New South Wales: James Hardie Former Subsidiaries (Winding up and Administration) Act 2005 (NSW)

James Hardie Former Subsidiaries (Winding up and Administration) Act 2005 No 105 An Act to facilitate funding by James Hardie Industries NV of compensation claims against certain former subsidiaries of the James Hardie corporate group for asbestos-related harm and to provide for the winding up of those former subsidiaries; and for other purposes. Part 1 Preliminary 1 Name of Act This Act is the James Hardie Former Subsidiaries (Winding up and Administration) Act 2005. 2 Commencement (1) This Act commences on a day or days to be appointed by proclamation, except as provided by this section. (2) Part 2 is taken to have commenced on the day on which the Bill for this Act was first introduced into Parliament. (3) Clause 3 of Schedule 1 commences on the date of assent to this Act. Note— Clause 3 of Schedule 1 provides that any trust fund established as referred to in section 8 during or after the introduction day but before the assent day is taken to have been validly established for the purposes of the law of the State. (4) The provisions of Part 3 of Schedule 1 commence on the date of assent to the James Hardie Former Subsidiaries (Winding up and Administration) Amendment (Trust Funds) Act 2006. 3 Principal objects of Act (1) The principal objects of this Act are as follows— (a) to set up a State scheme for the winding up and other external administration over an extended period of certain companies that were formerly within the James Hardie corporate group, (b) to ensure that not only present, but also future, liabilities of those companies in respect of personal injury or death of persons arising from exposure to any asbestos or asbestos products that were mined, manufactured, sold, distributed or used by those companies are dealt with— (i) in accordance with the Final Funding Agreement, and (ii) so that preference is given to those claims over other claims which are deferred to the future, and (iii) in a manner that recognises that exposure to such asbestos or asbestos products, or personal injury or death arising from such exposure, may occur for an extended period into the future. (2) To achieve the objects set out in subsection (1), this Act displaces certain provisions of the Corporations Act and includes provisions for the establishment of a trust fund and the administration of the companies concerned during the winding up periods for the companies that are apposite to the unique circumstances of the winding up and administration of the companies. 4 Definitions (1) In this Act— ABN 60 means the company registered under the Corporations Act immediately before the introduction day as ABN 60 Pty Limited (ACN 000 009 263) that was formerly called James Hardie Industries Limited, and includes any successor to or continuation of that company. ABN 60 Foundation means the company registered under the Corporations Act immediately before the introduction day as ABN 60 Foundation Limited (ACN 106 266 611), and includes any successor to or continuation of that company. Amaba means the company registered under the Corporations Act immediately before the introduction day as Amaba Pty Limited (ACN 000 387 342) that was formerly called Jsekarb Pty Limited, and includes any successor to or continuation of that company. Amaca means the company registered under the Corporations Act immediately before the introduction day as Amaca Pty Limited (ACN 000 035 512) that was formerly called James Hardie & Coy Pty Limited, and includes any successor to or continuation of that company. assent day means the day on which this Act received the Royal Assent. assets means any legal or equitable estate or interest (whether present or future, whether vested or contingent and whether personal or assignable) in real or personal property of any description (including money), and includes securities, choses in action and documents. authorised loan facility means a loan facility provided under a relevant loan facility agreement. claim means any claim, demand, action, cause of action or proceedings (whether based in tort, contract, under legislation or otherwise). claims processing expenses of a liable entity means any of the following incurred by the entity (whether before or during the winding up period for the entity as provided by Part 4) in connection with the management of claims made against the entity— (a) expenses, charges or other costs for the provision of legal services to the entity, (b) expenses, charges or other costs for the provision of expert evidence or for the provision of other professional advice to the entity, (c) expenses, charges or other costs arising out of proceedings in a court or other tribunal or the use of any structured negotiation process for the settlement of claims (including mediation, conciliation or arbitration), but does not include any interest or legal costs payable by the entity to a claimant under a final judgment or binding settlement in respect of a proven personal asbestos claim or proven personal asbestos contribution claim. Compensation Foundation means the company registered under the Corporations Act immediately before the introduction day as the Medical Research and Compensation Foundation (ACN 095 924 137), and includes any successor to or continuation of that company. compensation funds means the following— (a) the SPF, (b) the discretionary fund. concurrent wrongdoer, in relation to a personal asbestos claim or other claim, means a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim. contravene includes fail to comply with. Corporations Act means the Corporations Act 2001 of the Commonwealth. Corporations legislation means the Corporations legislation to which Part 1.1A of the Corporations Act applies. damages includes any form of monetary compensation. discretionary fund means any discretionary trust fund— (a) established in accordance with the SPF trust deed and the Final Funding Agreement with respect to any income derived from assets that form part of the SPF, and (b) in respect of which the SPF trustee is also the trustee. exercise a function includes perform a duty. Final Funding Agreement means the deed entitled "A deed in respect of a Final Funding Agreement in respect of the provision of long term funding for compensation arrangements for certain victims of Asbestos-related diseases in Australia" that was entered into by the State, James Hardie Industries NV and LGTDD Pty Limited (ACN 116 110 948) on 1 December 2005, as in force from time to time. finalisation day, in relation to a liable entity, means the finalisation day in relation to the entity within the meaning of section 43. function includes a power, authority or duty. general law means the common law and equity. insurance proceeds right means any right of a person to the proceeds (or part of the proceeds) of a contract of insurance or re-insurance of a liable entity that is conferred by or under section 30. introduction day means the day on which the Bill for this Act was first introduced into Parliament. James Hardie Industries NV means the foreign company incorporated in the Netherlands registered under the Corporations Act immediately before the introduction day as James Hardie Industries NV (ARBN 097 829 895), and includes such successors to or continuations of that company, or other entities having obligations under the Final Funding Agreement, as may be prescribed by the regulations. legislation includes— (a) any statute of a legislature (whether enacted or made in Australia or elsewhere), and (b) any proclamation, regulation, rule, by-law, order or any other kind of subordinate legislation (however described) made under the authority of a statute (whether enacted or made in Australia or elsewhere). liable entity means each of the following— (a) ABN 60, (b) Amaba, (c) Amaca. loan repayment, in relation to an authorised loan facility, means— (a) the repayment of any part of the principal payable under the facility, or (b) the payment of any interest (whether or not the interest is capitalised) payable under the facility, or (c) the payment of any other amounts that are payable under, or in connection with, the facility. loan security expense of a liable entity means any amount that the entity is required to pay under, or in connection with, a relevant loan facility agreement. management of claims includes the handling, finalisation or payment of such claims. Member Register of a company means a register of members of the company kept under Chapter 2C of the Corporations Act. MRCF Investments means the company registered under the Corporations Act immediately before the introduction day as MRCF (Investments) Pty Limited (ACN 095 926 837), and includes any successor to or continuation of that company. operating expenses of a liable entity— (a) means any expenses, charges or other costs (including taxes and duties), other than claims processing expenses, incurred by the entity in carrying on its business (whether before or during the winding up period for the entity as provided by Part 4), and (a1) includes any loan security expenses of the entity, and (b) includes any expenses, charges or other costs, other than claims processing expenses, incurred by the entity (including costs awarded against the entity) in connection with the making of an application to the Supreme Court under a provision of this Act. payable claimant of a liable entity means any person to whom the entity has incurred a payable liability. payable liability of a liable entity means a liability of the entity to pay any of following— (a) a proven personal asbestos claim made against the entity in an Australian court or other Australian tribunal, but only to the extent that the exposure to asbestos or asbestos products to which the claim relates occurred wholly within the territorial limits of Australia, (b) a proven personal asbestos contribution claim made against the entity in an Australian court or other Australian tribunal, but only to the extent that the exposure to asbestos or asbestos products to which the claim relates occurred wholly within the territorial limits of Australia, (c) a pre-commencement claim against the entity, (d) an operating expense of the entity, (e) a claims processing expense of the entity, (f) a claim for the payment of an insurance proceeds right that is declared to be a payable liability by regulations made for the purposes of section 30, (g) an amount in respect of which the SPF trustee has a right to be indemnified by the entity under section 36 (2) (b), (h) a statutory recovery claim against the entity. Note— Section 32 (2) of this Act provides that certain proven personal asbestos claims made against a liable entity may not be paid during its winding up period if the claimant has already received compensation for the personal injury or death to which the claim relates from a specified person. personal asbestos claim against a liable entity or concurrent wrongdoer means a claim by any of the following persons for damages (whether arising before, during or after the assent day) in respect of personal injury or death arising from exposure to any asbestos or asbestos products that were mined, manufactured, sold, distributed or used by or on behalf of the liable entity or concurrent wrongdoer (as the case may be)— (a) the person who sustains the personal injury, (b) the legal personal representative of a deceased person who sustained the injury or died as a result of the injury, (c) a relative of a deceased person who sustained the injury or died as a result of the injury, and includes such a claim against a liable entity or concurrent wrongdoer pursuant to the joinder of the liable entity or concurrent wrongdoer as a party to proceedings. Note— Part 4 of the James Hardie (Civil Liability) Act 2005 provides that Amaca is liable for certain personal asbestos claims against Marlew Mining Pty Limited in connection with its asbestos mining operations in Baryulgil. That Part also provides that the claims for which Amaca is liable are to be treated as personal asbestos claims against Amaca for the purposes of this Act. personal asbestos claimant means a person who has, or may at any time in the future have, a personal asbestos claim. personal asbestos contribution claim against a liable entity means any claim against the entity by a concurrent wrongdoer for contribution (whether arising before, during or after the assent day) in respect of a personal asbestos claim that has been made against the wrongdoer. power includes an authority. pre-commencement claim against a liable entity means any claim that was made or brought in legal proceedings commenced before 1 December 2005. proceeds of asset realisations of a liable entity includes the proceeds of a relevant insurance contract of the entity within the meaning of section 30. proven personal asbestos claim against a liable entity means a personal asbestos claim against the entity in respect of which— (a) a final judgment has been entered by a court or other tribunal against the entity, or (b) a binding settlement has been entered into by the entity, but only to the extent that the judgment or settlement gives rise to a liability of the entity (including any liability to pay damages, interest or legal costs to the claimant). Note— Part 4 of the James Hardie (Civil Liability) Act 2005 provides that Amaca is liable for certain personal asbestos claims against Marlew Mining Pty Limited in connection with its asbestos mining operations in Baryulgil. That Part also provides that claims for which Amaca is liable and in respect of which final judgment has been entered or a binding settlement entered are to be treated as proven personal asbestos claims against Amaca for the purposes of this Act. Section 32 (2) of this Act provides that certain proven personal asbestos claims made against a liable entity may not be paid during its winding up period if the claimant has already received compensation for the personal injury or death to which the claim relates from a specified person. proven personal asbestos contribution claim against a liable entity means a personal asbestos contribution claim against the entity by a concurrent wrongdoer in respect of which— (a) a final judgment has been entered by a court or other tribunal against the entity, or (b) a binding settlement has been entered into by the entity, but only to the extent that the judgment or settlement gives rise to a liability of the entity (including any liability to pay damages, interest or legal costs to the claimant). Related Agreement means any agreement as in force from time to time that is entered into (whether before, during or after the assent day) as contemplated by the terms of the Final Funding Agreement. relevant loan facility agreement means any agreement that is authorised by section 30A, as in force from time to time. small claim—see section 4A. SPF means the trust fund established as referred to in section 8 or, if that trust fund is terminated, such other trust fund as may be prescribed by the regulations. SPF trust deed means the deed that established