Corporations Amendment (Meetings and Documents) Bill 2021 [2021] AUSStaCSBSD 232 (24 November 2021)

• Corporations Amendment (Meetings and Documents) Bill 2021
• Power for delegated legislation to modify primary legislation (akin to Henry VIII clause)4

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Corporations Amendment (Meetings and Documents) Bill 2021

Purpose	This bill seeks to amend the Corporations Act 2001 to allow companies and registered schemes to hold hybrid meetings (which give shareholders the option of either attending in person or remotely) and use technology to execute company documents, sign meetings-related documents and provide those documents to their members.
Portfolio	Treasury
Introduced	House of Representatives on 20 October 2021

Power for delegated legislation to modify primary legislation (akin to Henry VIII clause)^[4]

1.8 Item 2 of Schedule 2 to the bill seeks to insert proposed Division 2 of Part 1.2AA into Chapter 1 of the Corporations Act 2001 to provide that certain entities may give listed documents to a person electronically or in physical form. Proposed subsection 110C(1) provides that the Division applies to any listed document that is sent by a company, the responsible entity of a registered scheme, a disclosing entity or an entity of a kind specified in the regulations. Proposed subsection 110C(5) provides that the regulations may modify the operation of the Division for the purpose of giving effect to regulations made under proposed subsection 110C(1).

1.9 Provisions enabling delegated legislation to modify the operation of primary legislation are akin to Henry VIII clauses, which authorise delegated legislation to make substantive amendments to primary legislation (generally the relevant parent statute). The committee has significant scrutiny concerns with Henry VIII-type clauses, as such clauses impact on the level of parliamentary scrutiny and may subvert the appropriate relationship between the Parliament and the executive. Consequently, the committee expects a sound justification to be included in the explanatory memorandum for the use of any clauses that allow delegated legislation to modify the operation of primary legislation. In this instance, the explanatory memorandum states:

These powers ensure that, in the event of unintended or unforeseen circumstances, the law can be quickly and flexibly adapted to impose the obligations in relation to sending documents on appropriate persons. The powers cannot be used to impose additional obligations on entities in relation to sending documents or to alter the obligations in the primary law.
The modification powers, along with the rest of the regime, will also be reviewed 2 years after the new rules take effect. If the power is used, then the Regulations would be subject to disallowance.
The power to modify the primary law also provides the flexibility to adapt the regime in response to future changes to the law. For example, the Government have announced future primary law changes to further modernise business communications and this power may be used to give effect to these reforms.^[5]

1.10 While noting the explanation in the explanatory memorandum, the committee has not generally accepted a desire for administrative flexibility to be a sufficient justification for allowing delegated legislation to modify the operation of primary legislation. The committee notes that delegated legislation, made by the executive, is not subject to the same level of parliamentary scrutiny inherent in bringing proposed changes in the form of an amending bill.

1.11 The committee draws this matter to the attention of senators and leaves to the Senate as a whole the appropriateness of allowing regulations made under proposed subsection 110C(5) to modify the operation of proposed Division 2 of Part 1.2AA (relating to the technology neutral sending of documents).

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[4] Schedule 2, item 2, proposed subsection 110C(5). The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv).

[5] Explanatory memorandum, pp. 12-13.