293 Voidable charges

(1)

A charge over any property or undertaking of a company is voidable by the liquidator if—

(a)

the charge was given within the restricted period; and

(b)

immediately after the charge was given, the company was unable to pay its due debts.

(1AA)

A charge over any property or undertaking of a company is voidable by the liquidator if—

(a)

the charge was given to a related party within the related party period; and

(b)

immediately after the charge was given, the company was unable to pay its due debts.

(1A)

Neither subsection (1) nor (1AA) applies to a charge that

(a)

secures money actually advanced or paid, or the actual price or value of property sold or supplied to the company, or any other valuable consideration given in good faith by the grantee of the charge at the time of, or at any time after, the giving of the charge; or

(b)

is in substitution for a charge that,—

(i)

in the case of subsection (1), was given before the restricted period:

(ii)

in the case of subsection (1AA), was given before the related party period.

(2)

Unless the contrary is proved, a company giving a charge within the restricted period is presumed to have been unable to pay its due debts immediately after giving the charge.

(3)

Subsection (1A)(b) does not apply to the extent that—

(a)

the amount secured by the substituted charge exceeds the amount secured by the existing charge; or

(b)

the value of the property subject to the substituted charge at the date of the substitution exceeds the value of the property subject to the existing charge at that date.

(4)

Nothing in subsection (1) or (1AA) applies to a charge given by a company that secures the unpaid purchase price of property, whether or not the charge is given over that property, if the instrument creating the charge is executed not later than 30 days after the sale of the property or, in the case of the sale of an estate or interest in land, not later than 30 days after the final settlement of the sale.

(5)

For the purposes of subsection (1A)(a) and subsection (4), where any charge was given by the company within the period specified in subsection (1) or (1AA) (as relevant), all payments received by the grantee of the charge after it was given shall be deemed to have been appropriated so far as may be necessary—

(a)

towards repayment of money actually advanced or paid by the grantee to the company on or after the giving of the charge; or

(b)

towards payment of the actual price or value of property sold by the grantee to the company on or after the giving of the charge; or

(c)

towards payment of any other liability of the company to the grantee in respect of any other valuable consideration given in good faith on or after the giving of the charge.

(5A)

For the purposes of subsections (1) to (2), restricted period means—

(a)

the period of 6 months before the date of commencement of the liquidation together with the period commencing on that date and ending at the time at which the liquidator is appointed; and

(b)

in the case of a company that was put into liquidation by the court, the period of 6 months before the making of the application to the court together with the period commencing on the date of the making of that application and ending on the date on which, and at the time at which, the order of the court was made; and

(c)

if—

(i)

an application was made to the court to put a company into liquidation; and

(ii)

after the making of the application to the court a liquidator was appointed under section 241(2)(a) or (b),—

the period of 6 months before the making of the application to the court together with the period commencing on the date of the making of that application and ending on the date and at the time of the commencement of the liquidation.

(6)

For the purposes of subsections (1AA) and (1A), related party period means—

(a)

the period of 2 years before the date of commencement of the liquidation together with the period commencing on that date and ending at the time at which the liquidator is appointed; and

(b)

in the case of a company that was put into liquidation by the court, the period of 2 years before the making of the application to the court together with the period commencing on the date of the making of the application and ending on the date on which, and at the time at which, the order of the court was made; and

(c)

if—

(i)

an application was made to the court to put a company into liquidation; and

(ii)

after the making of the application to the court a liquidator was appointed under section 241(2)(a) or (b),—

the period of 2 years before the making of the application to the court together with the period commencing on the date of the making of that application and ending on the date and at the time of the commencement of the liquidation.

(7)

[Repealed]

Section 293(1): replaced, on 1 November 2007, by section 28(1) of the Companies Amendment Act 2006 (2006 No 56).

Section 293(1)(a): amended, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).

Section 293(1AA): inserted, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).

Section 293(1A): inserted, on 1 November 2007, by section 28(1) of the Companies Amendment Act 2006 (2006 No 56).

Section 293(1A): amended, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).

Section 293(1A)(a): amended, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).

Section 293(1A)(b): replaced, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).

Section 293(3): amended, on 1 November 2007, by section 28(2) of the Companies Amendment Act 2006 (2006 No 56).

Section 293(4): amended, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).

Section 293(5): amended, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).

Section 293(5): amended, on 1 November 2007, by section 28(3) of the Companies Amendment Act 2006 (2006 No 56).

Section 293(5A): inserted, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).

Section 293(6): amended, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).

Section 293(6)(a): replaced, on 26 April 1999, by section 9(1) of the Companies Amendment Act 1999 (1999 No 19).

Section 293(6)(a): amended, on 1 November 2007, by section 28(4) of the Companies Amendment Act 2006 (2006 No 56).

Section 293(6)(b): amended, on 1 November 2007, by section 28(4) of the Companies Amendment Act 2006 (2006 No 56).

Section 293(6)(b): amended, on 26 April 1999, by section 9(2)(a) of the Companies Amendment Act 1999 (1999 No 19).

Section 293(6)(b): amended, on 3 June 1998, by section 13(1) of the Companies Amendment Act 1998 (1998 No 31).

Section 293(6)(c): inserted, on 3 June 1998, by section 13(1) of the Companies Amendment Act 1998 (1998 No 31).

Section 293(6)(c)(ii): amended, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).

Section 293(6)(c): amended, on 1 November 2007, by section 28(4) of the Companies Amendment Act 2006 (2006 No 56).

Section 293(6)(c): amended, on 26 April 1999, by section 9(2)(b) of the Companies Amendment Act 1999 (1999 No 19).

Section 293(7): repealed, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).