Document ID: chunk:federal_register_of_legislation:C2004A04501:schedule:3:p88
Version: federal_register_of_legislation:C2004A04501
Segment Type: schedule
Provision Reference: sch 3 (pt 88/110)
Character Range: 375421–378123

to the company of entering into the transaction; and

    (c)     the respective benefits to other parties to the transaction of entering into it; and

  (d)     any other relevant matter.

"(2) A transaction may be an uncommercial transaction of a company because of subsection (1):

    (a)     whether or not a creditor of the company is a party to the transaction; and

    (b)     even if the transaction is given effect to, or is required to be given effect to, because of an order of an Australian court or a direction by an agency.

Insolvent transactions

"588FC. A transaction of a company is an insolvent transaction of the company if, and only if, it is an unfair preference given by the company, or an uncommercial transaction of the company, and:

    (a) any of the following happens at a time when the company is insolvent:

       (i) the transaction is entered into;

         (ii) an act is done, or an omission is made, for the purpose of giving effect to the transaction; or

    (b) the company becomes insolvent because of, or because of matters including:

       (i) entering into the transaction; or

        (ii) a person doing an act, or making an omission, for the purpose of giving effect to the transaction.

Unfair loans to a company

  "588FD.(1) A loan to a company is unfair if, and only if:

    (a)     the interest on the loan was extortionate when the loan was made, or has since become extortionate because of a variation; or

    (b)     the charges in relation to the loan were extortionate when the loan was made, or have since become extortionate because of a variation;

even if the interest is, or the charges are, no longer extortionate.

  "(2) In determining:

    (a)     whether interest on a loan was or became extortionate at a particular time as mentioned in paragraph (1)(a); or

    (b)     whether charges in relation to a loan were or became extortionate at a particular time as mentioned in paragraph (1)(b);

regard is to be had to the following matters as at that time:

  (c)     the risk to which the lender was exposed; and

  (d)     the value of any security in respect of the loan; and

  (e)     the term of the loan; and

     (f) the schedule for payments of interest and charges and for repayments of principal; and

  (g) the amount of the loan; and

  (h) any other relevant matter.

Voidable transactions

"588FE.(1) Where a company is being wound up, a transaction of the company that was entered into at or after the commencement of this Part may be voidable because of any one or more of the following subsections.

  "(2) The transaction is voidable if:

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

    (b)