the SPF, as in force from time to time. SPF trustee means the person who is the trustee of the SPF from time to time. statutory recovery claim against a liable entity means any of the following claims— (a) a claim against the entity under section 8E of the Workers' Compensation (Dust Diseases) Act 1942 for reimbursement of compensation paid or payable by the Workers' Compensation (Dust Diseases) Board, (b) any other claim against the entity for the payment of compensation, or the reimbursement of compensation paid, under a statute enacted in Australia in circumstances of a kind prescribed by the regulations. the State means the State of New South Wales. transfer of a share includes— (a) an assignment (whether or not for consideration) of the share, and (b) an assignment or transfer, or the creation, of any legal or beneficial interest (or both) in the share. winding up period for a liable entity—see section 20. (2) In this Act, the following terms have the meanings given in section 9 of the Corporations Act— ACN ARBN ASIC books company constitution contributory director foreign company insolvent member negotiable instrument officer public document registered company auditor registered office (3) In this Act, a reference to winding up of a liable entity includes a reference to any scheme of arrangement, receivership or other form of external administration of the liable entity (including, without limitation, the administration of a liable entity by the SPF trustee and the Minister under this Act). (4) If this Act provides for an event or other thing to occur on a particular day, that event or thing is taken to occur at the beginning of that day. (4A) Unless the context or subject-matter indicates or requires otherwise, a reference in this Act to the payment or discharge (whether in whole or in part) by the SPF trustee of a payable liability of a liable entity on the entity's behalf or for its benefit is a reference to the payment or discharge of such a liability by the SPF trustee in its capacity as the trustee of the SPF or the discretionary fund or in both capacities (as the case may be). (5) Notes included in this Act do not form part of this Act. 4A Meaning of "small claim" (1) For the purposes of this Act, a claim is a small claim if it is a claim for an amount that does not exceed $25,000 or any other amount adjusted in accordance with this section from time to time that is applicable at the time when a claim is payable. (2) If an approved payment scheme under section 35 is or will be in force on 1 July of any year, the Minister is to declare on or before that date, by order published on the NSW legislation website, the amount that is to apply, as from the date specified in the order, for the purposes of subsection (1). (3) The amount declared is to be the amount applicable under subsection (1) (or that amount as last adjusted in accordance with this section) that is adjusted— (a) in the case of the first adjustment that is required to be made following the commencement of this section—by the percentage change in the amount estimated by the Australian Statistician of the average weekly total earnings of full-time adults in Australia over the number of quarters since the commencement of this section that precede the date of the declaration for which those estimates are, at that date, available, or (b) in the case where an adjustment was made for 1 July of the previous year—by the percentage change in the amount estimated by the Australian Statistician of the average weekly total earnings of full-time adults in Australia over the 4 quarters that precede the date of the declaration for which those estimates are, at that date, available, or (c) in the case where the previous adjustment that was required to be made was for 1 July of a year before the previous year—by the percentage change in the amount estimated by the Australian Statistician of the average weekly total earnings of full-time adults in Australia over the number of quarters since the previous adjustment that precede the date of the declaration for which those estimates are, at that date, available. (4) An amount declared for the time being under this section applies to the exclusion of the amount of $25,000 or an amount previously adjusted in accordance with this section. (5) If the Australian Statistician fails or ceases to estimate the amount referred to in subsection (3), the amount declared is to be determined in accordance with the regulations. (6) In adjusting an amount to be declared for the purposes of subsection (1), the amount determined in accordance with subsection (3) is to be rounded to the nearest $500 (with the amounts of $250 and $750 being rounded up). (7) A declaration made or published on the NSW legislation website after 1 July in a year and specifying a date that is before the date it is made or published as the date from which the amount declared by the order is to apply has effect as from that specified date. 5 Extraterritorial operation of Act (1) It is the intention of the Parliament of New South Wales that the operation of this Act should, as far as possible, include operation in relation to the following— (a) things situated in or outside the territorial limits of the State, (b) acts, transactions and matters done, entered into or occurring in or outside the territorial limits of the State, (c) things, acts, transactions and matters (wherever situated, done, entered into or occurring) that would, apart from this Act, be governed or otherwise affected by the law of another State, a Territory, the Commonwealth or a foreign country. (2) Without limiting subsection (1), it is the intention of the Parliament of New South Wales that the provisions of this Act have an operation in relation to the things, acts, transactions and matters referred to in that subsection even if the rules of private international law (whether at general law or as provided by legislation) would require the application of a law other than this Act instead of the provisions of this Act. 6 Construction of legislation so as not to exceed legislative power (1) Unless a contrary intention appears, if a provision of this Act or an instrument made under this Act— (a) would, apart from this section, have an invalid application, but (b) also has at least one valid application, it is the intention of the Parliament of New South Wales that the provision is not to have the invalid application, but is to have every valid application. (2) Despite subsection (1), the provision is not to have a particular valid application if— (a) apart from this section, it is clear, taking into account the provision's context and the purposes or objects underlying this Act, that the provision was intended to have that valid application only if every invalid application, or a particular invalid application, of the provision had also been within the legislative power of the Parliament of New South Wales, or (b) the provision's operation in relation to that valid application would be different in a substantial respect from what would have been its operation in relation to that valid application if every invalid application of the provision had been within the legislative power of the Parliament of New South Wales. (3) Subsection (2) does not limit the cases in which a contrary intention may be taken to appear for the purposes of subsection (1). (4) This section is in addition to, and not in derogation of, section 31 of the Interpretation Act 1987. (5) In this section— application means an application in relation to— (a) one or more particular persons, things, matters, places, circumstances or cases, or (b) one or more classes (however defined or determined) of persons, things, matters, places, circumstances or cases. invalid application, in relation to a provision, means an application because of which the provision exceeds the legislative power of the Parliament of New South Wales. valid application, in relation to a provision, means an application which, if it were the provision's only application, would be within the legislative power of the Parliament of New South Wales. 