Bills Digest No. 158 2000-01
Corporations (Repeals, Consequentials and Transitionals) Bill 2001
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Corporations (Repeals, Consequentials and Transitionals)
Bill 2001
Date Introduced: 24 May
2001
House: House of Representatives
Portfolio: Treasury
Commencement: Most provisions of the Bill commence
at the same time as the Corporations Act 2001. It is intended that
Act will commence on July 1 2001.
To repeal the existing Commonwealth
elements of the corporations law national scheme and the former co-operative
scheme for corporate regulation. The legislation will be replaced by a
new framework based in part on a referral of powers by the States to enact
the proposed Corporations Act 2001 and Australian Securities
and Investments Commission Act 2001. The Bill also amends a large
number of Acts to remove references to repealed legislation and insert
references to the new corporations legislation. Furthermore the Bill also
contains transitional arrangements for the ACT.
This Bill is one of 7 pieces
of legislation(1) introduced by the Government to deal with
the implications for corporate regulation arising out of the High Court
decisions in Re Wakim; ex parte McNally(2) and The
Queen v Hughes(3). In response to these judgements
the Government has decided to essentially re-enact the existing corporations
law based in part on a referral of powers to the Commonwealth by the States
under section 51(xxxvii) of the Constitution. For a detailed discussion
of the issues that have resulted in this legislation see the Bills Digest
for the Corporations Bill 2001(4).
Part 3 of the Bill provides for transitional
arrangements for the ACT. These provisions are necessary because under
the current national scheme the Corporations Act 1989 (Cth) applies
the Corporations Law to the ACT(5).
Chapter 10 of the proposed Corporations Act 2001
and Part 16 of the proposed Australian Securities and Investments Commission
Act 2001 (the corporations legislation) contain transitional provisions
which have the effect of creating a new right or liability in specified
circumstances to replace rights and liabilities that existed under the
Corporations Law. The Explanatory Memorandum states that as far as possible
new rights and liabilities are equivalent to those existing under present
legislation(6). Clause 6(1) complements this legislation
in relation to the ACT by cancelling rights and liabilities existing prior
to the commencement of the new corporations legislation. It is expected
that the States and the Northern Territory will introduce legislation
to extinguish liabilities in their jurisdiction.
The new corporations legislation attempts to bring existing
court proceedings under federal jurisdiction. Where the corporations legislation
creates a new proceeding, clause 6(2) terminates existing proceedings
that relate to the present ACT corporations legislation.
Clause 6(3) extinguishes existing liabilities
to pay fees or levies under the Corporations Act 1989. Transitional
provisions in other Bills(7) create a new liability where a
person owed fees or levies prior to the commencement of the Corporations
Act 2001.
Schedule 1 repeals the Australian Securities
and Investments Commission Act 1989 and the Corporations Act 1989.
The schedule also repeals the Commonwealth elements of the co-operative
scheme that operated between 1982 and 1990.
Schedule 2 amends the proposed ASIC Act 2001
and the proposed Corporations Act 2001. Most of the substantive
amendments made by the schedule arise from the High Court's decision in
ASIC v Edensor Nominees(8). The case overturned a decision
of the Full Federal Court that it had no power to grant the declarations
and injunctions sought by ASIC under the Victorian Corporations Law because
of the Re Wakim(9) decision. The High Court held
that the Federal Court had jurisdiction because ASIC was the moving party.
The High Court stated that ASIC was 'the Commonwealth' for the purposes
of the Constitution and the Judiciary Act 1903 and that because
the Commonwealth was a party the Federal Court was exercising federal
jurisdiction when ASIC sought relief. In addition, section 79 of the Judiciary
Act operated to apply the Corporations Law of a State in proceedings brought
by ASIC in the Federal Court(10).
Item 4 of schedule 2 amends the definition
of 'federal ASIC proceeding' in section 266 of the proposed ASIC Act
2001 to cover proceedings of the type before the Court in Edensor.
Item 15 makes a similar amendment to the definition of 'federal
corporations proceeding' in section 1382 of the proposed Corporations
Act 2001.
The effect of the amendments is that a greater range
of existing proceedings will be continued as federal proceedings(11).
Section 268 of the proposed ASIC Act 2001 and 1384 of the proposed
Corporations Act 2001 state that if a proceeding is a federal proceeding
that had not been terminated before the commencement of the new corporations
legislation, the proceeding continues in the same court as if it had always
been a proceeding under a corresponding provision of the new legislation.
Schedule 3 makes minor amendments to a large number
of Commonwealth Acts. For the most part these amendments simply delete
references to repealed corporations legislation and insert new references
to the proposed Corporations Act 2001.
- The other Bills are: Corporations Bill 2001; Australian Securities
and Investments Commission Bill 2001; Corporations (Securities Exchanges
Levies) Bill 2001; Corporations (Futures Organisations Levies) Bill
2001; Corporations (National Guarantee Fund Levies) Bill 2001 and Corporations
(Fees) Bill 2001.
- (1999) 198 CLR 511
- (2000) 171 ALR 155.
- http://www.aph.gov.au/library/pubs/bd/2000-01/01BD140.htm
- The Corporations Law is contained in section 82 of the Corporations
Act 1989.
- p. 4.
- See Corporations (Securities Exchanges Levies) Bill 2001; Corporations
(Futures Organisations Levies) Bill 2001; Corporations (National Guarantee
Fund Levies) Bill 2001 and Corporations (Fees) Bill 2001.
- (2001) 19 ACLC 427.
- In Wakim, the High Court ruled that cross-vesting legislation
was invalid to the extent that it purported to invest federal courts
with State jurisdiction.
- Section 79 states: 'The laws of each State or Territory, including
the laws relating to procedure, evidence, and the competency of witnesses,
shall, except as otherwise provided by the
Constitution or the laws of the Commonwealth, be binding on all
Courts exercising federal jurisdiction in that State or Territory in
all cases to which they are applicable.'
- Explanatory Memorandum, p. 10.
Mark Tapley
15 June 2001
Bills Digest Service
Information and Research Services
This paper has been prepared for general distribution to Senators and
Members of the Australian Parliament. While great care is taken to ensure
that the paper is accurate and balanced, the paper is written using information
publicly available at the time of production. The views expressed are
those of the author and should not be attributed to the Information and
Research Services (IRS). Advice on legislation or legal policy issues
contained in this paper is provided for use in parliamentary debate and
for related parliamentary purposes. This paper is not professional legal
opinion. Readers are reminded that the paper is not an official parliamentary
or Australian government document.
IRS staff are available to discuss the paper's contents
with Senators and Members
and their staff but not with members of the public.
ISSN 1328-8091
© Commonwealth of Australia 2000
Except to the extent of the uses permitted under the Copyright Act
1968, no part of this publication may be reproduced or transmitted
in any form or by any means, including information storage and retrieval
systems, without the prior written consent of the Parliamentary Library,
other than by Members of the Australian Parliament in the course of their
official duties.
Published by the Department of the Parliamentary Library, 2000.
|
