ASIC Class Order [CO 14/571] [F2014L00977]-New and continuing matters [2014] AUSStaCSDLM 158 (27 August 2014)

• ASIC Class Order [CO 14/571] [F2014L00977]

ASIC Class Order [CO 14/571] [F2014L00977]

Purpose	extends the date of ASIC Class Order [CO 13/898] to 12 July 2016
Last day to disallow	25 September 2014
Authorising legislation	Corporations Act 2001
Department	Treasury

Background:

In 2009, the Full Court of the Federal Court held in Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd [2009] FCAFC 147 that a funded representative action and solicitors' retainers for two representative proceedings against Brookfield Multiplex Ltd in the Federal Court were a managed investment scheme that should have been registered for the purposes of the Corporations Act 2001 (the Act).

Issue:

Timetable for making of substantive amendments to principal legislation

Scrutiny principle (d) of the committee's terms of reference require the committee to consider whether an instrument contains matters more appropriate for parliamentary enactment (that is, matters that should be enacted via principal rather than delegated legislation). This may include instruments which extend relief from compliance with principal legislation.

The ES for the instrument states that it was made to allow time for consideration of whether to exempt representative proceedings and proof-of-debt arrangements that are subject to a conditional costs agreement from the definition of 'managed investment scheme' in certain provisions and parts of the Act.

Class Order [CO 14/571] extends the relief in [CO 13/898] until 12 July 2016 to allow further time for the government to consider its position on whether to exempt litigation funding arrangements and proof-of-debt funding arrangements under similar terms as those in [CO 13/898] (in light of the High Court's finding).

The committee notes that the current order effectively extends the relief from the Act by a further two years. The committee generally prefers that relief from compliance with an Act effected via legislative instrument does not operate as a de facto amendment to the principal legislation. The committee therefore seeks the minister's advice as to the progress of consideration of whether to exempt litigation funding arrangements and proof-of-debt funding arrangements; and the appropriateness of continuing to provide relief from the Act via legislative instrument in this case.