An Act to provide reporting, accountability and other rules for
Commonwealth authorities and Commonwealth companies, and for related purposes
Part 1—Preliminary
1
Short title [see
Note 1]
This Act may be cited as the Commonwealth
Authorities and Companies Act 1997.
2
Commencement [see
Note 1]
This Act commences on the same day as
the Financial Management and Accountability Act 1997.
3 This
Act binds the Crown
This Act binds the Crown in right of the
Commonwealth, but does not make the Crown liable to be prosecuted for an
offence.
4 This
Act extends to things outside Australia
This Act extends to acts, omissions,
matters and things outside Australia (unless the contrary intention appears).
Part 2—General provisions about definitions, offences and civil
penalties
5
Definitions
In this Act, unless the contrary
intention appears:
bank means:
(a) a person who carries on the
business of banking, either in Australia or outside Australia; or
(b) any other institution:
(i) that carries on a
business in Australia that consists of or includes taking money on deposit; and
(ii) the operations of
which are subject to prudential supervision or regulation under a law of the
Commonwealth, a State or a Territory.
books includes:
(a) a register; and
(b) any other record of information;
and
(c) financial reports or financial
records, however compiled, recorded or stored; and
(d) a document.
civil penalty provision has the meaning given
by subclause 1(1) of Schedule 2.
Commonwealth authority has the meaning given
by section 7.
Commonwealth company has the meaning given by
section 34.
consolidated financial statements, in
relation to a Commonwealth authority or Commonwealth company, means financial
statements for the group consisting of:
(a) the authority or company; and
(b) the entities that were
subsidiaries at any relevant time.
Corporations Act company means a body
corporate that is incorporated, or taken to be incorporated, under the Corporations
Act 2001.
court means any court exercising jurisdiction
under this Act.
Court means:
(a) the Federal Court of Australia; or
(b) the Supreme Court of a State or
Territory.
director means:
(a) for a Commonwealth authority that
has a council or other governing body—a member of the governing body; or
(b) for a Commonwealth authority that
does not have a council or other governing body—a member of the authority; or
(c) for a Commonwealth company—a
person who is a director of the company for the purposes of the Corporations
Act 2001.
enabling legislation, in relation to a
Commonwealth authority, means the Act, regulations or Ordinance under which the
authority is incorporated.
Finance Minister means the Minister who
administers this Act.
Finance Minister’s Orders means Orders made
under section 48.
financial statements includes consolidated
financial statements.
financial year:
(a) means, for a Commonwealth
authority:
(i) a period of 12 months
commencing on 1 July; or
(ii) if the incorporating
law specifies another period of 12 months as the financial year for the
authority for the purpose of this Act—a period of 12 months as so specified;
and
(b) means, for a Commonwealth company,
the company’s annual accounting period.
GBE or government business enterprise
means a Commonwealth authority or Commonwealth company that is prescribed by
the regulations for the purpose of this definition.
incorporating law, in relation to a
Commonwealth authority, means the Act, regulations or Ordinance by which the
authority is incorporated.
involved: a person is involved in a
contravention if, and only if, the person has:
(a) aided, abetted, counselled or
procured the contravention; or
(b) has induced, whether by threats or
promises or otherwise, the contravention; or
(c) has been in any way, by act or
omission, directly or indirectly, knowingly concerned in or party to the
contravention; or
(d) has conspired with others to
effect the contravention.
Minister includes the President of the Senate
and the Speaker of the House of Representatives.
officer, in relation to a Commonwealth
authority, means:
(a) a director of the authority; or
(b) any other person who is concerned
in, or takes part in, the management of the authority.
responsible Minister means:
(a) for a Commonwealth authority—the
Minister who is responsible for the authority; or
(b) for a Commonwealth company:
(i) the Minister who is
prescribed by the regulations as the Minister responsible for the company; or
(ii) if no Minister is
prescribed—the Minister who is responsible for the company.
SMA or statutory marketing authority
means a Commonwealth authority that is prescribed by the regulations for the
purpose of this definition.
subsidiary, in relation to a Commonwealth
authority or Commonwealth company, means an entity that is controlled by the
Commonwealth authority or Commonwealth company. For this purpose, entity
and control have the same meanings as in the accounting standard
that applies for the purpose of deciding whether a company has to prepare
consolidated financial statements under the Corporations Act 2001.
wholly‑owned Commonwealth
company has the meaning given by section 34.
6
Offences and civil penalties
(1) Chapter 2 of the Criminal Code
applies to all offences against this Act.
(2) Schedule 2 deals with the civil
consequences of contravening civil penalty provisions.
(3) A maximum penalty that is specified:
(a) at the foot of a section of this
Act (other than a section that is divided into subsections); or
(b) at the foot of a subsection of
this Act;
indicates that a person who contravenes the section or
subsection is guilty of an offence against the section or subsection that is
punishable, on conviction, by a penalty up to that maximum.
Note 1: Chapter 2 of the Criminal Code sets
out the general principles of criminal responsibility.
Note 2: If the specified penalty is imprisonment only,
section 4B of the Crimes Act 1914 allows the court to impose a fine
instead of imprisonment or in addition to imprisonment.
(4) A maximum penalty that is specified:
(a) at the foot of a clause of a
Schedule to this Act (other than a clause that is divided into subclauses); or
(b) at the foot of a subclause of a
Schedule to this Act;
indicates that a person who contravenes the clause or
subclause is guilty of an offence against the clause or subclause that is
punishable, on conviction, by a penalty up to that maximum.
Note 1: Chapter 2 of the Criminal Code sets
out the general principles of criminal responsibility.
Note 2: If the specified penalty is imprisonment only,
section 4B of the Crimes Act 1914 allows the court to impose a fine
instead of imprisonment or in addition to imprisonment.
Part 3—Reporting and other obligations for Commonwealth authorities
Division 1—Preliminary
7
Meaning of Commonwealth authority
(1) In this Act, Commonwealth authority
means either of the following kinds of body that holds money on its own
account:
(a) a body corporate that is
incorporated for a public purpose by an Act;
(b) a body corporate that is
incorporated for a public purpose by:
(i) regulations under an
Act; or
(ii) an Ordinance of an
external Territory (other than Norfolk Island) or regulations under such an
Ordinance;
and is prescribed for the
purposes of this paragraph by regulations under this Act.
(2) None of the following are Commonwealth
authorities:
(a) Corporations Act companies;
(b) corporations registered under the Corporations
(Aboriginal and Torres Strait Islander) Act 2006;
(c) associations of employees that are
organisations within the meaning of Schedule 1B to the Workplace Relations
Act 1996.
(3) For the purposes of subsection (1),
all money that a body holds is taken to be held by it on its own account,
unless the money is public money as defined in section 5 of the Financial
Management and Accountability Act 1997.
8 Role
of Auditor‑General
(1) The Auditor‑General is to be the
auditor of each Commonwealth authority.
(2) The Auditor‑General is to audit the
financial statements of each subsidiary of a Commonwealth authority (there are
exceptions to this—see subsection 12(4)).
Note: If the Auditor‑General is not the
subsidiary’s auditor, this means that the Auditor‑General has to do an
audit of the statements in addition to that done by the subsidiary’s auditor.
Division 2—Reporting obligations
Subdivision A—Annual report and related obligations
9
Directors must prepare annual report
(1) The directors of a Commonwealth authority
must:
(a) prepare an annual report in
accordance with Schedule 1 for each financial year; and
(b) give it to the responsible
Minister by the deadline for the financial year.
