Bankruptcy Amendment (Service of Documents) Regulations 2022-Ongoing matters [2022] AUSStaCSDLM 82 (28 September 2022)

• New and ongoing matters
• New matters
• Ongoing matters
• Bankruptcy Amendment (Service of Documents) Regulations 2022
• Overview
• Scrutiny concerns
• Modification of the operation of primary legislation;4 parliamentary oversight5
• Attorney-General's response6
• Committee view
• Compliance with authorising legislation8

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Chapter 1

New and ongoing matters

1.1 This Chapter details the committee's significant new and ongoing scrutiny concerns in legislative instruments relating to the committee's technical legislative scrutiny principles in Senate standing order 23(3).

New matters

1.2 At this time, the committee has not resolved to raise significant technical scrutiny concerns in relation to any instruments registered within this period. The committee is continuing to engage with relevant agencies in relation to the instruments listed in Chapter 3.

Ongoing matters

1.3 The committee requests further information from relevant ministers about its significant technical scrutiny concerns in relation to the instruments listed below.

Bankruptcy Amendment (Service of Documents) Regulations 2022

FRL No.	F2022L00528[1]
Purpose	Amends section 102 of the Bankruptcy Regulations 2021 to disapply paragraphs 9(1)(d) and 9(2)(d) of the Electronic Transactions Act 1999 to ensure that the valid electronic service of documents required or permitted by the Bankruptcy Act 1966 can occur without the need to seek consent from the recipient.
Authorising legislation	Bankruptcy Act 1966
Portfolio	Attorney-General's
Disallowance	15 sitting days after tabling (tabled in the Senate on 26 July 2022)

Overview

1.4 The Bankruptcy Amendment (Service of Documents) Regulations 2022 (the instrument) amends the Bankruptcy Regulations 2021 (the principal regulations) to disapply paragraphs 9(1)(d) and 9(2)(d) of the Electronic Transactions Act 1999 (the ETA) to ensure that the valid electronic service of documents required or permitted by the Bankruptcy Act 1966 (the Bankruptcy Act) can occur without the need to seek consent from the recipient.

1.5 The instrument is made under section 315 of the Bankruptcy Act, which provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to that Act. Paragraph 315(2)(g) of the Bankruptcy Act specifies that the regulations may provide for the means of service of documents.

1.6 In Delegated Legislation Monitor 5 of 2022, the committee sought advice from the Attorney-General regarding scrutiny concerns, detailed below, on exemptions from the operation of the ETA being included in delegated legislation.^[2] The Attorney-General responded on 23 September 2022.^[3]

Scrutiny concerns

Modification of the operation of primary legislation;^[4] parliamentary oversight^[5]

1.7 Paragraphs 9(1)(d) and 9(2)(d) of the ETA provide that information required or permitted to be given to another person under a Commonwealth law can be provided electronically with the recipient's consent. Item 3 of Schedule 1 to the instrument amends section 102 of the principal regulations so that the consent requirements do not apply to the electronic service of documents required or permitted by the Bankruptcy Act or the principal regulations. It appears this exemption from the requirements of primary legislation is intended to remain in force for the ordinary 10 year sunsetting period.

1.8 The committee noted in its correspondence with the Attorney-General that, where provisions which exempt persons or entities from the operation of primary legislation are included in delegated legislation, the instrument should operate no longer than strictly necessary. In most cases, the committee considers this means the instrument should cease to operate no more than three years after commencement, to facilitate parliamentary oversight. The committee therefore requested the Attorney-General's advice as to why it is necessary and appropriate to use delegated legislation rather than primary legislation to introduce the exemption from the requirements under the ETA, whether the instrument could be amended to provide that the measures cease within three years after commencement, and whether there is any intention to conduct a review of the provisions to determine whether they remain necessary and appropriate.

Attorney-General's response^[6]

1.9 The Attorney-General advised that paragraph 315(2)(g) of the Bankruptcy Act prescribes that regulations may 'provide for the means of service of documents' and sections 7A and 9 of the ETA contemplate the possibility that regulations may provide that provisions of the ETA do not apply, and therefore Parliament has already determined it is necessary and appropriate for delegated legislation to be used to provide for the service of documents. The Attorney-General advised that the Bankruptcy Regulations 1996, which were remade by the principal regulations, did not contain a consent requirement for the electronic transmission of documents and it was not intended that the principal regulations would require this. The instrument therefore rectifies this error in the principal regulations. The Attorney-General also advised this exemption is required to ensure efficient administration of the bankruptcy system.

1.10 The Attorney-General further advised that there is no intention to amend the instrument such that it will cease after three years, as paragraph 315(2)(g) of the Bankruptcy Act provides evidence of Parliament's intention that regulations made under the Bankruptcy Act may provide for the means of service of documents and the ETA contemplates that exemptions from the operation of the ETA may be implemented by regulation. In response to whether there is any intention to conduct a review of the provisions, the Attorney-General advised that the government 'will continually assess whether these laws remain necessary and appropriate'.

