(1) If a
director of a statutory SOC has a direct or indirect interest in a matter
being considered, or about to be considered, by the board, the director must
disclose the nature of the interest to a meeting of the board as soon as
practicable after the relevant facts come to the director's knowledge.
:
Maximum penalty--100 penalty units.
(2) The disclosure must be recorded in
the board's minutes.
2 Voting by interested director
(1) A director of a statutory SOC who has a
material personal interest in a matter that is being considered by the board
must not--
(a) vote on the matter, or
(b) vote on a proposed resolution (a
"related resolution" ) under subclause (2) in relation to the matter (whether
in relation to the director or another director), or
(c) be present while the
matter, or a related resolution, is being considered by the board, or
(d)
otherwise take part in any decision of the board in relation to the matter or
a related resolution.
: Maximum penalty--100 penalty units.
(2) Subclause
(1) does not apply to the matter if the board has at any time passed a
resolution that--
(a) specifies the director, the interest and the matter, and
(b) states that the directors voting for the resolution are satisfied that the
interest should not disqualify the director from considering or voting on the
matter.
(3) In determining whether a quorum is present at a meeting of the
board during a consideration of such a matter by the board, only those
directors are regarded as present who are entitled to vote on any motion that
may be moved in relation to the matter.
(4) The voting shareholders may, by
each signing consent to a proposed resolution, deal with a matter if the board
cannot deal with it because of subclause (3).
(c) another person who is concerned, or
takes part, in the SOC's management.
(2) An officer of a statutory SOC must
act honestly in the exercise of powers, and discharge of functions, as an
officer of the SOC.
: Maximum penalty--
(a) if the contravention is committed
with intent to deceive or defraud the SOC, creditors of the SOC or creditors
of another person or for another fraudulent purpose--500 penalty units or
imprisonment for 5 years, or
(b) in any other case--100 penalty units.
(3)
In the exercise of powers and the discharge of functions, an officer of a
statutory SOC must exercise the degree of care and diligence that a reasonable
person in a like position in a statutory SOC would exercise in the
statutory SOC's circumstances.
: Maximum penalty--100 penalty units.
(4) An
officer of a statutory SOC, or a person who has been an officer of a
statutory SOC, must not make improper use of information acquired because of
his or her position as an officer of the SOC--
(a) to gain, directly or
indirectly, an advantage for himself or herself or for another person, or
(b)
to cause detriment to the SOC.
: Maximum penalty--500 penalty units or
imprisonment for 5 years.
(5) An officer of a statutory SOC must not make
improper use of his or her position as an officer of the SOC--
(a) to gain,
directly or indirectly, an advantage for himself or herself or another person,
or
(b) to cause detriment to the SOC.
: Maximum penalty--500 penalty units
or imprisonment for 5 years.
(a) if the person or another person made a
profit because of the contravention--an amount equal to the profit, and
(b)
if the statutory SOC suffered loss or damage because of the contravention--an
amount equal to the loss or damage.
(7) An amount may be recovered from the
person under subclause (6) whether or not the person has been convicted of an
offence in relation to the contravention.
(9)
In determining for the purposes of subclause (3) the degree of care and
diligence that a reasonable person in a like position in a statutory SOC would
exercise in the circumstances of the statutory SOC concerned, regard must be
had to--
(a) is in addition to, and does not limit,
any rule of law relating to the duty or liability of a person because of the
person's office in relation to a corporation, and
(b) does not prevent civil
proceedings being instituted for a breach of the duty or the liability.
4 Prohibition on loans to directors
(1) A statutory SOC must not, whether
directly or indirectly--
(a) make a loan to a director, a spouse or de facto
partner, of a director or a relative of a director, spouse or de facto
partner, or
(b) give a guarantee or provide security in connection with a
loan made to a director, a spouse or de facto partner, of a director or a
relative of a director, spouse or de facto partner.
(2) Subclause (1)
does not apply to the entering into by the SOC of an instrument with a person
mentioned in subclause (1) if the instrument is entered into on the same terms
as similar instruments (if any) are entered into by the SOC with members of
the public.
(3) A director of a statutory SOC who is knowingly concerned in a
contravention of subclause (1) by the SOC (whether or not in relation to the
director) commits an offence.
(a)
indemnify a person who is or has been an officer of the SOC against a
liability incurred as an officer, or
(b) exempt a person who is or has been
an officer of the SOC from a liability incurred as an officer.
(2) An
instrument is void so far as it provides for the statutory SOC to do something
that subclause (1) prohibits.
(3) Subclause (1) does not prevent the
statutory SOC from indemnifying a person against civil liability (other than a
liability to the SOC or a subsidiary of the SOC) unless the liability arises
out of conduct involving a lack of good faith.
(4) Subclause (1) does not
prevent the statutory SOC from indemnifying a person against a liability for
costs and expenses incurred by the person--
(a) in defending a proceeding,
whether civil or criminal, in which judgment is given in favour of the person
or in which the person is acquitted, or
(b) in connection with an application
in relation to a proceeding in which relief is granted to the person by a
court.
(5) The statutory SOC may give an indemnity mentioned in subclause (3)
or (4) only with the prior approval of the voting shareholders.
(1)
A statutory SOC must not pay, or agree to pay, a premium in relation to a
contract insuring a person who is or has been an officer of the SOC against a
liability--
(i) a wilful breach of duty in relation to the SOC, or
(ii) without limiting subparagraph (i), a contravention of clause 3 (4) or
(5).
(2) Subclause (1) does not apply to a liability for costs and expenses
incurred by a person in defending proceedings, whether civil or criminal, and
whatever their outcome.
(3) An instrument is void so far as it insures a
person against a liability in contravention of subclause (1).
(c) another person who is concerned, or
takes part, in the SOC's management.
"pay" includes pay indirectly through one or more interposed entities.
7 Director's duty to prevent insolvent trading
(1) If--
(a) immediately
before a statutory SOC incurs a debt--
(i) there are reasonable grounds to
suspect that the SOC will not be able to pay all its debts as and when they
become due, or
(ii) there are reasonable grounds to suspect that, if the SOC
incurs the debt, it will not be able to pay all its debts as and when they
become due, and
(b) the SOC is, or later becomes, unable to pay all its debts
as and when they become due,
a person who is a director of the SOC, or takes
part in the SOC's management, at the time when the debt is incurred commits an
offence.
: Maximum penalty--100 penalty units or imprisonment for 1 year.
(2)
In a proceeding against a person for an offence against this clause, it is a
defence if it is proved--
(a) that the debt was incurred without the person's
express or implied authority or consent, or
(b) that, at the time when the
debt was incurred, the person did not have reasonable cause to suspect--
(i)
that the SOC would not be able to pay all its debts as and when they became
due, or
(ii) that, if the SOC incurred that debt, it would not be able to pay
all its debts as and when they became due, or
(c) that the person took all
reasonable steps to prevent the SOC from incurring the debt, or
(d) in the
case of a director--that the person did not take part at the time in the SOC's
management because of illness or for some other good cause.
8 Court may order compensation
(1) If a person is found guilty of an offence
against clause 7 (Director's duty to prevent insolvent trading) in relation to
the incurring of a debt by a statutory SOC, the Supreme Court may declare that
the person is to be personally responsible without any limitation of liability
for the payment to the SOC of the amount required to satisfy the part of the
SOC's debts that the court considers proper.
(2) This clause does not affect
any rights of a person to indemnity, subrogation or contribution.
(a) is in addition to, and does not limit, any rule of law about the
duty or liability of a person because of the person's office in relation to a
corporation, and
(b) does not prevent proceedings being instituted for a
breach of the duty or the liability.
(a) a person who has been concerned, or taken
part, in a statutory SOC's management, administration or affairs has been, or
may have been, guilty of fraud, negligence, default, breach of trust or breach
of duty or other misconduct in relation to the SOC, or
(b) a person may be
capable of giving information in relation to a statutory SOC's management,
administration or affairs,
the Attorney General may apply to the Supreme Court
or the District Court for an order under this clause in relation to the
person.
(2) The court may order that the person attend before the court at a
time and place fixed by the court to be examined on oath on any matters
relating to the SOC's management, administration or affairs.
(3) The
examination of the person is to be held in public except so far as the court
considers that, because of special circumstances, it is desirable to hold the
examination in private.
(4) The court may give directions about--
(a) the
matters to be inquired into at the examination, and
(b) the procedures to be
followed at the examination (including, if the examination is to be held in
private, the persons who may be present).
(5) The person must not fail,
without reasonable excuse--
(a) to attend as required by the order, or
(b) to
continue to attend as required by the court until the completion of the
examination.
: Maximum penalty--200 penalty units or imprisonment for 2
years.
(6) The person must not fail to take an oath or make an affirmation at
the examination.
: Maximum penalty--200 penalty units or imprisonment for 2
years.
(7) The person must not fail to answer a question that the person is
directed by the court to answer.
: Maximum penalty--200 penalty units or
imprisonment for 2 years.
(8) The person may be directed by the court
(whether in the order or by subsequent direction) to produce any document in
the person's possession, or under the person's control, relevant to the
matters on which the person is to be, or is being, examined.
(9) The person
must not, without reasonable excuse, contravene a direction under subclause
(8).
: Maximum penalty--200 penalty units or imprisonment for 2 years.
(10)
If the court directs the person to produce a document and the person has a
lien on the document, the production of the document does not prejudice the
lien.
(11) The person must not knowingly make a statement at the examination
that is false or misleading in a material particular.
: Maximum penalty--500
penalty units or imprisonment for 5 years.
(12) The person is not excused
from answering a question put to the person at the examination on the ground
that the answer might tend to incriminate the person or make the person liable
to a penalty.
(13) If--
(a) before answering a question put to the person at
the examination, the person claims that the answer might tend to incriminate
the person or make the person liable to a penalty, and
(b) the answer might
in fact tend to incriminate the person or make the person liable to a penalty,
the answer is not admissible in evidence against the person in--
(c) a
criminal proceeding, or
(d) a proceeding for the imposition of a penalty,
other than a proceeding for an offence against this clause or another
proceeding in relation to the falsity of the answer.
(14) The court may order
the questions put to the person and the answers given by the person at the
examination to be recorded in writing and may require the person to sign the
record.
(15) Subject to subclause (13), any written record of the examination
signed by the person, or any transcript of the examination that is
authenticated by the signature of the examiner, may be used in evidence in any
legal proceeding against the person.
(16) The person may, at his or her own
expense, employ counsel or a solicitor, and the counsel or solicitor may put
to the person questions that the court considers just for the purpose of
enabling the person to explain or qualify any answers given by the person.
(17) The court may adjourn the examination from time to time.
(18) If the
court is satisfied that the order for the examination of the person was
obtained without reasonable cause, the court may order the whole or any part
of the costs incurred by the person be paid by the State.
(2) If, in a proceeding
against a person to whom this clause applies for negligence, default, breach
of trust or breach of duty as a person to whom this clause applies, it appears
to the court that--
(a) the person is or may be liable for the negligence,
default or breach, but
(b) the person has acted honestly and, having regard
to all the circumstances of the case (including circumstances connected with
the person's appointment) the person ought fairly to be excused for the
negligence, default or breach,
the court may relieve the person (in whole or
part) from liability on terms that the court considers appropriate.
(3) If a
person to whom this clause applies believes that a claim will or might be made
against the person for negligence, default, breach of trust or breach of duty
as a person to whom this clause applies, the person may apply to the Supreme
Court or the District Court for relief.
(4) The court has the same power to
relieve the person as it would have if a proceeding had been brought against
the person in the court for the negligence, default or breach.
(5) If--
(a) a
proceeding mentioned in subclause (2) is being tried by a Judge with a jury,
and
(b) the Judge, after hearing the evidence, is satisfied that the
defendant ought under that subclause be relieved (in whole or part) from the
liability sought to be enforced against the person,
the Judge may withdraw the
case (in whole or part) from the jury and direct that judgment be entered for
the defendant on the terms (as to costs or otherwise) that the Judge considers
appropriate.
(a) make a statement concerning the affairs of
the SOC to another officer or the voting shareholders that the first officer
knows is false or misleading in a material particular, or
(b) omit from a
statement concerning the SOC's affairs made to another officer or the
voting shareholders anything without which the statement is, to the first
officer's knowledge, misleading in a material particular.
(3) An information
or complaint against a person for an offence against subclause (2) (a) or (b)
is sufficient if it states that the information given was false or misleading
to the person's knowledge.
(4) An officer of a statutory SOC must not give to
another officer or the voting shareholders a document containing information
that the first officer knows is false, misleading or incomplete in a material
particular without--
(a) indicating to the recipient that the document is
false, misleading or incomplete and the respect in which the document is
false, misleading or incomplete, and
(b) giving the correct information to
the recipient if the first officer has, or can reasonably obtain, the correct
information.
: Maximum penalty--
(a) if the contravention is committed with
intent to deceive or defraud the SOC, creditors of the SOC or creditors of
another person or for another fraudulent purpose--500 penalty units or
imprisonment for 5 years, or
(b) in any other case--100 penalty units.
12 Notice of suspected insolvency otherwise than because of direction or
notification
(1) If--
(a) a statutory SOC's board suspects that the SOC or a
subsidiary of the SOC is, may be, will or may become insolvent, and
(b) in
the board's opinion, compliance with a direction or notification given by the
voting shareholders is not or would not be the cause or a substantial cause of
the suspected insolvency,
(2) The notice must state that it is given under this clause.
(3)
If the voting shareholders are satisfied that the board's suspicion is
well-founded, the voting shareholders must immediately give the board the
written directions that the voting shareholders consider necessary or
desirable, including any directions necessary or desirable to ensure--
(b)
that the statutory SOC or subsidiary will be able to pay all its debts as and
when they become due.
(4) Without limiting subclause (3), a direction under
this clause may require the statutory SOC or any of its subsidiaries to cease
or limit particular activities.
(5) The board must ensure that a direction
under this clause is complied with in relation to the SOC and must, as far as
practicable, ensure that it is complied with in relation to its subsidiaries.
(6) This clause is in addition to, and does not limit, another provision of
this Act or another law.
(1) In determining for the purposes of the Corporations Law the
degree of care and diligence that a reasonable person in a like position in a
company SOC would exercise in the circumstances of the company SOC concerned,
regard must be had to--
(a) the application of this Act to the SOC, and
(b)
relevant matters required or permitted to be done under this Act in relation
to the SOC,
including, for example, any relevant directions, notifications or
approvals given to the SOC by the SOC's voting shareholders or
portfolio Minister.
(2) This section has effect despite the Corporations Law
.
Part 3 - SOCs generally
14 Application of Corporations Law to officers of SOC
subsidiaries
(1) In determining for the purposes of the Corporations Law the
degree of care and diligence that a reasonable person in a like position in a
subsidiary of a SOC would exercise in the circumstances of the subsidiary
concerned, regard must be had to--
(a) the application of this Act to the SOC
and subsidiary, and
(b) relevant matters required or permitted to be done
under this Act in relation to the SOC and subsidiary,
including, for example,
any relevant directions, notifications or approvals given to the SOC by the
SOC's voting shareholders or portfolio Minister.
(2) This section has effect
despite the Corporations Law .
