Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (17 of 2019)

Schedule 2   Amendment of the Australian Securities and Investments Commission Act 2001

Part 1   Amendments

Australian Securities and Investments Commission Act 2001

8   Sections 12GBA to 12GBC

Repeal the sections, substitute:

12GBA Declaration of contravention of civil penalty provision

Application for declaration of contravention

(1) ASIC may apply to a Court for a declaration that a person has contravened a civil penalty provision.

(2) ASIC must make the application within 6 years of the alleged contravention.

Declaration of contravention

(3) The Court must make the declaration if it is satisfied that the person has contravened the provision.

(4) The declaration 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.

Declaration of contravention conclusive evidence

(5) The declaration is conclusive evidence of the matters referred to in subsection (4).

Meaning of civil penalty provision

(6) The following provisions are civil penalty provisions :

(a) a provision of Subdivision C;

(b) a provision of Subdivision D (other than section 12DA);

(c) a provision of Subdivision GC.

12GBB Pecuniary penalty orders

Application for order

(1) ASIC may apply to a Court for an order that a person, who is alleged to have contravened a civil penalty provision, pay the Commonwealth a pecuniary penalty.

(2) ASIC must make the application within 6 years of the alleged contravention.

Court may order person to pay pecuniary penalty

(3) If a declaration has been made under section 12GBA that the person has contravened the provision, the Court may order the person to pay to the Commonwealth a pecuniary penalty that the Court considers is appropriate (but not more than the amount specified in section 12GBC).

(4) An order under subsection (3) is a pecuniary penalty order .

Determining pecuniary penalty

(5) 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 a foreign country) to have engaged in any similar conduct.

12GBC Maximum pecuniary penalty

The pecuniary penalty must not be more than the pecuniary penalty applicable to the contravention of the civil penalty provision.

12GBCA Pecuniary penalty applicable

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

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

(a) the penalty specified for the civil penalty provision; 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

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

(a) the penalty specified for the civil penalty provision, multiplied by 10; 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

(3) This section applies 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 penalty applicable to the contravention. In that case, the penalty applicable is the penalty specified for the civil penalty provision.

12GBCB Civil enforcement of pecuniary penalty order

(1) A pecuniary penalty is a debt payable to the Commonwealth.

(2) The Commonwealth may enforce a pecuniary penalty 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.

12GBCC Relinquishing the benefit derived from engaging in conduct resulting in a pecuniary penalty order

Relinquishment order

(1) A Court may order a person to pay the Commonwealth an amount equal to the benefit derived and detriment avoided because of a contravention of a civil penalty provision. The order is a relinquishment order .

(2) The Court may make a relinquishment order:

(a) on its own initiative, during proceedings before the Court; or

(b) on application by ASIC, made within 6 years after the alleged contravention.

Relationship between relinquishment orders and pecuniary penalty orders

(3) To avoid doubt, the Court may make a relinquishment order in relation to the contravention of a civil penalty provision even if a pecuniary penalty order could be, or has been, made in relation to the contravention of the civil penalty provision.

Note: The relationship between relinquishment orders and proceedings for an offence are dealt with in sections 12GBCG, 12GBCH, 12GBCJ and 12GBCK.

12GBCD Civil enforcement of relinquishment order

(1) The amount payable under a relinquishment order is a debt payable to ASIC on behalf of the Commonwealth.

(2) ASIC or the Commonwealth may enforce a relinquishment 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.

12GBCE Meaning of benefit derived and detriment avoided because of a contravention of a civil penalty provision

The benefit derived and detriment avoided because of a contravention of a civil penalty provision is the sum of:

(a) the total value of all benefits obtained by one or more persons that are reasonably attributable to the contravention; and

(b) the total value of all detriments avoided by one or more persons that are reasonably attributable to the contravention.

12GBCF Civil evidence and procedure rules for declarations of contravention, pecuniary penalty orders and relinquishment orders

A Court must apply the rules of evidence and procedure for civil matters when hearing proceedings for a declaration of contravention, a pecuniary penalty order or a relinquishment order.

12GBCG Civil proceedings after criminal proceedings

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

12GBCH Criminal proceedings during civil proceedings

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

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

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

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

(a) the civil proceedings are dismissed; and

(b) costs must not be awarded in relation to the civil proceedings.

12GBCJ Criminal proceedings after civil proceedings

Criminal proceedings may be commenced against a person for conduct that is the same, or substantially the same, as conduct that would constitute a contravention of a civil penalty provision regardless of whether a declaration of contravention, a pecuniary penalty order, a relinquishment order or any other order has been made against the person in relation to the contravention.

12GBCK Evidence given in civil proceedings not admissible in criminal proceedings

(1) 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 information or produced the documents in proceedings for a declaration of contravention, a pecuniary penalty order or a relinquishment order against the individual for an alleged contravention of a civil penalty provision (whether or not the order was made); and

(b) the conduct alleged to constitute the offence is the same, or substantially the same, as the conduct alleged to constitute the contravention.

(2) However, subsection (1) does not apply to criminal proceedings in relation to the falsity of the evidence given by the individual in the proceedings for the pecuniary penalty order.

12GBCL Attempt and involvement in contravention treated in same way as actual contravention

A person who:

(a) attempts to contravene a civil penalty provision; or

(b) is involved in a contravention of a civil penalty provision;

is taken to have contravened the provision.

12GBCM Continuing contraventions of civil penalty provisions

(1) If an act or thing is required under a civil penalty provision to be done:

(a) within a particular period; or

(b) before a particular time;

then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed).

(2) A person who contravenes a civil penalty provision that requires an act or thing to be done:

(a) within a particular period; or

(b) before a particular time;

commits a separate contravention of that provision in respect of each day during which the contravention occurs (including the day the relevant pecuniary penalty order is made or any later day).

12GBCN State of mind

(1) In proceedings for a declaration of contravention, a pecuniary penalty order, a relinquishment order or any other order against a person for a contravention of a civil penalty provision, it is not necessary to prove:

(a) the person's intention; or

(b) the person's knowledge; or

(c) the person's recklessness; or

(d) the person's negligence; or

(e) any other state of mind of the person.

(2) Subsection (1) does not apply to the extent that the proceedings relate to attempting to contravene a civil penalty provision, or being involved in a contravention of a civil penalty provision.

(3) Subsection (1) does not affect the operation of section 12GI (which is about mistake of fact and other matters).

(4) Subsection (1) does not apply to the extent that the civil penalty provision, or a provision that relates to the civil penalty provision, expressly provides otherwise.

12GBCP Exceptions etc. to civil penalty provisions - burden of proof

(1) If, in proceedings for a declaration of contravention, a pecuniary penalty order, a relinquishment order or any other order against a person for a contravention of a civil penalty provision, the person wishes to rely on any exception, exemption, excuse, qualification or justification provided by the law creating the civil penalty provision, then the person bears an evidential burden in relation to that matter.

(2) In subsection (1), evidential burden , in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.