The deadline is the 15th day of the 4th month after the
end of the financial year.
Note: The deadline will be 15 October if the
financial year ends on 30 June. Financial year is defined in
section 5.
(2) The responsible Minister may grant an
extension of time in special circumstances.
(3) The responsible Minister must table the
report in each House of the Parliament as soon as practicable.
10
Modified requirements for first year of existence
(1) If a Commonwealth authority is
established during the last 3 months of a financial year:
(a) the directors are not required to
prepare an annual report for that financial year; and
(b) the period from the time of
establishment to the end of the financial year must be dealt with in the next
annual report.
(2) If a Commonwealth authority is
established during the first 9 months of a financial year, the annual report
for the financial year must cover the period from the time of establishment to
the end of the financial year.
11
Contravention of annual report rules by directors
(1) If a directors reporting rule is
contravened, each director who:
(a) caused the contravention; or
(b) failed to take all reasonable
steps to comply with the rule, or secure compliance with the rule;
contravenes this subsection.
Note: This is a civil penalty provision and Schedule 2
sets out the civil and criminal consequences of contravening it.
(2) If a contravention of a directors
reporting rule consists of an omission from the financial statements, it is a
defence if the defendant proves that the information omitted was immaterial and
did not affect the giving of a true and fair view of the matters required by
the Finance Minister’s Orders to be included in the statements.
(3) In this section:
directors reporting rule means subsection
9(1) or any of the requirements of Schedule 1 that impose obligations on
the directors.
12
Audit of relevant subsidiary’s financial statements
(1) Subject to subsection (4), the
directors of a Commonwealth authority must do whatever is necessary to ensure
that all relevant subsidiary’s financial statements are audited by the Auditor‑General.
(2) For a subsidiary that is a Corporations Act
company that, under the Corporations Act 2001, is required to have those
statements audited, the Auditor‑General’s report on the subsidiary’s
financial statements must be prepared using the relevant rules in the Corporations
Act 2001. Those rules must also be used for other subsidiaries, so far as
is practicable.
(3) The Auditor‑General must give the
report to the responsible Minister, together with a copy of the relevant
subsidiary’s financial statements.
(4) Relevant financial statements of a subsidiary
do not have to be audited by the Auditor‑General if:
(a) the subsidiary is incorporated or
formed in a place outside Australia; and
(b) either:
(i) under the law applying
to the subsidiary in that place, the Auditor‑General cannot be appointed
as auditor of the subsidiary; or
(ii) in the Auditor‑General’s
opinion, it is impracticable or unreasonable for the Auditor‑General to
audit, or to be required to audit, the statements.
(5) In this section:
relevant subsidiary’s financial statements,
in relation to a Commonwealth authority, means financial statements of an
entity for an annual accounting period of the entity, where the entity is a
subsidiary of the authority at the end of that accounting period.
Subdivision B—Other reporting obligations
13 Interim
reports
(1) The Finance Minister may, by notice in
the Gazette, require particular Commonwealth authorities or a class of
Commonwealth authorities to give the responsible Minister either:
(a) an interim report for the first 6
months of a financial year; or
(b) an interim report for each of the
following periods:
(i) the first 3 months of
each financial year;
(ii) the first 6 months of
each financial year;
(iii) the first 9 months of
each financial year.
(2) The interim report must include:
(a) a report of operations, prepared
by the directors in accordance with the Finance Minister’s Orders; and
(b) financial statements, prepared by
the directors in accordance with the Finance Minister’s Orders; and
(c) a report prepared by the Auditor‑General
in accordance with the regulations.
(3) The directors must give the interim
report to the responsible Minister within 2 months after the end of the period
to which the report relates.
(4) The responsible Minister may grant an
extension of time in special circumstances.
(5) The responsible Minister must table the
interim report in each House of the Parliament as soon as practicable.
14
Estimates
(1) The directors of a Commonwealth authority
(other than a GBE) must prepare budget estimates for each financial year, and
for any other periods directed by the responsible Minister.
(2) The estimates:
(a) must be in the form required by
the responsible Minister; and
(b) must be given to the responsible
Minister within the time required by the responsible Minister.
15
Responsible Minister to be notified of significant events
(1) If a Commonwealth authority, or any of
its subsidiaries, proposes to do any of the following things, the directors of
the Commonwealth authority must immediately give the responsible Minister
written particulars of the proposal:
(a) form a company or participate in
the formation of a company;
(b) participate in a significant
partnership, trust, unincorporated joint venture or similar arrangement;
(c) acquire or dispose of a significant
shareholding in a company;
(d) acquire or dispose of a
significant business;
(e) commence or cease a significant
business activity;
(f) make a significant change in the
nature or extent of its interest in a significant partnership, trust, unincorporated
joint venture or similar arrangement.
(2) The responsible Minister may in writing
exempt the directors of a Commonwealth authority from the requirement to notify
matters covered by paragraph (1)(a). The exemption may be granted subject
to conditions.
(3) The responsible Minister may give written
guidelines to the directors that are to be used by the directors in deciding
whether a proposal is covered by paragraph (1)(b), (c), (d), (e) or (f).
16
Keeping responsible Minister and Finance Minister informed
(1) The directors of a Commonwealth authority
must:
(a) keep the responsible Minister
informed of the operations of the authority and its subsidiaries; and
(b) give the responsible Minister such
reports, documents and information in relation to those operations as the
responsible Minister requires; and
(c) give the Finance Minister such
reports, documents and information in relation to those operations as the
Finance Minister requires.
(2) The directors must comply with
requirements under paragraphs (1)(b) and (c) within the time limits set by
the Minister concerned.
17
Corporate plan for GBE
(1) This section applies to a Commonwealth
authority that is a GBE.
(2) The directors must prepare a corporate
plan at least once a year and give it to the responsible Minister.
(3) The plan must cover a period of at least
3 years.
(4) If the Commonwealth authority has
subsidiaries, the plan must cover both the authority and its subsidiaries. In
particular, for each subsidiary the plan must include details of the matters in
subsection (6), so far as they are applicable.
(5) The directors must keep the responsible
Minister informed about:
(a) significant changes to the plan;
and
(b) matters that arise that might
significantly affect the achievement of the objectives in the plan.
(6) The plan must include details of the
following matters (so far as they are applicable):
(a) the objectives of the authority;
(b) assumptions about the business
environment in which the authority operates;
(c) the business strategies of the
authority;
(d) the investment and financing
programs of the authority, including strategies for managing financial risk;
(e) financial targets and projections
for the authority;
(f) the dividend policy of the
authority;
(g) non‑financial performance
measures for the authority;
(h) community service obligations of
the authority and the strategies and policies the authority is to follow to
carry out those obligations;
(i) review of performance against
previous corporate plans and targets;
(j) analysis of factors likely to
affect achievement of targets or create significant financial risk for the
authority or for the Commonwealth;
(k) price control and quality control
strategies for goods or services supplied by the authority under a monopoly;
(l) human resource strategies and
industrial relations strategies.
(7) The plan must also cover any other
matters required by the responsible Minister (which may include further details
about the matters in subsection (6)).
(8) The responsible Minister may give written
guidelines to the directors that are to be used by the directors in deciding
which matters are covered by subsection (5).
