Part 1
Voidable transactions and charges

Voidable transactions

1 Definitions - In clause 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) 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 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
sections 215 or 216; and
(d) in the case of a liquidator appointed under section
187(1)(c), the period of 6 months before the
administration begins together with the period
380 Companies Amendment Act 2006, No.18

commencing on that date and ending at the time
the liquidator is appointed “specified 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 that application and ending on the
date on which, and at the time at which, the order
was made; and
(c) 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 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
sections 215 or 216; and
(d) in the case of a liquidator appointed under section
187(1)(c), the period of 2 years before the
administration begins together with the period
commencing on that date and ending at the time
the liquidator is appointed;
“transaction”, in relation to a company, means:
(a) a conveyance or transfer of property by the company;
(b) the giving of a security or charge over the property
of the company;
(c) the incurring of an obligation by the company;
(d) the acceptance by the company of execution under a
judicial proceeding;
2006, No.18 Companies Amendment Act 381

(e) the payment of money by the company, including
the payment of money under a judgment or order
of a Court.

2. Voidable transactions-(1) A transaction by a company
is voidable on the application of the liquidator if the transaction:
(a) was made -
(i) at a time when the company was
unable to pay its due debts; and
(ii) within the specified period; and
(b) enabled another person to receive more towards
satisfaction of a debt than the person would
otherwise have received or be likely to have
received in the liquidation.
(2) Subclause (1) does not apply if the transaction took
place in the ordinary course of business.
(3) Unless the contrary is proved, a transaction that took
place within the restricted period is presumed to have been
made:
(a) at a time when the company was unable to pay its
debts; and
(b) otherwise than in the ordinary course of business.
(4) In determining whether a transaction took place in the
ordinary course of business, no account is, unless that other
person knew that that was the intent or purpose of the company,
to be taken of any intent or purpose on the part of a company:
(a) to enable another person to receive more towards
satisfaction of a debt than the person would
otherwise receive or be likely to receive in the
liquidation; or
(b) to reduce or cancel the liability, whether in whole or
in part, of another person in respect of a debt
incurred by the company; or
(c) to contribute towards the satisfaction of the liability,
whether in whole or in part, of another person in
respect of a debt incurred by the company.
382 Companies Amendment Act 2006, No.18

Voidable charges

3. Definitions - In clause 4, -
“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 the application and ending on the date
on which, and at the time at which, the order of
the Court was made; and
(c) 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 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
sections 215 or 216; and
(d) in the case of a liquidator appointed under section
187(1)(c), the period of 6 months before the
administration begins together with the period
commencing on that date and ending at the time
the liquidator is appointed
“specified period” means -
(a) the period of 1 year 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
2006, No.18 Companies Amendment Act 383

(b) in the case of a company that was put into liquidation
by the Court, the period of 1 year 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) the period of 1 year 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 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
sections 215 or 216; and
(d) in the case of a liquidator appointed under section
187(1)(c), the period of 1 year before the
administration begins together with the period
commencing on that date and ending at the time
the liquidator is appointed.

4. Voidable charges-(1) A charge over any property or
undertaking of a company is voidable on the application of the
liquidator if the charge was given within the specified period,
unless:
(a) the charge secures -
(i) money actually advanced or paid; or
(ii) the actual price or value of property
sold or supplied to the company; or
(iii) 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) immediately after the charge was given, the company
was able to pay its due debts; or
(c) the charge is in substitution for a charge given before
the specified period.
384 Companies Amendment Act 2006, No.18

(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.

5. Exception: certain kinds of substituted charges -
Clause 4(1)(c) 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.

6. Exception: charge that secures unpaid purchase
price - Nothing in clause 4 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:
(a) the charge document is executed not later than 30
days after the sale of the property; or
(b) in the case of the sale of an estate or interest in land,
the charge document is executed not later than
30 days after the final settlement of the sale.

7. Payments received by secured party - For the purposes
of clauses 4(1)(a) and 6, if a charge was given by the company
within the period specified in clause 4, all payments received
by the secured party entitled to the charge after it was given are
deemed to have been appropriated so far as may be necessary:
(a) towards repayment of money actually advanced or
paid by the secured party 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 secured party to the
company on or after the giving of the charge; or
(c) towards payment of any other liability of the
company to the secured party in respect of any
other valuable consideration given in good faith
on or after the giving of the charge.
2006, No.18 Companies Amendment Act 385

Procedure for setting aside voidable transactions and charges

8. Procedure-(1) A liquidator who wishes to have a
transaction that is voidable or a charge that is voidable set aside
must:
(a) file in the Court a notice to that effect specifying the
transaction or charge to be set aside and, in the
case of a transaction, the property or value which
the liquidator wishes to recover, and also the
effect of subclauses (2), (3), and (4); and
(b) serve a copy of the notice on the other party to the
transaction or the secured creditor entitled to the
charge and on every other person from whom the
liquidator wishes to recover.
(2) A person:
(a) who would be affected by the setting aside of the
transaction or charge specified in the liquidator’s
notice; and
(b) who considers that the transaction or charge is not
voidable,
may file in the Court a notice objecting to the transaction or
charge being set aside, and serve a copy of that notice on the
liquidator, within 20 working days after the service of the
liquidator’s notice.
(3) Unless a person on whom the liquidator’s notice was
served has given notice under subclause (2), the transaction or
charge is set aside on the 20th
working day after the date of
service of the notice.
(4) If 1 or more persons have given notice under subclause
(2), the liquidator may apply to the Court for an order that the
transaction or charge be set aside. That application must be
served on every person referred to in subclause (1)(b), whether
or not that person gave a notice under subclause (2).

9. Other orders - If a transaction or charge is set aside, the
Court may make 1 or more of the following orders:
386 Companies Amendment Act 2006, No.18

(a) an order requiring a person to pay to the liquidator,
in respect of benefits received by that person as a
result of the transaction or charge, such sums as
fairly represent those benefits;
(b) an order requiring property transferred as part of the
transaction to be restored to the company;
(c) an order requiring property to be vested in the
company if it represents in a person’s hands the
application, either of the proceeds of sale of
property, or of money, so transferred;
(d) an order releasing, in whole or in part, a charge given
by the company;
(e) an order requiring security to be given for the
discharge of an order made under this clause;
(f) an order specifying the extent to which a person
affected by the setting aside of a transaction or
by an order made under this clause is entitled to
claim as a creditor in the liquidation.

