41Guarantee of borrowings and raisings by wholly owned subsidiaries

#### 41 Guarantee of borrowings and raisings by wholly owned subsidiaries (1) Where: (a) a body corporate that is a wholly owned subsidiary of DHA: (i) borrows money otherwise than from the Commonwealth; or (ii) raises money otherwise than by borrowing; and (b) the money has been, or is to be, expended in connection with the objects of the body corporate; then, whether the money is borrowed or raised by dealing in securities or otherwise, and whether or not the money is borrowed or raised, in whole or in part, in a currency other than Australian currency, this section applies to the borrowing or raising. (2) Subject to subsection (4), the Finance Minister may, on behalf of the Commonwealth, enter into a contract in relation to a borrowing or raising by a body corporate, being a borrowing or raising to which this section applies: (a) guaranteeing the repayment by the body corporate of the money borrowed and the payment by the body corporate of interest (including any interest on that interest) on the money borrowed; or (b) guaranteeing the payment by the body corporate of such amounts (which may be interest) that the body corporate is liable to pay with respect to the money raised as are specified in the contract. (3) Subject to subsection (4) the Finance Minister may, in writing, determine in relation to a borrowing or raising by a body corporate, being a borrowing or raising to which this section applies: (a) that the repayment by the body corporate of the money borrowed, and the payment by the body corporate of interest (including any interest on that interest) on the money so borrowed, are guaranteed by the Commonwealth; or (b) that the payment by the body corporate of such money (which may be interest) that the body corporate is liable to pay with respect to the money raised as is specified in the determination is guaranteed by the Commonwealth; and, where the Finance Minister makes such a determination, the repayment of that money and the payment of that interest are, or the payment of that money is, by force of this subsection, guaranteed by the Commonwealth. (4) The Finance Minister shall not enter into a contract under subsection (2), or make a determination under subsection (3), in relation to a borrowing or raising by a body corporate unless: (a) the Finance Minister is satisfied that the terms and conditions of the borrowing or raising are reasonable; (b) if the borrowing or raising consists of, or includes, the issue of instruments—the issue of those instruments, and the form of those instruments, have been approved, in writing, by the Finance Minister; (c) the Finance Minister is satisfied that appropriate security has been, or is to be, given to the Commonwealth; (d) the Finance Minister is satisfied that appropriate undertakings have been given by the body corporate that the property over which security has been, or is to be, given in accordance with paragraph (c): (i) will be insured and kept insured to its full insurable value against all risks against which it is customary to insure; (ii) will not be sold or made the subject of a mortgage or charge having priority over the security; and (iii) will not be taken out of Australia for a destination outside Australia except after the giving of such security as the Finance Minister approves in writing; (e) the Finance Minister is satisfied that appropriate undertakings have been given by the body corporate that, while the contract or determination remains in force: (i) persons appointed or engaged under the Public Service Act 1999 and authorised in writing by the Minister will, at all reasonable times, have full and free access to the financial accounts of the body corporate; and (ii) the body corporate will do everything in its power to ensure that those persons so authorised will, at all reasonable times, have full and free access to the financial accounts of any body, whether corporate or unincorporate, in which the body corporate has, whether directly or indirectly, a controlling interest; (f) the Finance Minister is satisfied that appropriate undertakings have been given by the body corporate that any legal costs incurred by the Commonwealth in connection with the contract or determination will be met by the body corporate; and (g) such other conditions as the Finance Minister considers necessary are fulfilled. (5) A contract may be entered into under subsection (2), and a determination may be made under subsection (3), in relation to a particular transaction or a class of transactions. (6) A contract entered into under subsection (2) may include either or both of the following provisions: (a) a provision agreeing that proceedings under the contract may be taken in the courts, or a specified court, of a country other than Australia; (b) a provision waiving the immunity of the Commonwealth from suit in the courts, or a specified court, of a country other than Australia in relation to any proceedings that may be taken under the contract. (7) Where the Finance Minister enters into a contract under subsection (2), or makes a determination under subsection (3), in relation to a borrowing or raising, the Finance Minister shall cause to be laid before each House of the Parliament, within 15 sitting days of that House after the contract is entered into or the determination made, a notice specifying the amount and term of the borrowing or raising and such other information relating to the borrowing or raising, and the contract or determination, as the Finance Minister considers appropriate. (8) For the purposes of this section: (a) the issue by a body corporate of an instrument acknowledging a debt in consideration of the payment or deposit of money or of the provision of credit; or (b) the obtaining of credit by a body corporate; shall, to the extent of the amount of that money or of that credit, as the case may be, be deemed to be a borrowing by the body corporate. (9) For the purposes of subsection (1), a body corporate is a wholly owned subsidiary of DHA if the body corporate is a subsidiary of DHA and none of the members of the body corporate is a person other than: (a) DHA; (b) a nominee of DHA; (c) a subsidiary of DHA, being a subsidiary none of the members of which is a person other than DHA or a nominee of DHA; or (d) a nominee of a subsidiary referred to in paragraph (c).