Division 3—Banking, investment etc.
18
Banking and investment (authorities other than GBEs and SMAs)
(1) This section applies to a Commonwealth
authority that is not a GBE or SMA.
(2) The authority must pay all money received
by it into an account maintained by it with a bank.
(3) The authority may invest surplus money:
(a) on deposit with a bank; or
(b) in securities of the Commonwealth
or of a State or Territory; or
(c) in securities guaranteed by the
Commonwealth, a State or a Territory; or
(d) in any other manner approved by
the Finance Minister.
(4) A provision in the authority’s
incorporating law to the effect that the authority must not enter into a
contract involving the expenditure or payment of more than a specified amount
of money without the approval of a specified person does not apply to a
contract for the investment of money under subsection (3), unless the
provision expressly states that it applies to such a contract.
(4A) The Finance Minister may, by written
instrument, delegate any of the Finance Minister’s powers or functions under
this section to an official (within the meaning of the Financial Management
and Accountability Act 1997). In exercising powers or functions under a
delegation, the official must comply with any directions of the Finance
Minister.
(5) In this section:
surplus money means money of the authority
that is not immediately required for the purposes of the authority.
19
Banking and investment (GBEs and SMAs)
(1) This section applies to a Commonwealth
authority that is a GBE or SMA.
(2) The authority must pay all money received
by it into an account maintained by it with a bank.
(3) The authority may invest surplus money:
(a) on deposit with any bank; or
(b) in securities of the Commonwealth
or of a State or Territory; or
(c) in securities guaranteed by the
Commonwealth, a State or a Territory; or
(d) in any other manner that is
consistent with sound commercial practice.
(4) A provision in the authority’s
incorporating law to the effect that the authority must not enter into a
contract involving the expenditure or payment of more than a specified amount
of money without the approval of a specified person does not apply to a
contract for the investment of money under subsection (3), unless the
provision expressly states that it applies to such a contract.
(5) In this section:
surplus money means money of the authority
that is not immediately required for the purposes of the authority.
20
Accounting records
(1) A Commonwealth authority must keep
accounting records that properly record and explain its transactions and
financial position and must keep those records in a way that:
(a) enables the preparation of the
financial statements required by this Act; and
(b) allows those financial statements
to be conveniently and properly audited in accordance with this Act.
(2) The authority must retain the records for
at least 7 years after completion of the transactions to which they relate.
(3) The authority must make the records
available at all reasonable times for inspection by any director of the
authority.
(4) If a requirement of this section is
contravened, each officer of the authority who:
(a) caused the contravention; or
(b) failed
to take all reasonable steps to comply with the requirement, or secure
compliance with the requirement;
is guilty of an offence.
Maximum penalty: Imprisonment for 6 months.
Note: Chapter 2 of the Criminal Code
sets out the general principles of criminal responsibility.
Division 4—Conduct of officers
21
Background to duties of directors, other officers and employees
(1) This Part sets out some of the most
significant duties of officers and employees of Commonwealth authorities. Other
duties are imposed by other provisions of this Act and other laws (including
the general law).
(2) Section 5 defines both director
and officer. Officer includes, as well as
directors, other people who are concerned in, or take part in, the management
of the authority.
Subdivision A—General duties
22
Care and diligence—civil obligation only
Care and diligence—officers
(1) An officer of a Commonwealth authority
must exercise his or her powers and discharge his or her duties with the degree
of care and diligence that a reasonable person would exercise if he or she:
(a) were an officer of a Commonwealth
authority in the Commonwealth authority’s circumstances; and
(b) occupied the office held by, and
had the same responsibilities within the Commonwealth authority as, the
officer.
Note: This subsection is a civil penalty provision
(see Schedule 2).
Business judgment rule
(2) An officer of a Commonwealth authority
who makes a business judgment is taken to meet the requirements of subsection (1),
and their equivalent duties at common law and in equity, in respect of the
judgment if he or she:
(a) makes the judgment in good faith
for a proper purpose; and
(b) does not have a material personal
interest in the subject matter of the judgment; and
(c) informs himself or herself about
the subject matter of the judgment to the extent he or she reasonably believes
to be appropriate; and
(d) rationally believes that the
judgment is in the best interests of the Commonwealth authority.
The officer’s belief that the judgment is in the best
interests of the Commonwealth authority is a rational one unless the belief is
one that no reasonable person in his or her position would hold.
Note: This subsection only operates in relation to
duties under this section and their equivalents at common law or in equity
(including the duty of care that arises under the common law principles
governing liability for negligence)—it does not operate in relation to duties
under any other provision of this Act or under any other laws.
(3) In this section:
business judgment means any decision to take
or not take action in respect of a matter relevant to the operations of the
Commonwealth authority.
23
Good faith—civil obligations
Good faith—officers
(1) An officer of a Commonwealth authority
must exercise his or her powers and discharge his or her duties:
(a) in good faith in the best
interests of the Commonwealth authority; and
(b) for a proper purpose.
Note 1: This subsection is a civil penalty provision
(see Schedule 2).
Note 2: Section 187 of the Corporations Act
2001 deals with the position of directors of wholly‑owned
subsidiaries of Commonwealth authorities.
(2) A person who is involved in a
contravention of subsection (1) contravenes this subsection.
Note 1: Section 5 defines involved.
Note 2: This subsection is a civil penalty provision
(see Schedule 2).
24 Use
of position—civil obligations
Use of position—officers and employees
(1) An officer or employee of a Commonwealth
authority must not improperly use his or her position to:
(a) gain an advantage for him or her
or someone else; or
(b) cause detriment to the
Commonwealth authority or to another person.
Note 1: Section 27A makes provision for officers
who are also public servants.
Note 2: This subsection is a civil penalty provision
(see Schedule 2).
(2) A person who is involved in a
contravention of subsection (1) contravenes this subsection.
Note 1: Section 5 defines involved.
Note 2: This subsection is a civil penalty provision
(see Schedule 2).
25 Use
of information—civil obligations
Use of information—officers and employees
(1) A person who obtains information because
they are, or have been, an officer or employee of a Commonwealth authority must
not improperly use the information to:
(a) gain an advantage for himself or
herself or someone else; or
(b) cause detriment to the
Commonwealth authority or to another person.
Note 1: Section 27A makes provision for officers
who are also public servants.
Note 2: This duty continues after the person stops
being an officer or employee of the Commonwealth authority.
Note 3: This subsection is a civil penalty provision
(see Schedule 2).
(2) A person who is involved in a
contravention of subsection (1) contravenes this subsection.
Note 1: Section 5 defines involved.
Note 2: This subsection is a civil penalty provision
(see Schedule 2).
26
Good faith, use of position and use of information—criminal offences
Good faith—officers
(1) An officer of a Commonwealth authority
commits an offence if he or she:
(a) is reckless; or
(b) is intentionally dishonest;
and fails to exercise his or her powers and discharge his
or her duties:
(c) in good faith in what he or she
believes to be in the best interests of the Commonwealth authority; or
(d) for a proper purpose.
Note: Section 187 of the Corporations Act
2001 deals with the position of directors of wholly‑owned
subsidiaries of Commonwealth authorities.
Penalty: Imprisonment for 5 years.
(2) An officer or employee of a Commonwealth
authority commits an offence if he or she uses his or her position dishonestly:
(a) with the intention of directly or
indirectly gaining an advantage for himself or herself, or someone else, or
causing detriment to the Commonwealth authority or to another person; or
(b) recklessly as to whether the use
may result in him or her or someone else directly or indirectly gaining an
advantage, or in causing detriment to the Commonwealth authority or to another
person.
Penalty: Imprisonment for 5 years.
Use of information—officers and employees
(3) A person who obtains information because
he or she is, or has been, an officer or employee of a Commonwealth authority
commits an offence if he or she uses the information dishonestly:
(a) with the intention of directly or
indirectly gaining an advantage for himself or herself, or someone else, or
causing detriment to the Commonwealth authority or to another person; or
(b) recklessly as to whether the use
may result in himself or herself or someone else directly or indirectly gaining
an advantage, or in causing detriment to the Commonwealth authority or to
another person.
Maximum penalty: Imprisonment for 5 years.
27A
Compliance with statutory duties
(1) An officer does not contravene section 23,
24 or 25, or commit an offence against section 26, by doing an act that
another provision of this Act requires the officer to do.
(2) If an officer of a Commonwealth authority
is also a public servant, the officer does not contravene section 23, 24
or 25, or commit an offence against section 26, by doing an act in the
course of the performance of his or her duties as a public servant. For this
purpose, public servant means a person appointed or engaged under
the Public Service Act 1999.
27B
Interaction of sections 22 to 26 with other laws etc.
Sections 22 to 26:
(a) have effect in addition to, and
not in derogation of, any rule of law relating to the duty or liability of a
person because of his or her office or employment in relation to a Commonwealth
authority; and
(b) do not prevent the commencement of
proceedings for a breach of duty or in respect of a liability referred to in paragraph (a).
This section does not apply to subsections 22(2) and (3)
to the extent to which they operate on the duties at common law and in equity
that are equivalent to the requirements of subsection 22(1).
27C
Disqualification order for contravention of civil penalty provision
(1) The Court may disqualify a person from
managing bodies corporate for a period that the Court considers appropriate if:
(a) a declaration is made under clause 1
of Schedule 2 (civil penalty provision) that the person has contravened a
civil penalty provision; and
(b) the Court is satisfied that the
disqualification is justified.
(2) An application for a disqualification
order under subsection (1) may be made by:
(a) the Finance Minister; or
(b) some other person authorised in
writing by the Finance Minister, under this paragraph, to make the application.
An authorisation for the purposes of paragraph (b)
may relate to applications in relation to specified contraventions, or to all
contraventions, of civil penalty provisions.
(3) In determining whether the
disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation
to the management, business or property of any Commonwealth authority or other
body corporate; and
(b) any other matters that the Court
considers appropriate.
(4) A person commits an offence if:
(a) such a disqualification is in
force against the person; and
(b) the person is a director of a
Commonwealth authority.
Maximum penalty: Imprisonment for 1 year.
(4A) However, the person has an excuse if the
person is a director of a Commonwealth authority with the leave of the Court.
Note: A defendant bears an evidential burden in
relation to the matter in subsection (4A), see subsection 13.3(3) of the Criminal
Code.
(5) When granting leave under subsection (4A),
the Court may impose conditions or restrictions that the Court considers
appropriate.
(6) A person must not contravene such a
condition or restriction.
Maximum penalty: Imprisonment for 1 year.
(7) A person may only apply for leave under subsection (4)
if he or she has given the Finance Minister at least 21 days notice of the
application.
(8) On the application of the Finance
Minister, the Court may revoke leave granted under subsection (4).
27D
Reliance on information or advice provided by others
If:
(a) a director relies on information,
or professional or expert advice, given or prepared by:
(i) an employee of the
Commonwealth authority whom the director believes on reasonable grounds to be
reliable and competent in relation to the matters concerned; or
(ii) a professional adviser
or expert in relation to matters that the director believes on reasonable
grounds to be within the person’s professional or expert competence; or
(iii) another director or
officer in relation to matters within the director’s or officer’s authority; or
(iv) a committee of
directors on which the director did not serve in relation to matters within the
committee’s authority; and
(b) the reliance was made:
(i) in good faith; and
(ii) after making proper
inquiry if the circumstances indicated the need for inquiry; and
(c) the reasonableness of the
director’s reliance on the information or advice arises in proceedings brought
to determine whether a director has performed a duty under this Division or an
equivalent general law duty;
the director’s reliance on the information or advice is
taken to be reasonable unless the contrary is proved.
27E
Responsibility for actions of delegate
(1) If the directors of a Commonwealth
authority delegate a power under its enabling legislation, a director is
responsible for the exercise of the power by the delegate as if the power had
been exercised by the directors themselves.
(2) A director is not responsible under subsection (1)
if:
(a) the director believed on
reasonable grounds at all times that the delegate would exercise the power in
conformity with the duties imposed on directors of the Commonwealth authority
by this Act and the authority’s enabling legislation; and
(b) the director believed:
(i) on reasonable grounds;
and
(ii) in good faith; and
(iii) after making proper
inquiry if the circumstances indicated the need for inquiry;
that the delegate was reliable
and competent in relation to the power delegated.
Subdivision B—Disclosure of, and voting on matters involving, material
personal interests
27F
Material personal interest—director’s duty to disclose
Director’s duty to notify other directors of material
personal interest when conflict arises
(1) A director of a Commonwealth authority
who has a material personal interest in a matter that relates to the affairs of
the authority must give the other directors notice of the interest unless subsection (2)
says otherwise.
(2) The director does not need to give notice
of an interest under subsection (1) if:
(a) the interest:
(i) arises in relation to
the director’s remuneration as a director of the authority; or
(ii) relates to a contract
that insures, or would insure, the director against liabilities the director
incurs as an officer of the authority (but only if the contract does not make
the authority or a subsidiary of the authority the insurer); or
(iii) relates to any payment
by the authority or a subsidiary of the authority in respect of an indemnity
permitted under section 27M or any contract relating to such an indemnity;
or
(iv) is in a contract, or
proposed contract, with, or for the benefit of, or on behalf of, a subsidiary
of the authority and arises merely because the director is a director of the
subsidiary; or
(b) all the following conditions are
satisfied:
(i) the director has
already given notice of the nature and extent of the interest and its relation
to the affairs of the authority under subsection (1)
(ii) if a person who was
not a director of the authority at the time when the notice under subsection (1)
was given is appointed as a director of the authority—the notice is given to
that person
(iii) the nature or extent
of the interest has not materially increased above that disclosed in the
notice; or
(c) the director has given a standing
notice of the nature and extent of the interest under section 27G and the
notice is still effective in relation to the interest.
(3) The notice required by subsection (1)
must:
(a) give details of:
(i) the nature and extent
of the interest; and
(ii) the relation of the
interest to the affairs of the authority; and
(b) be given at a directors’ meeting
as soon as practicable after the director becomes aware of his or her interest
in the matter.
The details must be recorded in the minutes of the
meeting.
Effect of contravention by director
(4) A contravention of this section by a
director does not affect the validity of any act, transaction, agreement,
instrument, resolution or other thing.
27G
Director may give other directors standing notice about an interest
Power to give notice
(1) A director of a Commonwealth authority
who has an interest in a matter may give the other directors standing notice of
the nature and extent of the interest in the matter in accordance with subsection (2).
The notice may be given at any time and whether or not the matter relates to
the affairs of the authority at the time the notice is given.
Note: The standing notice may be given to the other
directors before the interest becomes a material personal interest.
(2) The notice under subsection (1)
must:
(a) give details of the nature and
extent of the interest; and
(b) be given:
(i) at a directors’
meeting (either orally or in writing); or
(ii) to the other directors
individually in writing.
The standing notice is given under subparagraph (paragraph (b)(ii)
when it has been given to every director.
Standing notice must be tabled at meeting if given to
directors individually
(3) If the standing notice is given to the
other directors individually in writing it must be tabled at the next
directors’ meeting after it is given.
Nature and extent of interest must be recorded in
minutes
(4) The director must ensure that the nature
and extent of the interest disclosed in the standing notice is recorded in the
minutes of the meeting at which the standing notice is given or tabled.
Dates of effect and expiry of standing notice
(5) The standing notice:
(a) takes effect as soon as it is
given; and
(b) ceases to have effect if a person
who was not a director of the authority at the time when the notice was given
is appointed as a director of the authority.
A standing notice that ceases to have effect under paragraph (b)
commences to have effect again if it is given to the person referred to in that
paragraph.
Effect of material increase in nature or extent of
interest
(6) The standing notice ceases to have effect
in relation to a particular interest if the nature or extent of the interest
materially increases above that disclosed in the notice.
Effect of contravention by director
(7) A contravention of this section by a
director does not affect the validity of any act, transaction, agreement, instrument,
resolution or other thing.
27H
Interaction of sections 27F and 27G with other laws etc.
Sections 27F and 27G have effect in
addition to, and not in derogation of:
(a) any general law rule about
conflicts of interest; and
(b) any provision in the Commonwealth
authority’s enabling legislation that restricts a director from:
(i) having a material
personal interest in a matter; or
(ii) holding an office or
possessing property;
involving duties or interests
that conflict with their duties or interests as a director.
27J
Restrictions on voting
Restrictions on voting and being present
(1) A director of a Commonwealth authority
who has a material personal interest in a matter that is being considered at a
directors’ meeting must not:
(a) be present while the matter is
being considered at the meeting; or
(b) vote on the matter;
unless:
(c) subsection (2) or (3) allows
the director to be present; or
(d) the interest does not need to be
disclosed under section 27F.
Participation with approval of other directors
(2) The director may be present and vote if
directors who do not have a material personal interest in the matter have
passed a resolution that:
(a) identifies the director, the
nature and extent of the director’s interest in the matter and its relation to
the affairs of the authority; and
(b) states that those directors are
satisfied that the interest should not disqualify the director from voting or
being present.
Participation with Ministerial approval
(3) The director may be present and vote if
they are so entitled under a declaration or order made by the responsible
Minister under section 27K.
Effect of contravention by director
(4) A contravention by a director of:
(a) this section; or
(b) a condition attached to a
declaration or order made by the responsible Minister under section 27K;
does not affect the validity of any resolution.
27K
Minister’s power to make declarations and class orders
Minister’s power to make specific declarations
(1) The responsible Minister may declare in
writing that a director of a Commonwealth authority who has a material personal
interest in a matter that is being, or is to be, considered at a directors’
meeting may, despite the director’s interest, be present while the matter is
being considered at the meeting, vote on the matter, or both be present and
vote. However, the Minister may only make the declaration if:
(a) the number of directors entitled
to be present and vote on the matter would be less than the quorum for a
directors’ meeting if the director were not allowed to vote on the matter at
the meeting; and
(b) the matter needs to be dealt with
urgently, or if there is some other compelling reason for the matter being
dealt with at the directors’ meeting.
(2) The declaration may:
(a) apply to all or only some of the
directors; or
(b) specify conditions that the
authority or director must comply with.
Responsible Minister’s power to make class orders
(3) The responsible Minister may make an
order in writing that enables directors who have a material personal interest
in a matter to be present while the matter is being considered at a directors’
meeting, vote on that matter, or both be present and vote. The order may be
made in respect of a specified class of Commonwealth authorities, directors,
resolutions or interests.
(4) The order may be expressed to be subject
to conditions.
(5) Notice of the making, revocation or
suspension of the order must be published in the Gazette.
27L
Right of access to authority’s books
Right while director
(1) A director of a Commonwealth authority
may inspect the books of the authority at all reasonable times for the purposes
of a legal proceeding:
(a) to which the director is a party;
or
(b) that the director proposes in good
faith to bring; or
(c) that the director has reason to
believe will be brought against him or her.
Right during 7 years after ceasing to be director
(2) A person who has ceased to be a director
of a Commonwealth authority may inspect the books of the authority at all
reasonable times for the purposes of a legal proceeding:
(a) to which the person is a party; or
(b) that the person proposes in good
faith to bring; or
(c) that the person has reason to
believe will be brought against him or her.
This right continues for 7 years after the person ceased
to be a director of the authority.
Right to take copies
(3) A person authorised to inspect books
under this section for the purposes of a legal proceeding may make copies of
the books for the purposes of those proceedings.
Commonwealth authority not to refuse access
(4) A Commonwealth authority must allow a
person to exercise his or her rights to inspect or take copies of the books
under this section.
Division 4A—Restrictions on indemnities and insurance for officers
27M
Indemnification and exemption of officer
Power to indemnify officers
(1) Except as provided in this section, a
Commonwealth authority may indemnify a person who is or has been an officer of
the authority from any liability incurred by the person as an officer of the authority.
Exemptions not allowed
(2) A Commonwealth authority, or a subsidiary
of a Commonwealth authority, must not exempt a person (whether directly or
through an interposed entity) from a liability to the authority incurred as an
officer of the authority.
When indemnity for liability (other than for legal
costs) not allowed
(3) A Commonwealth authority, or a subsidiary
of a Commonwealth authority, must not indemnify a person (whether by agreement
or by making a payment and whether directly or through an interposed entity)
against any of the following liabilities incurred as an officer of the
authority:
(a) a liability owed to the authority
or a subsidiary of the authority; or
(b) a liability for a civil penalty
order under clause 3 of Schedule 2 or a compensation order under
clause 4 of Schedule 2; or
(c) a liability that is owed to
someone other than the authority or a subsidiary of the authority and did not
arise out of conduct in good faith.
This subsection does not apply to a liability for legal costs.
When indemnity for legal costs not allowed
(4) A Commonwealth authority, or a subsidiary
of a Commonwealth authority, must not indemnify a person (whether by agreement
or by making a payment and whether directly or through an interposed entity)
against legal costs incurred in defending an action for a liability incurred as
an officer of the authority if the costs are incurred:
(a) in defending or resisting a
proceedings in which the person is found to have a liability for which they
could not be indemnified under subsection (3); or
(b) in defending or resisting criminal
proceedings in which the person is found guilty; or
(c) in defending or resisting
proceedings brought by the Finance Minister for a court order if the grounds
for making the order are found by the court to have been established; or
(d) in connection with proceedings for
relief to the person under this Act in which the Court denies the relief.
Paragraph (c) does not apply to costs incurred in
responding to actions taken by the Finance Minister as part of an investigation
before commencing proceedings for the court order.
Note: Paragraph (c)—This includes proceedings
by the Finance Minister for an order under section 27C (disqualification
order) or clause 3 or 4 of Schedule 2 (civil penalties).
(5) For the purposes of subsection (4),
the outcome of proceedings is the outcome of the proceedings and any appeal in
relation to the proceedings.
27N
Insurance for certain liabilities of officers
(1) Except as provided in subsection (2),
a Commonwealth authority may insure a person who is or has been an officer
against liabilities incurred by the person as an officer.
(2) A Commonwealth authority, or a subsidiary
of a Commonwealth authority, must not pay, or agree to pay, a premium for a contract
insuring a person who is, or has been, an officer of the authority against a
liability (other than one for legal costs) arising out of:
(a) conduct involving a wilful breach
of duty in relation to the authority; or
(b) a contravention of section 24
or 25.
This section applies to a premium whether it is paid
directly or through an interposed entity.
27P
Certain indemnities, exemptions, payments and agreements not authorised and
certain documents void
(1) Sections 27M and 27N do not
authorise anything that would otherwise be unlawful.
(2) Anything that purports to indemnify or
insure a person against a liability or exempt them from a liability is void to
the extent that it contravenes section 27M or 27N.
Division 5—Miscellaneous
28
Compliance with general policies of the Government
(1) The responsible Minister may notify the
directors of a Commonwealth authority in writing of general policies of the
Commonwealth Government that are to apply to the authority. The responsible
Minister must consult the directors before notifying them of the policies.
(2) The directors must ensure that the
policies are carried out in relation to the authority.
(3) The directors must also ensure, as far as
practicable, that the policies are carried out in relation to the subsidiaries
of the authority.
(4) The responsible Minister may, in writing,
exempt the directors of a Commonwealth authority from subsection (2) or
(3) in relation to specified activities.
29
Activities of subsidiaries
A Commonwealth authority must ensure
that none of its subsidiaries does anything that the authority does not itself
have power to do.
30
Aligning accounting periods of subsidiaries
(1) If the annual accounting period of a
subsidiary of a Commonwealth authority is not the same as the financial year of
the authority, the directors of the authority must do whatever is necessary to
ensure that the annual accounting period of the subsidiary becomes the same as
the authority’s financial year:
(a) within 12 months after the
subsidiary becomes a subsidiary; or
(b) within 12 months after the
commencement of this Act;
whichever is later.
(2) If the annual accounting period of a
subsidiary is already the same as the authority’s financial year, the directors
must do whatever is necessary to ensure that it continues to be the same.
(3) If this section is contravened, each
director who:
(a) caused the contravention; or
(b) failed to take all reasonable
steps to comply with this section, or secure compliance with this section;
is guilty of an offence.
Maximum penalty: 50 penalty units.
Note 1: Chapter 2 of the Criminal Code sets
out the general principles of criminal responsibility.
Note 2: Section 4AA of the Crimes Act 1914
sets the current value of a penalty unit.
31
Exemption from requirement to align accounting periods of subsidiaries
(1) The Finance Minister may grant a written
exemption to the directors of a Commonwealth authority from the requirements of
section 30, either generally or in relation to one or more subsidiaries.
(2) The exemption may be granted subject to
conditions.
(3) The Finance Minister may, on behalf of
the Commonwealth, engage a registered company auditor to investigate and report
on an exemption application. For this purpose, registered company auditor
means a person who is registered, or taken to be registered, as an auditor
under the Corporations Act 2001.
(4) The authority is liable to reimburse the
Commonwealth for the costs of the investigation and report.
32
Audit committee
(1) The directors of a Commonwealth authority
must establish and maintain an audit committee with functions that include:
(a) helping the authority and its
directors to comply with obligations under this Act; and
(b) providing a forum for
communication between the directors, the senior managers of the authority and
the internal and external auditors of the authority.
(2) If the regulations state how the
committee is to be constituted, it must be constituted in accordance with the
regulations.
33
Special rules for Commonwealth authorities established by regulations etc.
(1) The application of this Act to
Commonwealth authorities covered by paragraph 7(1)(b) is subject to any
modifications that are prescribed by the regulations.
(2) In this section:
modifications includes additions, omissions
and substitutions.
Part 4—Reporting and other obligations for Commonwealth companies
Division 1—Preliminary
34
Meaning of Commonwealth company and wholly‑owned Commonwealth
company
(1) In this Act, Commonwealth company
means a Corporations Act company in which the Commonwealth has a controlling
interest. However, it does not include a company in which the Commonwealth has
a controlling interest through one or more interposed Commonwealth authorities
or Commonwealth companies.
(2) In this Act, wholly‑owned
Commonwealth company means any
Commonwealth company, other than a company any of the shares in which are
beneficially owned by a person other than the Commonwealth.
35
Role of Auditor‑General
(1) The Auditor‑General is, in relation
to each Commonwealth company, either:
(a) to be the auditor of the company
under the Corporations Act 2001; or
(b) if someone else is the company’s
auditor—to give a report on the company’s financial statements (see subsection 36(2)).
(2) The Auditor‑General is to audit the
financial statements of each subsidiary of a Commonwealth company (there are
exceptions to this—see subsection 37(4)).
Note: If the Auditor‑General is not the
subsidiary’s auditor, this means that the Auditor‑General has to do an
audit of the statements in addition to that done by the subsidiary’s auditor.
Division 2—Reporting obligations
Subdivision A—Annual report and related obligations
36
Annual Report
(1) At least 14 days before each annual
general meeting, a Commonwealth company must give the responsible Minister:
(a) a copy of the company’s annual
report that includes the company’s annual general meeting documents (or, if
there is no such annual report, a copy of the company’s annual general meeting
documents); and
(b) any additional report under subsection (2).
For this purpose, annual general meeting documents
means the documents relating to a financial year that the company is required
by the Corporations Act 2001 to lay before its annual general meeting.
Maximum penalty: 50 penalty units.
Note 1: Chapter 2 of the Criminal Code sets
out the general principles of criminal responsibility.
Note 2: Section 4AA of the Crimes Act 1914
sets the current value of a penalty unit.
(2) If the auditor’s report required by the Corporations
Act 2001 was prepared by an auditor other than the Auditor‑General, subsection (1)
also requires the company to give a report by the Auditor‑General on the
financial statements.
(3) In preparing a report for the purposes of
subsection (2), the Auditor‑General must use the same Corporations
Act 2001 rules as applied to the report by the other auditor.
(4) If the Commonwealth company is a wholly‑owned
Commonwealth company, the responsible Minister must table the documents in
each House of the Parliament as soon as practicable after receiving them. In
all other cases, the Minister must table the documents in each House of the
Parliament as soon as practicable after the annual general meeting of the
company.
(5) The regulations may make provision
dealing with how this section applies to a Commonwealth company that is not
required to hold an annual general meeting or in relation to which an auditor’s
report is not required to be prepared.
(6) Without limiting the generality of subsection (5),
regulations for the purposes of that subsection may provide that this section
applies with specified modifications.
37
Audit of relevant subsidiary’s financial statements
(1) Subject to subsection (4), the
directors of a Commonwealth company must do whatever is necessary to ensure
that all relevant subsidiary’s financial statements are audited by the Auditor‑General.
(2) For a subsidiary that is a Corporations
Act company that, under the Corporations Act 2001, is required to have
financial statements audited, the Auditor‑General’s report must be
prepared using the relevant rules in the Corporations Act 2001. Those
rules must also be used for other subsidiaries, so far as is practicable.
(3) The Auditor‑General must give the
report to the responsible Minister, together with a copy of the relevant
subsidiary’s financial statements.
(4) Relevant financial statements of a
subsidiary do not have to be audited by the Auditor‑General if:
(a) the subsidiary is incorporated or
formed in a place outside Australia; and
(b) either:
(i) under the law applying
to the subsidiary in that place, the Auditor‑General cannot be appointed
as auditor of the subsidiary; or
(ii) in the Auditor‑General’s
opinion, it is impracticable or unreasonable for the Auditor‑General to
audit, or to be required to audit, the statements.
(5) In this section:
relevant subsidiary’s financial statements,
in relation to a Commonwealth company, means financial statements of an entity
for an annual accounting period of the entity, where the entity is a subsidiary
of the company at the end of that accounting period.
Subdivision B—Other reporting obligations
38
Interim reports
(1) The Finance Minister may, by notice in
the Gazette, require particular wholly‑owned Commonwealth
companies or a class of wholly‑owned Commonwealth companies to give the
responsible Minister either:
(a) an interim report for the first 6
months of a financial year; or
(b) an interim report for each of the
following periods:
(i) the first 3 months of
each financial year;
(ii) the first 6 months of
each financial year;
(iii) the first 9 months of
each financial year.
(2) The interim report must include:
(a) a report of operations, prepared
by the directors in accordance with the Finance Minister’s Orders; and
(b) financial statements, prepared by
the directors in accordance with the Finance Minister’s Orders; and
(c) a report prepared by the Auditor‑General
in accordance with the regulations.
(3) The directors must give the interim
report to the responsible Minister within 2 months after the end of the period
to which the report relates.
(4) The responsible Minister may grant an
extension of time in special circumstances.
(5) The responsible Minister must table the
interim report in each House of the Parliament as soon as practicable.
39
Estimates
(1) The directors of a wholly‑owned Commonwealth
company (other than a GBE) must prepare budget estimates for each financial
year, and for any other periods directed by the responsible Minister.
(2) The estimates:
(a) must be in the form required by
the responsible Minister; and
(b) must be given to the responsible
Minister within the time required by the responsible Minister.
40
Responsible Minister to be notified of significant events
(1) If a wholly‑owned Commonwealth
company, or any of its subsidiaries, proposes to do any of the following
things, the directors of the Commonwealth company must immediately give the
responsible Minister written particulars of the proposal:
(a) form a company or participate in
the formation of a company;
(b) participate in a significant
partnership, trust, unincorporated joint venture or similar arrangement;
(c) acquire or dispose of a
significant shareholding in a company;
(d) acquire or dispose of a
significant business;
(e) commence or cease a significant
business activity;
(f) make a significant change in the
nature or extent of its interest in a significant partnership, trust,
unincorporated joint venture or similar arrangement.
(2) The responsible Minister may in writing
exempt the directors of a Commonwealth company from the requirement to notify
matters covered by paragraph (1)(a). The exemption may be granted subject
to conditions.
(3) The responsible Minister may give written
guidelines to the directors that are to be used by the directors in deciding
whether a proposal is covered by paragraph (1)(b), (c), (d), (e) or (f).
41
Keeping responsible Minister and Finance Minister informed
(1) The directors of a wholly‑owned Commonwealth
company must:
(a) keep the responsible Minister
informed of the operations of the Commonwealth company and its subsidiaries;
and
(b) give the responsible Minister such
reports, documents and information in relation to those operations as the
responsible Minister requires; and
(c) give the Finance Minister such
reports, documents and information in relation to those operations as the
Finance Minister requires.
(2) The directors must comply with
requirements under paragraphs (1)(b) and (c) within the time limits set by
the Minister concerned.
42
Corporate plan for GBE
(1) This section applies to a wholly‑owned
Commonwealth company that is a GBE.
(2) The directors must prepare a corporate
plan at least once a year and give it to the responsible Minister.
(3) The plan must cover a period of at least
3 years.
(4) If the Commonwealth company has
subsidiaries, the plan must cover both the Commonwealth company and its
subsidiaries. In particular, for each subsidiary the plan must include details
of the matters in subsection (6), so far as they are applicable.
(5) The directors must keep the responsible
Minister informed about:
(a) significant changes to the plan;
and
(b) matters that arise that might
significantly affect the achievement of the objectives in the plan.
(6) The plan must include details of the following
matters (so far as they are applicable):
(a) the objectives of the company;
(b) assumptions about the business
environment in which the company operates;
(c) the business strategies of the
company;
(d) the investment and financing
programs of the company, including strategies for managing financial risk;
(e) financial targets and projections
for the company;
(f) the dividend policy of the
company;
(g) non‑financial performance
measures for the company;
(h) community service obligations of
the company and the strategies and policies the company is to follow to carry
out those obligations;
(i) review of performance against
previous corporate plans and targets;
(j) analysis of factors likely to
affect achievement of targets or create significant financial risk for the
company or for the Commonwealth;
(k) price control and quality control
strategies for goods or services supplied by the company under a monopoly;
(l) human resource strategies and
industrial relations strategies.
(7) The plan must also cover any other
matters required by the responsible Minister (which may include further details
about the matters in subsection (6)).
(8) The responsible Minister may give written
guidelines to the directors that are to be used by the directors in deciding
which matters are covered by subsection (5).
Subdivision C—Miscellaneous
43
Compliance with general policies of the Government
(1) The responsible Minister may notify the
directors of a wholly‑owned Commonwealth company in writing of general policies
of the Commonwealth Government that are to apply to the company. The
responsible Minister must consult the directors before notifying them of the
policies.
(2) The directors must ensure that the
policies are carried out in relation to the company.
(3) The directors must also ensure, as far as
practicable, that the policies are carried out in relation to the subsidiaries
of the company.
(4) The responsible Minister may, in writing,
exempt the directors of a wholly‑owned Commonwealth company from subsection (2)
or (3) in relation to specified activities.
44
Audit committee
(1) The directors of a wholly‑owned Commonwealth
company must establish and maintain an audit committee with functions that
include:
(a) helping the company and its
directors to comply with obligations under this Act and the Corporations Act
2001; and
(b) providing a forum for
communication between the directors, the senior managers of the company and the
internal and external auditors of the company.
(2) If
the regulations state how the committee is to be constituted, it must be
constituted in accordance with the regulations.
Part 5—Miscellaneous
45
Ministers must inform Parliament of share acquisitions etc.
(1) The Minister who has the responsibility
for any of the following events must table a notice of the event in each House
of the Parliament as soon as practicable after the event happens:
(a) the Commonwealth forms, or
participates in forming, a company;
(b) the Commonwealth acquires shares
in a company (either by purchase or subscription) or disposes of shares in a
company;
(c) the Commonwealth becomes a member
of a company;
(d) a variation occurs in the rights
attaching to company shares held by the Commonwealth;
(e) a variation occurs in the
Commonwealth’s rights as a member of a company;
(f) the Commonwealth ceases to be a
member of a company.
(2) The notice must include the particulars
required by the regulations.
(3) This section does not apply to anything
that results from the transfer to a Minister of any property that is to be
dealt with as unclaimed property under Part 9.7 of the Corporations Act
2001.
46
Companies conducted for the purposes of intelligence or security agencies
(1) The application of this Act to a company
conducted for the purposes of an intelligence or security agency is subject to
any modifications that are prescribed by the regulations.
(2) In this section:
intelligence or security agency has the
meaning given by section 85ZL of the Crimes Act 1914;
modifications includes additions, omissions
and substitutions.
47
Regulations may deal with how this Act applies if body stops being a
Commonwealth authority
(1) The regulations may make provision
dealing with how this Act applies in relation to a financial year of a body
that ceases to be a Commonwealth authority during the financial year.
(2) Without limiting the generality of subsection (1),
regulations for the purposes of that subsection may provide that this Act
applies with specified modifications.
47A
Compliance with government procurement requirements
(1) This section applies to Commonwealth
authorities, and wholly‑owned Commonwealth companies, specified in the
regulations for the purposes of this section.
(2) Subject to subsection (3), the Finance
Minister may, in writing, give directions to the directors of an authority or a
company to which this section applies on matters related to the procurement of
property or services.
(3) The Finance Minister must not give a
direction that is inconsistent with Australia’s obligations under any
international agreement that deals with government procurement (whether or not
the agreement also deals with other matters).
(4) Without limiting the generality of
subsection (2), directions permitted by subsection (2) may apply, adopt or incorporate,
with or without modifications, all or any of the Commonwealth Procurement
Guidelines, as in force from time to time.
(5) The directors must ensure that the
directions are complied with by the authority or company.
(6) The directors must also ensure, as far as
practicable, that the directions are complied with by the subsidiaries of the
authority or company.
(7) In this section:
Commonwealth Procurement Guidelines means the
guidelines relating to procurement issued under the Financial Management and
Accountability Regulations 1997.
48
Finance Minister’s Orders
(1) The
Finance Minister may make Orders on any matter on which this Act requires or
permits Finance Minister’s Orders to be made.
(2) An
Order cannot create offences or impose penalties.
(3) An
Order is a disallowable instrument for the purposes of section 46A of the Acts
Interpretation Act 1901.
49
Regulations
(1) The Governor‑General may make
regulations prescribing matters:
(a) required or permitted by this Act
to be prescribed; or
(b) necessary or convenient to be
prescribed for carrying out or giving effect to this Act.
(2) The regulations may require the provision
of financial statements, estimates or other information by overseas
corporations in which the Commonwealth has a controlling interest. For this
purpose, overseas corporation means a body corporate that is
incorporated by or under the law of an external Territory or overseas country.
(3) The regulations may make provision for
penalties for offences against the regulations by way of fines of up to 10
penalty units.
Note: Section 4AA of the Crimes Act 1914
sets the current value of a penalty unit.
Schedule 1—Annual report for Commonwealth Authority
Note: See section 9.
Part 1—Contents of annual report
1
Summary of contents
The annual report must include:
(a) a report of operations, prepared
by the directors in accordance with the Finance Minister’s Orders; and
(b) financial statements, prepared by
the directors under clause 2 of this Schedule; and
(c) the Auditor‑General’s report
on those financial statements, prepared under Part 2 of this Schedule and
addressed to the responsible Minister.
Note: The report may include other matters, for
example, matters that are required by another Act or by Ministerial guidelines.
2
Financial statements
(1) The financial statements must be prepared
in accordance with the Finance Minister’s Orders and must give a true and fair
view of the matters that those Orders require to be included in the statements.
(2) If financial statements prepared in
accordance with the Finance Minister’s Orders would not otherwise give a true
and fair view of the matters required by those Orders, the directors must add
such information and explanations as will give a true and fair view of those matters.
(3) In the financial statements, the
directors must state whether, in their opinion, the financial statements give a
true and fair view of the matters required by the Finance Minister’s Orders.
(4) If the Commonwealth authority is a GBE or
SMA, the directors must state whether or not, in their opinion, there are, when
the statement is made, reasonable grounds to believe that the authority will be
able to pay its debts as and when they fall due.
Part 2—Auditor’s report on financial statements
3 Whether
the statements comply with the Finance Minister’s Orders
(1) The Auditor‑General must state
whether, in the Auditor‑General’s opinion, the financial statements:
(a) have been prepared in accordance
with the Finance Minister’s Orders; and
(b) give a true and fair view of the
matters required by those Orders.
(2) If the Auditor‑General is not of
that opinion, the Auditor‑General must state the reasons.
(3) If the Auditor‑General is of the
opinion that failing to prepare the financial statements in accordance with the
Finance Minister’s Orders has a quantifiable financial effect, the Auditor‑General
must quantify that financial effect and state the amount.
4
Proper accounting records not kept
If the Auditor‑General is of the
opinion that the authority has contravened section 20, the Auditor‑General
must state particulars of the contravention.
5
Inadequate information and explanations
If the Auditor‑General is of the
opinion that the Auditor‑General did not obtain all necessary information
and explanations, the Auditor‑General must state particulars of the
shortcomings.
6
Subsidiaries’ financial statements
(1) This clause applies if the authority’s
financial statements are consolidated financial statements.
(2) The Auditor‑General must state the
name of each entity (if any) that satisfies the following description:
(a) the entity was a subsidiary of the
authority at any time during the financial year; and
(b) the Auditor‑General has not:
(i) acted as auditor of
the entity for the financial year; or
(ii) audited the entity’s
financial statements for the financial year.
(3) If the consolidated financial statements
include information derived from financial statements of an entity of a kind
referred to in subclause (2), then:
(a) if the Auditor‑General has
not examined those financial statements and the auditor’s report (if any) on
them, the Auditor‑General must state that fact; and
(b) if an auditor’s report on any of
those financial statements included any qualification, the Auditor‑General
must state the name of the subsidiary and particulars of the qualification.
7
Deficiencies in consolidation
If the Auditor‑General is of the
opinion that:
(a) any of the financial statements
that were used in preparing consolidated financial statements were not
appropriate and proper, in both form and content, to be used in that way; or
(b) there was any deficiency in the
procedures and methods used in arriving at the amounts taken in to consolidated
financial statements;
the Auditor‑General must state particulars of the
deficiency.
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.
|
Transitional
arrangements
|
|
|
If...
|
then, after commencement...
|
|
1
|
before commencement, a director of a Commonwealth
authority who had an interest in a matter declared the nature of the interest
in accordance with subsection 21(1) of the old Law
|
the director is taken to have disclosed the interest as a
material personal interest in accordance with section 27F of the new Law
and to have made the disclosure on commencement.
|
|
2
|
before commencement, the Board of a Commonwealth authority
made a determination under subsection 21(3) of the old Law
|
the determination is taken to be a resolution passed in
accordance with subsection 27J(2) of the new Law.
|
|
3
|
before commencement, the responsible Minister for a
Commonwealth authority made a determination under subsection 21(3) of the old
Law
|
the determination has effect as if it were a determination
under section 27K of the new Law.
|
|
4
|
before commencement, an officer of a Commonwealth
authority incurred a liability
|
sections 27M and 27N of the new Law apply if an
indemnity was given, or a premium paid, in respect of the liability after
commencement; in all other cases, sections 26 and 27 of the old Law continue
to apply.
|
|
5
|
before commencement, an application for a civil penalty
order was made and not dealt with under Schedule 2 to the old Law
|
Schedule 2 to the old Law continues to apply in
relation to the application
|
|
6
|
before commencement, a person was granted leave under
subclause 8(2) of Schedule 2 to the old Law
|
the leave has effect as if it were granted under
subsection 27C(4) of 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.