10. Additional provisions relating to setting aside
transactions and charges-(1) The setting aside of a transaction
or an order made under clause 9 does not affect the title or
interest of a person in property that the person has acquired:
(a) from a person other than the company; and
(b) for valuable consideration; and
(c) without knowledge of the circumstances under which
the property was acquired from the company.
(2) The setting aside of a charge or an order made under
clause 9 does not affect the title or interest of a person in
property that the person has acquired:
(a) as the result of the exercise of a power of sale by the
secured creditor entitled to the charge; and
(b) for valuable consideration; and
(c) without knowledge of the circumstances relating to
the giving of the charge.
(3) Recovery by the liquidator of property or its equivalent
value, whether under clause 9 or any other provision of this Act,
or under any other enactment, or in equity or otherwise, may be
denied wholly or in part if:
2006, No.18 Companies Amendment Act 387

(a) the person, from whom recovery is sought, received
the property in good faith and has altered his or
her position in the reasonably held belief that the
transfer to that person was validly made and
would not be set aside; and
(b) in the opinion of the Court, it is inequitable to order
recovery or recovery in full.
(4) Nothing in the Land Registration Act 1992/1993
restricts the operation of this clause or clauses 4 to 9.

Part 2
Recovery in other cases

Transactions at undervalue

11. Definitions - In clause 12:
“specified period” means:
(a) the period of 1 year 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 1 year 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) the period of 1 year 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 if -
(i) an application was made to the Court
to put a company into liquidation; and
388 Companies Amendment Act 2006, No.18

(ii) after the making of the application to
the Court a liquidator was appointed under
sections 215 or 216; and
(d) in the case of a liquidator appointed under section
187(1)(c), the period of 1 year before the
administration begins together with the period
commencing on that date and ending at the time
the liquidator is appointed,
transaction includes the giving of a guarantee by a company.

12. Transactions at undervalue-(1) A liquidator of a
company may recover from any other party to a transaction any
amount by which the value of the consideration or benefit
provided by the company exceeded the value of the
consideration or benefit received by the company if:
(a) the transaction was entered into by a company within
the specified period; and
(b) the value of the consideration or benefit received by
the company was less than the value of the
consideration provided by the company, or the
company received no consideration or benefit;
and
(c) when the transaction was entered into, the company-
(i) was unable to pay its due debts; or
(ii) was engaged, or about to engage, in
business for which its financial resources
were unreasonably small; or
(iii) incurred an obligation knowing that
the company would not be able to perform
the obligation when required to do so; and
(d) when the transaction was entered into, the other
party to the transaction knew or ought to have
known of the matter referred to in paragraph (c).
(2) A liquidator of a company may recover from any other
party to a transaction any amount by which the value of the
2006, No.18 Companies Amendment Act 389

consideration or benefit provided by the company exceeded the
value of the consideration or benefit received by the company
if:
(a) the transaction was entered into by a company within
the specified period; and
(b) the value of the consideration or benefit received by
the company was less than the value of the
consideration provided by the company, or the
company received no consideration or benefit;
and
(c) the company became unable to pay its due debts as a
result of the transaction; and
(d) when the transaction was entered into, the other
party to the transaction knew or ought to have
known that the company would become unable
to pay its due debts as a result of the transaction.

Transactions for inadequate or excessive consideration with
directors, etc

13. Definitions-(1) In clause 14, specified period means:
(a) the period of 3 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 3 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) the period of 3 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 if -
390 Companies Amendment Act 2006, No.18

(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
sections 215 or 216; and
(d) in the case of a liquidator appointed under section
187(1)(c), the period of 3 years before the
administration begins together with the period
commencing on that date and ending at the time
the liquidator is appointed.
(2) For the purposes of clause 14:
(a) the value of a business or property includes the value
of any goodwill attaching to the business or
property:
(b) without limiting the circumstances in which a
company may be taken to be controlled by a
person, a company is controlled by a person, if
that person can, by exercising a power
exercisable by that person (whether with or
without the consent or concurrence of any other
person), appoint or remove all the directors of
the company, or any number of directors as
together hold a majority of voting rights at a
meeting of directors.

14. Transactions for excessive consideration with
directors, etc - A liquidator of a company may recover from
the person, relative, company, or related company, as the case
may be, any amount by which the value of the consideration
given for the acquisition of the business, property, or services
exceeded the value of the business, property, or services at the
time of the acquisition if, within the specified period, the
company has acquired a business or property from, or the
services of:
(a) a person who was, at the time of the acquisition, a
director of the company, or a nominee or relative
of or a trustee for, or a trustee for a relative of, a
director of the company; or
2006, No.18 Companies Amendment Act 391

(b) a person, or a relative of a person, who, at the time of
the acquisition, had control of the company; or
(c) another company that was, at the time of the
acquisition, controlled by a director of the
company, or a nominee or relative of or a trustee
for, or a trustee for a relative of, a director of the
company; or
(d) another company that was, at the time of the
acquisition, a related company.

15. Transactions for inadequate consideration with
directors, etc - A liquidator of a company may recover from
the person, relative, company, or related company, as the case
may be, any amount by which the value of the business,
property, or services, or the value of the shares, at the time of
the disposition, provision, or issue exceeded the value of any
consideration received by the company if, within the specified
period, a company has disposed of a business or property, or
provided services, or issued shares, to:
(a) a person who was, at the time of the disposition,
provision, or issue, a director of the company, or
a nominee or relative of or a trustee for, or a
trustee for a relative of, a director of the
company; or
(b) a person, or a relative of a person, who, at the time of
the disposition, provision, or issue, had control
of the company; or
(c) another company that was, at the time of the
disposition, provision, or issue, controlled by a
director of the company, or a nominee or relative
of or a trustee for, or a trustee for a relative of, a
director of the company; or
(d) another company that, at the time of the disposition,
provision, or issue, was a related company.
392 Companies Amendment Act 2006, No.18

Court may set aside certain securities and charges

16. Court may set aside certain securities and charges-
(1) The Court may, on the application of the liquidator of a
company, order that a security or charge, or part of it, created by
the company over any of its property in favour of any of the
persons referred to in subclause (2) must, so far as any security
on the property is conferred, be set aside as against the
liquidator if:
(a) the company is unable to meet all its debts; and
(b) the Court considers that, having regard to the
circumstances in which the security or charge
was created, the conduct of the person, relative,
company, or related company, as the case may
be, in relation to the affairs of the company, and
any other relevant circumstances, it is just and
equitable to make the order.
(2) The persons referred to in subclause (1) are as follows:
(a) a person who was, at the time the security or charge
was created, a director of the company, or a
nominee or relative of or a trustee for, or a
trustee for a relative of, a director of the
company; or
(b) a person, or a relative of a person, who, at the time
when the security or charge was created, had
control of the company; or
(c) another company that was, when the security or
charge was created, controlled by a director of
the company, or a nominee or relative of or a
trustee for, or a trustee for a relative of, a director
of the company; or
(d) another company, that at the time when the security
or charge was created, was a related company.

17. Certain securities exempted - Clause 16 does not
apply to a security or charge that has been transferred by the
person (person A) in whose favour it was originally created and
has been purchased by another person (whether or not from
person A) if:
2006, No.18 Companies Amendment Act 393

(a) at the time of the purchase, the purchaser was not a
person specified in that clause; and
(b) the purchase was made in good faith and for valuable
consideration.

18. Other orders, etc-(1) The Court may make any other
orders that it thinks proper for the purpose of giving effect to an
order under this clause.
(2) Nothing in the Land Registration Act 1992/1993
restricts the operation of this clause or clauses 16 and 17.

Contribution for not keeping proper accounting records

19. Contribution for not keeping proper accounting
records-(1) The Court, on the application of the liquidator,
may, if it thinks it proper to do so, declare that any 1 or more of
the directors and former directors of a company is, or are,
personally responsible, without limitation of liability, for all or
any part of the debts and other liabilities of the company that
the Court may direct if:
(a) the company that is in liquidation and is unable to
pay all its debts has failed to comply with -
(i) section 129 (which relates to the
keeping of accounting records); or
(ii) section 130 (which relates to the
preparation of financial statements); and
(b) the Court considers that -
(i) the failure to comply has contributed
to the company’s inability to pay all its debts,
or has resulted in substantial uncertainty as to
the assets and liabilities of the company, or
has substantially impeded the orderly
liquidation; or
(ii) for any other reason it is proper to
make a declaration.
(2) The Court may give any direction it thinks fit for the
purpose of giving effect to the declaration.

394 Companies Amendment Act 2006, No.18

(3) The Court may make a declaration under this clause
even though the person concerned is liable to be convicted of an
offence.
(4) An order under this clause is deemed to be a final
judgment within the meaning of section 26(f) of the Bankruptcy
Act 1908.

20. When Court may not make declaration under clause
19 - The Court must not make a declaration under clause 19 in
relation to a person if the Court considers that the person:
(a) took all reasonable steps to secure compliance by the
company with clause 19(1)(a); or
(b) had reasonable grounds to believe and did believe
that a competent and reliable person was charged
with the duty of seeing that that provision was
complied with and was in a position to discharge
that duty.

Court may require persons to repay money or return property

21. Court may require persons to repay money or return
property-(1) The Court may, on the application of the
liquidator or a creditor or shareholder, do any of the things set
out in subclause (2) if, in the course of the liquidation of a
company, it appears to the Court that a person who has taken
part in the formation or promotion of the company, or a past or
present director, manager, liquidator, administrator, receiver, or
officer of the company, has:
(a) misapplied, or retained, or become liable or
accountable for, money or property of the
company; or
(b) been guilty of negligence, default, or breach of duty
or trust in relation to the company.
(2) The Court may:
(a) inquire into the conduct of the promoter, director,
manager, liquidator, administrator, receiver, or
officer; and
2006, No.18 Companies Amendment Act 395

(b) order that person -
(i) to repay or restore the money or
property or any part of it with interest at a
rate the Court thinks just; or
(ii) to contribute such sum to the assets of
the company by way of compensation as the
Court thinks just; or
(c) if the application is made by a creditor, order that
person to pay or transfer the money or property
or any part of it with interest at a rate the Court
thinks just to the creditor.
(3) This clause has effect even though the conduct may
constitute an offence.
(4) An order for payment of money under this clause is
deemed to be a final judgment within the meaning of section
26(f) of the Bankruptcy Act 1908.

Pooling of assets

22. Pooling of assets of related companies-(1) On the
application of the liquidator, or a creditor or shareholder, the
Court, if satisfied that it is just and equitable to do so, may order
that:
(a) a company that is, or has been, related to the
company in liquidation must pay to the
liquidator the whole or part of any or all of the
claims made in the liquidation:
(b) if 2 or more related companies are in liquidation, the
liquidations in respect of each company must
proceed together as if they were 1 company to
the extent that the Court so orders and subject to
such terms and conditions as the Court may
impose.
(2) The Court may make any other order or give any
directions to facilitate giving effect to an order under subclause
(1) that it thinks fit.


396 Companies Amendment Act 2006, No.18

23. Guidelines for orders-(1) In deciding whether it is just
and equitable to make an order under clause 22(1)(a), the Court
must consider the following matters:
(a) the extent to which the related company took part in
the management of the company in liquidation;
(b) the conduct of the related company towards the
creditors of the company in liquidation;
(c) the extent to which the circumstances that gave rise
to the liquidation of the company are attributable
to the actions of the related company;
(d) any other matters as the Court thinks fit.
(2) In deciding whether it is just and equitable to make an
order under clause 22(1)(b), the Court must consider the
following matters:
(a) the extent to which any of the companies took part in
the management of any of the other companies;
(b) the conduct of any of the companies towards the
creditors of any of the other companies;
(c) the extent to which the circumstances that gave rise
to the liquidation of any of the companies are
attributable to the actions of any of the other
companies;
(d) the extent to which the businesses of the companies
have been combined;
(e) any other matters that the Court thinks fit.
(3) The fact that creditors of a company in liquidation relied
on the fact that another company is, or was, related to it is not a
ground for making an order under clause 22.
2006, No.18 Companies Amendment Act 397

Schedule 18
ss 3(i), 228(2), 250, 251(5)

Creditors’ claims
Contents

Part 1
Preliminary provisions
1. Application of bankruptcy
rules to liquidation of
insolvent companies 2. Admissible claims
3. Ascertainment of amount of
claim 4. Claim not of ascertained
amount 5. Fines and penalties 6. Claims relating to debts
payable after commencement
of liquidation
7. Claims by unsecured
creditors
Part 2
Secured claims

8. Powers of secured creditors
9. Realising secured property
10. Valuation of security
11. Liquidator’s duties on receipt
of claim by secured creditor
12. Liquidator may redeem
security
13. Liquidator may require
secured creditor to exercise
powers
14. Offence to make false or
misleading Claim
Part 3
Preferential claims
15. Definitions
16. First priority claims 17. Second priority claims 18. Third priority claims 19. Ranking of claims in clauses
17 and 18
20. When landlord or other
person has distrained on
goods, etc
Part 4 Mutual credit and set-off
21. Definitions
22. Mutual credit and set-off 23. Proof for person who is not
related person
24. Proof for person who is
related person
25. Exceptions for amounts paid
or payable by shareholder

