Section 588GAAA grammatical gymnastics

Section 588GAAA of the Corporations Act was inserted urgently as a temporary relief from insolvent trading during the pandemic, it provides that personal liability for insolvent trading “does not apply in relation to a person and a debt incurred by a company if the debt is incurred:

(a) in the ordinary course of the company's business; and

(b) during the 6-month period starting on the day this section commences; and

(c) before any appointment DURING THAT PERIOD of an administrator, restructuring practitioner or liquidator of the company.” (emphasis added)

In Star Recruitment Service Pty Ltd v Smith [2025] QSC 334 contrary to the plain meaning of the provision above, the Court determined in (in 27 paragraphs beyond the scope of this post) that insolvent trading relief can apply where the appointment occurred AFTER THAT PERIOD.

Whilst the interpretation probably reflects the intention of this hastily legislated provision, it is hard to explain why the words “during that period” appear at all.