Explanatory Memorandum
(Circulated by authority of the Minister for Financial Services and Regulation, the Honourable J.B. Hockey MP and the Attorney-General, the Honourable Daryl Williams AM QC MP)Chapter 6 - Correction of Anomalies and Changes in Drafting Style
Correction of Anomalies
6.1. The Bill will correct a number of anomalies within the existing Corporations Law. These amendments will not make any substantive changes to the law.
6.2. Bill clause 9 amends the definition of `Australian bank' to mean an Australian ADI that is permitted under section 66 of the Banking Act 1959 to assume or use:
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- the word bank, banker or banking; or
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- any other word (whether or not in English) that is of like import to one of these.
6.3. Bill clause 9, definitions of `board or managerial office' and `person', will be amended to correct cross-references.
6.4. Bill clause 9 will define `Panel' to mean the Corporations and Securities Panel established by section 171 of the ASIC Bill.
6.5. Bill clause 9 defines the term `Corporations legislation' to means this Bill, the ASIC Bill, and rules of court made by the Federal Court, the Supreme Court of the Capital Territory, or the Family Court, because of a provision of this Bill. It also extends to rules of court applied by the Supreme Court, or a State Family Court, of a State when exercising jurisdiction conferred by Division 1 of Bill Part 9.6A.
6.6. The definition of `exempt body' will be simplified so that a body corporate is an exempt body of a State or Territory if, and only if, it is not a company, and is incorporated by or under a law of the State or Territory (clause 66A).
6.7. The Bill does not include the section 9 definition of `public authority of the Commonwealth or a State'.
6.8. Bill clause 91 corrects cross-references, referring to clauses 206B, 206E, 206D and 206F rather than section 229, 230, 599 and 600 respectively.
6.9. Bill clause 109X, concerning the service of documents, includes a cross-reference to clause 205B(1) (section 109X of the Corporations Law incorrectly referred to section 242(1)). The clause also includes a new reference to clause 5H(2), concerning the registration of companies under a law of a referring State or Territory.
6.10. The table of replaceable rules in Bill clause 141 will be amended to correct a number of cross-references.
6.11. The note to Bill clause 208(1) will be amended to correct the cross-reference to the definition of `control'.
6.12. Bill clauses 249CA(2), 249HA(2), 300A(2) and 323DA(2) will be amended to omit a redundant requirement that the companies to which they apply be incorporated in Australia.
6.13. Bill clause 251A will be amended so that ASIC may only approve a place for the keeping of minute books if that place is in Australia. This amendment will make clause 251A consistent with Bill clause 172(1A) relating to registers.
6.14. Bill clause 252L will be amended to renumber subsection (1A) (second occurring) as paragraph (1B).
6.15. Bill clause 261(4) will be amended so that a document will not be taken to have been lodged with ASIC until it has been received by ASIC in a referring State or Territory.
6.16. The clauses comprising Bill Chapter 2L, entitled `Debentures', have been renumbered as clauses 283AA to 283I (inclusive) to reflect the appearance of these provisions between clauses 282 and 285. The renumbering of these provisions is also reflected in amendments to Schedule 3, which sets the penalty for provisions that establish offences.
6.17. Bill clause 344 will correct the effect of an incorrect section reference in Item 236 of Schedule 3 of the Corporate Law Economic Reform Program Act 1999 .
6.18. The note to Bill clause 348 will be amended to correct the cross-reference to clause 205B as the provision requiring a company to lodge changes in relation to its directors and secretaries.
6.19. Bill clause 601ED(5) will be amended to make it clear that the prohibition against operating an unregistered managed investment scheme applies only in `this jurisdiction'.
6.20. Bill clauses 601FC(3) and 601FE(2) will be amended to provide that the following duties prevail over any duties that an officer of the responsible entity might have under Bill Part 2D.1:
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- the duties that the responsible entity has as trustee of the scheme's assets; and
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- the duties that an officer of a responsible entity has not to use their position improperly.
6.21. Bill clause 601HH(4)(a) will be amended to extend the auditor's qualified privilege to proceedings in a federal court.
6.22. Bill clause 659B(1) will allow a Minister of the Commonwealth or a referring State or Territory to commence court proceedings in relation to a takeover bid before the end of the bid period, while section 659B(1) of the Corporations Law conferred that power on a public authority of the Commonwealth or a State.
6.23. Bill clause 654B will be amended to make it clear that the usual period of 2 days referred to in that clause is 2 business days.
6.24. Bill clause 655B(1) will be will be amended to correctly refer to clause 655B(2).
6.25. Bill clause 658D has been amended to refer to a `declaration', consistent with the language used in clause 655A.
6.26. Bill Clause 661C(4) will be amended to refer to `securities' instead of `shares' to reflect the broader operation of the balance of the clause.
6.27. Bill Clause 670B(3) has been amended by substituting `This Chapter' for `This Part' to reflect the fact that the clause appears in a Chapter and not a Part of the Bill.
6.28. Section 708(11)(f) of the Corporations Law has not been included in the Bill because, as a result of amendments made by the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 , the definition of terminating building societies was removed from the Financial Corporations Act 1974 .
6.29. Section 708(11)(g) of the Corporations Law has not been included in the Bill because friendly societies that are registered under the Life Insurance Act 1995 will be covered by Bill clause 708(11)(c).
6.30. Sections 854(ba) and (b) of the Corporations Law will be renumbered as sections 854(b) and (c) respectively.
6.31. The Bill does not include the redundant definition of `previous Board' in section 920 of the Corporations Law.
6.32. Bill clause 1274AA(1) has been amended to correct the cross-reference from Part 9.1 to Bill Part 2D.6.
6.33. Section 1317S(2)(a) (second occurring), has been renumbered as Bill clause 1317S(2)(b).
6.34. Typographical errors are corrected in clauses 200G(1)(c), 299(1)(f), 300A(1)(a), 300(1), 432(4), 562(1), 960(4) and 1087(1)(c).
Changes in drafting Style
6.35. Provisions of the Corporations Law that operate by reference to a particular date, such as the date the provision was amended, have been amended to specify the actual date (clauses 135(1)(a)(i) and (ii), 135(2)(b), 148(5)(a) and (b), 151(1)(b), 169(4)(a) and (b), 169(5)(a), 319(6)(a) and (b), 411(8A), 417, 418A(1)(a) and (b), 459E(5), 565(1), 566, 567(1), (2) and (5), 588F(1), 588FE(1), 588FI(1)(a), 588FJ(1)(b), 588Z(b), 592(1)(a), 664AA(a), 954B(1)(c) and 984 (definition of `joining exchange')).
6.36. Unlike the Corporations Law, the Bill does not define the term `State' to include the Northern Territory. The Bill relies on the Acts Interpretation Act 1901 to define `internal Territory' to mean the Northern Territory, Australian Capital Territory and the Jervis Bay Territory. The Bill therefore does not define the terms `internal Territory', `excluded Territory' and `external Territory'. Bill clause 9, definition of `incorporated in Australia', has been amended to take account of the Bill's reliance on the definition of `internal Territory' in the Acts Interpretation Act 1901 .
6.37. The Bill uses contemporary language such as `must', `taken', `given', `ASIC', `employee', `are', `law of' and `chair' in places where the Corporations Law would use expressions such as `shall', `are to be taken', `deemed', `furnished', `the Commission', `servant', `law in force in' or `chairman'. The Bill uses the plural `are' where the Corporations Law currently inappropriately uses the singular `is', and vice versa.
6.38. Bill clause 9 modernises the drafting of the definitions of the terms `foreign company' and `registrable Australian body', without any change in effect.
6.39. A number of clauses include a semi-colon, or the words `and' or `or', at the end of each item in a list.
6.40. Bill clause 9 amalgamates the two definitions of the term `entity' in section 9 of the Corporations Law.
6.41. Bill clause 271(1) has been paragraphed without any change in effect.
6.42. Bill clause 327(5) rewrites section 327(5) of the Corporations Law without any change in effect.
6.43. Bill clause 659A takes account of the fact that exemptions and modifications may be `made' under clause 655A.
6.44. The paragraphs to Bill section 713(6) have been placed in the same order as the provisions to which they refer appear in the Bill.
6.45. Sections 896(b) and (ba) of the Corporations Law have been merged into Bill clause 896(b) without any change in effect.
6.46. Bill clause 902(1)(b) refers to a person being admitted to membership of a relevant partnership without any change in effect.
6.47. Sections 925A and 926 of the Corporations Law have been merged into Bill clause 926 without any change in effect.
6.48. The title for Bill clauses 1276 and 1317A have been changed from `Interpretation' to `Definition'.
6.49. Section 1416 of the Corporations Law provides that a number of provisions of the Corporations Law in force before the commencement of the Company Law Review Act 1998 apply in relation to a company limited by share and by guarantee as if they had not been repealed or amended by that Act. The Bill includes the provisions omitted or repealed by the Company Law Review Act 1998 (clauses 9 (definition of `limited company'), 167AA, 516, 517, 518, 519).