Conveyancers Licensing Amendment
Bill 2006

Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.

Overview of Bill

The object of this Bill is to amend the Conveyancers Licensing Act 2003 (the
Principal Act) for the following purposes:

(a) to remove the distinction between trust money and controlled money by
defining trust money more generally as money received for or on behalf of any
person by a licensee in connection with the licensee’s conveyancing business
(providing a comprehensive scheme for trust accounting rather than two
separate schemes),

(b) to clarify that Australian legal practitioners, incorporated legal practices and
solicitor corporations are disqualified persons for the purposes of the Principal
Act and therefore not eligible to hold a licence under that Act (and not
permitted to be employed by a licensee),

(c) to broaden the disqualification provisions relating to undischarged bankrupts
and persons concerned in the management of insolvent corporations so that a
director or person concerned in the management of an externally-administered
body corporate (within the meaning of the Corporations Act 2001 of the
Commonwealth) is a disqualified person except in a case of the voluntary
winding up of the body corporate,

(d) to further extend this category of disqualified persons so that a person cannot
avoid disqualification by resigning within the 12 month period before the
appointment of an external administrator,

(e) to clarify that the Commissioner for Fair Trading (the Commissioner), in
exercising his or her discretionary power to grant a licence to a person that falls
within this category of disqualified persons, must consider the steps that could
have been taken when the relevant financial difficulties first arose (and not just
those that could have been taken when the bankruptcy, liquidation or
administration was imminent),

(f) to disqualify persons who have been disqualified from holding certain licences
under New South Wales law from holding a licence under the Principal Act,

(g) to make other minor and consequential amendments and amendments by way
of statute law revision.

Outline of provisions

Clause 1 sets out the name (also called the short title) of the proposed Act.

Clause 2 provides for the commencement of the proposed Act on the date of assent.

Clause 3 is a formal provision that gives effect to the amendments to the
Conveyancers Licensing Act 2003 set out in Schedule 1.

Clause 4 provides for the repeal of the proposed Act after all the amendments made
by the proposed Act have commenced. Once the amendments have commenced the
proposed Act will be spent and section 30 of the Interpretation Act 1987 provides
that the repeal of an amending Act does not affect the amendments made by that Act.

Schedule 1 Amendments
Disqualified persons—lawyers
The Principal Act provides that the requirement that a person hold a licence under
that Act in order to conduct a conveyancing business does not apply to an Australian
legal practitioner or an incorporated legal practice. Schedule 1 [8] clarifies that
Australian legal practitioners, incorporated legal practices and solicitor corporations
are also disqualified persons for the purposes of the Principal Act (and therefore not
eligible to hold a licence under that Act and not permitted to be employed by a
licensee).

Schedule 1 [2] provides that a corporation cannot be a disqualified person in order
to be eligible to hold a corporation licence.

Disqualified persons—undischarged bankrupts and persons involved
in the management of an insolvent corporation
Schedule 1 [4] omits the current provisions relating to the disqualification of
undischarged bankrupts and other persons involved in the management of insolvent
corporations from holding a licence under the Principal Act. At present, the Principal
Act provides for the disqualification of a director or person concerned in the
management of a corporation that is the subject of a winding up order or for which a
controller or administrator has been appointed. Schedule 1 [10] generally re-enacts
the current provisions but broadens this category so as to include the disqualification
of a director or person concerned in the management of an externally-administered
body corporate (within the meaning of the Corporations Act 2001 of the
Commonwealth) except in the case of the voluntary winding up of the body
corporate. The proposed new provisions also disqualify a director or person
concerned in the management of a body corporate that, within 12 months after the
person ceased to be a director or person concerned in the management of the body
corporate, became an externally-administered body corporate (so that a person
cannot avoid disqualification by resigning just before the appointment of an external
administrator).

At present, the Commissioner may grant a licence to a person that falls within the
category of disqualified persons if the Commissioner is satisfied that the person took
all reasonable steps to avoid the bankruptcy or the liquidation or administration.

Schedule 1 [11] inserts proposed section 10 (3B)–(3D) into the Principal Act to
re-enact this discretionary power of the Commissioner and to further clarify that, in
determining whether a person has taken such reasonable steps, the Commissioner is
to have regard to the steps that could have been taken when the financial difficulties
first arose (and not just those that could have been taken when the bankruptcy,
liquidation or administration was imminent).

Trust money
The Principal Act makes a distinction between trust money and controlled money.

Trust money received from a person by a licensee is money held exclusively for that
person and must be paid into a general trust account under that Act. Controlled
money, on the other hand, is money received by the licensee that is to be paid or
disbursed as the person directs and must be held in accordance with separate
regulations relating to controlled money. Schedule 1 [18] substitutes Divisions 1 and
2 of Part 5 of the Principal Act so as to remove the distinction between trust money
and controlled money. The definition of, and any references to, controlled money are
omitted. Trust money is more generally defined as money received for or on behalf
of any person by a licensee in connection with the licensee’s conveyancing business.

Accordingly, the amendments establish a comprehensive scheme for the accounting
requirements relating to trust money. Schedule 1 [19] substitutes Division 4 of Part
5 so that the introduction of the proposed comprehensive scheme is also reflected in
the provisions relating to unclaimed trust money. Schedule 1 [7], [15], [17] and
[20]–[26] make consequential amendments relating to the introduction of the
proposed comprehensive scheme.

Schedule 1 [18] also sets out additional particulars relating to the trust accounts that
must appear on the books and records of the licensee and the cheques drawn on the
trust account.

Schedule 1 [19] also makes a minor amendment to the procedures relating to the
repayment of trust money.

Other miscellaneous amendments
Schedule 1 [1] clarifies that the conveyancers licensing scheme in the Principal Act
does not apply to the conduct of a conveyancing business by a solicitor corporation.

Schedule 1 [3] makes an amendment by way of statute law revision.

Schedule 1 [5] provides that a person is a disqualified person for the purposes of the
Principal Act if the person is the holder of a licence, permit or other authority that is
suspended under legislation administered by the Minister or is disqualified from
holding a licence, permit or other authority under legislation administered by the
Minister. Currently, this disqualification applies only to the holder of a licence,
permit or other authority that is suspended under the Fair Trading Act 1987.

Schedule 1 [11] inserts proposed section 10 (3A) in order to extend the discretionary
power of the Commissioner to grant a licence to a person that falls within this
category of disqualified person if the Commissioner determines that it is appropriate
to do so. Schedule 1 [6] makes a consequential amendment.

Schedule 1 [9] re-enacts a provision that is removed as a consequence of Schedule
1 [10].

Schedule 1 [12] applies section 21 (7) of the Licensing and Registration (Uniform
Procedures) Act 2002 to licences issued under the Principal Act so that a licence is
taken to be cancelled if the licensee surrenders the licence to the Commissioner
together with a notice to the effect that the licensee intends that the licence be
cancelled. Schedule 1 [13] and [14] make consequential amendments.

Schedule 1 [16] makes a minor amendment to clarify that publishing an
advertisement includes causing it to be published.

Schedule 1 [27] enables regulations to be made for or with respect to the waiver or
refund of the whole or any part of a fee payable under the Principal Act.

Schedule 1 [28] and [30] make consequential amendments.

Schedule 1 [29] enable regulations of a savings and transitional nature to be made as
a consequence of the enactment of the proposed Act.

Schedule 1 [31] inserts provisions of a savings and transitional nature.

Note: If this Bill is not modified, these Explanatory Notes would reflect the Bill as passed in the House. If the Bill has been amended by Committee, these Explanatory Notes may not necessarily reflect the Bill as passed.

 

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