Document ID: chunk:federal_register_of_legislation:C2016A00043:clause:1_30:p1
Version: federal_register_of_legislation:C2016A00043
Segment Type: clause
Provision Reference: sch 1 cl 30 (pt 1/2)
Character Range: 16118–18849

30  Subsections 14(3), (4) and (5)
Repeal the subsections, substitute:
 (3) Subsections (1) and (2) have effect in relation to a close‑out netting contract:
 (a) subject to a specified stay provision that applies to the contract; and
 (b) despite any other law (including the specified provisions).
Note 1: Section 5 defines specified provisions and specified stay provision.
Note 2: Division 2 sets out the circumstances in which non‑direction stays may cease.
 (4) A person may not rely on the application of subsection (1) or (2) to a right or obligation under a close‑out netting contract if:
 (a) the person acquired the right or obligation from another person with notice that that other person, or the other party to the contract, was at that time unable to pay their debts as and when they became due and payable; and
 (b) the person acquired the right or obligation otherwise than as a result of the operation of section 22, 35 or 36R of the Business Transfer Act.
 (5) Subsection (1) or (2) does not apply to an obligation owed by a party to a close‑out netting contract to another person if:
 (a) the 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