143Stay on enforcing rights merely because the body corporate is under statutory management or subject to a transfer determination

143 Stay on enforcing rights merely because the body corporate is under statutory management or subject to a transfer determination

Stay on enforcing rights

(1) A right cannot be enforced against a body corporate for:

(a) the reason that:

(i) the body corporate has come or is under statutory management; or

(ii) the Reserve Bank makes or has made a determination under section 118 that there is to be a transfer of shares in the body corporate; or

(iii) the Reserve Bank makes or has made a determination under section 119 that there is to be a transfer of business of the body corporate; or

(iv) the Reserve Bank gives or has given a direction to the body corporate under subsection 91(1); or

(b) the reason of the body corporate’s financial position; or

(c) a reason that, in substance, is contrary to this subsection;

if the right arises for that reason by express provision (however described) of an arrangement.

Note: This result is subject to sections 144 and 145.

Example: A right to terminate a contract will not be enforceable to the extent that those rights are triggered by the body corporate coming under statutory management.

Period of the stay

(2) The right cannot be enforced as described in subsection (1) during the period (the stay period):

(a) starting when section 137 begins to apply to the body corporate; and

(b) ending at the latest of the following times:

(i) when section 137 ceases to apply to the body corporate;

(ii) if one or more orders are made under subsection (3) of this section for the body corporate as the result of an application made before section 137 ceases to apply to the body corporate—when the last made of those orders ceases to be in force.

(3) The Court:

(a) may order an extension of the period otherwise applying under subsection (2) for the body corporate if the Court is satisfied that the extension is appropriate having regard to the interests of justice; and

(b) before deciding an application for an order under paragraph (a), may grant an interim order, but must not require the applicant to give an undertaking as to damages as a condition for doing so.

Enforcing rights after the stay for reasons relating to earlier circumstances

(4) The right is unenforceable against the body corporate indefinitely after the end of the stay period to the extent that a reason for seeking to enforce the right:

(a) is the body corporate’s financial position before the end of the stay period; or

(b) is any of the following: