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

Schedule 4 Amendment of the Insurance Contracts Act 1984

Part 1 Amendments

Insurance Contracts Act 1984

4 After Part IX

Insert:

Part IXA - Enforcement

Division 1 - Civil penalty provisions

Subdivision A - Obtaining a pecuniary penalty order

75A Declaration of contravention of civil penalty provision

Application for declaration of contravention

(1) ASIC may apply to a relevant court for a declaration that the person contravened the 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;

(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).

75B Pecuniary penalty orders

Application for order

(1) ASIC may apply to a relevant 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 75A 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 75C).

(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

(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.

75C Maximum pecuniary penalty

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

75D 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

(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.

75E Civil enforcement of pecuniary penalty orders

(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.

75F 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.

75G Conduct contravening more than one civil penalty provision

(1) If conduct constitutes a contravention of 2 or more civil penalty provisions, proceedings may be instituted under this Division against a person in relation to the contravention of any one or more of those provisions.

(2) However, the person is not liable to more than one pecuniary penalty under this Division in relation to the same conduct.

75H Multiple contraventions

(1) A relevant court may make a single pecuniary penalty order against a person for multiple contraventions of a civil penalty provision if proceedings for the contraventions are founded on the same facts, or if the contraventions form, or are part of, a series of contraventions of the same or a similar character.

Note: For continuing contraventions of civil penalty provisions, see section 75R.

(2) However, the penalty must not exceed the sum of the maximum penalties that could be ordered if a separate penalty were ordered for each of the contraventions.

75J Proceedings may be heard together

A relevant court may direct that 2 or more proceedings for pecuniary penalty orders are to be heard together.

75K Civil evidence and procedure rules for pecuniary penalty orders

A relevant court must apply the rules of evidence and procedure for civil matters when hearing proceedings for a pecuniary penalty order.

Subdivision B - Civil proceedings and criminal proceedings

75L Civil proceedings after criminal proceedings

A relevant court must not make a declaration of contravention or a pecuniary penalty 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.

75M Criminal proceedings during civil proceedings

(1) Proceedings for a declaration of contravention or a pecuniary penalty 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.

75N 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 or a pecuniary penalty order has been made against the person in relation to the contravention.

75P 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 or a pecuniary penalty 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 declaration of contravention or the pecuniary penalty order.

Subdivision C - Miscellaneous

75Q 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.

75R 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).

75S State of mind

(1) In proceedings for a declaration of contravention or a pecuniary penalty 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

(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 75T (which is about mistake of fact).

(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.

75T Mistake of fact

(1) A person is not liable to have a declaration of contravention or a pecuniary penalty order made against the person for a contravention of a civil penalty provision if:

(a) at or before the time of the conduct constituting the contravention, the person:

(i) considered whether or not facts existed; and

(ii) was under a mistaken but reasonable belief about those facts; and

(b) had those facts existed, the conduct would not have constituted a contravention of the civil penalty provision.

(2) For the purposes of subsection (1), a person may be regarded as having considered whether or not facts existed if:

(a) the person had considered, on a previous occasion, whether those facts existed in the circumstances surrounding that occasion; and

(b) the person honestly and reasonably believed that the circumstances surrounding the present occasion were the same, or substantially the same, as those surrounding the previous occasion.

(3) A person who wishes to rely on subsection (1) or (2) in proceedings for a declaration of contravention or a pecuniary penalty order bears an evidential burden in relation to that matter.

(4) In subsection (3), 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.

75U Exceptions etc. to civil penalty provisions - burden of proof

(1) If, in proceedings for a declaration of contravention or a pecuniary penalty 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.

75V Civil penalty provisions contravened by employees, agents or officers

If an element of a civil penalty provision is done by an employee, agent or officer of a body corporate acting:

(a) within the actual or apparent scope of the employee's, agent's, or officer's employment; or

(b) within the employee's, agent's, or officer's actual or apparent authority;

the element must also be attributed to the body corporate.

Division 2 - Infringement notices

75W When an infringement notice may be given

(1) If ASIC believes on reasonable grounds that a person has contravened a provision subject to an infringement notice under this Division, ASIC may give the person an infringement notice for the alleged contravention.

(2) The infringement notice must be given within 12 months after the day on which the contravention is alleged to have taken place.

(3) A single infringement notice must relate only to a single contravention of a single provision unless subsection (4) applies.

(4) An infringement officer may give a person a single infringement notice relating to multiple contraventions of a single provision if:

(a) the provision requires the person to do a thing within a particular period or before a particular time; and

(b) the person fails or refuses to do that thing within that period or before that time; and

(d) each contravention is constituted by the failure or refusal on one of those days.

(5) If a single provision can constitute both a civil penalty provision and an offence provision, the infringement notice must relate to the provision as an offence provision.

75X Provisions subject to an infringement notice

The following provisions are subject to an infringement notice under this Division:

(a) prescribed offences;

(b) prescribed civil penalty provisions.

75Y Matters to be included in an infringement notice

(1) An infringement notice must:

(a) be identified by a unique number; and

(b) state the day on which it is given; and

(d) state the name and contact details of the person who gave the notice; and

(e) give brief details of the alleged contravention, or each alleged contravention, to which the notice relates, including:

(i) the provision that was allegedly contravened; and

(ii) the maximum penalty that a court could impose for each contravention, if the provision were contravened; and

(iii) the time (if known) and day of, and the place of, each alleged contravention; and

(f) state the amount that is payable under the notice; and

(g) give an explanation of how payment of the amount is to be made; and

(h) state that the payment period for the notice will be 28 days, beginning on the day on which the notice is given, unless the period is extended, an arrangement is made for payment by instalments or the notice is withdrawn; and

(i) state that, if the person to whom the notice is givenpays the amount within the payment period, then (unless the notice is withdrawn):

(i) if the alleged contravention is of an offence provision and would not also constitute a contravention of a civil penalty provision - the person will not be liable to be prosecuted in a court for the alleged contravention; or

(ii) if the alleged contravention is of an offence provision and would also constitute a contravention of a civil penalty provision - the person is not liable to be prosecuted in a court, and proceedings seeking a pecuniary penalty order will not be brought, in relation to the alleged contravention; or

(iii) if the alleged contravention is of a civil penalty provision - proceedings seeking a pecuniary penalty order will not be brought in relation to the alleged contravention; and

(j) state that payment of the amount is not an admission of guilt or liability; and

(k) state that the person may apply to ASIC to have the period in which to pay the amount extended or for an arrangement to pay the amount by instalments; and

(l) state that the person may choose not to pay the amount and, if the person does so:

(i) if the alleged contravention is of an offence provision and would not also constitute a contravention of a civil penalty provision - the person may be prosecuted in a court for the alleged contravention; or

(ii) if the alleged contravention is of an offence provision and would also constitute a contravention of a civil penalty provision - the person may be prosecuted in a court, or proceedings seeking a pecuniary penalty order may be brought, in relation to the alleged contravention; or

(iii) if the alleged contravention is of a civil penalty provision - proceedings seeking a pecuniary penalty order may be brought in relation to the alleged contravention; and

(m) set out how the notice can be withdrawn; and

(n) state that if the notice is withdrawn:

(iii) if the alleged contravention is of a civil penalty provision - proceedings seeking a pecuniary penalty order may be brought in relation to the alleged contravention; and

(o) state that the person may make written representations to ASIC seeking the withdrawal of the notice.

(2) The amount to be stated in the notice for the purposes of paragraph (1)(f) is:

(a) for a single contravention of an offence provision - half the maximum penalty that a court could impose on the person for the contravention; and

(b) for multiple contraventions of an offence provision - the amount worked out under paragraph (a) for a single contravention multiplied by the number of contraventions; and

(c) for a single contravention of a civil penalty provision - 12 penalty units for an individual and 60 penalty units for a body corporate; and

(d) for multiple contraventions of a civil penalty provision - the amount worked out under paragraph (c) for a single contravention multiplied by the number of contraventions.

75Z Payment period

Usual payment period

(1) The payment period for an infringement notice begins on the day after the notice is given and, unless otherwise specified in this section, continues for 28 days.

Payment period extended under section 75ZA

(2) If, under section 75ZA, ASIC extends the payment period for the notice, the payment period is as extended.

(3) If ASIC refuses an application under subsection 75ZA(1) for an extension of the payment period for the notice, the payment period ends on the later of the following days:

(a) the last day of the period that, without the extension that has been refused, would be the payment period for the notice;

(b) the day that is 7 days after the day the applicant was given notice of ASIC's decision not to extend;

Instalments

(4) If, under section 75ZB, ASIC makes an arrangement for the amount payable under the notice to be paid by instalments, the payment period ends on the earlier of the following days:

(a) the last day on which an instalment is to be paid under the arrangement;

(b) if the person fails to pay an instalment in accordance with the arrangement, the last day on which the missed instalment was to be paid.

(5) If ASIC refuses an application made under subsection 75ZB(1) to make an arrangement for the amount payable under the notice to be paid by instalments, the payment period ends on the earlier of the following days:

(a) the last day of the period that, without the instalment arrangement, would be the payment period for the notice;

(b) the day that is 7 days after the day the applicant was given notice of ASIC's decision not to make the arrangement;

Payment period if ASIC refuses to withdraw infringement notice

(6) If ASIC refuses a representation made under subsection 75ZC(1) for the notice to be withdrawn, the payment period ends on the later of the following days:

(a) the last day of the period that, without the withdrawal, would be the payment period for the notice;

(b) the day that is 7 days after the day the person was given notice of ASIC's decision not to withdraw the notice;

(c) the day that is 7 days after the day on which, under subsection 75ZC(5), ASIC is taken to have refused to withdraw the infringement notice.

75ZA Extension of time to pay amount

(1) A person to whom an infringement notice has been given may, during the payment period for the notice, apply to ASIC for an extension of the payment period for the notice.

(2) ASIC may, in writing, extend the payment period for an infringement notice:

(a) if a person makes an application in accordance with subsection (1); or

(b) on ASIC's own initiative.

ASIC may do so before or after the end of the payment period.

(3) ASIC must do each of the following within 14 days after an application in accordance with subsection (1) is made:

(a) grant or refuse to grant an extension of the payment period for the infringement notice;

(b) give the applicant notice in writing of ASIC's decision.

(4) If ASIC does not comply with subsection (3):

(a) ASIC is taken to have refused to grant an extension of the payment period for the infringement notice; and

(b) the refusal is taken to have occurred on the last day of the 14 day period.

(5) ASIC may extend the payment period more than once under subsection (2).

75ZB Payment by instalments

(1) A person to whom an infringement notice has been given may, within 28 days after the infringement notice is given, apply to ASIC to make an arrangement to pay the amount payable under the infringement notice by instalments.

(2) ASIC may, in writing, make an arrangement for a person to pay the amount payable under an infringement notice by instalments:

(a) if a person makes an application in accordance with subsection (1); or

(b) on ASIC's own initiative.

ASIC may do so before or after the end of the payment period.

(3) ASIC must do each of the following within 14 days after an application in accordance with subsection (1) is made:

(a) decide to make, or refuse to make, an arrangement for the applicant to pay the amount payable under the infringement notice by instalments;

(b) give the applicant notice in writing of ASIC's decision;

(i) the day by which each instalment is to be paid; and

(ii) the amount of each instalment.

(4) If ASIC does not comply with subsection (3):

(a) ASIC is taken to have refused to make an arrangement for the applicant to pay the amount payable under the infringement notice by instalments; and

(b) the refusal is taken to have occurred on the last day of the 14 day period.

(5) ASIC may vary an arrangement for a person to pay the amount payable under an infringement notice by instalments.

(6) If:

(a) a person does not pay all of the instalments in accordance with an arrangement made under this section; and

(b) the person is prosecuted, or proceedings seeking a pecuniary penalty order are brought, for the alleged contravention;

ASIC must refund to the person the amount of any instalments paid.

75ZC Withdrawal of an infringement notice

Representations seeking withdrawal of notice

(1) A person to whom an infringement notice has been given may, within 28 days after the infringement notice is given, make written representations to ASIC seeking the withdrawal of the notice.

Withdrawal of notice

(2) ASIC may withdraw an infringement notice given to a person:

(a) if the person makes representations to ASIC in accordance with subsection (1); or

(b) on ASIC's own initiative.

ASIC may do so before or after the end of the payment period.

(3) ASIC must, within 14 days after a representation is made in accordance with subsection (1):

(a) decide to withdraw, or refuse to withdraw, the infringement notice; and

(b) if ASIC decides to withdraw the notice - give the applicant a withdrawal notice in accordance with subsection (6); and

(4) When deciding whether to withdraw, or refuse to withdraw, an infringement notice, ASIC:

(a) must take into account any written representations seeking the withdrawal that were given by the person to ASIC; and

(b) may take into account the following:

(i) whether a court has previously imposed a penalty on the person for a contravention of a provision of this Act;

(ii) the circumstances of the alleged contravention;

(iii) whether the person has paid an amount, stated in an earlier infringement notice, for a contravention of a provision of this Act;

(iv) any other matter ASIC considers relevant.

(5) If ASIC does not comply with subsection (3):

(a) ASIC is taken to have refused to make an arrangement for the applicant to pay the amount payable under the infringement notice by instalments; and

(b) the refusal is taken to have occurred on the last day of the 14 day period.

Notice of withdrawal

(6) Notice of the withdrawal of the infringement notice must be given to the person. The withdrawal notice must state:

(a) the person's name and address; and

(b) the day the infringement notice was given; and

(d) that the infringement notice is withdrawn; and

(e) that:

(iii) if the alleged contravention is of a civil penalty provision - proceedings seeking a pecuniary penalty order may be brought in relation to the alleged contravention.

Refund of amount if infringement notice withdrawn

(7) If:

(a) ASIC withdraws the infringement notice; and

(b) the person has already paid all or part of the amount stated in the notice;

ASIC must refund to the person an amount equal to the amount paid.

75ZD Effect of payment of amount

(1) If the person to whom an infringement notice for an alleged contravention of a provision is given pays the amount stated in the notice before the end of the payment period for the notice:

(a) any liability of the person for the alleged contravention is discharged; and

(b) if the alleged contravention is of an offence provision and would not also constitute a contravention of a civil penalty provision - the person may not be prosecuted in a court for the alleged contravention; and

(c) if the alleged contravention is of an offence provision and would also constitute a contravention of a civil penalty provision - the person may not be prosecuted in a court, and proceedings seeking a pecuniary penalty order may not be brought, in relation to the alleged contravention; and

(d) if the alleged contravention is of a civil penalty provision - proceedings seeking a pecuniary penalty order may not be brought in relation to the alleged contravention; and

(e) the person is not regarded as having admitted guilt or liability for the alleged contravention; and

(f) if the provision is an offence provision - the person is not regarded as having been convicted of the alleged offence.

(2) Subsection (1) does not apply if the notice has been withdrawn.

75ZE Effect of this Division

This Division does not:

(a) require an infringement notice to be given to a person for an alleged contravention of a provision subject to an infringement notice under this Division; or

(b) affect the liability of a person for an alleged contravention of a provision subject to an infringement notice under this Division if:

(i) the person does not comply with an infringement notice given to the person for the contravention; or

(ii) an infringement notice is not given to the person for the contravention; or

(iii) an infringement notice is given to the person for the contravention and is subsequently withdrawn; or

(c) prevent the giving of 2 or more infringement notices to a person for an alleged contravention of a provision subject to an infringement notice under this Division; or

(d) limit a court's discretion to determine the amount of a penalty to be imposed on a person who is found to have contravened a provision subject to an infringement notice under this Division.

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