"business judgment" means any decision to take or not take action in respect of a matter relevant to the operations of the Commonwealth authority.

23 Good faith—civil obligations

Good faith—officers

(1)

An officer of a Commonwealth authority must exercise his or her powers and discharge his or her duties:

(a)

in good faith in the best interests of the Commonwealth authority; and

(b)

for a proper purpose.

Note 1: This subsection is a civil penalty provision (see Schedule 2).

Note 2: Section 187 of the Corporations Law deals with the position of directors of wholly-owned subsidiaries of Commonwealth authorities.

(2)

A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note 1: Section 5 defines involved .

Note 2: This subsection is a civil penalty provision (see Schedule 2).

24 Use of position—civil obligations

Use of position—officers and employees

(1)

An officer or employee of a Commonwealth authority must not improperly use his or her position to:

(a)

gain an advantage for him or her or someone else; or

(b)

cause detriment to the Commonwealth authority or to another person.

Note 1: Section 27A makes provision for officers who are also public servants.

Note 2: This subsection is a civil penalty provision (see Schedule 2).

(2)

A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note 1: Section 5 defines involved .

Note 2: This subsection is a civil penalty provision (see Schedule 2).

25 Use of information—civil obligations

Use of information—officers and employees

(1)

A person who obtains information because they are, or have been, an officer or employee of a Commonwealth authority must not improperly use the information to:

(a)

gain an advantage for himself or herself or someone else; or

(b)

cause detriment to the Commonwealth authority or to another person.

Note 1: Section 27A makes provision for officers who are also public servants.

Note 2: This duty continues after the person stops being an officer or employee of the Commonwealth authority.

Note 3: This subsection is a civil penalty provision (see Schedule 2).

(2)

A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note 1: Section 5 defines involved .

Note 2: This subsection is a civil penalty provision (see Schedule 2).

26 Good faith, use of position and use of information—criminal offences

Good faith—officers

(1)

An officer of a Commonwealth authority commits an offence if he or she:

(a)

is reckless; or

(b)

is intentionally dishonest;

and fails to exercise his or her powers and discharge his or her duties:

(c)

in good faith in what he or she believes to be in the best interests of the Commonwealth authority; or

(d)

for a proper purpose.

Note: Section 187 of the Corporations Law deals with the position of directors of wholly-owned subsidiaries of Commonwealth authorities.

Penalty: Imprisonment for 5 years.

(2)

An officer or employee of a Commonwealth authority commits an offence if he or she uses his or her position dishonestly:

(a)

with the intention of directly or indirectly gaining an advantage for himself or herself, or someone else, or causing detriment to the Commonwealth authority or to another person; or

(b)

recklessly as to whether the use may result in him or her or someone else directly or indirectly gaining an advantage, or in causing detriment to the Commonwealth authority or to another person.

Penalty: Imprisonment for 5 years.

Use of information—officers and employees

(3)

A person who obtains information because he or she is, or has been, an officer or employee of a Commonwealth authority commits an offence if he or she uses the information dishonestly:

(a)

with the intention of directly or indirectly gaining an advantage for himself or herself, or someone else, or causing detriment to the Commonwealth authority or to another person; or

(b)

recklessly as to whether the use may result in himself or herself or someone else directly or indirectly gaining an advantage, or in causing detriment to the Commonwealth authority or to another person.

Maximum penalty: Imprisonment for 5 years.

27A Compliance with statutory duties

(1)

An officer does not contravene section 23, 24 or 25, or commit an offence against section 26, by doing an act that another provision of this Act requires the officer to do.

(2)

If an officer of a Commonwealth authority is also a public servant, the officer does not contravene section 23, 24 or 25, or commit an offence against section 26, by doing an act in the course of the performance of his or her duties as a public servant. For this purpose, public servant means an a person appointed or engaged under the Public Service Act 1999 .

27B Interaction of sections 22 to 26 with other laws etc.

Sections 22 to 26:

(a)

have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of his or her office or employment in relation to a Commonwealth authority; and

(b)

do not prevent the commencement of proceedings for a breach of duty or in respect of a liability referred to in paragraph (a).

This section does not apply to subsections 22(2) and (3) to the extent to which they operate on the duties at common law and in equity that are equivalent to the requirements of subsection 22(1).

27C Disqualification order for contravention of civil penalty provision

(1)

The Court may disqualify a person from managing bodies corporate for a period that the Court considers appropriate if:

(a)

a declaration is made under clause 1 of Schedule 2 (civil penalty provision) that the person has contravened a civil penalty provision; and

(b)

the Court is satisfied that the disqualification is justified.

(2)

An application for a disqualification order under subsection (1) may be made by:

(a)

the Finance Minister; or

(b)

some other person authorised in writing by the Finance Minister, under this paragraph, to make the application.

An authorisation for the purposes of paragraph (b) may relate to applications in relation to specified contraventions, or to all contraventions, of civil penalty provisions.

(3)

In determining whether the disqualification is justified, the Court may have regard to:

(a)

the person's conduct in relation to the management, business or property of any Commonwealth authority or other body corporate; and

(b)

any other matters that the Court considers appropriate.

(4)

If a disqualification order under subsection (1) is in force against a person, the person must not be a director of a Commonwealth authority except with the leave of the Court.

Maximum penalty: Imprisonment for 1 year.

(5)

When granting leave under subsection (4), the Court may impose conditions or restrictions that the Court considers appropriate.

(6)

A person must not contravene a condition or restriction imposed under subsection (5).

Maximum penalty: Imprisonment for 1 year.

(7)

A person may only apply for leave under subsection (4) if he or she has given the Finance Minister at least 21 days notice of the application.

(8)

On the application of the Finance Minister, the Court may revoke leave granted under subsection (4).

27D Reliance on information or advice provided by others

If:

(a)

a director relies on information, or professional or expert advice, given or prepared by:

(i)

an employee of the Commonwealth authority whom the director believes on reasonable grounds to be reliable and competent in relation to the matters concerned; or

(ii)

a professional adviser or expert in relation to matters that the director believes on reasonable grounds to be within the person's professional or expert competence; or

(iii)

another director or officer in relation to matters within the director's or officer's authority; or

(iv)

a committee of directors on which the director did not serve in relation to matters within the committee's authority; and

(b)

the reliance was made:

(i)

in good faith; and

(ii)

after making proper inquiry if the circumstances indicated the need for inquiry; and

(c)

the reasonableness of the director's reliance on the information or advice arises in proceedings brought to determine whether a director has performed a duty under this Division or an equivalent general law duty;

the director's reliance on the information or advice is taken to be reasonable unless the contrary is proved.

27E Responsibility for actions of delegate

(1)

If the directors of a Commonwealth authority delegate a power under its enabling legislation, a director is responsible for the exercise of the power by the delegate as if the power had been exercised by the directors themselves.

(2)

A director is not responsible under subsection (1) if:

(a)

the director believed on reasonable grounds at all times that the delegate would exercise the power in conformity with the duties imposed on directors of the Commonwealth authority by this Act and the authority's enabling legislation; and

(b)

the director believed:

(i)

on reasonable grounds; and

(ii)

in good faith; and

(iii)

after making proper inquiry if the circumstances indicated the need for inquiry;

that the delegate was reliable and competent in relation to the power delegated.

Subdivision B—Disclosure of, and voting on matters involving, material personal interests
27F Material personal interest—director's duty to disclose

Director's duty to notify other directors of material personal interest when conflict arises

(1)

A director of a Commonwealth authority who has a material personal interest in a matter that relates to the affairs of the authority must give the other directors notice of the interest unless subsection (2) says otherwise.

(2)

The director does not need to give notice of an interest under subsection

(1)

if:

(a)

the interest:

(i)

arises in relation to the director's remuneration as a director of the authority; or

(ii)

relates to a contract that insures, or would insure, the director against liabilities the director incurs as an officer of the authority (but only if the contract does not make the authority or a subsidiary of the authority the insurer); or

(iii)

relates to any payment by the authority or a subsidiary of the authority in respect of an indemnity permitted under section 27M or any contract relating to such an indemnity; or

(iv)

is in a contract, or proposed contract, with, or for the benefit of, or on behalf of, a subsidiary of the authority and arises merely because the director is a director of the subsidiary; or

(b)

all the following conditions are satisfied:

(i)

the director has already given notice of the nature and extent of the interest and its relation to the affairs of the authority under subsection (1)

(ii)

if a person who was not a director of the authority at the time when the notice under subsection (1) was given is appointed as a director of the authority—the notice is given to that person

(iii)

the nature or extent of the interest has not materially increased above that disclosed in the notice; or

(c)

the director has given a standing notice of the nature and extent of the interest under section 27G and the notice is still effective in relation to the interest.

(3)

The notice required by subsection (1) must:

(a)

give details of:

(i)

the nature and extent of the interest; and

(ii)

the relation of the interest to the affairs of the authority; and

(b)

be given at a directors' meeting as soon as practicable after the director becomes aware of his or her interest in the matter.

The details must be recorded in the minutes of the meeting.

Effect of contravention by director

(4)

A contravention of this section by a director does not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.

27G Director may give other directors standing notice about an interest

Power to give notice

(1)

A director of a Commonwealth authority who has an interest in a matter may give the other directors standing notice of the nature and extent of the interest in the matter in accordance with subsection (2). The notice may be given at any time and whether or not the matter relates to the affairs of the authority at the time the notice is given.

Note: The standing notice may be given to the other directors before the interest becomes a material personal interest.

(2)

The notice under subsection (1) must:

(a)

give details of the nature and extent of the interest; and

(b)

be given:

(i)

at a directors' meeting (either orally or in writing); or

(ii)

to the other directors individually in writing.

The standing notice is given under subparagraph (b)(ii) when it has been given to every director.

Standing notice must be tabled at meeting if given to directors individually

(3)

If the standing notice is given to the other directors individually in writing it must be tabled at the next directors' meeting after it is given.

Nature and extent of interest must be recorded in minutes

(4)

The director must ensure that the nature and extent of the interest disclosed in the standing notice is recorded in the minutes of the meeting at which the standing notice is given or tabled.

Dates of effect and expiry of standing notice

(5)

The standing notice:

(a)

takes effect as soon as it is given; and

(b)

ceases to have effect if a person who was not a director of the authority at the time when the notice was given is appointed as a director of the authority.

A standing notice that ceases to have effect under paragraph (b) commences to have effect again if it is given to the person referred to in that paragraph.

Effect of material increase in nature or extent of interest

(6)

The standing notice ceases to have effect in relation to a particular interest if the nature or extent of the interest materially increases above that disclosed in the notice.

Effect of contravention by director

(7)

A contravention of this section by a director does not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.

27H Interaction of sections 27F and 27G with other laws etc.

Sections 27F and 27G have effect in addition to, and not in derogation of:

(a)

any general law rule about conflicts of interest; and

(b)

any provision in the Commonwealth authority's enabling legislation that restricts a director from:

(i)

having a material personal interest in a matter; or

(ii)

holding an office or possessing property;

involving duties or interests that conflict with their duties or interests as a director.

27J Restrictions on voting

Restrictions on voting and being present

(1)

A director of a Commonwealth authority who has a material personal interest in a matter that is being considered at a directors' meeting must not:

(a)

be present while the matter is being considered at the meeting; or

(b)

vote on the matter;

unless:

(c)

subsection (2) or (3) allows the director to be present; or

(d)

the interest does not need to be disclosed under section 27F.

Participation with approval of other directors

(2)

The director may be present and vote if directors who do not have a material personal interest in the matter have passed a resolution that:

(a)

identifies the director, the nature and extent of the director's interest in the matter and its relation to the affairs of the authority; and

(b)

states that those directors are satisfied that the interest should not disqualify the director from voting or being present.

Participation with Ministerial approval

(3)

The director may be present and vote if they are so entitled under a declaration or order made by the responsible Minister under section 27K.

Effect of contravention by director

(4)

A contravention by a director of:

(a)

this section; or

(b)

a condition attached to a declaration or order made by the responsible Minister under section 27K;

does not affect the validity of any resolution.

27K Minister's power to make declarations and class orders

Minister's power to make specific declarations

(1)

The responsible Minister may declare in writing that a director of a Commonwealth authority who has a material personal interest in a matter that is being, or is to be, considered at a directors' meeting may, despite the director's interest, be present while the matter is being considered at the meeting, vote on the matter, or both be present and vote. However, the Minister may only make the declaration if:

(a)

the number of directors entitled to be present and vote on the matter would be less than the quorum for a directors' meeting if the director were not allowed to vote on the matter at the meeting; and

(b)

the matter needs to be dealt with urgently, or if there is some other compelling reason for the matter being dealt with at the directors' meeting.

(2)

The declaration may:

(a)

apply to all or only some of the directors; or

(b)

specify conditions that the authority or director must comply with.

Responsible Minister's power to make class orders

(3)

The responsible Minister may make an order in writing that enables directors who have a material personal interest in a matter to be present while the matter is being considered at a directors' meeting, vote on that matter, or both be present and vote. The order may be made in respect of a specified class of Commonwealth authorities, directors, resolutions or interests.

(4)

The order may be expressed to be subject to conditions.

(5)

Notice of the making, revocation or suspension of the order must be published in the Gazette .

27L Right of access to authority's books

Right while director

(1)

A director of a Commonwealth authority may inspect the books of the authority at all reasonable times for the purposes of a legal proceeding:

(a)

to which the director is a party; or

(b)

that the director proposes in good faith to bring; or

(c)

that the director has reason to believe will be brought against him or her.

Right during 7 years after ceasing to be director

(2)

A person who has ceased to be a director of a Commonwealth authority may inspect the books of the authority at all reasonable times for the purposes of a legal proceeding:

(a)

to which the person is a party; or

(b)

that the person proposes in good faith to bring; or

(c)

that the person has reason to believe will be brought against him or her.

This right continues for 7 years after the person ceased to be a director of the authority.

Right to take copies

(3)

A person authorised to inspect books under this section for the purposes of a legal proceeding may make copies of the books for the purposes of those proceedings.

Commonwealth authority not to refuse access

(4)

A Commonwealth authority must allow a person to exercise his or her rights to inspect or take copies of the books under this section.

Division 4A—Restrictions on indemnities and insurance for officers
27M Indemnification and exemption of officer

Power to indemnify officers

(1)

Except as provided in this section, a Commonwealth authority may indemnify a person who is or has been an officer of the authority from any liability incurred by the person as an officer of the authority.

Exemptions not allowed

(2)

A Commonwealth authority, or a subsidiary of a Commonwealth authority, must not exempt a person (whether directly or through an interposed entity) from a liability to the authority incurred as an officer of the authority.

When indemnity for liability (other than for legal costs) not allowed

(3)

A Commonwealth authority, or a subsidiary of a Commonwealth authority, must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against any of the following liabilities incurred as an officer of the authority:

(a)

a liability owed to the authority or a subsidiary of the authority; or

(b)

a liability for a civil penalty order under clause 3 of Schedule 2 or a compensation order under clause 4 of Schedule 2; or

(c)

a liability that is owed to someone other than the authority or a subsidiary of the authority and did not arise out of conduct in good faith.

This subsection does not apply to a liability for legal costs.

When indemnity for legal costs not allowed

(4)

A Commonwealth authority, or a subsidiary of a Commonwealth authority, must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against legal costs incurred in defending an action for a liability incurred as an officer of the authority if the costs are incurred:

(a)

in defending or resisting a proceedings in which the person is found to have a liability for which they could not be indemnified under subsection (3); or

(b)

in defending or resisting criminal proceedings in which the person is found guilty; or

(c)

in defending or resisting proceedings brought by the Finance Minister for a court order if the grounds for making the order are found by the court to have been established; or

(d)

in connection with proceedings for relief to the person under this Act in which the Court denies the relief.

Paragraph (c) does not apply to costs incurred in responding to actions taken by the Finance Minister as part of an investigation before commencing proceedings for the court order.

