New South Wales Bills Explanatory Notes New South Wales Bills Explanatory Notes[Index] [Search] [Download] [Bill] [Help]
South Wales) Bill 1995
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
The Competition Policy Reform Bill 1995 of the Commonwealth (the
Commonwealth Bill) is complemented by legislation to be enacted by the
States and Territories. The package of competition law applying throughout
Australia will be found in the Trade Practices Act 1974 of the
Commonwealth (as proposed to be amended by the Commonwealth Bill)
and the proposed legislation of the States and Territories.
This Bill deals principally with the application of the Competition Code. It
does so in concert with the Commonwealth Bill, which effectively creates
the Competition Code but which does not itself apply the Code. The
principal purpose of this scheme is to apply Part IV of the Trade Practices
Act (TPA) to those persons and things that do not or may not fall within the
constitutional competence of the Commonwealth (especially individuals and
partnerships). It does so by applying the provisions of the Part to all persons
(including corporations, as well as individuals and partnerships). The
Competition Code consists of:
*
The text set out in the Schedule to the TPA (this repeats most, but not
all, of Part IV, but generalised so as to apply to "persons" instead of
"corporations"). The result will be an overlap, mainly in the area of
corporations (the question of double jeopardy is dealt with in the
legislation, as mentioned below).
*
The remaining provisions of the TPA (with certain exceptions), so far
as they would relate to the Schedule version of Part IV if the Schedule
version were substituted for the actual Part IV.
* Relevant regulations under the TPA.
Preliminary
Clause l sets out the name (also called the short title) of the proposed Act.
Clause 2 provides for the commencement of the proposed Act. Part 1 and
Part 7 will commence immediately on receiving assent. These Parts are
supplementary to the substantive provisions of the Bill. Part 1 contains the
name of the proposed Act, its commencement and definitions. Part 7
contains transitional provisions.
The remaining provisions are intended to commence 12 months after the
date of assent to the Commonwealth Bill. Although the Commonwealth Bill
contains a number of different commencement dates, virtually all of the
Commonwealth Bill will have commenced 12 months after the date of
assent. The result therefore is that the Commonwealth Bill will be in force
when the State Bill commences.
There is provision in clause 2 of the Bill for the postponement of` the
commencement of those remaining provisions, to deal with any unforeseen
circumstances that might arise.
Clause 3 contains interpretive provisions for the proposed Act. Clause 3 (1)
contains a list of definitions. An explanation of their origin or purpose is as
follows:
Explanatory note page 2
application law-- the same as in proposed Part XIA, to be inserted into the
TPA by the Commonwealth Bill.
Commission-- the same as in section 4 of the TPA, as amended by the
Commonwealth Bill.
Competition Code-- the same as in proposed Part XIA.
Competition Code text-- the text of the law to be applied as the Competition
Code.
Conduct Code Agreement-- the same as in section 4 of the TPA, as
amended by the Commonwealth Bill.
Council-- the same as in section 4 of the TPA, as amended by the
Commonwealth Bill.
instrument-- the same as the definition used in corporations legislation and
agriculturaI and chemical legislation (agvet legislation).
jurisdiction-- to mean a State, which is in turn defined to include a Territory.
law-- the same as the definition used in corporations and agvet legislation.
modifications-- the same as in proposed Part XIA.
month-- the same as in the Acts Interpretation Act 1901 of the
Commonwealth.
officer-- merely picks up the definition in proposed Part XIA.
participating jurisdiction-- a jurisdiction that applies the Competition Code.
proclamation-- makes it clear that it is a proclamation of the State, not of
the Commonwealth.
Schedule version of Part IV-- the same as in proposed Part XIA.
State-- is defined as including a Territory.
Territory-- the same as in proposed Part XIA.
this jurisdiction-- will mean New South Wales. Use of this definition
reduces variation between the corresponding legislation.
Trade Practices Act-- a convenient short definition.
Tribunal-- the same as in section 4 of the TPA, as amended by the
Commonwealth Bill.
Clause 3 (2) provides for expressions used in the Bill to have the same
meanings as in the TPA.
Explanatory note page 3
Clause 3 (3) provides that references to Commonwealth Acts include
amendments and replacements.
Part 2
The Competition Code
Clause 4 defines the Competition Code text that will be applied to become
the Competition Code. As mentioned above, this is primarily the provisions
of Part IV of the TPA.
Clause 5 is the operative clause of the Bill. It applies the Competition Code
text as a law of New South Wales.
Clause 6 provides a scheme to deal with future modifications of the
Competition Code text by Commonwealth legislation. In essence, the
scheme provides that there is to be at least a two month gap between the
enactment or making of Commonwealth modifications and their application
under clause 5. That period can be shortened by proclamation; alternatively,
a proclamation can provide that a modification is not to apply at all in
the State.
Clause 7 provides, for the purposes of uniformity, that the Acts
Interpretation Act 1901 of the Commonwealth applies to the interpretation
of the Competition Code (instead of the Interpretation Act 1987 of New
South Wales).
Clause 8 makes it clear that the Competition Code is not to be construed as
merely applying in the territorial area of the State, and that the
extraterritorial competence of the legislature of the State is being used.
