Lodgement of Caveats during Voluntary Administration

Is the lodgement of a caveat over the real estate of a director or a director's spouse prohibited by operation of s. 440J of the Corporations Act?

Section 440J of the Corporations Act provides that during a company's voluntary administration, a personal guarantee cannot be enforced against a director's spouse or relative. This provision is well-known to insolvency practitioners and essentially provides a moratorium so that a director and the director's family members are protected from enforcing personal guarantees while the administration process plays out.

Holman Webb Lawyers recently acted for a trade creditor supplier that lodged a caveat based on an equitable charge contained in a Personal Guarantee over real estate owned by the director's wife. The caveat was lodged on the same day an Administrator was appointed to the customer company.