Document ID: chunk:federal_register_of_legislation:C2004A04501:schedule:3:p91
Version: federal_register_of_legislation:C2004A04501
Segment Type: schedule
Provision Reference: sch 3 (pt 91/110)
Character Range: 382723–385550

each benefit that the person received because of the transaction:

      (i) the person received the benefit in good faith; and

      (ii) at the time when the person received the benefit:

             (A)    the person had no reasonable grounds for suspecting that the company was insolvent at that time or would become insolvent as mentioned in paragraph 588FC(b); and

             (B)     a reasonable person in the person's circumstances would have had no such grounds for so suspecting.

"(2) The Court is not to make under section 588FF an order materially prejudicing a right or interest of a person if the transaction is not an unfair loan to the company and it is proved that:

  (a)     the person became a party to the transaction in good faith; and

  (b)     at the time when the person became such a party:

        (i) the person had no reasonable grounds for suspecting that the company was insolvent at that time or would become insolvent as mentioned in paragraph 588FC(b); and

        (ii) a reasonable person in the person's circumstances would have had no such grounds for so suspecting; and

     (c) the person has provided valuable consideration under the transaction or has changed his, her or its position in reliance on the transaction.

Liquidator may recover from related entity benefit resulting from insolvent transaction

"588FH.(1) This section applies where a company is being wound up and a transaction of the company:

  (a)     is an insolvent transaction of the company; and

  (b)     is voidable under section 588FE; and

    (c)     has had the effect of discharging, to the extent of a particular amount, a liability (whether under a guarantee or otherwise and whether contingent or otherwise) of a related entity of the company.

"(2) The company's liquidator may, by proceedings in a court of competent jurisdiction, recover from the related entity, as a debt due to the company, an amount equal to the amount referred to in paragraph (1)(c).

"(3) In deciding what orders (if any) to make under section 588FF on an application relating to the transaction, the Court must take into account any amount recovered under subsection (2) of this section.

"(4) If the liquidator recovers an amount under subsection (2) from the related entity, the related entity has the same rights:

    (a)     whether by way of indemnity, subrogation, contribution or otherwise; and

  (b)     against the company or anyone else;

as if the related entity had paid the amount in discharging, to the extent of that amount, the liability referred to in paragraph (1)(c).

Creditor who gives up benefit of unfair preference may prove for preferred debt

  "588FI.(1) This section applies where:

    (a)     a transaction is an unfair preference given by a company to a creditor of the company after