However provisions contained in section 5 of the TPA are repeated in the
clause to require consent of the Commonwealth Minister for proceedings
involving conduct outside Australia.
Clause 9 provides for the interpretation of the expression "the
commencement of this section" in the Schedule version of Part IV. This
expression will, in effect, be read as a reference to the commencement of
substantive provisions of the Bill.
Part 3
Citing the Competition Codes
Clauses 1012. This Part provides a system for referring to the Competition
Codes.
Explanatory note page 4
Part 4 Application of Competition Codes to Crown
Clause 13 provides that the Act and Competition Code of New South
Wales will bind the Crown in all its capacities (to the full extent of
constitutional capacity to do this). In line with section 2A (1) and proposed
section 2B (1) of the TPA, this will apply to the Crown only when carrying
on a business.
Clause 14 is the counterpart of clause 13, and provides that the Act and
Competition Code of another State or Territory will bind the Crown in right
of New South Wales. Again, this will apply to the Crown only when
carrying on a business.
Clause 15 makes it clear that certain activities carried on by governments
or government authorities do not amount to carrying on a business (for the
purposes of clauses 13 and 14). The clause is the same as proposed section
2C of the TPA.
Clause 16 provides that the Crown is not liable to pecuniary penalties or
prosecutions. This is in line with proposed sections 2A (3) and 2B (2) of
the TPA.
Clause 17 makes it clear that, where the law of another jurisdiction binds
the Crown in right of New South Wales by virtue of this Part, the Code
overrides any prerogative right or privilege of the Crown (eg in relation to
the payment of debts). Similar provisions are included in corporations and
agvet legislation.
Part 5 National administration and enforcement of
Competition Codes
Clauses 1833. The provisions of this Part are intended to promote the
uniform administration of the Competition Codes, as if they were a single
Commonwealth Act. The provisions are similar to those included in
corporations legislation.
Part 6 Miscellaneous
Clause 34 recognises that the same conduct is capable of being punished
under more than one law (the Competition Code of the State, the
Competition Code of another jurisdiction, or the Trade Practices Act), and
removes this double jeopardy. The clause has its counterpart in proposed
section 150H of the TPA.
Explanatory note page 5
Clause 35 makes it clear that documentation and other things are not
invalid because they also serve other Competition Codes or the TPA.
Clause 36 is intended to deal with the technical point that a reference in an
applied law to another Commonwealth law is to be treated as if the other law
were itself an applied law. There is a similar provision in the corporations
and agvet legislation.
Clause 37 provides that fees, taxes, penalties, fines and other money paid
under the Competition Code of the State are to be paid to the
Commonwealth. This will not apply to amounts recovered in actions for
damages. Clause 37 (3) is a technical provision that imposes fees (including
fees that are taxes) prescribed by the applied regulations.
Clause 38 allows regulations to be made for the purposes of the proposed
legislation.
Clause 39 provides a specific power to make regulations for the purposes
of prescribing exceptions under section 51 of the TPA or section 5 1 of the
Competition Code.
Part 7
Transitional rules
Clause 40 contains definitions used in Part 7.
Clause 41 gives effect to the policy that existing contracts made before 19
August 1994 (the date the legislative scheme was announced) are not caught
by the Competition Code. However, if such a contract is varied on or after
that date, the Competition Code will apply to future conduct in relation to
the varied contract, except as regards matters that were previously protected.
The Code applies to future conduct in relation to contracts made after
that date.
Although a contract is "grandfathered" under clause 41 in relation to the
Competition Code, it may still be caught by Part IV of the TPA.
Although clause 41 corresponds generally to clauses 30 and 84 of the
Commonwealth Bill, those clauses do not contain provisions that correspond
to clause 41 (1) (c) and (3). That paragraph and that subclause are inserted in
this Bill for the purpose of clarifying the way the Competition Code applies
in relation to existing contracts made on or after 19 August 1994, and are
not intended to imply that clause 41 operates differently from those clauses
of the Commonwealth Bill in this respect.
Explanatory note page 6
Clause 42 complements clause 29 of the Commonwealth Bill. Clause 29 is
intended to provide a three-year continuation of current exceptions (under
section 51 of the TPA) that do not comply with the requirements of new
section 51 (1) and (1B) of the TPA (to be inserted by clause 13 of the
Commonwealth Bill). Clause 42 provides that the same exceptions will be
treated as exceptions from Part IV of the Competition Code for that
three-year period.
Clause 43 gives effect to the policy that pecuniary penalties will not apply
in respect of conduct that is being subjected to the competition law for the
first time, until two years have passed after the Commonwealth Bill is
assented to. Since this Bill is intended to commence 12 months after the
Commonwealth Bill is assented to, this effectively means that there will be
one year during which pecuniary penalties will not be available under the
Competition Code. Other remedies will be available during that period of
one year.
The period of one year will be extended if the commencement of the
substantive provisions of this Bill is postponed under clause 2.
Clause 44 permits persons to apply to the Commission for authorisation of
conduct and to notify conduct to the Commission before the Competition
Code applies to the conduct.
Clause 45 enables regulations to be made for savings and transitional
purposes. Regulations can be made retrospectively for this purpose, but any
retrospective effect is not to prejudice rights or impose liabilities (except as
regards the State or its authorities).
Explanatory note page 7