7 Act to bind State and other jurisdictions (1) This Act binds the State and, in so far as the legislative power of the Parliament of New South Wales permits, the other States, the Territories and the Commonwealth. Note— The Interpretation Act 1987 defines the term person to include a body politic. (2) Without limiting subsection (1), this Act has effect despite any privilege or immunity of the Crown in any of its capacities. (3) This Act does not make any State or Territory, the Commonwealth, or the Crown in any of its capacities, liable to be prosecuted for an offence. (4) A reference in this section to a State, Territory or the Commonwealth includes a reference to the Government of the State, Territory or Commonwealth. Part 2 Establishment of SPF 8 SPF may be treated as charitable trust (1) For the avoidance of doubt, it is declared that a trust fund (the SPF) established by James Hardie Industries NV as contemplated by the Final Funding Agreement is a valid charitable trust for the purposes of the law of the State if— (a) the principal purposes for which the trust fund is established include the following purposes— (i) the purpose of receiving and providing funding for the payment, and paying, of payable liabilities of any liable entity, (ii) the purpose of providing services with respect to the management and resolution of claims made against any liable entity, and (b) the instrument that establishes the trust fund makes provision for the trustee of the trust fund to be a company registered under the Corporations Act that is taken under section 119A of that Act to be registered in New South Wales. (2) Without limiting subsection (1), any of the purposes referred to in subsection (1) (a) is to be treated as being a charitable purpose for the purposes of the Charitable Trusts Act 1993 and the general law relating to charitable trusts. (3) If the discretionary fund is for the time being authorised or required under the Final Funding Agreement or the SPF trust deed to receive and provide funding for the payment of, and to pay, any of the payable liabilities of any liable entity instead of or in addition to the SPF, any trust fund that was originally established for the purposes referred to in subsection (1) (a)— (a) continues to be a valid charitable trust, and (b) is taken to be administered by the SPF trustee for the purposes for which the trust fund was originally established, even though the fund is not the only trust fund being used during that time for the purpose referred to in subsection (1) (a) (i). (4) Despite anything to the contrary in the SPF trust deed or any legislation of the State or the general law— (a) any money provided to the SPF trustee under an authorised loan facility is taken to have been provided to the SPF trustee for the purpose referred to in subsection (1) (a) (i) and, consequently, to be subject to the trust established by the SPF trust deed, and (b) the making of loan repayments in relation to an authorised loan facility by the SPF trustee from the SPF is taken to be a valid application of the trust fund for the purpose referred to in subsection (1) (a) (i). 9 Application of law of charitable trusts to SPF (1) The Charitable Trusts Act 1993 and the general law relating to charitable trusts apply to the SPF, subject to the following modifications— (a) the Supreme Court may not, despite section 6 of the Charitable Trusts Act 1993 or any other law, grant leave to any person (other than the SPF trustee or James Hardie Industries NV) to bring charitable trust proceedings or any other proceedings relating to the administration of the SPF, (b) charitable trust proceedings or any other proceedings relating to the administration of the SPF may only be brought by— (i) the Attorney General (whether with or without a relator), or (ii) the SPF trustee or James Hardie Industries NV, but only with the leave of the Supreme Court under section 6 of the Charitable Trusts Act 1993, (c) for the purposes of determining whether the trust property of the SPF should be applied cy pres, it is to be presumed for all purposes that the only general charitable intention with which the trust property was given was for making or assisting the payment of compensation to personal asbestos claimants having claims against a liable entity, (d) a scheme for the administration of the SPF under Part 4 of the Charitable Trusts Act 1993 may be established subject to the following provisions— (i) the scheme may only be established with the consent of the SPF trustee and James Hardie Industries NV, (ii) section 14 of that Act does not operate to limit the circumstances in which such a scheme may be established, (iii) section 18 of that Act does not enable a person other than the SPF trustee or James Hardie Industries NV to bring an appeal under that section. (2) Accordingly, no court or other tribunal has any jurisdiction or power to entertain charitable trust proceedings or any other proceedings relating to the administration of the SPF, or to grant relief in any such proceedings, unless the proceedings have been brought as provided by subsection (1) (b) by the Attorney General (whether with or without a relator), the SPF trustee or James Hardie Industries NV. (3) In this section, charitable trust proceedings has the same meaning as it has in Part 2 of the Charitable Trusts Act 1993. 10 Part does not alter law of charitable trusts generally Nothing in this Part authorises or permits any person other than James Hardie Industries NV to establish a charitable trust for a purpose that is not a charitable purpose at general law. Part 3 Limitations on corporate restructuring Division 1 Interpretation 11 Definitions In this Part— hold a share includes hold a share on trust or for the benefit of another person. relevant company means any of the following— (a) any liable entity, (b) the Compensation Foundation, (c) MRCF Investments, (d) the ABN 60 Foundation. Division 2 Registered offices and Member Registers 12 Registered offices to be within the State (1) A relevant company must not, without the written approval of the Minister— (a) change the address of its registered office to a location that is outside of the territorial limits of the State, or (b) have its registered office at a location that is outside of the territorial limits of the State. Maximum penalty—1,000 penalty units. Note— If a relevant company contravenes this subsection, section 67 operates to make each person who is a director of the company or who is concerned in the management of the company liable for the offence if the person knowingly authorised or permitted the contravention. (2) It is taken to be a provision of the constitution of each relevant company that— (a) the registered office of the company be located within the territorial limits of the State unless the Minister gives written approval for it to be located outside the territorial limits of the State, and (b) the address of its registered office not be changed to a location that is outside of the territorial limits of the State without the written approval of the Minister, and (c) the provisions of paragraphs (a) and (b) have effect despite any other provisions of the constitution of the company. 