House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Financial Sevices and Regulation, the Hon. Joe Hockey, MP)

Chapter 1 - Amendments of Legislation other than Taxation Legislation

Outline of chapter

1.1 This chapter explains the amendments that are being made to Treasury legislation, other than that administered by the Commissioner of Taxation, consequential on the Criminal Code (the Code) applying generally to offences under Commonwealth laws from 15 December 2001. The amendments are necessary to ensure that the provisions being amended will operate in the same manner after the application of the Code as before.

1.2 This chapter discusses Schedule 1 and Schedule 2 of the Bill. Schedule 1 contains amendments of the Superannuation (Resolution of Complaints) Act 1993 . Schedule 2 contains amendments of the Trade Practices Act 1974 .

Commencement

1.3 The amendments in Schedule 1 and Schedule 2 will commence on the day mentioned in subsection 2.2(2) of the Code (ie 15 December 2001). There is an exception for item 3 of Schedule 2 which will commence immediately after the commencement of the Treasury Legislation Amendment (Application of the Criminal Code) Act (No. 1) 2001 if that date is after 15 December 2001. This is because item 3 of Schedule 2 would repeal a measure provided for by that Act see paragraph 1.28 below. [Clause 2]

1.4 The Bill makes it clear that the amendments in Schedule 1and Schedule 2 will only apply to acts or omissions after the commencement. The amendments will not apply to continuous acts or omissions that began before the commencement. Nor will the amendments apply where the exact date of an act or omission is unknown, but it happened between 2 dates (eg 12 and 19 December) that straddle the commencement date. [Clause 4]

Explanation of Amendments

Schedule 1 Amendments of the Superannuation (Resolution of Complaints) Act 1993

1.5 Schedule 1 to the Bill would amend the Superannuation (Resolution of Complaints) Act 1993 (the SRC Act).

Application of Code

1.6 Chapter 2 of the Code sets out the general principles of criminal responsibility and, except for Part 2.5 in that Chapter, it will apply to the SRC Act . Part 2.5 of the Code deals with general principles of corporate criminal responsibility. However the existing provisions of section 66 the SRC Act, dealing with the acts of directors, servants or agents of a corporation, differ from those that would apply under the Code, and it is not the purpose of this Bill to change the effect of the existing provisions [Schedule 1, item 1, s4AA]

Strict Liability

1.7 An offence of strict liability is an offence where no fault elements apply to the physical elements of the offence. For an offence of strict liability the defence of reasonable mistake of fact under section 9.2 of the Code is available. Strict liability is described in section 6.1 of the Code.

1.8 The Code requires that provisions that create an offence of strict liability must expressly state that they are strict liability offences. If the provision does not specifically state this, the offence is not a strict liability offence.

1.9 The amendments insert a provision for each strict liability offence in the SRC Act to expressly state that the offence is a strict liability offence. These amendments do not create new offences of strict liability. They are simply identifying the current strict liability offences and ensuring that they will continue to operate as strict liability offences following the application of the Code. [Schedule 1,item 3, subsection 25(7)); item 6, subsection63(2A)]

1.10 The provisions are identified as strict liability provisions by the language of the provision.

1.11 Section 25 of the SRC Act provides that the Tribunal may require a person to provide information or documents relevant to a complaint made under the Act. Subsection 25(5) provides for a penalty if a person, without reasonable excuse, refuses or fails to comply with a requirement made by the Tribunal. The offence of failure to comply does not require proof of intention. Also, the use of the term without reasonable excuse indicates that it is likely to be considered an offence of strict liability. Consequently, the Bill proposes that the offence of failure to comply be expressly indicated to be an offence of strict liability. The amendments separate the conduct elements of refusal to comply and failure to comply in subsection 25(5) into two limbs and makes the offence of failure to comply expressly one of strict liability.

1.12 Subsection 63(2) of the SRC Act provides that a person must not make a record of or disclose any information acquired in connection with a complaint. The Explanatory Memorandum to the Bill for SRC Act stated that an offence against subsection 63(2) was intended to be one of strict liability. Consequently, the Bill will now expressly state that subsection 63(2) is an offence of strict liability.

