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1
Bank Merger (BankSA and Advance Bank)
BANK MERGER (BANKSA AND
ADVANCE BANK) BILL 1996
EXPLANATORY NOTES
Introductory Note
In June 1995, the South Australian Government reached an agreement to
sell the Bank of South Australia Limited ("BankSA") to Advance Bank
Australia Limited ("Advance Bank"). The sale completed the
corporatisation of the former State Bank of South Australia.
BankSA is required under Reserve Bank regulations to surrender its
banking licence. It is thus necessary to transfer BankSA's undertakings to
Advance Bank.
Further, since Commonwealth legislation is not being passed,
inconsistencies between this Bill and various Commonwealth Acts such as
the Privacy Act and the Cheques Act may arise. The Act is to be gazetted
for the purposes of section 38A of the Banking Act 1959 in order to remove
any possible inconsistencies between this Bill and such existing
Commonwealth legislation. It is envisaged that gazettal will take place after
passing and before commencement of the Bill.
The aim of these notes is to explain the operation of the legislation.
Policy objectives of the Bill
To provide for the transfer of the undertaking of BankSA to Advance
Bank by:
· providing for the transfer of assets and liabilities in Queensland
from BankSA to Advance Bank, without the usual written
documents;
· providing for certain exemptions from Queensland State taxes
and charges (including stamp duty and debits tax), conditional
upon agreement to, and payment of, a lump sum in lieu of such
taxes and charges, the amount of which will be determined by the
Governor in Council, on the advice of the Treasurer; and
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Bank Merger (BankSA and Advance Bank)
· requiring the Queensland Registrar of Titles and other relevant
authorities to register certain transactions on written application by
Advance Bank.
In addition, the legislation creates certain safeguards for third parties who
are affected by the merger. This is desirable in ensuring no person suffers
loss or damage as a result of the merger.
The way these policy objectives will be achieved by the Bill and why
this way of achieving the policy objectives is reasonable and
appropriate
The primary objective is achieved by vesting the undertaking of BankSA
in Advance Bank, effectively transferring the assets and liabilities, and by
allowing exemption for State taxes and charges, conditional upon the
payment of a lump sum in lieu of such charges. A legislative approach
such as this overcomes the need to identify, transfer ownership and pay
duty on the conveyance of individual assets and liabilities.
Protection for third parties is achieved by transferring employment and
employee entitlements to Advance Bank, removing the obligation of third
parties to enquire as to the title of assets and liabilities, continuing customer
relationships with Advance Bank, continuing legal proceedings by or
against Advance Bank and providing for transitional administrative
arrangements. Legislating in these areas establishes clear guidelines as to
the rights and obligations of the merged entity.
Alternative way of achieving the policy objective
The alternative method to transfer the banking business of BankSA to
Advance Bank is to identify and transfer individual assets and liabilities by
conveyance, and for Advance Bank to pay stamp duty on each individual
transfer. In these circumstances, assistance would not be provided to the
merging banks and the benefit of protection for third parties would be
forgone.
Administrative costs for Government implementation of this Bill
The administrative costs arising from this Bill are insignificant and able
to be met from current appropriations.
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Bank Merger (BankSA and Advance Bank)
Consistency with fundamental legislative principles
Care has been taken in drafting this Bill to ensure that no aspects of the
Bill infringe upon fundamental legislative principles.
Consultation
Consultation has been undertaken with the Treasury Department (Office
of State Revenue), Justice Department (Office of Consumer Affairs), the
Department of Natural Resources (Titles Office) and the Department of
Premier and Cabinet (Office of Parliamentary Counsel). BankSA also has
been consulted extensively during formulation of the Bill.
PART 1--PRELIMINARY
Clause 1 specifies the short title.
Clause 2 provides that the Act commences on the commencement of the
South Australian Act. Retrospectivity is precluded from occurring by
providing that the Act will commence on assent, if the South Australian Act
commences before assent.
Clause 3 defines words and expressions used in the Act.
Clause 4 provides that the Act will bind the Crown.
PART 2--VESTING OF BSAL's UNDERTAKING IN
ABAL
Clause 5 provides for the undertaking of BankSA to be transferred to,
and vested in, Advance Bank on the appointed day, which is a day to be set
by proclamation under the South Australian Act.
Clause 6 provides, in relation to transferred assets and liabilities:
(a) references to BankSA, a BankSA branch and BankSA staff, are
to be interpreted as references to Advance Bank, the
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Bank Merger (BankSA and Advance Bank)
corresponding Advance Bank branch and the corresponding
Advance Bank staff; and
(b) the relationship between a customer and BankSA that existed
immediately before the transfer is continued between the
customer and Advance Bank after the transfer; and
(c) instructions, orders, mandates, authorities or notices given to
BankSA before transfer are taken as having been given to
Advance Bank; and
(d) security held by BankSA is transferred to Advance Bank and
Advance Bank has the same rights and obligations as BankSA
would have had if the transfer had not taken place. In addition,
Advance Bank is entitled to use that security to fulfil any
obligations arising after the transfer;
(e) Advance Bank is entitled to possession of all documents relating
solely to transferred assets and liabilities, and is entitled to access
and copy documents which relate only partly to transferred assets
and liabilities; and
(f) Advance Bank is liable for payment on certain instruments carried
out by BankSA as if those instruments had been carried out by
Advance Bank; and
(g) cheques drawn on BankSA accounts which have been transferred,
are taken to be drawn on the corresponding account at Advance
Bank; and
(h) credit and debit cards issued by BankSA on accounts which have
been transferred under the Act, are taken to have been issued by
Advance Bank and to be the property of Advance Bank; and
(i) Advance Bank is entitled to possession and use of property
acquired under lease agreements without exposing BankSA to
liability for breach of conditions restricting such behaviour; and
(j) Advance Bank is able to ratify contracts or agreements in the
same manner as BankSA could have if the transfer had not
occurred; and
(k) legal proceedings commenced by or against BankSA are to be
continued by or against Advance Bank. Advance Bank is subject
to the same rights and liabilities that BankSA would have been
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Bank Merger (BankSA and Advance Bank)
subject to if the transfer had not taken place. Documents which
could have been used as evidence by or against BankSA may be
used in the same manner by or against Advance Bank; and
(l) Advance Bank may carry out transactions on transferred assets
and liabilities in its own name, BankSA's name or the name of
any predecessor in title to BankSA.
Clause 7 provides that an instruction, order, mandate, authority or notice
for payment to be made to a BankSA account which has been transferred
under this Act, is to be construed as an instruction, order or mandate for
payment to be made to the corresponding Advance Bank account.
Clause 8 provides that the registrar of titles or any other person required
to register transfers, may, without formal application, note a transfer under
this Act. Where a written application has been lodged by Advance Bank,
the registrar of titles must note those transfers requested by Advance Bank,
provided that the appropriate fee is paid. If a transaction is carried out by
Advance Bank, and that transaction normally would be required to be
registered, but the proprietor of that asset currently is registered as BankSA
or a predecessor in title to BankSA, then the transaction must be registered
even though Advance Bank is not the registered proprietor.
Clause 9 removes the obligation of persons dealing with either bank to
enquire as to whether assets and liabilities are, or are not, transferred.
Further, a transaction will not be invalid merely because the particular bank
was not entitled to deal with that asset or liability due to the fact that it was,
or was not, transferred. However, this clause is not applicable where the
person has committed a fraud or was aware that the bank was not entitled to
transact in relation to that asset or liability.
PART 3--STAFF
Clause 10 provides the CEO may transfer all staff, by an order an
writing, within 12 months of the appointed day. Such employees cease to
be employed by BankSA and commence employment with Advance Bank.
However the rights, terms of employment and accrued entitlements of such
employees are not affected. The status and position of employees is
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Bank Merger (BankSA and Advance Bank)
protected. Any liability of BankSA relating to employee entitlements is
transferred to Advance Bank upon the transfer of employment.
Clause 11 excludes directors, secretaries and auditors from a transfer of
employment carried out under clause 10.
PART 4--MISCELLANEOUS
Clause 12 provides exemption from Queensland State taxes and charges
payable in relation to the transfer of assets and liabilities from BankSA to
Advance Bank, subject to payment by Advance Bank to the Treasurer of an
amount in lieu of all such State taxes and charges. Payment of the sum is to
be notified by gazette notice. By virtue of the definition of State tax, the
exemption does not extend to fees charged for recording or registering a
transfer of ownership.
Clause 13 allows the CEO to issue a certificate specifying whether
certain assets and liabilities are, or are not, transferred. Certificates must be
accepted as evidence of the matter certified. This clause also provides that
the transfer does not affect the evidentiary value of banking records.
Clause 14 provides that any action taken under the Act does not
constitute a breach of a contract, an Act or any other law. Further, nothing
done under the Act constitutes a breach of duty of confidence, constitutes a
civil or criminal wrong, allows a party to terminate an agreement or
obligation or releases a surety or other obligee from an obligation.
Clause 15 authorises Advance Bank to carry on business under any of
the following names:
(a) its own name;
(b) Bank of South Australia;
(c) BankSA;
(d) any other name registered under the Business Names Act 1962.
Clause 16 provides that the Governor in Council may make regulations.
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Bank Merger (BankSA and Advance Bank)
Clause 17 provides that a copy of the schedule to the South Australian
Act is attached, however, that schedule does not form part of this Act.
Clause 18 provides that section 20A of the Acts Interpretation Act 1954
applies to this Act. This provides for the continuation of effectiveness of the
Act after its expiry.
Clause 19 provides for the Act to expire in 20 years. This provides a
reasonable period during which the Act remains on the statue books and is
accessible by Advance Bank should a need arise wherein a defence needs to
be mounted against such charges as, for example, the effect of the Act
having contravened a provision of another law.
© The State of Queensland 1996