13 Member Register to be within the State (1) A relevant company must not, without the written approval of the Minister— (a) change the location where any Member Register of the company is kept to a location that is outside of the territorial limits of the State, or (b) keep any Member Register of the company at a location that is outside of the territorial limits of the State. Maximum penalty—1,000 penalty units. Note— If a relevant company contravenes this subsection, section 67 operates to make each person who is a director of the company or who is concerned in the management of the company liable for the offence if the person knowingly authorised or permitted the contravention. (2) It is taken to be a provision of the constitution of each relevant company that— (a) any Member Register of the company be kept at a location within the territorial limits of the State unless the Minister gives written approval for it to be kept at a location outside the territorial limits of the State, and (b) the location where a Member Register is kept not be changed to a location that is outside of the territorial limits of the State without the written approval of the Minister, and (c) the provisions of paragraphs (a) and (b) have effect despite any other provisions of the constitution of the company. 14 Orders to relocate registered office or Member Register to the State (1) The Minister may, by order served on a relevant company, instruct the company and its directors and other officers to take such steps as are necessary under the Corporations Act— (a) to change the address of its registered office to a location that is within the territorial limits of the State within the period specified in the order, and (b) to change the location where any Member Register of the company is kept to a location that is within the territorial limits of the State within the period specified in the order. (2) A relevant company on which an order made under subsection (1) is served must comply with the order. Maximum penalty—1,000 penalty units. Note— If a relevant company contravenes this subsection, section 67 operates to make each person who is a director of the company or who is concerned in the management of the company liable for the offence if the person knowingly authorised or permitted the contravention. Division 3 Transfers of shares by relevant companies 15 Certain transfers of shares in liable entities prohibited (1) A relevant company must not transfer to any person any shares that it holds in a liable entity without the written approval of the Minister. Maximum penalty—1,000 penalty units. Note— If a relevant company contravenes this subsection, section 67 operates to make each person who is a director of the company or who is concerned in the management of the company liable for the offence if the person knowingly authorised or permitted the contravention. (2) Without limiting subsection (1), an order of the Minister under section 16 instructing a relevant company and its directors and officers to transfer shares constitutes written approval of the Minister for the purposes of that subsection for the transfer of those shares. (3) It is taken to be a provision of the constitution of each liable entity that— (a) shares in the entity cannot be transferred without the written approval of the Minister, and (b) the provisions of paragraph (a) have effect despite any other provisions of the constitution of the entity. 16 Orders requiring transfer of shares in liable entities (1) The Minister may, by order served on a relevant company, instruct the company and its directors and other officers to take such steps as are necessary under the Corporations Act and any other relevant law (whether written or unwritten) to transfer any or all of the shares that it holds in a liable entity to the person or persons specified in the order during the day or within the period specified in the order. (2) A relevant company on which an order made under subsection (1) is served must comply with the order. Maximum penalty—1,000 penalty units. Note— If a relevant company contravenes this subsection, section 67 operates to make each person who is a director of the company or who is concerned in the management of the company liable for the offence if the person knowingly authorised or permitted the contravention. (3) If a relevant company holds shares to which an order under subsection (1) applies on trust or for the benefit of another person, any beneficial interest of the other person in the shares is extinguished on the transfer of the shares to the specified person or persons. (4) Nothing in subsection (3) prevents the Minister from requiring any shares in a liable entity to be transferred to the SPF trustee to be held in trust for the purposes of the SPF. (5) No compensation is payable for any of the following— (a) the loss of any legal or beneficial interest in shares resulting from the transfer of the shares in compliance with an order under subsection (1) (including the extinguishment of a person's beneficial interest in shares by operation of subsection (3)), (b) any costs or other expenses incurred by a person in complying with an order under subsection (1). (6) It is taken to be a provision of the constitution of each relevant company that, if the relevant company and its directors and other officers fail to comply with an order served on it under subsection (1) by the end of the day or period specified in the order— (a) the shares in the liable entity are, by the operation of this subsection, taken to be transferred to the person or persons specified in the order at the end of that day or period, and (b) the order is taken, for all purposes, to constitute a proper instrument of transfer for those shares, and (c) the provisions of paragraphs (a) and (b) have effect despite any other provisions of the constitution of the company. Division 4 Directors of relevant companies 17 Minister may order directors of relevant companies to vacate office (1) The Minister may, by order served on a relevant company, direct that— (a) a specified director of the company ceases to hold office as a director on the day specified in the order, and (b) a specified person is appointed instead of the specified director on that day or a subsequent day specified in the order. (2) The Minister may not make an order under subsection (1) in respect of a liable entity if the SPF trustee holds all of the shares in the liable entity for the purposes of the SPF. (3) A director of a relevant company in respect of whom an order is made under subsection (1) must not continue to act as a director of the company during or after the day specified in the order for the director to cease to hold office. Maximum penalty—1,000 penalty units. (4) It is taken to be a provision of the constitution of each relevant company that— (a) a director in respect of whom an order is made under subsection (1) ceases to hold office as a director on the day specified in the order, and (b) the vacancy in the office may only be filled by a person appointed by the Minister in an order made under subsection (1), and (c) this power of appointment has effect despite any other provision of the constitution of the relevant company. (5) A person who, by operation of this section, ceases to hold office as a director of a relevant company is not entitled to any remuneration or compensation because of the loss of that office. Division 5 Expiry of Part 18 When Part expires The provisions of this Part cease to have effect— (a) in relation to a relevant company that is a liable entity—at the end of the day on which the winding up period for that entity ends, and (b) in relation to a relevant company that is not a liable entity—at the end of 1 October 2007. Division 6 Displacement of Corporations legislation 19 Displacement of certain provisions of Corporations legislation The provisions of Divisions 2–5 (and section 67 in its application to contraventions of those provisions by relevant companies) are declared to be Corporations legislation displacement provisions for the purposes of section 5G of the Corporations Act in relation to the provisions of the Corporations legislation generally. Note— Chapter 2B of the Corporations Act makes provision with respect to the registered offices of companies and places of business of companies. See also section 121 (Registered office) of that Act. Chapter 2C of the Corporations Act makes provision for the keeping of registers (including Member Registers) by companies. See, in particular, sections 169 (Register of members), 172 (Location of registers) and 178 (Overseas branch registers) of that Act. Chapters 2H and 2J of the Corporations Act make provision with respect to the issue of shares and transactions affecting share capital. Part 7.11 of the Corporations Act makes provision with respect to title and transfer of shares in a company. It includes provisions relating to the proper instrument of transfer (section 1071B). Section 5G (5) of the Corporations Act provides that if a provision of a law of a State or Territory specifically— (a) authorises a person to give instructions to the directors or other officers of a company or body, or (b) requires the directors of a company or body to— (i) comply with instructions given by a person, or (ii) have regard to matters communicated to the company or body by a person, or (c) provides that a company or body is subject to the control or direction of a person, a provision of the Corporations legislation does not— (d) prevent the person from giving an instruction to the directors or exercising control or direction over the company or body, or (e) prohibit a director from complying with the instruction or direction, or (f) impose a liability (whether civil or criminal) on a director for complying with the instruction or direction. Section 5G (9) of the Corporations Act provides that if a provision of a law of a State or Territory provides that a provision is included, or taken to be included, in a company's constitution, the provision is included in the company's constitution even though the procedures and other requirements of that Act are not complied with in relation to the provision. Section 5G (11) of the Corporations Act provides that if a State law declares a provision of a State law to be a Corporations legislation displacement provision, any provision of the Corporations legislation with which the State provision would otherwise be inconsistent does not apply to the extent necessary to avoid the inconsistency. However, section 5G (3) of the Corporations Act provides that section 5G will only apply to a provision of a law of a State or Territory enacted after the commencement of that Act if a law of the State or Territory declares the provision to be a Corporations legislation displacement provision for the purposes of that section. Part 4 Winding up of liable entities Division 1 General 20 Winding up period (1) For the purposes of this Act, the winding up period for a liable entity means the period— (a) commencing on the day on which this section commences, and (b) ending at the end of the day— (i) appointed by the Governor under subsection (2) for the termination of the winding up under this Part, or (ii) on which the liable entity is deregistered under the Corporations Act, whichever first occurs. Note— Section 28 prevents the making of applications for the deregistration of a liable entity under the Corporations Act unless the Minister has consented to the application or the Supreme Court has made an order under section 52 for the deregistration application to be made. (2) At any time before the finalisation day in relation to a liable entity, the Governor may, by proclamation published in the Gazette, fix a day under subsection (1) (b) (i) for the termination of the winding up of the liable entity under this Part. (3) Different days may be fixed for the termination of the winding up of different liable entities. (4) The Governor may, by proclamation published in the Gazette, revoke a proclamation published under subsection (2), in which case the revoked proclamation is taken never to have been published. (5) A revoking proclamation has effect only if published before the day fixed under subsection (2) by the proclamation it revokes. (6) The revocation of a proclamation published under subsection (2) does not prevent publication of a further proclamation under that subsection. 21 Winding up under this Part (1) During the winding up period for a liable entity— (a) any winding up of the entity is to be conducted only in accordance with the provisions of this Part, and (b) no proceedings may be brought or continued in a court or other tribunal for the winding up of the entity otherwise than in accordance with the provisions of this Part. (2) Nothing in this Part is intended to prevent or limit any liable entity or any of its directors or other officers from providing assistance to ASIC. (3) In this section, winding up means any scheme of arrangement, receivership, winding up or other kind of external administration. Division 2 Management of liable entities 22 Management during winding up period Subject to the provisions of Part 3 and this Part, each liable entity is to be managed during the winding up period for the entity in accordance with any applicable provisions of the Corporations Act or any other legislation, the constitution of the entity and the general law. Note— The provisions of the Corporations Act continue to apply to the liable entities as a federal law, except to the extent that the operation of the Corporations Act is displaced by the operation of this Part. Section 21 provides that a liable entity may only be wound up as provided by this Part. Section 60 displaces the operation of Chapter 5 (External administration) and other provisions of the Corporations Act in favour of the provisions of this Part. 23 Conduct of business during winding up period (1) Subject to this Part, the powers of each liable entity must be exercised during the winding up period for the entity so as to— (a) carry on the business of the entity so far as is necessary or convenient for the management of claims made against the entity to ensure that only payable liabilities of the entity are paid in accordance with the provisions of this Part, and (b) pay payable liabilities in accordance with the provisions of this Part, and (c) apply any funds provided from the SPF only in accordance with the conditions on which the funding is provided. Note— Part 2B.1 of the Corporations Act makes provision for the powers of companies and how they are to be exercised. In particular, section 124 of that Act provides that a company has the legal capacities and powers of an individual. However, section 124 (3) of that Act makes it clear that nothing in that section authorises a company to do an act that is prohibited by a law of a State or gives a right to a company that a law of a State denies to it. (2) Without limiting subsection (1), a liable entity may also— (a) make any compromise or arrangement with personal asbestos claimants or payable claimants or persons claiming to be such claimants or having or alleging that they have any personal asbestos claim or a claim for a payable liability (present or future, certain or contingent, ascertained or sounding only in damages) against the entity or by which the entity may be rendered liable, and (b) enforce any calls, liabilities to calls, debts, liabilities capable of resulting in debts and any claims (present or future, certain or contingent, ascertained or sounding only in damages) subsisting or supposed to subsist between the entity and a contributory (including, without limitation, a concurrent wrongdoer) or other debtor or person apprehending liability to the entity, and (c) act as a single claims manager in relation to the management of claims referred to in paragraph (a) or (b), and (d) compromise any call, debt, liability or claim referred to in paragraph (b), and all questions in any way relating to or affecting the property of the entity or the winding up of the entity under this Part, on such terms as are agreed, and take any security for the discharge of, and give a complete discharge in respect of, any such call, debt, liability or claim, and (d1) comply with the obligations of the entity under any relevant loan facility agreement (whether or not directed to do so by the SPF trustee), and (d2) without limiting paragraph (d1) or (e), do such of the following as is directed by the SPF trustee from time to time— (i) give guarantees with respect to obligations of the SPF trustee in connection with an authorised loan facility or proposed authorised loan facility, (ii) grant interests in, or other entitlements to, any assets of the entity (or the proceeds of asset realisations of the entity) as security for any such guarantees or any other obligation under a relevant loan facility agreement or proposed relevant loan facility agreement, and (e) do all such other things— (i) as are necessary for the purposes of exercising a power under subsection (1) or paragraph (a), (b), (c), (d), (d1) or (d2) or of the winding up of the entity under this Part, or (ii) that the entity is directed, required, authorised or permitted to do by or under this Part. (3) An exercise of a power by a liable entity is not invalid merely because it is exercised in contravention of subsection (1) or (2). (4) However, nothing in subsection (3) prevents— (a) the making of an application to the Supreme Court under section 54 for an order to remedy or restrain a contravention of subsection (1) or (2), or (b) the Supreme Court from granting any relief under section 54 on any such application. 24 Directions from SPF trustee (1) The SPF trustee may, by written order served on a liable entity, direct the entity to do, or not to do, any thing that the trustee is satisfied is necessary or appropriate for the winding up of the entity in accordance with the provisions of this Part or the carrying out of the terms of the Final Funding Agreement or any Related Agreement (or both). (2) Without limiting subsection (1), the SPF trustee may direct a liable entity to do any one or more of the following— (a) enter into arrangements with another or other liable entities for the pooling of funds of the liable entities and for allocation of the pooled funds to payment of payable liabilities of any one or more of those entities, (b) comply with the entity's obligations under any relevant loan facility agreement, (c) give guarantees with respect to obligations of the SPF trustee in connection with an authorised loan facility or proposed authorised loan facility, (d) grant interests in, or other entitlements to, any assets of the entity (or the proceeds of asset realisations of the entity) as security for any such guarantees or any other obligation under a relevant loan facility agreement or proposed relevant loan facility agreement. (3) However, nothing in this section authorises the SPF trustee to direct a liable entity to pay proven personal asbestos claims (whether or not from funds provided from any of the compensation funds) in a manner that discriminates between claimants by reference to the nature or extent of the loss or damage sustained. (4) A liable entity is required and authorised to comply with any direction given to it under an order made under subsection (1) that is served on it. 25 SPF trustee to provide management services (1) Without limiting section 24, the SPF trustee may, by written order served on a liable entity, direct the entity— (a) to utilise such services provided by the SPF trustee in respect of the management of claims made against the entity (including acting as a single claims manager in relation to the management of such claims) as may be specified in the order, or (b) to utilise such services provided by any other person specified in the order in respect of the management of claims made against the entity as may be specified in the order. (2) Without limiting subsection (1), the SPF trustee may provide such other services to a liable entity in connection with the winding up of the entity under this Part as may be agreed by the SPF trustee and the liable entity from time to time. (3) A liable entity is required and authorised to comply with any direction given to it in an order made under subsection (1) that is served on it. (4) The following are specifically authorised by this Act for the purposes of the Competition and Consumer Act 2010 of the Commonwealth and the Competition Code of New South Wales— (a) a direction of the SPF trustee given under subsection (1), (b) any conduct required by or under such a direction, (c) the entering or making of a contract, agreement, arrangement or understanding as the result of such a direction, (d) any conduct authorised or required by or under the terms or conditions of any such contract, agreement, arrangement or understanding. (5) Things authorised to be done by subsection (4) are authorised only to the extent (if any) that they would otherwise contravene Part IV of the Competition and Consumer Act 2010 of the Commonwealth or the Competition Code of New South Wales. 26 Notification that liable entity under NSW administered winding up Each liable entity is authorised and required during the winding up period for the entity to set out in every public document, and in every negotiable instrument, of the entity, after the name of the entity where it first appears, the expression "under NSW administered winding up". 27 Liable entity may continue to trade while insolvent A liable entity and its directors and other officers are specifically authorised during the winding up period for the entity to conduct the business of the entity in the manner directed, required, authorised or permitted by or under this Part even if— (a) the entity is insolvent, or (b) the entity will become insolvent by reason of conducting its business in such a manner. 