Note: Paragraph (c)—This includes proceedings by the Finance Minister for an order under section 27C (disqualification order) or clause 3 or 4 of Schedule 2 (civil penalties).

(5)

For the purposes of subsection (4), the outcome of proceedings is the outcome of the proceedings and any appeal in relation to the proceedings.

27N Insurance for certain liabilities of officers

(1)

Except as provided in subsection (2), a Commonwealth authority may insure a person who is or has been an officer against liabilities incurred by the person as an officer.

(2)

A Commonwealth authority, or a subsidiary of a Commonwealth authority, must not pay, or agree to pay, a premium for a contract insuring a person who is, or has been, an officer of the authority against a liability (other than one for legal costs) arising out of:

(a)

conduct involving a wilful breach of duty in relation to the authority; or

(b)

a contravention of section 24 or 25.

This section applies to a premium whether it is paid directly or through an interposed entity.

27P Certain indemnities, exemptions, payments and agreements not authorised and certain documents void

(1)

Sections 27M and 27N do not authorise anything that would otherwise be unlawful.

(2)

Anything that purports to indemnify or insure a person against a liability or exempt them from a liability is void to the extent that it contravenes section 27M or 27N.

12 Schedule 2

Repeal the Schedule, substitute:

Note: See section 6.

1 Declarations of contravention

(1)

If a Court is satisfied that a person has contravened 1 of the following provisions, it must make a declaration of contravention:

(a)

subsections 22(1) and 23(1) and (2), 24(1) and (2), 25(1) and (2) (officers' duties)

(b)

subsection 11(1) (annual reporting rules)

These provisions are the civil penalty provisions .

Note: Once a declaration has been made, the Finance Minister can then seek a pecuniary penalty order (clause 3) or a disqualification order (section 27C).

(2)

A declaration of contravention must specify the following:

(a)

the Court that made the declaration;

(b)

the civil penalty provision that was contravened;

(c)

the person who contravened the provision;

(d)

the conduct that constituted the contravention;

(e)

the Commonwealth authority to which the conduct related.

2 Declaration of contravention is conclusive evidence

A declaration of contravention is conclusive evidence of the matters referred to in subclause 1(2).

3 Pecuniary penalty orders

(1)

A Court may order a person to pay the Commonwealth a pecuniary penalty of up to $200,000 if:

(a)

a declaration of contravention by the person has been made under clause 1; and

(b)

the contravention:

(i)

materially prejudices the interests of the Commonwealth authority; or

(ii)

materially prejudices the Commonwealth authority's ability to pay its creditors; or

(iii)

is serious.

(2)

The penalty is a civil debt payable to the Commonwealth. The Commonwealth may enforce the order as if it were an order made in civil proceedings against the person to recover a debt due by the person. The debt arising from the order is taken to be a judgment debt.

4 Compensation orders

Compensation for damage suffered

(1)

A Court may order a person to compensate a Commonwealth authority for damage suffered by the authority if:

(a)

the person has contravened a civil penalty provision in relation to the authority; and

(b)

the damage resulted from the contravention.

The order must specify the amount of the compensation.

Damage includes profits

(2)

In determining the damage suffered by the Commonwealth authority for the purposes of making a compensation order, include profits made by any person resulting from the contravention or the offence.

Recovery of damage

(3)

A compensation order may be enforced as if it were a judgment of the Court.

5 Effect of clause 4

Clause 4:

(a)

has effect in addition to, and not in derogation of, any rule of law about the duty or liability of a person because of the person's office or employment in relation to a Commonwealth authority; and

(b)

does not prevent proceedings from being instituted in respect of such a duty or in respect of such a liability.

6 Who may apply for a declaration or order

Application by Finance Minister

(1)

The Finance Minister, or some other person authorised in writing by the Finance Minister under this subclause to make the application, may apply for a declaration of contravention, a pecuniary penalty order or a compensation order.

Application by Commonwealth authority

(2)

The Commonwealth authority may apply for a compensation order.

(3)

The Commonwealth authority may intervene in an application for a declaration of contravention or a pecuniary penalty order in relation to the Commonwealth authority. The Commonwealth authority is entitled to be heard on all matters other than whether the declaration or order should be made.