Committee view

1.11 The committee's longstanding view is that provisions which exempt persons or entities from the operation of primary legislation should be included in primary rather than delegated legislation.^[7] If the provisions are in delegated legislation, the instrument should operate no longer than strictly necessary. As noted above, the committee considers that in most cases, this means the instrument should cease to operate no more than three years after it commences, to ensure a minimum degree of regular parliamentary oversight.

1.12 In this instance, it appears that the exemption is intended to be longstanding, and may therefore be more appropriate to include it in primary, rather than delegated, legislation to ensure regular parliamentary oversight. While the Bankruptcy Act and the ETA envisage regulations may be required to implement the detail of service of documents and exemptions from the operation of the ETA, regular parliamentary oversight over such exemptions is key to ensuring they remain necessary and appropriate and consistent with Parliament's intention regarding the operation of those regimes when they were enacted.

1.13 While noting the Attorney-General's advice, the committee reiterates its concerns about the use of delegated legislation to create exemptions to primary legislation, especially where the long duration of such exemptions limits parliamentary oversight. The committee remains of the view that such exemptions should operate no longer than is strictly necessary, which it generally considers to be no more than three years after commencement. The committee is particularly concerned where the exemptions may be broad, and to this end, seeks further information about the scope of the exemption, including whether it applies to key documents such as bankruptcy notices.

1.14 To assist the committee's further examination of the issue, the committee requests the Attorney-General's advice on the scope of the exemption, including whether the exemption applies in relation to bankruptcy notices.

Compliance with authorising legislation^[8]

1.15 As noted above, this instrument amends the principal regulations, made under the Bankruptcy Act, to disapply requirements under another Act, specifically paragraphs 9(1)(d) and 9(2)(d) of the ETA.

1.16 Senate standing order 23(3)(a) requires the committee to scrutinise each instrument as to whether it is in accordance with its enabling Act and otherwise complies with all legislative requirements. Compliance facilitates certainty in the law. In this case, it is not clear what authority is relied upon under the Bankruptcy Act to make regulations to alter the operation of another Act.

1.17 The Attorney-General's response explains that section 315 of the Bankruptcy Act provides that regulations may be made 'prescribing matters required or permitted by the Act to be prescribed', or 'necessary or convenient to be prescribed, for carrying out or giving effect to the Act,' and that paragraph 315(2)(g) prescribes that the regulations may ‘provide for the means of service of documents.’ The Attorney-General's response also explains that 'Sections 7A and 9 of the [ETA] contemplate the possibility that regulations may provide that all or specified provisions of this Act do not apply'. Section 7A of the ETA enables the Electronic Transactions Regulations 2020 to exempt Commonwealth laws from the operation of the ETA, which those regulations do in Schedule 1.

1.18 Notwithstanding this broad regulation making power in the Bankruptcy Act, the committee considers that, in general, delegated legislation can fill out the detail of an Act but cannot extend it; for example, by creating exemptions to the operation of another Act. In this instance, the instrument made under the Bankruptcy Act is creating an exemption to the ETA. Where the power to extend the operation of an Act is claimed, it would need to be clear that the enabling provision contains an exemption-making power; however, it does not appear to the committee that this is the case in relation to this instrument.

1.19 In contrast to the Bankruptcy Act, the committee notes that section 7A of the ETA expressly enables regulations made under that Act to provide for exemptions and otherwise disapply provisions of the ETA to specified laws of the Commonwealth. In this regard, Schedule 1 to the Electronic Transactions Regulations 2020 provides for exemptions to requirements under the ETA, including those in section 9, regarding requirements to give information in writing. It is therefore unclear to the committee why the exemption in this instrument has been made pursuant to the Bankruptcy Act, which appears to lack an equivalent express exemption-making power by regulation.

1.20 The committee therefore requests the Attorney-General's further advice as to the source of authority relied upon to create the exemption to the Electronic Transactions Act 1999, noting that the Bankruptcy Act 1966 does not appear to contain an express exemption-making power by regulation equivalent to section 7A of the Electronic Transactions Act 1999.

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[1] Accessible on the Federal Register of Legislation.

[2] Senate Standing Committee for the Scrutiny of Delegated Legislation, Delegated Legislation Monitor 5 of 2022 (7 September 2022) pp. 27–28.

[3] This correspondence was tabled with this Monitor and will be accessible via the Index of Instruments page on the committee's website.

[4] Senate standing order 23(3)(l).

[5] Senate standing order 23(3)(m).

[6] This correspondence was tabled with this Monitor and will be accessible via the Index of Instruments page on the committee's website.

[7] Senate Standing Committee for the Scrutiny of Delegated Legislation, Guidelines, 2nd edition (February 2022) p. 36.

[8] Senate standing order 23(3)(a).