Clarification of Fault Elements

1.13 Section 24AA requires superannuation providers to provide documents to the Tribunal that are in their possession and that are considered by the superannuation provider to be relevant to the complaint. Subsection 24AA(5) provides that the superannuation provider must not intentionally refuse or fail to comply with the section. The term intentionally is not required as intention is the fault element that will apply by virtue of the Code. [Schedule 1, item 2, subsection 24AA(5)]

1.14 The amendments to section s25 of the SRC Act also separate the conduct elements of refusal to comply and failure to comply in the present subsection 25(5) into two limbs. The default fault element under the Code for a refusal to comply will be intention. As noted the offence of failure to comply will be expressly stated to be one of strict liability. [Schedule 1, item 3, subsections 25(5) and (6)]

1.15 Some other offences under the SRC Act use the inappropriate fault element of recklessness when the offences involve the physical element of conduct.

1.16 Section 38 specifies certain matters in relation to the conduct of review meetings, including that the Tribunal may give directions as to the persons who may be present at a review meeting and prohibiting or restricting the disclosure of documents or information relating to a review meeting. Subsection 38(6) provides that a person must not intentionally or recklessly refuse or fail to comply with a direction of the Tribunal.

1.17 Section 63 provides for the protection of any information or documents acquired under or for the purposes of this Act. Subsection 63(3B) provides that a member of the Tribunal or ASIC staff must not intentionally or recklessly disclose information that reveals personal information relating to an individual unless the person has consented in writing. This offence requires a positive act of disclosure and therefore the application of the default element of intention would be appropriate.

1.18 In the above cases recklessly is used as an alternative to the fault element of intentionally, which is the appropriate fault element for conduct. Therefore the Bill will delete references to intentionally or recklessly from these provisions and the fault element of intention will apply by virtue of the operation of the Code. [Schedule 1, item 4, subsection 38(6); item 7, subsection 63(3B)]

Defence separated from offence and evidential burden identified

1.19 Some provisions in the SRC Actare being amended to ensure that the defences and the applicable burden of proof imposed on the defendant are stated clearly. The provisions in question currently contain offences and defences in the same section, subsection or paragraph. The amendments separate the defences from the offences and place them in a separate subsection to ensure the defence is stated clearly. The new provision includes a note explaining that the defendant bears an evidential burden for the matters in the subsection.

1.20 Section 13.3 of the Criminal Code explains when an evidential burden of proof is imposed on the defendant. An evidential burden of proof means that the onus is on the defendant to adduce or point to evidence that suggests a reasonable possibility that the matter exists or does not exist. A defendant who wishes to rely on a defence, being an exception, exemption, excuse, qualification or justification, bears an evidential burden of proof. This applies whether the exception, exemption, excuse, qualification or justification is within the offence provision itself or is separated from it. 1.21 The relevant provisions of the SRC Act are proposed subsection 25(8) which deals with a reasonable excuse for failure to comply with a requirement to provide information or documents and proposed subsection 63(2B) the making of records, disclosure of information or production of documents for the purposes of the SRC Act. [Schedule 1, item 3, subsection 25(8); item 5, subsection 63(2) and item 6 subsection 63(2B)]

The replacement of references to the Crimes Act 1914 with references to the Criminal Code Act 1995

1.21 Following the application of the Code to all Commonwealth legislation, sections 4, 5, 7, 7A, 14, 15D and 86 of the Crimes Act 1914 will duplicate, or be inconsistent with, provisions of the Code. The Law and Justice Legislation Amendment (Application of Criminal Code) Bill 2000 Schedule 51, item 4 repeals these sections of the Crimes Act 1914 upon the general application of the Code to all Commonwealth offences.

1.22 Section 66 of the SRC Act contains references to some of these sections of the Crimes Act 1914 .

1.23 These provisions are being amended to refer to the corresponding provisions in Division 11 of the Code. These sections relate to attempt, inciting or encouraging the commission of offences and conspiracy. [Schedule 1, item 8, subsection 66(8)] The reference to section 6 of the Crimes Act 1914 , which deals with accessories after the fact, shall remain.

1.24 The table below sets out the Crimes Act 1914 provisions relevant to the SRC Act and their Code equivalents.

Schedule 2 - Amendments of the Trade Practices Act 1974

1.25 Schedule 2 to the Bill would amend the Trade Practices Act 1974 (the TPA).

Application of Code

1.26 Part 1 of the TPA contains a number of provisions that relate generally to the other provisions of that Act. A new section 6AA in that Part would provide that Chapter 2 of the Code, which deals with the general principles of criminal responsibility, applies to offences against the Act. New subsection (2) would provide that Part 2.5 of the Code, which deals with corporate criminal responsibility, does not apply in relation to an offence against a provision of Part IIIA, VC, Part XIC or Division 7 of Part XIB. However the relevant provisions of the TPA, dealing with the conduct of directors, servants or agents of a corporation, differ from those that would apply under the Criminal Code and it is not the purpose of this Bill to change the effect of those existing provisions. [Schedule 2, item 1, s6AA] .

1.27 A number of provisions of the TPA will have explanatory notes included referring the reader firstly, to the general principles of criminal responsibility in Chapter 2 of the Code and, secondly, to the Crimes Act 1914 for details of the calculation of penalty units. The following table lists the relevant amendments:

1.28 A new subsection 84(6) would be inserted by the Treasury Legislation Amendment (Application of the Criminal Code) Bill (No.1) 2001. However the inclusion in Item 1 ofsubsection 6AA(2) makes subsection 84(6) redundant,and this Bill repeals that subsection. [Schedule 2, item 4]

Strict Liability

1.29 An offence of strict liability is an offence where no fault elements apply to the physical elements of the offence. For an offence of strict liability the defence of reasonable mistake of fact under section 9.2 of the Code is available. Strict liability is described in section 6.1 of the Code.

1.30 The Code requires that provisions that create an offence of strict liability must expressly state that they are strict liability offences. If the provision does not specifically state this, the offence is not a strict liability offence.

1.31 An amendment will be therefore be made to section 87A of the TPA, which gives the Court broad powers to make orders to preserve the assets of a party who has alleged to have contravened the consumer protection provisions of the Act, pending a final determination in the case. Subsection 87A(5) provides that a person who contravenes or fails to comply with an order of the Court under the section is guilty of an offence. A new subsection 875A will be added to make it clear that the offence is one of strict liability; the amendment does not create a new offence of strict liability. [Schedule 2, item 5, subsection 87A(5)]

Existing offences to be replaced by offences under the Code

1.32 Sections 151BI and 151BS of the TPA create offences relating to false or misleading information. Section 151BI creates an offence of supplying false or misleading information in connection with an application for an exemption order. Section 151BS of the TPA creates an offence of providing false or misleading information in purported compliance with a tariff filing direction. Sections 151BI and 151BS will be repealed as these sections are no longer necessary as they will be replaced by the offence in section 137.1 of the Code (false or misleading information). [Schedule 2, item 6, section 151BI and item 7, section 151BS]

1.33 Consequential amendments are required to related provisions of the TPA. Subsection 151BTA(12), which relates to section 151BS, will also be repealed. That subsection currently provides that section 151BS (which creates an offence of providing false or misleading information) applies to information given to the Australian Competition and Consumer Commission (ACCC) in purported compliance with section 151BTA. The subsection is no longer necessary as section 151BS will be replaced by the by the offence in section 137.1 of the Code (false or misleading information). [Schedule 2, item 8, subsection 151BTA(12)]

1.34 A new subsection 151BZ(2) is also to be substituted which refers to Division 137 of the Code (which creates a general offence of providing false or misleading information) and replaces the present reference to section 151BS. [Schedule 2, item 16, subsection 151BZ(2)]

Clarification of Fault Elements

1.35 Sections 151BUA, 151BUB and 151BUC of the TPA give the ACCC the power to disclose, or require disclosure of, reports prepared in accordance with record-keeping rules to the public or specified people. Subsections 151BUA(7), 151BUB(9) and 151BUC(9) require a carrier or carriage service provider to comply with particular directions from the ACCC. Subsection 151BUA(10), 151BUB(12) and 151BUC(12) establish offences of intentionally or recklessly contravening these subsections.

1.36 Subsections 151BUA(9), 151BUB(11) and 151BUC(11) require a person to comply with certain terms and conditions (if any) when inspecting or purchasing a copy of a report or extract. Subsections 151BUA(11), 151BUB(13) and 151BUC(13) establish offences of intentionally or recklessly contravening these subsections.

1.37 Subsection 151BV(1) of the TPA provides that a person must not make an incorrect record in purported compliance with a requirement imposed by the record-keeping rules. An offence of intentionally or recklessly contravening subsection (1) is provided in subsection 151BV(2).

1.38 The Bill will amend the TPA by omitting the references to the words intentionally or recklessly in the above provisions. These amendments are intended to provide clarity to the interpretation of the offences and to give consistency as to how criminal offences are to be interpreted by the courts. The current wording of the offences appear to apply an alternative fault element of recklessly to the physical elements of conduct. Repeal of a specific fault element of recklessly from an offence does not prevent the Codesupplying the default fault element of recklessly to a physical element of circumstance or result in an offence. It also ensures that the appropriate fault element of intention applies to the physical element of conduct in the offence and the fault element of recklessness applies to the physical element of circumstance or result in the offence. The following table lists the relevant amendments:

1.39 Section 152DG of the TPA makes it an offence for a person appearing before the ACCC under section 152DD to give evidence knowing that the evidence is false or misleading in a material particular. This offence will be amended by removing the reference to knowingly. This is to make the provision consistent with the principles of the Code and is necessary because, following the application of the Code, it will not be possible to apply the fault element of knowingly to a physical element consisting of conduct (see Division 5 of Part 2.2 of the Code generally). The fault element of knowingly can only be applied to physical elements of circumstance or result. The default fault element of intention will apply to the conduct element of the offence. The fault element of knowingly can still be applied to the circumstance element of the offence. [Schedule 2, item 22, section 152DG]

Defence separated from offence and evidential burden identified

1.40 Some provisions in the TPA are being amended to ensure that the defences and the applicable burden of proof imposed on the defendant are stated clearly. The provisions in question currently contain offences and defences in the same section, subsection or paragraph. The amendments separate the defences from the offences and place them in a separate subsection to ensure the defence is stated clearly. The new provision includes a note explaining that the defendant bears an evidential burden for the matters in the subsection.

1.41 Section 13.3 of the Criminal Code explains when an evidential burden of proof is imposed on the defendant. An evidential burden of proof means that the onus is on the defendant to adduce or point to evidence that suggests a reasonable possibility that the matter exists or does not exist. A defendant who wishes to rely on a defence, being an exception, exemption, excuse, qualification or justification, bears an evidential burden of proof. This applies whether the exception, exemption, excuse, qualification or justification is within the offence provision itself or is separated from it.

1.42 Section 152DE of the TPA obliges a person to answer a summons and attend as a witness before the ACCC and establishes offences if a person fails to appear, or attend as required. A new subsection (2) will provide that an offence does not occur if the person has a reasonable excuse for a failure to appear or attend. Similarly section 152DF establishes offences if a person appearing as a witness before the ACCC refuses or fails to be sworn or to make an affirmation, or to answer a question or produce a document as required. A new subsection (1A) will provide that an offence does not occur if the person has a reasonable excuse for their failure. A consequential amendment is required to subsection 152DF(2) of the TPA to replace a reference to subsection (1) with subsection (1A). [Schedule 2, items 17 and 18 section 152DE; items 19, 20 and 21, section 152DF]

1.43 Section 155 empowers the ACCC, in connection with its enforcement of the Act generally, to require among other things - the production of information and documents and establishes offences where a person refuses or fails to comply with a notice given under the section. A new subsection (5A) will provide that an offence does not occur to the extent that the person is not capable of complying with the requirement. [Schedule 2, items 23 and 24 section 155] Subsection 155(7A) presently provides a defence in relation to Cabinet documents of a State or Territory and a note is to be added that the defendant bears the evidential burden. [Schedule 2, item 26, section 155(7A)]

1.44 Section 155B of the TPA enables the ACCC to receive information and documents on behalf of the New Zealand Commerce Commission under reciprocal legislative arrangements which prohibit the misuse of market power in a trans Tasman market. Subsection (3) establishes offences, including a prohibition against a person knowingly furnishing information to the Commerce Commission that is false or misleading. A new subsection (3A) will provide that an offence does not occur if the person has a reasonable excuse. [Schedule 2, items 27 and 29, subsection 155B(3)]

1.45 Section 160 obliges a person to answer a summons to attend as a witness before the Australian Competition Tribunal (Tribunal) and establishes offences if a person fails to appear or attend, as required. A new subsection (1A) will provide that an offence does not occur if the person has a reasonable excuse. Section 161 complements section 160 by requiring a witness before the Tribunal to be sworn or affirmed and to answer questions. A new subsection (1A) will provide that an offence does not occur if the person has a reasonable excuse. [Schedule 2, items 30 and 31, section 160; items 33 and 34, section 161] Subsection 161(2) presently provides defence in relation to self-incrimination and a note is to be added that the defendant bears the evidential burden. [Schedule 2, item 35, subsection 161(2)]

Substitution of penalty units

1.46 A number of provisions in the TPA will be amended to standardise the form of the penalty provision and/or to replace the present reference to dollar amounts with references to penalty units. The following table lists the relevant amendments: