Insolvency Practitioners Regulation Act 2019

67 Restriction on purchase of goods or services from person connected with insolvency practitioner

(1)

This section applies to an insolvency practitioner who is acting as an administrator, a deed administrator, a liquidator, or a receiver of a company.

(2)

An insolvency practitioner must not, without the leave of the court, purchase for the company any goods or services from a person (P) if the insolvency practitioner knows, or ought to know, that the insolvency practitioner’s connection with P would result in the insolvency practitioner directly or indirectly obtaining a portion of any benefit arising out of the transaction.

(3)

However, subsection (2) does not apply to—

(a)

a transaction that is, for commercial purposes, an integral part of a continuing business relationship (for example, a running account) between,—

(i)

in the case of a company in administration, in liquidation, or under a deed of company arrangement, the company and P; and

(ii)

in the case of the receivership of property of a company, the company and P; or

(b)

a transaction that is conducted on arm’s-length terms; or

(c)

a transaction that is conducted with the leave of the court.

(4)

A person who fails to comply with subsection (2) commits an offence and is liable on conviction to a fine not exceeding $75,000.

(5)

The court may give leave for the purpose of subsection (2) on the terms and conditions that it thinks fit.

(6)

The court may disallow or order the recovery of any benefit made contrary to subsection (2).