Effect of payment by entity (including entity’s right to recover from responsible person)
(1) This section applies if an entity pays an amount in discharge of a liability of the entity under section 789CB, or pursuant to an order under section 789CD. (1A) The payment discharges the liability of the responsible person for the unpaid amount, to the extent of the payment. This does not affect any right that the entity has to recover an equivalent amount from the responsible person (under this section or otherwise) or from another person, or to be otherwise indemnified in relation to the making of the payment. (2) The entity may, in accordance with this section, recover from the responsible person an amount (the recoverable amount) equal to the sum of: (a) the amount paid by the entity as mentioned in subsection (1); and (b) any interest paid by the entity in relation to that amount pursuant to an order under section 789CD. (3) The entity may recover the recoverable amount: (a) by offsetting it against any amount that the entity owes to the responsible person; or (b) by action against the responsible person under subsection (4). (4) The entity may commence proceedings against the responsible person for payment to the entity of the recoverable amount. The proceedings may be commenced in: (a) the Federal Court; or (b) the Federal Circuit and Family Court of Australia (Division 2); or (c) an eligible State or Territory court. (5) The court may make an order requiring the responsible person to pay the entity the recoverable amount (or so much of it as is still owing) if the court is satisfied that: (a) this section applies as mentioned in subsection (1); and (b) the entity has not otherwise recovered the recoverable amount in full from the responsible person. (6) In making the order the court must, on application, include an amount of interest in the sum ordered, unless good cause is shown to the contrary. (7) Without limiting subsection (6), in determining the amount of interest, the court must take into account the period between the day when the recoverable amount was paid by the entity and the day when the order is made. (8) Proceedings cannot be commenced under this section more than 6 years after the time when the entity paid the recoverable amount.
Sourced from the Federal Register of Legislation at 17 May 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au. Verify the current text against the official source before relying on it.
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