New South Wales Bills Explanatory Notes New South Wales Bills Explanatory Notes[Index] [Search] [Download] [Bill] [Help]
CORPORATIONS (NEW SOUTH WALES) AMENDMENT
BILL 1991
NEW SOUTH WALES
EXPLANATORY NOTE
(This Explanatory Note relates to this Bill as introduced into Parliament)
General objects
1. The objects of this Bill arc to make a series of miscellaneous amendments to the
Corporations (New South Wales) Act 1990 and to enact provisions consequent on the
abolition of the National Companies and Securities Commission (the NCSC).
Background
2. The Corporations (New South Wales) Act 1990 is part of a legislative scheme that
involves complementary legislation of the Commonwealth, the States and the Northern
Territory. The scheme is based on an agreement reached at a meeting of Ministers at
Alice Springs on 29 June 1990.
3. The Northern Territory is treated as a State for the purposes of the scheme, and
accordingly references in this Explanatory Note to a State extend to the Northern
Territory.
4. The Commonwealth component of the legislation is contained in the Corporations
Act 1989 (the Corporations Act) and the Australian Securities Commission Act 1989.
5. The corporations Legislation Amendment Act 1990 amended those Acts to
separate the substantive law from the machinery provisions relating to the application of
the law and supporting legislative infrastructure. The Commonwealth legislation is
limited in its application to the Australian Capital Territory. The State Acts contain
complementary machinery provisions that apply the substantive law to the respective
States and provide similar supporting legislative infrastructure.
6. A major feature of the Commonwealth and State legislation is the use of legal
devices to establish a framework that creates a uniform legal text that has the
appearance and, for most practical purposes, the effect of a single national law.
7. The result is that amendments made to the substantive provisions by
Commonwealth legislation automatically become part of the law of the States through
the operation of the machinery provisions in the State legislation.
Corporations (New South Wales) Amendment 1991
8. Amendments to both the substantive and machinery provisions are to involve
consultation with the Ministerial Council for Corporations.
9. Consistent with the establishment of a single national regulatory framework, the
Australian Securities Commission (the ASC) was established as the principal
administering authority, replacing the NCSC and the State Corporate Affairs offices.
The Corporations Legislation Amendment Act 1991
10. The Corporations Legislation Amendment Act 1991 of the Commonwealth (Act
No. 110 of 1991) was assented to on 27 June 1991. For ease of reference, that Act is
referred to in this Explanatory Note as "the Commonwealth Bill". Broadly, the
Commonwealth Bill has three purposes:
(a) to amend the substantive provisions (these amendments are applied
automatically as law of the States);
(b) to amend the machinery provisions;
(c) to abolish the NCSC.
Some of the amendments are designed to bring the Corporations Act into conformity
with the current text of the State Acts.
This Bill
11. This Bill amends the machinery provisions contained in the Corporations (New
South Wales) Act 1990. Most of the amendments complement the amendments made to
the Commonwealth machinery provisions by the Commonwealth Bill. The Bill also
enacts complementary provisions relating to the abolition of the NCSC.
12. The bulk of the provisions of the Bill relate to the Family Court of Australia and
the Family Court of Western Australia, and the abolition of the NCSC. These aspects are
discussed in the following paragraphs. The provisions of the Bill are discussed in detail
in the notes on provisions that follow paragraph 17.
Jurisdiction of the Family Courts
13. As mentioned above, the bulk of the amendments relate to the Family Courts of
Australia and Western Australia. The Bill will confer cross-vested jurisdiction under the
Corporations Law on the Family Courts. The amendments propose to restore to the
Family Courts the jurisdiction those courts had in relation to companies and securities
legislation immediately before the commencement of the Corporations Law on 1
January 1991.
14. Before the commencement of the Corporations Law, the Family Courts had
jurisdiction to deal with matters under the co-operative companies and securities
legislation by virtue of the general scheme for the cross-vesting of jurisdiction of
Australian Courts. However, the corporations legislation excluded the general
cross-vesting scheme and replaced it with a special regime for the vesting and
cross-vesting of jurisdiction between the Federal Court and the State and Territory
Courts on Corporations Law matters, in which all those Courts have full co-ordinate
jurisdiction under the law.
15. The Bill, together with the complementary legislation of the Commonwealth and
the other States, gives the Family Courts the same status under the Corporations Law as
they had under the general cross-vesting legislation m relation to jurisdiction under the
16. For this reason the obligations on the Family Courts to transfer, in appropriate
cases, Corporations Law matters to other courts follow closely the provisions of the
general Jurisdiction of Courts (Cross-vesting) legislation. A Family Court will be able to
transfer a case to any appropriate State Supreme Court or the Federal Court having
jurisdiction under the Corporations Law.
Abolition of the NCSC
17. As the functions of the NCSC have been assumed by the ASC, and the further
existence of that body is redundant, the NCSC is to be abolished by Commonwealth
legislation. Powers and duties were imposed on the NCSC by the National Companies
and Securities Commission (State Provisions) Act 1981. The Bill will repeal that Act,
and require the tabling of certain reports and financial statements before the Parliament
of the State.
PART 1--PRELIMINARY
Clause 1 provides for the citation of the proposed Act and states its purpose.
Clause 2 provides for the commencement of the proposed Act. Some amendments
of a technical nature are taken to have commenced on 1 January 1991. The formal
provisions of the Bill are to commence on assent, as are the transitional provisions
relating to the reports and financial statements of the NCSC. The remaining provisions
are to commence on a proclaimed day or days.
PART 2--AMENDMENTS
Clause 3 is a formal provision giving effect to the Schedule of amendments.
PART 3--ABOLITION OF NATIONAL COMPANIES AND SECURITIES
COMMISSION
Clause 4 repeals the National Companies and Securities commission (State
provisions) Act 1981. This complements the repeal of the National Companies and
Securities Commission Act 1979 of the Commonwealth by section 14 of the
Commonwealth Bill.
Clause 5 requires the Minister to table
in Parliament a copy of each report of the
operations of the NCSC and the financial statements of the NCSC prepared by the ASC
under section 15 of the Commonwealth Bill, together with a copy of the report of the
Auditor-General of the Commonwealth on those financial statements.
SCHEDULE 1--AMENDMENTS
Schedule 1 (1) (a) amends the definition of "Commonwealth administrative laws" to
include the regulations made under the relevant Commonwealth Acts. This amendment
is made for the avoidance of doubt and is intended to make explicit what was intended
Corporations (New South Wales) Amendment 1991
to be implicit in the operation of the present provisions. This amendment is consistent
with the amendment made to section 4 of the Corporations Act by Schedule 1 to the
Commonwealth Bill.
Schedule 1 (1) (b) and (c) insert definitions of "Family Court" and "State Family
Court", which correspond to the definitions inserted into section 50 of the Corporations
Act by Schedule 1 to the Commonwealth Bill. Schedule 1 (1) (b) also inserts a
definition of "Federal Court".
Schedule 1 (2) amends section 30 to make it clear that the Commonwealth laws
applying as laws of the State to offences against the applicable provisions of another
jurisdiction apply as if they were not laws of that jurisdiction, but as laws of the
Commonwealth. This will bring section 30 into line with section 29, and complements
amendments to section 42 of the Corporations Act made by Schedule 1 to the
Commonwealth Bill.
Schedule
l (3) amends the definition of "Corporations
Law of New South Wales" in
section 41 to include rules of court made by the Family Courts. This is consequential on
the conferral of cross-vested jurisdiction on the Family Courts, and corresponds to an
amendment to section 50 of the Corporations Act made by Schedule 1 to the
Commonwealth Bill.
Schedule 1 (4) amends section 42 to omit words that become redundant as a
consequence of the new definition of "Federal Court".
Schedule 1 (5) confers jurisdiction on the Family Court of Australia with respect to
civil matters arising under the Corporations Law of this jurisdiction. Jurisdiction is also
conferred on State Family Courts with respect to those matters. The conferral of this
jurisdiction on a State Family Court is limited to the extent that a court of a State does
not have jurisdiction to grant an injunction, a prerogative writ or a declaratory order m
relation to certain decisions of an administrative character, in accordance with section 9
of the Administrative Decisions (Judicial Review) Act 1977. The clause corresponds to
section 51A of the Corporations Act, as inserted by Schedule 1 to the Commonwealth
Bill.
Schedule 1 (6) repeals section 43 and inserts a new section that takes account of the
inclusion of the Family Courts in the scheme. The section ensures that, despite the
cross-vesting of jurisdiction, the normal hierarchy of appeals is to apply. The section
corresponds to the new section 52 inserted in the corporations Act by Schedule 1 to the
Commonwealth Bill.
Schedule 1 (7) and (8) omit
three subsections of section 44 and replace them with
new sections 44B, 44C and 44D, which apply for the purposes of transfer of
proceedings under section 44 and proposed section 44A.
Schedule 1 (8) also inserts section 44A, which
establishes a regime for the transfer
of proceedings m respect of civil matters arising under the Corporations Law instituted
in a Family Court. It differs from the regime in section 44 that applies in relation to such
proceedings instituted in other superior courts. The section 44A regime is similar to the
provisions for the transfer of proceedings under the general cross-vesting arrangements
established by the Jurisdiction of Courts (Cross-vesting) legislation. The provisions
ensure that proceedings begun inappropriately m a Family Court, M related proceedings
begun in separate courts, will be transferred to an appropriate court.
Schedule 1 (9) and (10) amend sections 45 and 50 in consequence of the inclusion
of the Family Courts in the civil cross-vesting arrangements. These amendments
correspond to the amendments to sections 54 and 59 of the Corporations Act by
Schedule 1 to the Commonwealth Bill.
Schedule 1 (11) inserts a new section 52A relating to the rules of court that a Family
Court should apply with respect to matters arising under the Corporations Law of this
jurisdiction. The section corresponds to subsections (2)--(4) of section 61A inserted in
the Corporations Act by Schedule 1 to the Commonwealth Bill.
Schedule 1 (12) replaces section 74 (3). The new subsection widens the scope of the
provision to include all national scheme laws of the particular jurisdiction rather than
only the ASC Law, and recognises for the purposes of the national scheme law of one
jurisdiction that an offence under the Crimes Act 1914 of the Commonwealth as it
applies in relation to an examination or hearing under the ASC Law of another
jurisdiction is taken to be an offence under the ASC Law of that other jurisdiction. The
purpose of the provision is to ensure that offences under Part III of the Crimes Act l9 14
of the Commonwealth are "cross-federalised" for the purposes of enforcement of the
ASC Law. The subsection corresponds to section 88 (1A) of the Australian Securities
Commission Act 1989 of the Commonwealth, as amended by Schedule 7 to the
Commonwealth Bill.
Schedule 1 (13) corrects a typographical error in section 85, and brings the section
into line with section 76 of the Commonwealth Act.
Schedule 1 (14) replaces
the definition of "instrument" in section 90. The effect of
the new definition is to exclude the national scheme laws and regulations of this
jurisdiction from the expression, so that the provisions construing references to
co-operative scheme laws etc. will not apply to them. It is assumed that if a national
scheme law refers to a co-operative scheme law it does so deliberately and the reference
is not meant to be updated The new definition corresponds to the definition inserted in
section 80 of the Corporations Act by Schedule 1 to the Commonwealth Bill.