28 Deregistration of liable entities A liable entity, any director, officer or member of such an entity or any other person may not make an application during the winding up period for the entity for the deregistration of the entity under the Corporations Act unless— (a) the Minister consents to the application, or (b) the Supreme Court makes an order under section 52 for the application to be lodged. Note— Section 52 enables the Supreme Court, on the application of the SPF trustee, to order a liable entity or its directors to lodge an application for the deregistration of the entity under the Corporations Act. Division 3 Accounts 29 Funds to be paid into special accounts (1) As soon as is reasonably practicable after the commencement of the winding up period for a liable entity, the entity must establish the following accounts (which are to be located within the territorial limits of the State) in one or more authorised deposit-taking institutions— (a) an account to be known as the "asset realisation account", (b) an account to be known as the "insurance proceeds account", (c) an account to be known as the "SPF account", (d) an account to be known as the "general account". (2) The following is to be paid into the asset realisation account— (a) all money received from the sale or other realisation of any asset (other than a policy of insurance) of the entity that existed immediately before the day on which the winding up period for the liable entity commenced, (b) all interest received in respect of investment of money in the account, (c) all money directed to be paid into the account by or under this or any other Act. (3) The following is to be paid into the insurance proceeds account— (a) all money received from an insurer of the entity in respect of insurance policies entered into before the day on which the winding up period for the liable entity commenced (whether by reason of recovery of amounts payable under insurance policies or the commutation of the proceeds of such policies) less any expenses of or incidental to getting in that money, (b) all interest received in respect of investment of money in the account, (c) all money directed to be paid into the account by or under this or any other Act. (4) The following is to be paid into the SPF account— (a) all money received or contributed by the SPF trustee from the SPF, (b) all interest received in respect of investment of money in the account, (c) all money directed to be paid into the account by or under this or any other Act. (5) The following is to be paid into the general account— (a) all money received by or on account of the entity (other than money that is required by this section to be paid into the asset realisation account, insurance proceeds account or SPF account), (b) all interest received in respect of investment of money in the account, (c) all money directed to be paid into the account by or under this or any other Act. (6) The SPF trustee may, by order served on a liable entity, direct that money received by the entity from another liable entity under a pooling arrangement referred to in section 24 (2) (a) be paid into an account established under this section. (7) A liable entity is authorised and required to comply with any direction given to it in an order made under subsection (6) that is served on it. (8) Money held in an account required to be established by a liable entity under this section may be applied only for the payment of the payable liabilities of the entity of a kind, and in a manner, that is required, authorised or permitted by or under this Act. Division 4 Insurance 30 Entitlements to proceeds of contracts of insurance (1) The regulations may make provision for or with respect to entitlements (during the winding up period of any liable entity) under or in relation to any contract of insurance or re-insurance of the entity entered into before that period (a relevant insurance contract) or to the proceeds of any such contract, including without limitation— (a) the application of the proceeds of a relevant insurance contract (including, for example, the establishment of a regime for the application of the proceeds between claimants on a proportionate or other basis), and (b) the conferral or extinguishment of rights (or the imposition or extinguishment of liabilities) in respect of a relevant insurance contract or the proceeds of such a contract, including (without limitation) rights or liabilities of any of the following— (i) the payable claimants of the entity, (ii) any other persons to whom a liable entity has incurred, or will incur, liabilities, (iii) the liable entity itself, (iv) the insurer. (2) Without limiting subsection (1), the regulations may— (a) declare that a right to the payment of the proceeds (or part of the proceeds) of a relevant insurance contract conferred on a person is a payable liability for the purposes of this Act, and (b) provide that any specified provision of the Corporations Act or any other legislation applies for the purposes of this section with such modifications (if any) as may be prescribed by the regulations. (3) For the avoidance of doubt, it is declared that any regulation made for the purposes of this section may, if the regulation so provides— (a) take effect on a day that is earlier than the day on which the regulation is published in the Gazette, or (b) apply to transactions, acts, things or other matters arising or occurring before its commencement. (4) The Minister is not to recommend the making of a regulation for the purposes of this section unless the Minister has received the written concurrence of the SPF trustee to the making of the regulation. (5) If regulations made for the purposes of this section apply with respect to entitlements under or in relation to any relevant insurance contract of a liable entity or to the proceeds of such a contract (as the case may be)— (a) the entity is authorised and required to apply the proceeds of a relevant insurance contract only in the manner provided by the regulations, and (b) the rights and liabilities of persons under the contract, or in relation to the proceeds of the contract, are subject to the provisions of the regulations. (6) In the event of an inconsistency between the provisions of this section (including the regulations made under this section) and the provisions of an approved payment scheme under section 35, the provisions of this section prevail. (6A) Nothing in this section (including any regulations made under this section) operates to prevent or limit the making of loan repayments under an authorised loan facility or the giving of directions by the SPF trustee under section 24 with respect to the facility or a relevant loan facility agreement. (7) The provisions of this section (including the regulations made under this section) have effect despite— (a) the provisions of any contract, arrangement or other agreement to the contrary, or (b) any other law (whether written or unwritten), including, without limitation, the provisions of section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 and section 601AG of the Corporations Act. (8) In this section— modification includes addition, exception, omission or substitution. proceeds of a relevant insurance contract means any amount that has been or is received (or that is receivable or may in the future be received) by a liable entity from an insurer in respect of a liability to a third party incurred by the liable entity (whether before or during the entity's winding up period) for which the liable entity is or was insured under the relevant insurance contract. Division 4A Authorised loan facility 30A Agreements concerning provision of loan facility (1) The SPF trustee and each of the liable entities are authorised to enter into one or more agreements with the State (or with both the State and any other persons) for any one or more of the following purposes— (a) the provision of funding to the SPF trustee by means of a loan facility, (b) the granting by the SPF trustee of interests in, or other entitlements to, assets (or proceeds of asset realisations) as security for a loan facility provided to the SPF trustee, (