Document ID: chunk:federal_register_of_legislation:C2024C00373:section:14:p3
Version: federal_register_of_legislation:C2024C00373
Segment Type: section
Provision Reference: s 14 (pt 3/4)
Character Range: 38803–41513

party goes into external administration; and
 (b) the party acquired the obligation otherwise than as a result of the operation of section 22, 35 or 36R of the Business Transfer Act; and
 (c) subsection (6) is satisfied.
 (6) This subsection is satisfied if any of the following are satisfied:
 (a) the other person did not act in good faith in entering into the transaction that created the terminated obligation;
 (b) when that transaction was entered into, the other person had reasonable grounds for suspecting that the party was insolvent at that time or would become insolvent because of, or because of matters including:
 (i) entering into the transaction; or
 (ii) doing an act, or making an omission, for the purposes of giving effect to the transaction;
 (c) the other person neither provided valuable consideration under, nor changed their position in reliance on, that transaction.
 (7) None of the following things done by a party to a close‑out netting contract, while it is under statutory/judicial management and a specified stay provision applies to the contract, is to be void or voidable in an external administration:
 (a) making a payment, or transferring property, to another person to meet an obligation under the contract;
 (b) creating rights or obligations in another person under the contract;
 (c) giving any security to another person in relation to the contract;
 (d) entering into one or more close‑out netting contracts with another person;
 (e) doing anything mentioned in paragraph (a), (b) or (c) under a close‑out netting contract mentioned in paragraph (d).
 (8) Subsection (7) does not apply to a thing mentioned in that subsection done by a party to a close‑out netting contract in relation to another person if:
 (a) the transaction did not result from the operation of section 22, 35 or 36R of the Business Transfer Act; and
 (b) either of the following is satisfied:
 (i) the other person did not act in good faith in entering into the transaction;
 (ii) the other person neither provided valuable consideration under, nor changed their position in reliance on, the transaction.
 (9) If security is given over financial property, in respect of obligations of a party to a close‑out netting contract, then:
 (a) subsection (3) applies in relation to the security in the same way as it applies in relation to the contract; and
 (b) subsection (4) applies in relation to rights and obligations under the security in the same way as it applies in relation to rights and obligations under the contract; and
 (c) subsection (5) applies in relation to an obligation owed by a party to the security in the same way as it applies in relation to an obligation owed by a party to