 451E(6) and 454N(6) of the Corporations Act 2001.

4  Interpretation

  In this instrument:

Act means the Corporations Act 2001.

financing arrangement means:

 (a) any form of financial accommodation; or

 (b) a contract, agreement or arrangement of a kind known as a finance lease, an operating lease, a bill facility, a performance bond, a guarantee, a bank guarantee, a letter of credit or a hire purchase agreement.

specified person means the body, corporation or company the subject of subsection 415D(1), 434J(1), 451E(1) or 454N(1) of the Act (as applicable).

standstill or forbearance arrangement means a contract, agreement or arrangement that suspends or restricts the enforcement of rights under another contract, agreement or arrangement.

5  Declaration of kinds of rights

 (1) The kinds of rights referred to in subsection (4) of this section are declared under paragraph 415D(7)(b) of the Act to be kinds of rights to which subsection 415D(1) of the Act does not apply.

 (2) The kinds of rights referred to in subsection (4) of this section are declared under paragraph 434J(6)(b) of the Act to be kinds of rights to which subsection 434J(1) of the Act does not apply.

 (3) The kinds of rights referred to in subsection (4) of this section are declared under paragraph 451E(6)(b) of the Act to be kinds of rights to which subsection 451E(1) of the Act does not apply.

 (3A) The kinds of rights referred to in subsection (4) of this section are declared under paragraph 454N(6)(b) of the Act to be kinds of rights to which subsection 454N(1) of the Act does not apply.

 (4) The kinds of rights are as follows:

 (a) a right to change the basis, including by the application of a different rate, on which an amount in respect of or under any of the following is calculated:

 (i) a financing arrangement;

 (ii) a guarantee, indemnity or security related to a financing arrangement (whether or not the guarantee, indemnity or security is limited in any way);

 (b) a right to payment by way of indemnity (whether or not the indemnity is limited in any way) in respect of:

 (i)  any liability or loss arising as a result of a person preserving or enforcing rights; or

 (ii) any charges and expenses incurred by a person in preserving or enforcing rights;

 (c) a termination right under a standstill or forbearance arrangement, whether or not the standstill or forbearance arrangement suspends, preserves or modifies the right under the other contract, agreement or arrangement to which it applies;

 (d) a right to change the priority, or order, in which amounts are to be paid, distributed or received under a contract, agreement or arrangement;

 (e) a right of set‑off or a right of combination of accounts;

 (f) a right to net balances or other amounts;

 (g) a right to take action to enforce:

 (i) a right referred to in paragraph (e) or (f); or

 (ii) a right referred to in subsection 6(1), (2), (3) or (3A) if, on the enforcement of that right to take action, the circumstances referred to in subsection 6(4) or (5) (as applicable) would be satisfied;

  for the purposes of enforcing a right referred to in paragraph (e) or (f), or in subsection 6(1), (2), (3) or (3A) (as applicable), whether or not an amount is due for payment, will or may become due for payment, or is unpaid;

Note: The rights referred to in this paragraph include:

(a) a right to accelerate or otherwise vary a date for payment of an amount;

(b) a right to convert or exchange amounts denominated in different currencies; and

(c) a right to crystallise a security interest.

 (h) a right to:

 (i) assign or otherwise transfer rights or obligations; or

 (ii) novate rights or obligations;

 (i) a right:

 (i) for property that is subject to a circulating security interest to become subject to a non‑circulating security interest; or

 (ii) for a floating charge over property to operate as a fixed charge; or

 (iii) for property consisting of accounts or chattel paper to be transferred to a secured party by way of security; or

 (iv) that restricts the grantor of a security interest in property from dealing with the property;

 (j) a right:

 (i) to perform obligations; or

 (ii) to engage another person to perform obligations; or

 (iii) to enforce rights; or

 (iv) to engage another person to enforce rights;

  of the specified person under a contract, agreement or arrangement;

 (k) a right to enforce a possessory security interest in circumstances where paragraphs 440JA(b), (c) and (d) of the Act are satisfied;

 (l) a right to enforce a possessory security interest in circumstances where paragraphs 453X(b), (c) and (d) of the Act are satisfied.

 (5) In paragraph (4)(i), words and expressions that are defined for the purposes of the Personal Property Securities Act 2009 have the same meanings.

 (6) For the purposes of paragraph (4)(k), the reference to the company in paragraph 440JA(b) of the Act is taken to be a reference to the specified person.

 (7) For the purposes of paragraph (4)(l), the reference to the company in paragraph 453X(b) of the Act is taken to be a reference to the specified person.

6  Declaration of kinds of rights in specified circumstances—a right to appoint a controller

 (1) A right to appoint a controller of property of the specified person is declared under paragraph 415D(7)(c) of the Act to be a kind of right to which subsection 415D(1) of the Act does not apply in the circumstances specified in subsection (4) or (5) of this section.

 (2) A right to appoint a controller of property of the specified person is declared under paragraph 434J(6)(c) of the Act to be a kind of right to which subsection 434J(1) of the Act does not apply in the circumstances specified in subsection (4) of this section.

 (3) A right to appoint a controller of property of the specified person is declared under paragraph 451E(6)(c) of the Act to be a kind of right to which subsection 451E(1) of the Act does not apply in the circumstances specified in subsection (4) of this section.

 (3A) A right to appoint a controller of property of the specified person is declared under paragraph 454N(6)(c) of the Act to be a kind of right to which subsection 454N(1) of the Act does not apply in the circumstances specified in subsection (4) of this section.

 (4) The circumstances are as follows:

 (a) the right is to be enforced by a person who has a security interest in, or over, property of the specified person; and

 (b) in relation to property of the specified person:

 (i) a controller has been appointed; or

 (ii) a right to appoint a controller has been enforced.

 (5) The circumstances are as follows:

 (a) the whole, or substantially the whole, of the property of the specified person is subject to a security interest; and

 (b) the right is to be enforced by the person who has the security interest referred to in paragraph (a).

Endnotes

Endnote 1—About the endnotes

The endnotes provide information about this compilation and the compiled law.

The following endnotes are included in every compilation:

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

Abbreviation key—Endnote 2

The abbreviation key sets out abbreviations that may be used in the endnotes.

Legislation history and amendment history—Endnotes 3 and 4

Amending laws are annotated in the legislation history and amendment history.

The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation.

The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law.

Editorial changes

The Legislation Act 2003 authorises First Parliamentary Counsel to make editorial and presentational changes to a compiled law in preparing a compilation of the law for registration. The changes must not change the effect of the law. Editorial changes take effect from the compilation registration date.

If the compilation includes editorial changes, the endnotes include a brief outline of the changes in general terms. Full details of any changes can be obtained from the Office of Parliamentary Counsel.

Misdescribed amendments

A misdescribed amendment is an amendment that does not accurately describe the amendment to be made. If, despite the misdescription, the amendment can be given effect as intended, the amendment is incorporated into the compiled law and the abbreviation “(md)” added to the details of the amendment included in the amendment history.

If a misdescribed amendment cannot be given effect as intended, the abbreviation “(md not incorp)” is added to the details of the amendment included in the amendment history.

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history