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1
Corporations (Ancillary Provisions) Bill 2001
CORPORATIONS (ANCILLARY
PROVISIONS) BILL 2001
EXPLANATORY NOTES
GENERAL OUTLINE
OBJECTIVES OF THE LEGISLATION
The purpose of this Bill is to enact ancillary provisions, including
transitional provisions and consequential amendments, relating to the
proposed new corporations legislation to be enacted by the Commonwealth
Parliament following references of matters relating to corporations made
by the States under section 51(xxxvii) of the Commonwealth Constitution.
The Queensland reference will be made under the Corporations
(Commonwealth Powers) Bill 2001. That Bill refers to the Commonwealth
Parliament certain matters relating to corporations, corporate regulation
and financial products and services. New South Wales and Victoria has
enacted a similar Act and the other States are to introduce corresponding
legislation. The Commonwealth proposes to enact, under the powers
conferred by these references and other powers available to it, a
Corporations Act 2001 and an Australian Securities and Investments
Commission Act 2001.
REASONS FOR THE OBJECTIVES AND HOW THEY WILL BE
ACHIEVED
This Bill, together with the Corporations (Commonwealth Powers) Bill
2001 and the Corporations (Administrative Actions) Bill 2001, make up the
legislative package needed in Queensland for the new corporations
arrangements.
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Corporations (Ancillary Provisions) Bill 2001
ADMINISTRATIVE COST TO GOVERNMENT OF
IMPLEMENTATION
The Bill will not impose any additional financial burdens on the
Government. The current arrangements for the sharing of revenue received
from the Corporations Law scheme (primarily from the collection of
registration and related fees by the Australian and Securities Commission)
as prescribed under the current Corporations Agreement will be
maintained.
FUNDAMENTAL LEGISLATIVE PRINCIPLES
The Bill raises an issue regarding consistency with the fundamental
legislative principles contained in section 4 of the Legislative Standards Act
1992 ("the LSA"). Specifically, clauses 5(5), 9(3), 12(2),(4) and (6), 13(4),
17(1)(f) and (2) and 26 may be in conflict with section 4(2)(b) of the LSA,
namely that legislation `has sufficient regard to the institution of
Parliament'.
These clauses may be seen as Henry VIII clauses, but they are designed
to operate in line with the purpose of the Bill, which is to enact ancillary
and transitional provisions, relating to the enactment by the Parliament of
the Commonwealth of new corporations legislation.
Generally, the effect of these clauses is to allow regulations to be made
providing for the application or non-application of certain provisions of the
Bill to certain references in State legislation or to specified circumstances.
The aim of these clauses is to facilitate the application of the new
Commonwealth corporations legislation in a manner which protects
provisions in Queensland legislation which may be inconsistent with the
new Commonwealth legislation and therefore invalid. The clauses will
facilitate immediate executive action where a potential inconsistency
arises.
As the primary aim of the clauses is to ensure a smooth transition from
the current Corporations Law to the new Commonwealth corporations
legislation, each of the Henry VIII clauses is to be subject to a 2-year sunset
clause.
The Parliament, in its scrutiny of the Bill, is fully apprised of the
parameters of its operation.
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Corporations (Ancillary Provisions) Bill 2001
CONSULTATION
The Bill was prepared through the Standing Committee of Attorneys-
General and the Ministerial Council for Corporations, in conjunction with
the Special Committee of Solicitors-General and the Parliamentary
Counsel's Committee.
All Government Departments were consulted during the preparation of
the Bill.
NOTES ON PROVISIONS
PART 1--PRELIMINARY
Clause 1 sets out the name (also called the short title) of the proposed
Act.
Clause 2 provides for commencement of the proposed Act.
Sub-clause (1) provides for the proposed Act, other than
Schedule (3) to come into operation immediately before the new
Commonwealth Corporations Act. Commencement at this time is
necessary to ensure an effective transition to the new
corporations arrangements.
Sub-clause (2) provides for Schedule (3) to come into operation
immediately after the new Commonwealth Corporations Act
comes into operation.
Clause 3 sets out the purpose of the proposed Act.
Clause 4 sets out definitions of terms used in the proposed Act.
Clause 5 sets out rules for determining whether provisions of old and
new legislation are corresponding provisions for the purposes of the
proposed Act.
Clause 6 provides that the proposed Act has effect despite any provision
of the Corporations (Queensland) Act 1990 or of the laws applied by that
Act, and avoids a possible argument that section 5 of that Act would
otherwise prevent the Bill from affecting the operation of that Act.
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Corporations (Ancillary Provisions) Bill 2001
PART 2--TRANSITIONAL PROVISIONS
Clause 7 limits the application of the national scheme laws (the
Corporations (Queensland) Act 1990, the Corporations Law of Queensland
and the ASIC Law of Queensland) to matters arising before the beginning
of the new corporations arrangements or matters arising out of such matters
to the extent that those matters are not dealt with by the new
Commonwealth legislation or the laws that pre-dated the national scheme
laws in Queensland (the co-operative scheme laws).
Clause 8 contains provisions dealing with the effect of clause 7.
Sub-clause (1) applies to the limitation of operation of the
national scheme laws effected by clause 7, the provisions of the
Acts Interpretation Act 1901 of the Commonwealth that apply on
a repeal. Thus all accrued rights and liabilities under the national
scheme laws are protected and legal proceedings in respect of
those rights and liabilities may be commenced or continued. The
Commonwealth provisions have been chosen so that a similar
result is achieved in all jurisdictions moving to the new
arrangements.
Sub-clause (2) cancels certain accrued rights and liabilities under
the national scheme laws where substituted rights and liabilities
are being provided under the new Commonwealth legislation.
Sub-clause (3) terminates certain legal proceedings commenced
under the national scheme laws where the new Commonwealth
legislation has the effect of deeming equivalent proceedings to
have been brought under the new legislation in the same court.
Sub-clause (4) ensures that a person does not have to pay in
respect of the same matter a fee or levy already paid under the
national scheme laws.
Sub-clause (5) defines "pre-commencement right or liability" for
the purposes of sub-clause (2).
Sub-clause (6) ensures that the limitation of operation of the
national scheme laws effected by clause 7 does not lead to the
revival of operation of laws previously superseded by the
national scheme laws.
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Corporations (Ancillary Provisions) Bill 2001
Clause 9 contains provisions designed to complement, and ensure the
widest possible operation of, certain provisions of the new Corporations
legislation.
Sub-clause (1) clarifies the continuing operation of existing State
laws that are inconsistent with the new Commonwealth
legislation by overcoming any argument against the effective
operation of those laws based on non-compliance with section 5
of the Corporations (Queensland) Act 1990.
Sub-clause (2) ensures the non-application of the new
Commonwealth legislation to a matter if a previous State
corporation's law did not apply to the matter.
Sub-clause (3) allows regulations to be made disapplying sub-
clause (1) or (2) in specified circumstances.
Sub-clause (4) provides a test of inconsistency for the purposes
of sub-clause (1).
Sub-clause (5) preserves the operation of section 6 of the
Corporations (Queensland) Act 1990.
Sub-clause (6) defines "matter" and "relevant law of the State"
for the purposes of the clause.
Clause 10 provides for the continuance of certain proceedings despite
the cessation of operation of the national scheme laws and for certain court
orders to cease to have effect.
Clause 11 saves existing court rules made under the national scheme
laws.
Clause 12 deals with the construction of references to corporation's
legislation.
Sub-clause (1), in conjunction with the Table in Schedule 3,
construes references in Acts, instruments made under Acts and
laws applying as State laws to the national scheme laws as
including references to the new Commonwealth legislation.
Sub-clause (2) enables regulations to be made providing for the
non-application of sub-clause (1) in certain cases or for sub-
clause (1) to operate in certain cases on an exclusive, rather than
an inclusive, basis.
Sub-clause (3) excepts certain laws from the operation of sub-
clause (1).
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Corporations (Ancillary Provisions) Bill 2001
Sub-clause (4) enables regulations to be made construing
references in Acts, instruments made under Acts and laws
applying as State laws.
Sub-clause (5) provides that express references to the new
Commonwealth legislation include, in connection with past
events, circumstances or things, references to the corresponding
old corporations legislation of this and other jurisdictions that
participated in the national scheme.
Sub-clause (6) enables regulations to be made providing for the
non-application of sub-clause (5) in certain cases or for sub-
clause (5) to operate in certain cases to construe a reference as a
reference to the old corporations legislation of a specified
jurisdiction only.
Clause 13 deals with the construction of references to certain companies
in Acts, instruments made under Acts and laws applying as State laws.
Sub-clause (1) construes references to companies incorporated or
registered under the national scheme laws as references to
companies taken to be registered under the new Commonwealth
legislation in Queensland or other relevant jurisdiction.
Sub-clause (2) construes references to foreign companies.
Sub-clause (3) construes references to the jurisdiction of
incorporation of a company as references to the State or Territory
in which the company is taken to be registered under the new
Commonwealth legislation.
Sub-clause (4) enables regulations to be made providing for the
non-application of sub-clause (1), (2) or (3) in certain cases or for
sub-clause (1), (2) or (3) to operate in certain cases on an
inclusive, rather than an exclusive, basis.
PART 3--APPLICATION OF COMMONWEALTH
CORPORATIONS LEGISLATION TO STATE MATTERS
Clause 14 defines certain terms used in the Part.
Clause 15 facilitates the application of the new Commonwealth
legislation for the purposes of State laws in circumstances where it has no
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Corporations (Ancillary Provisions) Bill 2001
application of its own force. The effect is not to extend the operation of the
Commonwealth legislation but to enable it to be applied as State law. The
clause enables the use of a legislative device (a declaratory provision)
which will result in either the whole, or a specified portion, of the new
Commonwealth legislation being applied for the purposes of State law.
Clause 16 sets out the effect of particular declaratory provisions.
Clause 17 makes certain modifications of the new Commonwealth
legislation for the purposes of its application under this Part and enables
further modifications to be made under the proposed Act or the Act
containing the declaratory provision.
Clause 18 limits the circumstances in which a function may be
conferred on the Australian Securities and Investments Commission
(ASIC) by means of a declaratory provision and ensures that, even where a
function is conferred on it, ASIC is not under a duty to perform the
function.
Clause 19 translates references in applied laws to courts as references to
the Supreme Court or other specified State court.
Clause 20 applies automatically certain other provisions of the new
Commonwealth legislation where a declaratory provision is used but
enables the application of these additional provisions to be modified by
regulations under this Act.
Clause 21 deals with prosecutions under applied laws, including the
procedure to be followed and the maximum penalties available.
Clause 22 makes it clear that this Part does not provide an exhaustive
code of how the new Commonwealth legislation might be applied as State
laws.
PART 4--GENERAL
Clause 23 enables regulations to be made under this Act consequentially
amending certain other statutory rules without complying with Part 5 of the
Statutory Instruments Act 1992.
Clause 24 provides a rule-making power for the Supreme Court.
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Corporations (Ancillary Provisions) Bill 2001
Clause 25 enables the Minister, or a person authorised by the Minister,
to enter into an agreement or arrangement with ASIC for functions to be
performed or powers to be exercised by it as an agent of the State.
Clause 26 provides that a note in the text of the proposed Act is part of
the Act.
Clause 27 enables regulations to be made for the purposes of the
proposed Act. The regulations may modify the operation of the transitional
provisions contained in Part 2 and may facilitate the operation of State laws
under the regime provided by the new Commonwealth legislation.
Clause 28 provides that certain regulation-making powers and any
regulations made under those provisions will expire at the end of 30 June
2003.
Schedule 1 contains a table of reference translations for the purposes of
clause 12.
Schedule 2 and 3 set out the consequential amendments necessary to
various Queensland Acts.
The Schedules:--
· amend provisions referring to the Corporations Law, or any part
of it, so that they refer in future to the Corporations Act of the
Commonwealth, or the relevant part of it;
· correct references to particular provisions of the Corporations
Law so that they are read in future as references to the correct
provisions of the Corporations Act (this includes amendments
consequential on the Corporate Law Economic Reform Program
Act 1999 of the Commonwealth (CLERP));
· make similar amendments and corrections in relation to existing
references to the Companies (Queensland) Code and other Code
Acts;
· in accordance with Part 1.1A of the proposed Corporations Act
of the Commonwealth, continue certain existing exemptions,
exceptions and exclusions from the operation of the Corporations
Law;
· re-enact provisions in Acts that apply particular provisions of the
Corporations Law as if they were part of those Acts, so that the
provisions continue to apply as State law; and
· make other miscellaneous adjustments necessary for the new
corporations scheme.
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Corporations (Ancillary Provisions) Bill 2001
Where a reference to the Corporations Law is not amended by the
Schedule and it is intended that the reference not be changed, whether
because it is purely historical or for any other reason, the existing reference
will be preserved by regulations made under clause 12. It is necessary to do
so because clause 12 of the Bill contains a general translation provision
which changes all references unless the regulations otherwise provide.
© State of Queensland 2001