Corporations Act 2001

CHAPTER 9 - MISCELLANEOUS  

PART 9.4B - CIVIL CONSEQUENCES OF CONTRAVENING CIVIL PENALTY PROVISIONS  

Division 1 - The Court may make declarations of contravention, pecuniary penalty orders, relinquishment orders, refund orders and compensation orders  

SECTION 1317G   PECUNIARY PENALTY ORDERS  

Court may order person to pay pecuniary penalty

1317G(1)    
A Court may order a person to pay to the Commonwealth a pecuniary penalty in relation to the contravention of a civil penalty provision if:

(a)    a declaration of contravention of the civil penalty provision by the person has been made under section 1317E ; and

(b)    

if the contravention is of a corporation/scheme civil penalty provision, the contravention:

(i) materially prejudices the interests of the corporation, scheme or fund, or its members; or

(ii) materially prejudices the corporation ' s ability to pay its creditors; or

(iii) is serious; and

(c)    

if the contravention is of a financial services civil penalty provision (other than one excluded by subsection (1A) ), the contravention:

(i) materially prejudices the interests of acquirers or disposers of the relevant financial products; or

(ii) materially prejudices the issuer of the relevant financial products or, if the issuer is a corporation, scheme or fund, the members of that corporation, scheme or fund; or

(iii) is serious; and

(d)    if the contravention is of subsection 1211B(1) or (2) (complying with the Passport Rules for this jurisdiction), the contravention:

(i) materially prejudices the interests of the passport fund or its members; or

(ii) is serious.

The order is a pecuniary penalty order .

1317G(1A)    

The civil penalty provisions in the following table are excluded by this subsection.

Excluded civil penalty provisions of Part 7.7A
Item	Provision	Matter
1	Subsections 961K(1) and (2)	Financial services licensee responsible for breach of certain best interests duties
2	Section 961L	Financial services licensee to ensure compliance with certain best interests duties
3	Subsection 961Q(1)	Authorised representative responsible for breach of certain best interests duties
4 - 9	(Repealed)
10	Subsections 963E(1) and (2)	Financial services licensee must not accept conflicted remuneration
11	Section 963F	Financial services licensee must ensure representatives do not accept conflicted remuneration
12	Subsection 963G(1)	Authorised representative must not accept conflicted remuneration
13	Section 963J	Employer must not pay employees conflicted remuneration
14	Section 963K	Financial product issuer or seller must not give conflicted remuneration to financial services licensee or representative
15	Section 963P	Person covered by section 963M must pay amount etc. in accordance with regulations
16	Subsection 964A(1)	Platform operator must not accept volume-based shelf-space fees
17	Subsections 964D(1) and (2)	Financial services licensee must not charge asset-based fees on borrowed amounts
18	Subsection 964E(1)	Authorised representative must not charge asset-based fees on borrowed amounts
19	Section 965	Anti-avoidance of Part 7.7A provisions

Maximum pecuniary penalty

1317G(2)    
The pecuniary penalty must not exceed the pecuniary penalty applicable to the contravention of the civil penalty provision.

Pecuniary penalty applicable to the contravention of a civil penalty provision - by an individual

1317G(3)    
The pecuniary penalty applicable to the contravention of a civil penalty provision by an individual is the greater of:

(a)    5,000 penalty units; and

(b)    if the Court can determine the benefit derived and detriment avoided because of the contravention - that amount multiplied by 3.

Pecuniary penalty applicable to the contravention of a civil penalty provision - by a body corporate

1317G(4)    
The pecuniary penalty applicable to the contravention of a civil penalty provision by a body corporate is the greatest of:

(a)    50,000 penalty units; and

(b)    if the Court can determine the benefit derived and detriment avoided because of the contravention - that amount multiplied by 3; and

(c)    either:

(i) 10% of the annual turnover of the body corporate for the 12-month period ending at the end of the month in which the body corporate contravened, or began to contravene, the civil penalty provision; or

(ii) if the amount worked out under subparagraph (i) is greater than an amount equal to 2.5 million penalty units - 2.5 million penalty units.

Contrary intention in relation to pecuniary penalty applicable

1317G(5)    
Subsections (3) and (4) apply in relation to a contravention of a civil penalty provision by an individual or a body corporate unless there is a contrary intention under this Act in relation to the pecuniary penalty applicable to the contravention. In that case, the pecuniary penalty applicable is the penalty specified for the civil penalty provision.

Determining pecuniary penalty

1317G(6)    
In determining the pecuniary penalty, the Court must take into account all relevant matters, including:

(a)    the nature and extent of the contravention; and

(b)    the nature and extent of any loss or damage suffered because of the contravention; and

(c)    the circumstances in which the contravention took place; and

(d)    whether the person has previously been found by a court (including a court in foreign country) to have engaged in similar conduct; and

(e)    

in the case of a contravention by the trustee of a registrable superannuation entity - the impact that the penalty under consideration would have on the beneficiaries of the entity.