Commonwealth Consolidated Acts

BANKING ACT 1959 - SECT 11CD

  (1)   This section applies if a body corporate is party to a contract, whether the proper law of the contract is:

  (a)   Australian law (including the law of a State or Territory); or

  (b)   law of a foreign country (including the law of part of a foreign country).

  (1A)   None of the matters mentioned in subsection   (1B) allows the contract, or a party to the contract (other than the body corporate), to do any of the following:

  (a)   deny any obligations under the contract;

  (b)   accelerate any debt under the contract;

  (c)   close out any transaction relating to the contract;

  (d)   enforce any security under the contract.

This subsection has effect subject to subsections   (2) and (3) of this section and section   31B.

  (1B)   The matters are as follows:

  (a)   the body corporate being given a direction by APRA under Subdivision A or B or section   29;

  (b)   if the body corporate is a member of a relevant group of bodies corporate--another member of the group being given a direction by APRA under Subdivision A or B or section   29.

  (2)   If the body corporate is prevented from fulfilling its obligations under the contract because of a direction under Subdivision A, other than a direction under paragraph   11CA(2)(m), or because of a direction under section   29, the other party or parties to the contract are, subject to any orders made under subsection   (3), relieved from obligations owed to the body corporate under the contract.

  (3)   A party to a contract to which subsection   (2) applies may apply to the Federal Court of Australia for an order relating to the effect on the contract of a direction under Subdivision A or section   29. The order may deal with matters including (but not limited to):

  (a)   requiring a party to the contract to fulfil an obligation under the contract despite subsection   (2);

  (b)   obliging a party to the contract to take some other action (for example, paying money or transferring property) in view of obligations that were fulfilled under the contract before the direction was made.

The order must not require a person to take action that would contravene the direction, or any other direction under Subdivision   A or section   29.