Corporate Law Economic Reform Program Act 1999 (156 of 1999)

Schedule 5   Consequential amendment of other Acts

Commonwealth Authorities and Companies Act 1997

12   Schedule 2

Repeal the Schedule, substitute:

Schedule 2 - Civil consequences of contravening civil penalty provisions

Note: See section 6.

1 Declarations of contravention

(1) If a Court is satisfied that a person has contravened 1 of the following provisions, it must make a declaration of contravention:

(a) subsections 22(1) and 23(1) and (2), 24(1) and (2), 25(1) and (2) (officers’ duties)

(b) subsection 11(1) (annual reporting rules)

These provisions are the civil penalty provisions .

Note: Once a declaration has been made, the Finance Minister can then seek a pecuniary penalty order (clause 3) or a disqualification order (section 27C).

(2) A declaration of contravention must specify the following:

(a) the Court that made the declaration;

(b) the civil penalty provision that was contravened;

(c) the person who contravened the provision;

(d) the conduct that constituted the contravention;

(e) the Commonwealth authority to which the conduct related.

2 Declaration of contravention is conclusive evidence

A declaration of contravention is conclusive evidence of the matters referred to in subclause 1(2).

3 Pecuniary penalty orders

(1) A Court may order a person to pay the Commonwealth a pecuniary penalty of up to $200,000 if:

(a) a declaration of contravention by the person has been made under clause 1; and

(b) the contravention:

(i) materially prejudices the interests of the Commonwealth authority; or

(ii) materially prejudices the Commonwealth authority’s ability to pay its creditors; or

(iii) is serious.

(2) The penalty is a civil debt payable to the Commonwealth. The Commonwealth may enforce the order as if it were an order made in civil proceedings against the person to recover a debt due by the person. The debt arising from the order is taken to be a judgment debt.

4 Compensation orders

Compensation for damage suffered

(1) A Court may order a person to compensate a Commonwealth authority for damage suffered by the authority if:

(a) the person has contravened a civil penalty provision in relation to the authority; and

(b) the damage resulted from the contravention.

The order must specify the amount of the compensation.

Damage includes profits

(2) In determining the damage suffered by the Commonwealth authority for the purposes of making a compensation order, include profits made by any person resulting from the contravention or the offence.

Recovery of damage

(3) A compensation order may be enforced as if it were a judgment of the Court.

5 Effect of clause 4

Clause 4:

(a) has effect in addition to, and not in derogation of, any rule of law about the duty or liability of a person because of the person’s office or employment in relation to a Commonwealth authority; and

(b) does not prevent proceedings from being instituted in respect of such a duty or in respect of such a liability.

6 Who may apply for a declaration or order

Application by Finance Minister

(1) The Finance Minister, or some other person authorised in writing by the Finance Minister under this subclause to make the application, may apply for a declaration of contravention, a pecuniary penalty order or a compensation order.

Application by Commonwealth authority

(2) The Commonwealth authority may apply for a compensation order.

(3) The Commonwealth authority may intervene in an application for a declaration of contravention or a pecuniary penalty order in relation to the Commonwealth authority. The Commonwealth authority is entitled to be heard on all matters other than whether the declaration or order should be made.

No one else may apply

(4) No person may apply for a declaration of contravention, a pecuniary penalty order or a compensation order unless permitted by this clause.

(5) Subclause (4) does not exclude the operation of the Director of Public Prosecutions Act 1983.

7 Time limit for application for a declaration or order

Proceedings for a declaration of contravention, a pecuniary penalty order, or a compensation order, may be started no later than 6 years after the contravention.

8 Civil evidence and procedure rules for declarations of contravention and civil penalty orders

The Court must apply the rules of evidence and procedure for civil matters when hearing proceedings for:

(a) a declaration of contravention; or

(b) a pecuniary penalty order.

9 Civil proceedings after criminal proceedings

A court must not make a declaration of contravention or a pecuniary penalty order against a person for a contravention if the person has been convicted of an offence constituted by conduct that is substantially the same as the conduct constituting the contravention.

10 Criminal proceedings during civil proceedings

(1) Proceedings for a declaration of contravention or pecuniary penalty order against a person are stayed if:

(a) criminal proceedings are started or have already been started against the person for an offence; and

(b) the offence is constituted by conduct that is substantially the same as the conduct alleged to constitute the contravention.

(2) The proceedings for the declaration or order may be resumed if the person is not convicted of the offence. Otherwise, the proceedings for the declaration or order are dismissed.

11 Criminal proceedings after civil proceedings

Criminal proceedings may be started against a person for conduct that is substantially the same as conduct constituting a contravention of a civil penalty provision regardless of whether:

(a) a declaration of contravention has been made against the person; or

(b) a pecuniary penalty order has been made against the person; or

(c) a compensation order has been made against the person; or

(d) the person has been disqualified from managing a Commonwealth authority under section 27C.

12 Evidence given in proceedings for penalty not admissible in criminal proceedings

Evidence of information given or evidence of production of documents by an individual is not admissible in criminal proceedings against the individual if:

(a) the individual previously gave the evidence or produced the documents in proceedings for a pecuniary penalty order against the individual for a contravention of a civil penalty provision (whether or not the order was made); and

(b) the conduct alleged to constitute the offence is substantially the same as the conduct that was claimed to constitute the contravention.

However, this does not apply to a criminal proceeding in respect of the falsity of the evidence given by the individual in the proceedings for the pecuniary penalty order.

13 Finance Minister requiring person to assist

(1) The Finance Minister may require a person to give all reasonable assistance in connection with:

(a) an application for a declaration of contravention or a pecuniary penalty order; or

(b) criminal proceedings for an offence against this Act.

The person must comply with the request.

Maximum penalty: 5 penalty units.

(2) The Finance Minister can require the person to assist in connection with an application for a declaration or order if, and only if:

(a) it appears to the Finance Minister that someone other than the person required to assist may have contravened a civil penalty provision; and

(b) the Finance Minister suspects or believes that the person required to assist can give information relevant to the application.

(3) The Finance Minister can require the person to assist in connection with criminal proceedings if, and only if:

(a) it appears to the Finance Minister that the person required to assist is unlikely to be a defendant in the proceedings; and

(b) the person required to assist is, in relation to a person who is or should be a defendant in the proceedings:

(i) an employee or agent (including a banker or auditor) of the other person; or

(ii) if the other person is a Commonwealth authority - an officer of the other person; or

(iii) if the other person is an individual - a partner of the other person.

(4) The Finance Minister can require the person to assist regardless of whether:

(a) an application for the declaration or penalty order has actually been made; or

(b) criminal proceedings for the offence have actually begun.

(5) The person cannot be required to assist if they are or have been a lawyer for:

(a) in an application for a declaration or penalty order - the person suspected of the contravention; or

(b) in criminal proceedings - a defendant or likely defendant in the proceedings.

(6) The requirement to assist must be given in writing.

(7) The Court may order the person to comply with the requirement in a specified way. Only the Finance Minister may apply to the Court for an order under this subsection.

14 Relief from liability for contravention of civil penalty provision

(1) In this section:

eligible proceedings :

(a) means proceedings for a contravention of a civil penalty provision (including proceedings under clause 4); and

(b) does not include proceedings for an offence (except so far as the proceedings relate to the question whether the court should make an order under clause 4).

(2) If:

(a) eligible proceedings are brought against a person; and

(b) in the proceedings it appears to the court that the person has, or may have, contravened a civil penalty provision but that:

(i) the person has acted honestly; and

(ii) having regard to all the circumstances of the case, the person ought fairly to be excused for the contravention;

the court may relieve the person either wholly or partly from a liability to which the person would otherwise be subject, or that might otherwise be imposed on the person, because of the contravention.

(3) If a person thinks that eligible proceedings will or may be begun against them, they may apply to the Court for relief.

(4) On an application under subclause (3), the Court may grant relief under subclause (2) as if the eligible proceedings had been begun in the Court.

(5) For the purposes of subclause (2) as applying for the purposes of a case tried by a judge with a jury:

(a) a reference in that subclause to the court is a reference to the judge; and

(b) the relief that may be granted includes withdrawing the case in whole or in part from the jury and directing judgment to be entered for the defendant on such terms as to costs as the judge thinks appropriate.

15 Power to grant relief

(1) If:

(a) civil proceedings are brought against an officer of a Commonwealth authority for negligence, default, breach of trust or breach of duty in a capacity as such an officer; and

(b) in the proceedings it appears to the court before which the proceedings are taken that:

(i) the officer is or may be liable in respect of the negligence, default or breach; and

(ii) the officer has acted honestly; and

(iii) having regard to all the circumstances of the case (including those connected with the officer’s appointment), the officer ought fairly to be excused for the negligence, default or breach;

the court may relieve the officer either wholly or partly from liability on the terms that the court thinks appropriate.

(2) An officer of a Commonwealth authority who has reason to apprehend that a claim will or might be made against him or her for negligence, default, breach of trust or breach of duty in a capacity as such an officer may apply to the Court for relief. On the application, the Court has the same power to relieve the officer as it would have had under subclause (1) if it had been a court before which proceedings against the officer for negligence, default, breach of trust or breach of duty had been brought.

(3) If:

(a) a case to which subclause (1) applies is being tried by a judge with a jury; and

(b) the judge after hearing the evidence is satisfied that the defendant ought pursuant to that subclause to be relieved either wholly or partly from the liability sought to be enforced against the officer;

the judge may withdraw the case in whole or in part from the jury and forthwith direct judgment to be entered for the defendant on the terms as to costs or otherwise that the judge thinks proper.

Schedule 3 - Application, transitional and savings provisions

1 Meaning of commencement , new Law and old Law

In this Schedule:

commencement means the commencement of the Corporate Law Economic Reform Program Act 1999.

new Law means this Act as in force after commencement.

old Law means this Act as in force immediately before commencement.

2 References to provisions of old Law in laws and other documents

(1) A reference in any law of the Commonwealth or of a State or Territory, or in any document, to a provision of the old Law is to be read after commencement as a reference to the corresponding provision of the new Law except so far as the contrary intention appears in the law or document.

(2) Without limiting subclause (1), sections 27F to 27K of the new Law correspond to section 21 of the old Law.

3 Conduct of officers

Column 2 of the table sets out things that have been done, or situations that have arisen, on or before commencement. Column 3 sets out how the things and situations will be dealt with after commencement - either under the old Law or the new Law.

4 Contraventions of, and offences against, civil penalty provisions

(1) Schedule 2 to the old Law continues to apply in relation to:

(a) a contravention of a civil penalty provision listed in clause 2 of Schedule 2 to the old Law; or

(b) an offence committed against one of those civil penalty provisions;

despite its repeal.

(2) Schedule 2 to the new Law applies in relation to a contravention of a civil penalty provision listed in subclause 1(1) of Schedule 2 to the new law.

5 Civil penalty orders made under old Law

(1) An order in force under paragraph 4(a) of Schedule 2 to the old Law immediately before commencement continues to have effect after commencement as if it were made under section 27C of the new Law.

(2) An order in force under paragraph 4(b) of Schedule 2 to the old Law immediately before commencement continues to have effect after commencement as if it were made under clause 3 of Schedule 2 to the new Law.