No one else may apply

(4)

No person may apply for a declaration of contravention, a pecuniary penalty order or a compensation order unless permitted by this clause.

(5)

Subclause (4) does not exclude the operation of the Director of Public Prosecutions Act 1983 .

7 Time limit for application for a declaration or order

Proceedings for a declaration of contravention, a pecuniary penalty order, or a compensation order, may be started no later than 6 years after the contravention.

8 Civil evidence and procedure rules for declarations of contravention and civil penalty orders

The Court must apply the rules of evidence and procedure for civil matters when hearing proceedings for:

(a)

a declaration of contravention; or

(b)

a pecuniary penalty order.

9 Civil proceedings after criminal proceedings

A court must not make a declaration of contravention or a pecuniary penalty order against a person for a contravention if the person has been convicted of an offence constituted by conduct that is substantially the same as the conduct constituting the contravention.

10 Criminal proceedings during civil proceedings

(1)

Proceedings for a declaration of contravention or pecuniary penalty order against a person are stayed if:

(a)

criminal proceedings are started or have already been started against the person for an offence; and

(b)

the offence is constituted by conduct that is substantially the same as the conduct alleged to constitute the contravention.

(2)

The proceedings for the declaration or order may be resumed if the person is not convicted of the offence. Otherwise, the proceedings for the declaration or order are dismissed.

11 Criminal proceedings after civil proceedings

Criminal proceedings may be started against a person for conduct that is substantially the same as conduct constituting a contravention of a civil penalty provision regardless of whether:

(a)

a declaration of contravention has been made against the person; or

(b)

a pecuniary penalty order has been made against the person; or

(c)

a compensation order has been made against the person; or

(d)

the person has been disqualified from managing a Commonwealth authority under section 27C.

12 Evidence given in proceedings for penalty not admissible in criminal proceedings

Evidence of information given or evidence of production of documents by an individual is not admissible in criminal proceedings against the individual if:

(a)

the individual previously gave the evidence or produced the documents in proceedings for a pecuniary penalty order against the individual for a contravention of a civil penalty provision (whether or not the order was made); and

(b)

the conduct alleged to constitute the offence is substantially the same as the conduct that was claimed to constitute the contravention.

However, this does not apply to a criminal proceeding in respect of the falsity of the evidence given by the individual in the proceedings for the pecuniary penalty order.

13 Finance Minister requiring person to assist

(1)

The Finance Minister may require a person to give all reasonable assistance in connection with:

(a)

an application for a declaration of contravention or a pecuniary penalty order; or

(b)

criminal proceedings for an offence against this Act.

The person must comply with the request.

Maximum penalty: 5 penalty units.

(2)

The Finance Minister can require the person to assist in connection with an application for a declaration or order if, and only if:

(a)

it appears to the Finance Minister that someone other than the person required to assist may have contravened a civil penalty provision; and

(b)

the Finance Minister suspects or believes that the person required to assist can give information relevant to the application.

(3)

The Finance Minister can require the person to assist in connection with criminal proceedings if, and only if:

(a)

it appears to the Finance Minister that the person required to assist is unlikely to be a defendant in the proceedings; and

(b)

the person required to assist is, in relation to a person who is or should be a defendant in the proceedings:

(i)

an employee or agent (including a banker or auditor) of the other person; or

(ii)

if the other person is a Commonwealth authority—an officer of the other person; or

(iii)

if the other person is an individual—a partner of the other person.

(4)

The Finance Minister can require the person to assist regardless of whether:

(a)

an application for the declaration or penalty order has actually been made; or

(b)

criminal proceedings for the offence have actually begun.

(5)

The person cannot be required to assist if they are or have been a lawyer for:

(a)

in an application for a declaration or penalty order—the person suspected of the contravention; or

(b)

in criminal proceedings—a defendant or likely defendant in the proceedings.

(6)

The requirement to assist must be given in writing.

(7)

The Court may order the person to comply with the requirement in a specified way. Only the Finance Minister may apply to the Court for an order under this subsection .

14 Relief from liability for contravention of civil penalty provision

(1)

In this section: