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1998-1999-2000
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
JURISDICTION OF COURTS LEGISLATION AMENDMENT BILL 2000
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be Moved on Behalf of the Government
(Circulated by authority of the
Attorney-General, the Hon Daryl Williams AM QC MP)
ISBN: 0642 430705
The Jurisdiction of Courts Legislation Amendment Bill contains amendments to various Commonwealth Acts to deal with some of the consequences of the High Court’s decision in Re Wakim; Ex parte McNally (1999) 163 ALR 270, and to make provision with respect to judicial review of decisions in the criminal justice process.
The proposed amendments to the Bill:
• confer jurisdiction on the Federal Court to review conduct of Commonwealth officers undertaken pursuant to State and Territory laws forming part of the National Registration Scheme for Agricultural and Veterinary Chemicals, and remove provisions from the Agricultural and Veterinary Chemicals Act 1994 which purport to permit States to confer jurisdiction on the Federal Court.
• amend the Australian Securities and Investments Commissions Act 1989 (ASIC Act) to reconfer upon the Federal Court jurisdiction to deal with actions for misleading or deceptive conduct in relation to dealings in securities of the kind lost due to the combined effect of the decision in Re Wakim and the Corporate Law Economic Reform Program Act 1999 (the CLERP Act);
• limit the availability of judicial review in courts exercising federal jurisdiction of decisions of the Corporations and Securities Panel relating to takeovers until after the ‘takeover period’; and
• amend the Director of Public Prosecutions Act 1983 to authorise the Director or a member of his staff to exercise rights of appeal conferred under State or Territory law in relation to prosecutions for State or Territory offences, confirm the Director’s rights of appeal in relation to proceedings for summary conviction in respect of Commonwealth offences, and confirm the Director’s authority to carry on or respond to appeals instituted by others in relation to such proceedings.
These amendments have no financial impact.
This amendment provides for the commencement of the amendments to the ASIC Act contained in proposed Schedule 3 to the Bill (see amendment 6). These amendments are to be taken to have commenced immediately after the commencement of the provisions in the CLERP Act which had the effect of removing the Federal Court’s jurisdiction in relation to actions for misleading or deceptive conduct in relation to dealings in securities. These provisions of the CLERP Act commenced on 13 March 2000. This retrospective operation of Schedule 3 will ensure that there is no lacuna in the Federal Court’s jurisdiction in respect of these matters.
This amendment provides for the amendments contained in Schedule 4 to commence on a date to be proclaimed.
Item 26 of Schedule 1 of the Bill inserts a new Schedule 3 into the Administrative Decisions (Judicial Review) Act 1977 (the ADJR Act). Schedule 3 describes classes of Acts of the States and Territories that will be ‘enactments’ for the purposes of the ADJR Act. This amendment adds to the classes of Acts described in Schedule 3 those Acts that apply as State or Territory law the code set out in the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994. The effect of this amendment will be that decisions of Commonwealth officers or authorities made pursuant to these statutes will be reviewable under the ADJR Act.
The Agricultural and Veterinary Chemicals Act 1994 enacted the legislative infrastructure for the complementary Commonwealth-State-Territory legislation establishing the National Registration Scheme for Agricultural and Veterinary Chemicals. A part of that infrastructure concerns the cross-vesting of State jurisdiction on the Federal Court of Australia which, after Re Wakim, has been rendered invalid. The amendments to the Bill made by amendments 4 and 5 remove provisions in the Agricultural and Veterinary Chemicals Act 1994 which purport to permit States to confer jurisdiction on the Federal Court. The capacity of the Northern Territory to confer jurisdiction on the Federal Court is retained.
This amendment adds Schedule 3 to the Bill. Schedule 3 contains amendments to the ASIC Act to reconfer upon the Federal Court jurisdiction to deal with actions for misleading or deceptive conduct in relation to dealings in securities of the kind lost due to the combined effect of the decision in Re Wakim and the CLERP Act. The CLERP Act amended Division 2 of Part 2 of the ASIC Act to remove a pre-existing inconsistency between the consumer protection provisions of that Division and provisions of the Corporations Law concerning securities matters. The CLERP Act amendments bring together in the Corporations Law the substantive rules about securities.
One effect of the amendments in the CLERP Act is to remove the possibility of bringing an action under Division 2 of Part 2 of the ASIC Act for a misleading or deceptive statement in a prospectus or takeover document, or any other action for conduct in relation to dealings in securities that is misleading or deceptive. Such action can now be brought only under the Corporations Law and, generally, only in State or Territory courts.
Schedule 3 will insert Subdivision J into Division 2 of Part 2 of the ASIC Act. Subdivision J will reinstate the Federal Court’s jurisdiction under the ASIC Act by reference to the Corporations Law actions.
Proposed section 12JA will ensure that Subdivisions A to I of Division 2 of Part 2 of the ASIC Act are disregarded in applying the provisions of Subdivision J. It is not intended that the other provisions of Division 2 should affect the operation of Subdivision J.
Proposed section 12JB will define the significant expressions used in Subdivision J.
The expression ‘constitutional corporation’ is defined to cover certain specified kinds of bodies corporate, and is relevant to the definition of ‘securities provisions’. The expression ‘securities provisions’ is defined to cover those provisions of the Corporations Law and related laws that are intended to be applied as Commonwealth law under Subdivision J. These provisions, as applied, are defined as the ‘applied law’. Paragraph (a) of the definition identifies sections 670A, 726, 727 and 728 of the Corporations Law, which deal with disclosure obligations in relation to takeovers and securities. Section 995 deals generally with misleading or deceptive conduct in connection with dealings in securities not involving a takeover or disclosure document.
Paragraph (b) identifies other provisions of the Corporations Law, Corporations Regulations, ASC Law and ASC Regulations, the operation of which may be incidental to the operation of the 5 sections identified in paragraph (a). It is intended, for example, that if the Australian Securities and Investments Commission were to seek an injunction under section 1324 of the Corporations Law restraining conduct that breaches the prohibition in section 995, section 1324 would operate as part of the applied law.
Paragraph (c) is intended to operate in a similar manner to cover other laws, including provisions of the Corporations Acts of the States and the Northern Territory, that may have an operation that is incidental to the operation of the primary provisions.
In addition to the definitions set out in proposed section 12JB, the definitions included in section 9 and other definitional provisions of the Corporations Law will be adopted for the purposes of Subdivision J, unless the provisions of Subdivision J indicate otherwise (see subsection 5(2) of the ASIC Act). For example, the expression ‘securities’ is defined in sections 9 and 92 of the Corporations Law.
Proposed subsection 12JC(1) will apply the securities provisions as a law of the Commonwealth. While the applied law will operate as a single, federal law, it is intended to apply the securities provisions as they operate in any given State or Territory jurisdiction (see the Note at the end of the subsection). Proposed subsection 12JC(2) will confirm that the operation of the securities provisions as Commonwealth law is in addition to the operation those provisions have as State or Territory laws. Proposed subsection 12JC(3) provides that the securities provisions, as they have effect in accordance with Subdivision J, will be referred to in Subdivision J as the ‘applied law’.
It is not intended that Subdivision J should create any liability to criminal prosecution (see proposed subsection 12JC(4)).
Proposed section 12JD will establish the jurisdiction of the Federal Court to adjudicate on matters arising under the applied law. Proposed subsection 12JD(1) will confer jurisdiction on the Federal Court with respect to civil matters (see proposed subsection 12JD(4) in relation to criminal matters). Proposed subsection 12JD(2) will provide that no other court (except the High Court) has jurisdiction in relation to the applied provisions. This provision will confirm that it is not intended that the State Supreme Courts will exercise jurisdiction under the applied provisions.
Proposed subsection 12JD(3) will make clear that the Federal Court has jurisdiction in relation to matters arising under the applied provisions. This provision is intended to prevail over other provisions relating to the jurisdiction of courts that may otherwise operate as part of the applied law (for example, section 58AA of the Corporations Law).
It is intended that the applied law should operate concurrently with the Corporations Law (see proposed subsection 12JE(1)).
Proposed subsections 12JE(2) and (3) address the issue of ‘double dipping’. Because the applied law establishes in Commonwealth law a series of prohibitions and remedies that are identical to those in States laws, this provision is necessary to ensure that the same remedy may not be sought for the same conduct more than once. Paragraphs 12JE(2)(a) and (3)(a) will prohibit a person from instituting proceedings under one set of laws in respect of loss or damage arising out of a contravention (either of the applied law or the Corporations Law) if the person has recovered in respect of that loss or damage in proceedings under the equivalent provisions of the alternative jurisdiction (the relevant Corporations Law provisions or the applied law).
The same prohibition will apply under paragraphs 12JE(2)(b) and (3)(b) if a person has brought proceedings to recover in respect of loss or damage, but judgment has been entered for the defendant.
Proposed section 243CA will provide that anything done under the applied provisions will be taken to have been done under, or for the purposes of, the corresponding provision of the relevant national scheme law of the jurisdiction. This will ensure that things done under the applied provisions can be treated as if they had been done under the Corporations Law. For example, under subparagraph 206E(1)(a)(ii) of the Corporations Law (inserted by proposed section 1, Schedule 1 of the CLERP Act), a person can be disqualified from managing corporations if the person has at least twice contravened the Corporations Law while they were an officer of a body corporate. Proposed section 243CA will ensure that contraventions of the ‘applied law’ can be taken into account in assessing whether a person could be disqualified from managing corporations.
This amendment contains amendments to the Corporations Act 1989 limiting the availability of judicial review, in courts exercising federal jurisdiction, of decisions of the Corporations and Securities Panel relating to takeovers in the ‘takeover period’.
The CLERP Act has reformed the takeover provisions of the Corporations Law. In particular, the reforms reconstitute the Corporations and Securities Panel (Panel) to take the place of the courts as the principal forum for resolving takeover disputes under the Corporations Law, with the exception of civil claims after a takeover has occurred, and criminal prosecutions. This will allow takeover disputes to be resolved as quickly and efficiently as possible by a specialist body largely comprised of takeover experts.
To achieve this, the CLERP Act included section 659B in the Corporations Law, which provides that court proceedings in relation to a takeover bid or proposed takeover bid cannot be commenced until after the end of the bid period, except on the application of the Australian Securities and Investments Commission or another public authority of the Commonwealth or a State. Damages claims and criminal prosecutions may proceed in the courts at the end of the bid period.
The restriction on court proceedings until after the end of the bid period covers proceedings under Commonwealth or State laws or the general law, and proceedings for review of Panel decisions (subsection 659B(4)).
Problems arise because section 659B of the Corporations Law is State law and does not operate to restrict the ability to commence proceedings in courts exercising federal jurisdiction. In particular, section 659B cannot operate in respect of judicial review proceedings in relation to the Panel where the court is exercising federal jurisdiction.
This is exacerbated by other amendments contained in the Bill. The Bill extends the operation of the ADJR Act so that it invests the Federal Court with federal jurisdiction to review decisions made by the Panel. Furthermore, as a result of other reforms proposed in this Bill, either the Federal Court or the State Supreme Court may be able to review a decision of the Panel in the course of proceedings in which a writ of mandamus or prohibition is sought against an officer of the Commonwealth.
Proposed section 59A will be inserted into the Corporations Act 1989 to ensure that section 659B will apply, as a law of the Commonwealth, to proceedings under the Administrative Decisions (Judicial Review) Act 1977 and proceedings for a writ of mandamus or prohibition.
This amendment adds Schedule 5 to the Bill. This Schedule contains amendments to the Director of Public Prosecutions Act 1983 to authorise the Director or a member of his staff to exercise rights of appeal conferred under State or Territory law in relation to prosecutions for State or Territory offences, to confirm the Director’s rights of appeal in relation to proceedings for summary conviction in respect of Commonwealth offences, and confirm the Director’s authority to carry on or respond to appeals instituted by others in relation to such proceedings.
This item adds a new definition of ‘appeal’ to subsection 3(1) of the Act. The new definition includes a proceeding in the nature of an appeal, a review or rehearing and a proceeding in the nature of a review or rehearing.
This is a technical amendment to add “and” after each of paragraphs 6(1)(a) to 6(1)(k).
This item adds a new paragraph (ma) to subsection 6(1) to empower the Director, where authorised by or under State law, to exercise rights of appeal where the Director, or a member of the Director’s staff has, with appropriate authorisation from the relevant State, instituted and carried on a prosecution for offences against the laws of that State.
This item amends existing paragraph 6(1)(n) to substitute a reference to paragraph (ma) for the current reference to paragraph (m).
This item repeals existing subsection 9(8A), which provided a definition of ‘right of appeal’. A definition of ‘appeal’ is now included in subsection 3(1) (see item 1).
This item also substitutes for existing subsection 9(8A) a proposed new subsection which expressly authorises the Director to carry on appeals in relation to proceedings for summary conviction in respect of Commonwealth offences where the proceedings were instituted by another person and carried on by the Director. The Director may exercise the rights of appeal that would otherwise be exerciseable by the person who instituted the proceedings for summary conviction, and exercises those rights of appeal to the exclusion of persons (other than the Attorney-General) who would have had such rights.
This item also adds proposed new subsection 9(8B). This subsection expressly authorises the Director to carry on appeals in relation to proceedings for summary conviction in respect of Commonwealth offences in certain circumstances: that is, where the proceedings for summary conviction were instituted and carried on by persons other than the Director, and the appeal was instituted by a person other than the Director. The Director is also authorised to act on behalf of the respondent in the appeal if the defendant in the original proceedings institutes an appeal.
This item adds proposed new subsection 17(2). This subsection empowers a member of the staff of the Office of the Director of Public Prosecutions, where authorised by or under a law of a State, to exercise any rights of appeal in cases where such a member or the Director has, with appropriate authorisation, instituted or carried on a prosecution for an offence against the laws of a State.
This item provides that the amendments made by items 3, 5, and 6 apply in relation to prosecutions and proceedings for summary conviction, whether instituted before, on or after the commencement of those items. The reference in these items to prosecutions and proceedings for summary conviction instituted before the commencement of amendments is intended to include only those prosecutions and proceedings which have not been finally disposed of at the date of commencement, or have been finally disposed of but in relation to which the period for lodging appeals has not yet expired.