Part 5
Set-off under netting agreement

26. Definitions
27. Application
28. Calculation of netted balance
29. Bilateral netting agreements:
mutuality
30. Recognised multilateral
netting agreements:
mutuality
31. Application of set-off under
Part 4
32. Transactions under netting
agreement
33. Effect of liquidation on
rights under netting
agreement
398 Companies Amendment Act 2006, No.18
34. Effect of notice
35. Court may set aside certain
bilateral netting agreements
36. Recognised clearing houses
37. Matters for bank to consider
38. Bank may impose conditions
39. Bank to notify recognised
clearing house
40 Effect of variation or
revocation of declaration

Part 6
Miscellaneous

41. Interest on claims
42. Trade discounts
43. Periodical payments
44. Employees’ claims
45. Notice to creditors to claim
46. Failure to claim by day fixed
for claims
47. Failure to establish priority
by day fixed for claims
48. Dividends in respect of
rejected claims
49. Costs of proceedings relating
to liquidator’s decision on
claims


__________

Part 1
Preliminary provisions

1. Application of bankruptcy rules to liquidation of
insolvent companies-(1) Subject to this Act, the rules in force
under the law of bankruptcy with respect to the estates of
persons adjudged bankrupt apply in the liquidation of a
company that is unable to pay its debts to:
(a) the rights of secured and unsecured creditors; and
(b) claims by creditors; and
(c) the valuation of annuities and future and contingent
liabilities.
(2) All persons who in any such case would be entitled to
make claims and receive payment in whole or in part are so
entitled in the liquidation.
(3) In applying in a liquidation the rules in force under the
law of bankruptcy, a claim made under clause 3 and admitted
by a liquidator is to be treated as if it were a debt proved in
accordance with the requirements of the Bankruptcy Act 1908.
2006, No.18 Companies Amendment Act 399

2 Admissible claims-(1) Subject to subclause (2), a debt or
liability, present or future, certain or contingent, whether it is an
ascertained debt or a liability for damages, may be admitted as a
claim against a company in liquidation.
(2) Fines, monetary penalties, and costs to which clause 5
applies are not claims that may be admitted against a company
in liquidation.

3. Ascertainment of amount of claim-(1) The amount of
a claim must be ascertained as at the date and time of
commencement of the liquidation.
(2) The amount of a claim based on a debt or liability
denominated in a currency other than the currency of Samoa
must be converted into the currency of Samoa at the rate of
exchange on the date of commencement of the liquidation.

4. Claim not of ascertained amount-(1) If a claim is
subject to a contingency, or is for damages, or, if for some other
reason the amount of the claim is not certain, the liquidator
may:
(a) make an estimate of the amount of the claim; or
(b) refer the matter to the Court for a decision on the
amount of the claim.
(2) On the application of the liquidator, or of a claimant
who is aggrieved by an estimate made by the liquidator, the
Court may determine the amount of the claim that it thinks fit.

5. Fines and penalties - Nothing in this Act limits or
affects the recovery of:
(a) a fine imposed on a company, whether before or after
the commencement of the liquidation of the
company, for the commission of an offence; or
(b) a monetary penalty payable to the State imposed on a
company by a Court, whether before or after the
commencement of the liquidation of the
company, for the breach of any enactment; or
(c) costs ordered to be paid by the company in relation
to proceedings for the offence or breach.
400 Companies Amendment Act 2006, No.18

6. Claims relating to debts payable after commencement
of liquidation-(1) A claim in respect of a debt that, but for the
liquidation, would not be payable until a date that is 6 months,
or later than 6 months, after the date of commencement of the
liquidation is to be treated, for the purposes of this Part, as a
claim for the present value of the debt.
(2) For the purposes of subclause (1), the present value of a
debt is to be determined by deducting from the amount of the
debt interest at the prescribed rate for the period from the date
on which the company is put into liquidation to the date when
the debt is due.
(3) For the purpose of this clause prescribed rate means the
prescribed rate for interest on judgment debts within the
meaning of the Supreme Court (Civil Procedure) Rules made
under the Judicature Ordinance 1961.

7. Claims by unsecured creditors-(1) A claim by an
unsecured creditor against a company in liquidation must be
made in the prescribed form and must:
(a) contain full details of the claim; and
(b) identify any documents that evidence or substantiate
the claim.
(2) The liquidator may require the production of a document
referred to in subclause (1)(b).
(3) The liquidator:
(a) must, as soon as practicable, either admit or reject a
claim in whole or in part; and
(b) if the liquidator later considers that a claim has been
wrongly admitted or rejected in whole or in part,
may revoke or amend that decision; and
(c) must record in writing any decision made under this
subclause.
(4) If a liquidator rejects a claim, whether in whole or in
part, he or she must immediately give notice in writing of the
rejection to the creditor.
(5) The costs of making a claim under subclause (1) or
producing a document under subclause (2) must be met by the
creditor making the claim.
2006, No.18 Companies Amendment Act 401

(6) Every person commits an offence and is liable on
conviction to imprisonment for a term not exceeding 2 years or
to a fine not exceeding 250 penalty units, or both if the person:
(a) makes, or authorises the making of, a claim under
this clause that is false or misleading in a
material particular knowing it to be false or
misleading; or
(b) omits, or authorises the omission, from a claim under
this clause of any matter knowing that the
omission makes the claim false or misleading in
a material particular.

Part 2
Secured claims

8. Powers of secured creditors-(1) A secured creditor
may:
(a) realise property subject to a charge, if entitled to do
so; or
(b) value the property subject to the charge and claim in
the liquidation as an unsecured creditor for the
balance due, if any; or
(c) surrender the charge to the liquidator for the general
benefit of creditors and claim in the liquidation
as an unsecured creditor for the whole debt.
(2) A secured creditor may exercise the power referred to in
subclause (1)(a) whether or not the secured creditor has
exercised the power referred to in subclause (1)(b).

9. Realising secured property - A secured creditor who
realises secured property:
(a) may, unless the liquidator has accepted a valuation
and claim by the secured creditor under clause
11, claim as an unsecured creditor for any
balance due after deducting the net amount
realised;
(b) must account to the liquidator for any surplus
remaining from the net amount realised after its
402 Companies Amendment Act 2006, No.18

satisfaction of the debt, including interest
payable in respect of that debt up to the time of
its satisfaction, and after making any proper
payments to the holder of any other charge over
the property subject to the charge.

10. Valuation of security-(1) If a secured creditor values
the security and claims as an unsecured creditor for the balance
due, if any, the valuation and any claim must be made in the
prescribed form and:
(a) contain full details of the valuation and any claim;
and
(b) contain full details of the charge including the date
on which it was given; and
(c) identify any documents that substantiate the claim
and the charge.
(2) The liquidator may require production of any document
referred to in subclause (1)(c).

11. Liquidator’s duties on receipt of claim by secured
creditor – If a claim is made by a secured creditor under clause
10, the liquidator must:
(a) accept the valuation and claim; or
(b) reject the valuation and claim, in whole or in part,
but -
(i) if a valuation and claim is rejected in
whole or in part, the creditor may make a
revised valuation and claim within 10
working days of receiving notice of the
rejection; and
(ii) the liquidator may, if he or she later
considers that a valuation and claim was
wrongly rejected, in whole or in part, revoke
or amend that decision; and
(c) record in writing any decision made by the liquidator
under this clause.
2006, No.18 Companies Amendment Act 403

12. Liquidator may redeem security - The liquidator
may, unless the secured creditor has realised the property, at
any time, redeem the security on payment of the assessed value
if the liquidator:
(a) accepts a valuation and claim under clause 11(a); or
(b) accepts a revised valuation and claim under clause
11(b)(i); or
(c) accepts a valuation and claim on revoking or
amending a decision to reject a claim under
clause 11(b)(ii).

13 Liquidator may require secured creditor to exercise
powers-(1) The liquidator may at any time, by notice in writing,
require a secured creditor, within 20 working days after receipt
of the notice, to:
(a) elect which of the powers referred to in clause 8 the
creditor wishes to exercise; and
(b) if the creditor elects to exercise the power referred to
in clause 8(1)(b) or (c) , exercise the power
within that period.
(2) A secured creditor on whom notice has been served
under subclause (1) who fails to comply with the notice, is to be
taken as having surrendered the charge to the liquidator under
clause 8(c) for the general benefit of creditors, and may claim in
the liquidation as an unsecured creditor for the whole debt.
(3) A secured creditor who has surrendered a charge under
clause 8(1)(c) or who is taken as having surrendered a charge
under subclause (2) may, with the leave of the Court or the
liquidator and subject to any conditions that the Court or the
liquidator thinks fit, at any time before the liquidator has
realised the property charged, -
(a) withdraw the surrender and rely on the charge; or
(b) submit a new claim under this clause.

14 Offence to make false or misleading claim - Every
person commits an offence and is liable on conviction to
imprisonment for a term not exceeding 7 years or to a fine not
exceeding 1000 penalty units, or both if the person:
404 Companies Amendment Act 2006, No.18

(a) makes, or authorises the making of, a claim under
clause 10 that is false or misleading in a material
particular knowing it to be false or misleading;
or
(b) omits, or authorises the omission, from a claim under
that clause of any matter knowing that the
omission makes the claim false or misleading in
a material particular.

Part 3
Preferential claims

15 Definitions - For the purposes of this Part:
(a) remuneration in respect of a period of holiday or of
absence from work through sickness or other
good cause is to be treated as wages in respect of
services rendered to the company during that
period;
(b) paid annual leave, in relation to a person, means all
sums payable to that person by the company
under sections 26 of the Labour and
Employment Act 1972, and includes all sums
that by or under any other enactment or any
award, agreement, or contract of service are
payable to that person by the company as holiday
pay.

16 First priority claims - The liquidator must first pay, in
the order of priority in which they are listed:
(a) the fees and expenses properly incurred by the
liquidator in carrying out the duties and
exercising the powers of the liquidator and the
remuneration of the liquidator;
(b) the reasonable costs of a person who applied to the
Court for an order that the company be put into
liquidation, including the reasonable costs of a
person appearing on the application whose costs
are allowed by the Court;
2006, No.18 Companies Amendment Act 405

(c) the actual out-of-pocket expenses necessarily
incurred by a liquidation committee.

17 Second priority claims-(1) After paying the claims
referred to in clause 16, the liquidator must next pay the
following claims:

Employees’ wages or salary
(a) subject to subclause (2), all wages or salary of any
employee, whether or not earned wholly or in
part by way of commission, and whether payable
for time or for piece work, in respect of services
rendered to the company during the 4 months
before the commencement of the liquidation;

Employees’ annual leave
(b) subject to subclause (2), paid annual leave becoming
payable to an employee (or if the employee has
died, to any other person in the employee's right)
on the termination of the employment before or
by reason of the commencement of the
liquidation;

Accident compensation
(c) amounts due in respect of any compensation or
liability for compensation under the Law Reform
Act 1964 or Accident Compensation Act 1986
accrued before the commencement of the
liquidation;

Amounts deducted by company from employees’ wages
or salary
(d) subject to subclause (2), amounts deducted by the
company from the wages or salary of an
employee in order to satisfy obligations of the
employee;
406 Companies Amendment Act 2006, No.18

Amounts payable under Maintenance Affiliation Act
1967
(e) subject to subclause (2), amounts payable in
accordance with section 37 of the Maintenance
Affiliation Act 1967;

Preferential claims under section 154
(f) amounts that are preferential claims under section
250;

Amounts payable to apprentices
(g) any amount payable to an apprentice by virtue of the
Apprenticeship Act 1972, who is deprived of
employment by reason of the commencement of
the liquidation;

National Provident Fund contributions
(h) any contributions payable by the company under
section 16(1) of the National Provident Fund Act
1972;

Priority payments under other enactments
(i) all sums that by any other enactment are required to
be paid in accordance with the priority
established by this clause;

Workers’ compensation
(j) unless the company is being liquidated merely for the
purposes of reconstruction or of amalgamation
with another company, or unless the company
has at the commencement of the liquidation
under such a contract of insurance rights capable
of being transferred to and vested in the worker,
all amounts due in respect of any workers
compensation or liability for workers
compensation accrued before the relevant date.
2006, No.18 Companies Amendment Act 407

(2) The total sum to which priority is to be given under
subclause (1)(a), (b), (d), or (e) must not, in the case of any 1
employee exceed $3,000 or any greater amount that is
prescribed at the commencement of the liquidation.
(3) If a payment has been made to the following persons
out of money advanced by some person for that purpose, the
person by whom the money was advanced has, in a liquidation,
the same right of priority in respect of the money advanced as
the employee, or other person receiving the payment in right of
the employee, would have if the payment had not been made:
(a) an employee of a company on account of wages or
salary:
(b) any such employee or, if the employee has died, to
any other person in the employee's right, on
account of holiday pay.

18 Third priority claims - After paying the sums referred
to in clause 17, the liquidator must next pay the following to the
extent that the amount is for the time being unpaid to the
Commissioner of Inland Revenue or to the Collector of
Customs, as the case may require:

Income tax
(a) tax payable by the company in the manner required
by Part IV of the Income Tax Administration Act
1974;

Tax deductions
(b) tax deductions made by the company under Part V of
the Income Tax Administration Act 1974;

Non-resident withholding tax,
(c) non-resident withholding tax deducted by a company
on behalf of an agent, absentee or non resident
under Part IV of the Income Tax Act 1974;
408 Companies Amendment Act 2006, No.18

Resident withholding tax
(d) every resident withholding tax deduction made by a
company under Part II of the Income Tax Act
1974;

Customs and excise duty
(e) duty payable within the meaning of section[2 (1) of
the Customs Act 1977 and excise duty payable
under Part V of the Excise Tax (Domestic
Administration) Act 1984 and section 5 of the
Excise Tax (Import Administration) Act 1984.

19. Ranking of claims in clauses 17 and 18-(1) The
claims listed in each of clauses 17 and 18:
(a) rank equally among themselves and must be paid in
full, unless the assets are insufficient to meet
them, in which case they abate in equal
proportions; and
(b) so far as the assets of the company available for
payment of general creditors are insufficient to
meet them, have priority over the claims of
persons in respect of assets that are subject to a
floating charge and must be paid accordingly out
of those assets.
(2) To the extent that the claims to which subclause (1)
applies are paid out of assets referred to in paragraph (b) of that
subclause, the amount so paid is an unsecured debt due by the
company to the secured party.

20. When landlord or other person has distrained on
goods, etc - If a landlord or other person has distrained on
goods or effects of the company within the month before the
commencement of the liquidation:
(a) the claims to which priority is given by this Part are a
first charge on the goods or effects so distrained
on, or the proceeds from their sale; but
(b) if any money is paid to a claimant under any such
charge, the landlord or other person has the same
rights of priority as that claimant.
2006, No.18 Companies Amendment Act 409

Part 4
Mutual credit and set-off

21. Definitions - In this Part, -
“related person” includes a related company and includes a
director of the company in liquidation
“restricted 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 that application and ending on the
date on which, and at the time at which, the order
of the Court was made; and
(c) 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 an
application and ending on the date and at the
time of the commencement of the liquidation if -
(i) the 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
sections 215 or 216; and
(d) in the case of a liquidator appointed under section
187(1)(c), the period of 6 months before the
administration begins together with the period
commencing on that date and ending at the time
the liquidator is appointed
“specified 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
410 Companies Amendment Act 2006, No.18

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) 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 an
application and ending on the date and at the
time of the commencement of the liquidation if -
(i) the 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
sections 215 or 216; and
(d) in the case of a liquidator appointed under section
187(1)(c), the period of 6 months before the
administration begins together with the period
commencing on that date and ending at the time
the liquidator is appointed.

22. Mutual credit and set-off - If there have been mutual
credits, mutual debts, or other mutual dealings between a
company and a person who seeks or, but for the operation of
this clause, would seek to have a claim admitted in the
liquidation of the company:
(a) an account must be taken of what is due from the 1
party to the other in respect of those credits,
debts, or dealings; and
(b) an amount due from 1 party must be set off against
an amount due from the other party; and
(c) only the balance of the account may be claimed in
the liquidation, or is payable to the company, as
the case may be.
2006, No.18 Companies Amendment Act 411

23. Proof for person who is not related person - Unless
the person proves that, at the time of the transaction or
assignment, the person did not have reason to suspect that the
company was unable to pay its debts as they became due, a
person who is not a related person is not entitled to claim the
benefit of a set-off arising from:
(a) a transaction made within the specified period, being
a transaction by which the person gave credit to
the company or the company gave credit to the
person; or
(b) the assignment within the specified period to that
person of a debt owed by the company to another
person.

24. Proof for person who is related person - Unless the
related person proves that, at the time of the transaction or
assignment, the related person did not have reason to suspect
that the company was unable to pay its debts as they became
due, the related person is not entitled to claim the benefit of a
set-off arising from:
(a) a transaction made within the restricted period, being
a transaction by which the related person gave
credit to the company or the company gave
credit to the related person; or
(b) the assignment within the restricted period to that
person of a debt owed by the company to another
person.

25. Exception for amounts paid or payable by
shareholder - Clauses 22 to 24 do not apply to an amount paid
or payable by a shareholder or former shareholder:
(a) as the consideration, or part of the consideration, for
the issue of a share; or
(b) in satisfaction of a call in respect of an outstanding
liability of the shareholder made by the directors
or by the liquidator.
412 Companies Amendment Act 2006, No.18

Part 5
Set-off under netting agreement

26. Definitions - In this Part, unless the context otherwise
requires, -
“bank” means the Central Bank of Samoa;
“bilateral netting agreement” means an agreement that
provides, in respect of transactions between 2 persons to
which the agreement applies:
(a) that on the occurrence of an event specified in the
agreement, all or any of those transactions must
(or may, at the option of a party) be terminated
and -
(i) an account taken of all money due
between the parties in respect of the
terminated transactions; and
(ii) all obligations in respect of that
money satisfied by payment of the net
amount due from or on behalf of the party
having a net debit to or on behalf of the party
having a net credit; or
(b) that each transaction is to be debited or credited to an
account with the effect that the rights and
obligations of each party that existed in respect
of the relevant account before the transaction are
extinguished and replaced by rights and
obligations in respect of the net debit due on the
relevant account after taking into account that
transaction; or
(c) that amounts payable by each party to the other party
are to be paid or satisfied by payment of the net
amount of those obligations by the party having
a net debit to the party having a net credit,
but does not include any bilateral netting agreement that is part
of a multilateral netting agreement.
2006, No.18 Companies Amendment Act 413

“clearing house” means a person that provides clearing or
settlement services in respect of financial transactions
between parties to a multilateral netting agreement;
“multilateral netting agreement” means an agreement that
provides for the settlement, between more than 2
persons, of payment obligations arising under
transactions that are subject to the agreement, and that
provides, in respect of transactions to which it relates,
that debits and credits arising between the parties are to
be brought into account so that amounts payable by or to
each party are satisfied by:
(a) payment by or on behalf of each party having a net
debit to or on behalf of a clearing house (whether
as agent or as principal) or a party having a net
credit; and
(b) receipt by or on behalf of each party having a net
credit from or on behalf of a clearing house
(whether as agent or as principal) or a party
having a net debit;
“netted balance” means any amount calculated under a
netting agreement as the net debit payable by or on
behalf of a party to the agreement to or on behalf of
another party to the agreement in respect of all or any
transactions to which the netting agreement applies;
“netting agreement” means a bilateral netting agreement or
a recognised multilateral netting agreement;
“recognised clearing house” means a clearing house
declared under clause 36 to be a recognised clearing
house;
“recognised multilateral netting agreement” means a
multilateral netting agreement that is contained in, or is
subject to, the rules of a recognised clearing house.

27 Application-(1) Despite anything in section 251,
clauses 26 to 40 apply:
(a) to a netting agreement -
414 Companies Amendment Act 2006, No.18

(i) made in or evidenced by writing; and
(ii) in which the application of clauses 26
to 40 has not been expressly excluded; and
(iii) whether made before or after the
commencement of this clause; and
(b) to all obligations under a netting agreement (whether
those obligations are payable in the currency of
Samoa or in some other currency).
(2) Clauses 26 to 40 apply despite:
(a) any disposal of rights under a transaction that is
subject to a netting agreement in contravention
of a prohibition in the netting agreement; or
(b) the creation of a charge or other interest in respect of
the rights referred to in paragraph (a) in
contravention of a prohibition in the netting
agreement.
(3) Nothing in clauses 26 to 40 applies to an amount paid or
payable by a shareholder or former shareholder:
(a) as the consideration, or part of the consideration, for
the issue of a share; or
(b) in the case of a company registered under the
Companies Act 1955, in satisfaction of a call in
respect of an outstanding liability of the
shareholder made by the directors of directors or
by the liquidator.

28. Calculation of netted balance - If a company that is a
party to a netting agreement is in liquidation:
(a) any netted balance payable by or to the company
must be calculated in accordance with the netting
agreement; and
(b) that netted balance constitutes the amount that may
be claimed in the liquidation or is payable to the
company, as the case may be, in respect of the
transactions that are included in the calculation.
2006, No.18 Companies Amendment Act 415

29. Bilateral netting agreements mutuality - Clauses 26
to 40 apply to transactions that are subject to a bilateral netting
agreement only if those transactions constitute mutual credits,
mutual debts, or other mutual dealings.

30.Recognised multilateral netting agreements:
mutuality-(1) Clauses 26 to 40 apply to transactions that are
subject to a recognised multilateral netting agreement, whether
or not those transactions constitute mutual credits, mutual debts,
or other mutual dealings.
(2) Despite subclause (1), clauses 26 to 40 do not apply to
transactions that are subject to a recognised multilateral netting
agreement if:
(a) those transactions do not constitute mutual credits,
mutual debts, or other mutual dealings; and
(b) a party to any of those transactions is acting as a
trustee for another person; and
(c) the party acting as trustee is not authorised by the
terms of the trust of which the party is a trustee
to enter into the transaction.

31. Application of set-off under Part 4-(1) Part 4 does not
apply to transactions that are subject to a netting agreement to
which this Part applies.
(2) However, a netted balance is to be treated as an amount
to which clause 22 applies if the company that is in liquidation
and the other party to the netting agreement also have mutual
credits, mutual debts, or other mutual dealings between them
that are not subject to the netting agreement.

32. Transactions under netting agreements-(1) Nothing
in clauses 26 to 40 prevents the operation of section 29 or
Schedule 17 in respect of a transaction that is subject to a
netting agreement.
(2) However, nothing in clause 2(3) of Schedule 17 applies
to a transaction that is subject to a netting agreement.
416 Companies Amendment Act 2006, No.18

(3) For the purposes of Schedule 17, transaction, in relation
to a company, does not include a netting agreement entered into
by the company, except to the extent that the effect of entering
into the netting agreement is to reduce any amount that was
owing by or to the company at the time the company entered
into the agreement.

33. Effect of liquidation on rights under netting
agreement - Nothing in Schedule 15 affects, in respect of a
company in liquidation, the exercise of any of the following
rights under a netting agreement:
(a) the termination, in accordance with the netting
agreement, of all or any transactions that are
subject to the netting agreement by reason of the
occurrence of an event specified in the netting
agreement, being an event (including the
appointment of a liquidator) occurring not later
than the commencement of the liquidation;
(b) the taking of an account, in accordance with the
netting agreement, of all money due between the
parties to the netting agreement in respect of
transactions affected by the termination.

34. Effect of notice - The filing of a notice under clause 8
of Schedule 17 in respect of any transaction that is subject to a
netting agreement does not affect the operation of clause 28 in
respect of the transaction, and that clause continues to apply to
the transaction until the transaction is set aside.

35. Court may set aside certain bilateral netting
agreements-(1) The Court may order, on the application of a
liquidator, that a bilateral netting agreement entered into by a
company, be set aside as against the liquidator of the company
if:
(a) the netting agreement is between the company and a
person who was a related person at the time that
the netting agreement was entered into; and
2006, No.18 Companies Amendment Act 417

(b) the netting agreement was entered into within the
restricted period; and
(c) the related person does not prove that, at the time the
netting agreement was entered into, the related
person did not have reason to suspect that the
company was unable to pay its debts as they
became due.
(2) The Court may make any other orders it thinks proper
for the purpose of giving effect to an order under subclause (1).
(3) In this clause, unless the context otherwise requires -
“related person” in relation to the company in liquidation,
means:
(a) a director of the company, or a nominee or relative of
or a trustee for, or a trustee for a relative of, a
director of the company; or
(b) a person, or a relative of a person, who has control of
the company; or
(c) another company that is controlled by a director of
the company, or a nominee or relative of or a
trustee for, or a trustee for a relative of, a director
of the company; or
(d) A related company:
“restricted period” has the same meaning as in clause 21.

36. Recognised clearing houses-(1) The Bank may, by
public notice, declare any person that provides or proposes to
provide clearing or settlement services to be a recognised
clearing house for the purposes of clauses 26 to 40.
(2) The Bank may, by public notice, vary or revoke any
declaration made under subclause (1).

37. Matters for bank to consider-(1) In determining
whether a declaration should be made, varied, or revoked, the
Bank must consider the extent to which the application of
clauses 26 to 40 to any multilateral netting agreement that is
subject to the rules of that clearing house would assist in
promoting the soundness or efficiency of the financial system.
418 Companies Amendment Act 2006, No.18

(2) In determining whether a declaration should be made,
varied, or revoked, the Bank may consider any of the following
matters:
(a) the type of transactions that may be effected through
the clearing house; and
(b) any laws or regulatory requirements relating to the
operation of that clearing house and compliance
with those laws or regulatory requirements; and
(c) any other matters that the Bank may, in any
particular case, consider appropriate.

38. Bank may impose conditions-(1) The Bank may, in
any declaration made or varied under clause 36, impose
conditions relating to any of the matters referred to in clause 37.
(2) If a recognised clearing house fails to comply with any
conditions referred to in subclause (1), the Bank may revoke the
declaration made under clause 36 that relates to the clearing
house.

39. Bank to notify recognised clearing house - The Bank
must not revoke or vary a declaration made under clause 36
unless:
(a) the recognised clearing house to which the notice
applies has been given not less than 5 working
days’ notice in writing of the Bank’s intention to
do so; and
(b) the clearing house has had a reasonable opportunity
to make submissions to the Bank; and
(c) the Bank considers those submissions.

40. Effect of variation or revocation of declaration - The
variation or revocation of a declaration under clause 36 does not
affect the application of sections 26 to 40 to any transaction:
(a) that is or was subject to a recognised multilateral
netting agreement; and
(b) that was entered into before the variation or
revocation of the declaration.
2006, No.18 Companies Amendment Act 419

Part 6
Miscellaneous

41. Interest on claims-(1) The amount of a claim may
include interest up to the date of commencement of the
liquidation:
(a) at such rate as may be specified or contained in any
contract that makes provision for the payment of
interest on that amount; or
(b) in the case of a judgment debt, at such rate as is
payable on the judgment debt.
(2) If any surplus assets remain after the payment of all
admitted claims, interest must be paid at the prescribed rate on
those claims from the date of commencement of the liquidation
to the date on which each claim is paid, and if the amount of the
surplus assets is insufficient to pay interest in full on all claims,
payment must abate rateably among all claims.
(3) If any surplus assets remain after the payment of interest
in accordance with subclause (2), interest must be paid on all
admitted claims referred to in subclause (1) from the date of
commencement of the liquidation to the date on which the claim
is paid at a rate equal to the excess between the prescribed rate
and the rate referred to in subclause (1)(a), as the case may be,
and, if the amount of the surplus assets is insufficient to pay
interest in full on all claims, payment must abate rateably
among all claims.
(4) For the purposes of this clause, prescribed rate means the
prescribed rate for interest on judgment debts within the
meaning of the Supreme Court (Civil Procedure) Rules made
under the Judicature Ordinance 1961.

42. Trade discounts - A creditor making his or her claim
must deduct all trade discounts that he or she would otherwise
have given if the company had not gone into liquidation.

43. Periodical payments-(1) When any payment (including
rent) falls due at stated periods, and liquidation commences at
any time other than at the beginning of 1 of those periods, the
420 Companies Amendment Act 2006, No.18

persons entitled to the payment may claim up to the date of
commencement of liquidation as if the payment accrued on a
daily basis.
(2) Nothing in subclause (1) affects the right of the lessor of
the property to claim rent that accrues on or after the
commencement of liquidation.

44. Employees’ claims-(1) A person may make a claim on
behalf of all or a number of employees of the company.
(2) A schedule setting out the names of the employees, and
the amounts due to each of them, must be attached to the claim.
(3) Any claim made in compliance with this regulation has
the same effect as if separate claims had been made by each of
the employees.

45. Notice to creditors to claim-(1) Subject to the
provisions of the Act, and unless otherwise ordered by the
Court, the liquidator may fix a certain day, which must not be
less than 10 working days from the date of the notice, on or
before which the creditors of the company are to make their
claims, and to establish any priority their claims may have
under Part 3.
(2) The liquidator must give public notice of the day fixed in
accordance with subclause (1).

46. Failure to claim by day fixed for claims-(1) Subject to
subclause (2), any creditor who fails to make a claim on or
before the day fixed in accordance with clause 45 will be
excluded from the benefit of any distribution made before his or
her claim is made.
(2) A creditor who makes a claim after the day fixed in
accordance with clause 45 and whose claim is admitted is
entitled to receive the benefit of any distribution from which the
creditor was previously excluded if any assets remain, or, in the
opinion of the liquidator, are likely to remain, available for
distribution.
2006, No.18 Companies Amendment Act 421

47. Failure to establish priority by day fixed for claims-
(1) Subject to subclause (2), any creditor who fails to establish
any priority that the creditor’s claim may have on or before the
day fixed in accordance with clause 45 must be excluded from
objecting to any distribution made before the priority of that
claim is established.
(2) The liquidator may, in making any distribution after the
claim is admitted, make an assumption as to the priority that the
claim may have and accord the creditor the benefit of the
distribution accordingly.
(3) A creditor who establishes the priority of the creditor’s
claim after the day fixed in accordance with clause 45 is entitled
to receive the benefit of any distribution from which the creditor
was previously excluded (if any) if any assets remain, or, in the
opinion of the liquidator, are likely to remain, available for
distribution.

48. Dividends in respect of rejected claims-(1) If any
creditor applies to the Court for an order reversing or modifying
the decision of a liquidator to reject the creditor’s claim, the
liquidator may in any such case make provision for the dividend
on the claim, and the probable cost of the application in the
event of the claim being admitted.
(2) If no notice of an application has been given within the
time specified in the Supreme Court Rules for appeals to the
Court, the liquidator must exclude all claims that have been
rejected from participation in the dividend.

49. Costs of proceedings relating to liquidator’s decision
on claim-If any creditor applies to the Court for an order
reversing or modifying the decision of a liquidator to reject the
creditor’s claim, the Court may, if it thinks fit:
(a) allow any costs of any creditor to be added to the
creditor’s claim;
(b) allow any costs of any party to be paid out of the
assets of the company, such costs being deemed
to be expenses of the liquidator;
422 Companies Amendment Act 2006, No.18

(c) order any costs to be paid by any party to the
proceedings other than the liquidator.


Schedule 19 ss 3(i), 292

Liquidation of assets of overseas companies

1. Modified application of subpart 3 of Part 9 - Subpart 3
of Part 9 applies to the liquidation of the assets in Samoa of an
overseas company, with the following modifications and
exclusions:
(a) references to assets are to be taken as references to
assets in Samoa;
(b) references to a company are to be taken as references
to an overseas company;
(c) references to removal from the Samoa register are to
be taken as references to ceasing to carry on
business in Samoa;
(d) the following provisions do not apply to such a
liquidation-
(i) clause 6 of Schedule 13;
(ii) clauses 1 and 3 of Schedule 15;
(e) clause 2 of Schedule 15 does not affect the tenure of
directors of an overseas company, but the
overseas company and its directors cease to have
any powers, functions, or duties in relation to the
company’s assets in Samoa, other than those
required or permitted to be exercised by subpart
3 of Part 9;
(f) section 253 applies to such a liquidation, but instead
of making the statement required by subsection
(1)(b)(iii) of that section, the liquidator must
state that the company has ceased to carry on
business in Samoa and is ready to be removed
from the overseas register.
2006, No.18 Companies Amendment Act 423

2. Rights of action not affected - Nothing in this Act
excludes the right of a creditor of an overseas company in
relation to the assets of which a liquidator has been appointed:
(a) to bring proceedings outside Samoa against the
overseas company in relation to a debt not
claimed in the liquidation or the balance of a
debt remaining unpaid after the completion of a
liquidation; or
(b) to bring an action in Samoa in relation to the balance
of a debt remaining unpaid after the completion
of a liquidation.”


__________

The Companies Amendment Act 2006 is administered in the
Ministry of Commerce, Industry and Labour.