189Control of property of a debtor who has given authority under section 188

189  Control of property of a debtor who has given authority under section 188  (1) When an authority given by a debtor under section 188 becomes effective, the property of the debtor becomes subject to control under this Division.  (1A) The control continues until one of the following events happens:  (a) the creditors resolve at a meeting called under this Part that the property cease to be subject to control;  (b) the debtor and a trustee execute a personal insolvency agreement following a special resolution of creditors;  (d) 4 months pass since the authority under section 188 became effective;  (e) the Court, under section 208, releases the property from control;  (f) the debtor becomes a bankrupt;  (g) the debtor dies.  (1B) The trustee must notify the Official Receiver in writing within 7 days after the trustee becomes aware that the control has ended because of an event specified in subsection (1A).  (2) A debtor whose property is subject to control under this Division:  (a) shall not remove, dispose of or deal with any of his or her property except with the consent of the controlling trustee;  (b) shall furnish to the controlling trustee such information with respect to any of the debtor’s examinable affairs as the controlling trustee requires; and  (c) shall comply with any direction given to him or her by the controlling trustee with respect to his or her property or affairs.  (3) A disposal of, or dealing with, property by a debtor in contravention of subsection (2) is not invalid by reason only of that contravention. 189AAA  Stay of proceedings relating to creditor’s petition until meeting of debtor’s creditors  (a) an authority signed by a debtor under section 188 has become effective; and  (i) a creditor’s petition was presented against the debtor before the authority became effective; or  (ii) a creditor’s petition is presented against the debtor after the authority became effective but before the first or only meeting of the debtor’s creditors called under the authority; proceedings relating to that petition are, by force of this subsection, stayed until:  (c) the conclusion of the meeting; or  (d) the adjournment of the meeting; whichever is the earlier.  (2) This section does not limit subsection 206(1). 189AA  Court orders with effect during period of control of debtor’s property  (1) The Court may make an order that has effect while the property of the debtor is subject to control:  (a) discharging an order made at any time against the person or property of the debtor under a law relating to the imprisonment of fraudulent debtors; or  (b) staying a civil or criminal legal process begun at any time against the person or property of the debtor for the debtor’s failure:  (i) to pay a debt that would be provable if the debtor were bankrupt; or  (ii) to pay a pecuniary penalty payable as a result of the failure to pay a debt that would be provable if the debtor were bankrupt; or  (iii) to obey an order of a court to pay a debt that would be provable if the debtor were bankrupt; or  (c) if the debtor has been imprisoned under a law described in paragraph (a) or for a failure described in paragraph (b)—releasing the debtor from custody.  (2) Paragraph (1)(b) does not allow the Court to stay any proceedings under a proceeds of crime law. 189AB  Charge over debtor’s property that is subject to control Creation of charge  (1) When the debtor’s property becomes subject to control under this Division, the debtor’s property is charged with:  (a) the debtor’s unsecured debts at the time the debtor signed the authority under section 188; and  (b) any amount by which the debtor’s secured debts exceeded the value of the property secured for payment of the debts at the time the debtor signed the authority under section 188. Charge continues despite changing ownership of charged property  (2) Subject to subsections (3) and (9), the charge is not affected by any change of ownership of the charged property. Certain other charges have priority  (3) The charge created by subsection (1) is subject to:  (a) any charge or encumbrance that was on the debtor’s property immediately before the debtor signed the authority under section 188; and  (b) any charge or encumbrance acquired in good faith and for market value by a person who did not have notice of the charge created by subsection (1). Priority over some other charges  (4) The charge created by subsection (1) has priority over a charge or encumbrance that is not described in subsection (3). Registration of charge  (5) The controlling trustee may register a charge created by subsection (1) over particular property if a law of the Commonwealth, or of a State or Territory, provides for registration of a charge over that sort of property. Effect of registration of charge  (6) If the trustee registers the charge over particular property, a person who acquires the property or an interest in the property after the charge is registered is taken to have notice of the charge for the purposes of subsections (3) and (9). Controlling trustee may sell charged property  (7) The controlling trustee may sell property that is subject to a charge under subsection (1). Application of proceeds of sale  (8) Any proceeds from the sale of charged property that are not needed to meet a charge or encumbrance that has higher priority than the charge created by subsection (1) are the debtor’s property. End of charge on property that is sold  (9) A charge created by subsection (1) ceases to have effect in relation to property if the property is acquired by a person:  (a) in good faith for consideration at least as valuable as the market value of the property without notice of the charge; or  (b) from the controlling trustee in a sale under subsection (7). Charge ends when property ceases to be subject to control  (10) Unless it has already ceased to have effect under subsection (9), the charge ceases to have effect when control of the debtor’s property ends under subsection 189(1A). Meaning of debtor’s property  (11) In this section: debtor’s property has the meaning given in subsection 190(5). 189AC  Right of indemnity for controlling trustee  (1) The controlling trustee is entitled to be indemnified out of the debtor’s property for:  (a) his or her remuneration; and  (b) any costs, charges or expenses properly and reasonably incurred by the controlling trustee while the debtor’s property was subject to control under this Division.  (2) To secure a right of indemnity under subsection (1), the controlling trustee has a lien on the debtor’s property.  (3) A lien under subsection (2) ceases to have effect if the debtor becomes a bankrupt.