April 2003
| Inhouse Home Page | Inhouse Library | Inhouse Archives | Search This Site |
In this edition:
Note: All hyperlinks below were correct at the time of publication. Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.
A package of legislation to enact the CLERP 7 reforms on simplified lodgements under the Corporations Act - comprising the Corporations Legislation Amendment Act 2003 No. 24, the Corporations (Review Fees) Act 2003 No. 23 and Corporations (Fees) Amendment Act 2003 No. 22 - received Royal Asset on 11 April 2003. Most of the provisions commence operation on 1 July 2003. For copies of the Acts, go to:
http://scaleplus.law.gov.au/html/comact/11/6630/top.htm
http://scaleplus.law.gov.au/html/comact/11/6629/top.htm
http://scaleplus.law.gov.au/html/comact/11/6628/top.htm
The Corporations Amendment (Repayment of Directors' Bonuses) Act 2003 No 25 also received Royal Assent on 11 April 2003. It amends the Corporations Act to permit liquidators to reclaim unreasonable payments made by companies that become insolvent to directors and their relatives and spouses, regardless of its solvency at the time of the transaction. For a copy of the Act, go to:
http://scaleplus.law.gov.au/html/comact/11/6633/top.htm
New regulations have been introduced - the Corporations Amendment Regulations (No. 2) 2003 No. 48 - to prevent a market practice that had developed where persons would approach shareholders off-market and make offers to purchase shares well below market value, essentially trading on the potential ignorance of those shareholders. The Regulations expand the definition of "financial service" under the Corporations Act to include the making of unsolicited off-market offers to purchase financial products from investors by persons in the business of acquiring financial products, thus requiring such persons to hold an Australian financial services licence. A licensing exemption is, however, available if the person discloses the current market value of the financial product they wish to purchase when making the offer. For a copy of the Regulation, go to:
http://scaleplus.law.gov.au/html/numrul/19/9696/top.htm
The Taxation Laws Amendment Bill (No. 6) 2002, which dealt (amongst other things) with the new interest withholding tax measures, and the New Business Tax System (Consolidation and Other Measures) Bill (No. 2) 2002 have now been enacted as the Taxation Laws Amendment Act (No. 1) 2003 and the New Business Tax System (Consolidation and Other Measures) Act 2003 respectively. For copies of the Acts, go to:
http://scaleplus.law.gov.au/html/comact/11/6618/top.htm
http://scaleplus.law.gov.au/html/comact/11/6632/top.htm
The Copyright Amendment (Parallel Importation) Act 2003 No. 34 has been enacted. When the Act comes into force, it will be lawful to import into Australia and commercially distribute computer software and games and enhanced CDs that are legitimately made overseas (ie "non-pirate" copies) without requiring the permission of the Australian copyright holder. For a copy of the Act, go to:
http://scaleplus.law.gov.au/html/comact/11/6631/top.htm
The Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Act 2003 No. 20 has been enacted. It amends the certified agreement and freedom of association provisions in the Workplace Relations Act 1996 to prevent clauses in certified agreements that purport to require payment of bargaining services fees as well as conduct designed to compel persons to pay bargaining services fees. For a copy of the Act, go to:
http://scaleplus.law.gov.au/html/comact/11/6625/top.htm
For a copy of the Dawson Committee Report on the review of the competition provisions of the Trade Practices Act and of the Commonwealth Government's and ACC's responses, see:
http://tpareview.treasury.gov.au/content/report.asp
http://www.treasurer.gov.au/tsr/content/publications/pub_downloads/TPAResponse.pdf
http://203.6.251.7/accc.internet/digest/view_media.cfm?RecordID=995
The High Court has granted the parties special leave to appeal and cross-appeal in the ACCC case against Rural Press Limited and others. The appeal will provide the High Court with an important opportunity to clarify the scope of the law relating to exclusionary provisions in section 4D of the Trade Practices Act. For details, see Media Release 68/03:
http://203.6.251.7/accc.internet/digest/view_media.cfm?RecordID=989
ASIC has released version 3 of the AFSL eLicensing kit. It is divided into two parts - Part 1 (How to apply for an AFS licence) and Part 2 (Answering the questions in your AFS licence application). For a copy of the kit, go to:
ASIC has issued a new class order exemption (CO 03/237) relating to the requirement under s1012J of the Corporations Act that the information in a Product Disclosure Statement must be up to date. It exempts issuers of PDSs from the requirement to ensure a PDS is up to date at the time when it is given, provided the issuer makes the up-to-date information available through a web site, a toll-free telephone service, or other facility that provides convenient access for investors. The relief will only be available where the update does not include materially adverse information of a kind that must be disclosed in a supplementary PDS. For a copy of the class order, go to:
http://asic.gov.au/asic/pdflib.nsf/LookupByFileName/co03-237.pdf/$file/co03-237.pdf
ASIC has released a policy proposal paper setting out its proposals for regulating managed discretionary account services offered to retail clients under the Corporations Act. For a copy of the paper, go to:
http://asic.gov.au/asic/pdflib.nsf/LookupByFileName/MDA_PPP.pdf/$file/MDA_PPP.pdf
The proposed amendments to Business Rule 5D.1.6 to bring it into line with section 991F of the Corporations Act foreshadowed in last month's Inhouse Update have now come into effect. See Participant Circular 131/03 and attachment:
ASX has introduced amendments to its capital requirements in Business Rule 1A. A number of the Rule amendments have been identified as having possible systems implications and accordingly a 6 month transitional period will apply to those particular Rules. All other amendments must be complied with from Monday 2 June 2003. See Participant Circular 147/03 and attachment:
ASX has released the contract specifications for its new grains futures contracts (milling wheat, feed wheat, feed barley, canola and sorghum). See Participant Circular 141/03:
SFE has announced that, subject to ASIC approval, it will complement the existing suite of individual share futures with 17 new contracts. See SFE Bulletin 23/03:
http://www.sfe.com.au/Content/bulletins/sfe/2003/sfe2003_023.pdf
In a decision that has implications for the valuation of ISDA-based derivatives, an Australian court has ruled that the experts consulted to provide quotations for the calculation of a close-out amount under an ISDA Master Agreement should have used a valuation method radically different from the one commonly accepted. For details, see Mallesons Stephen Jaques, Court Rules on ISDA Close-out Calculations - April 2003:
http://www.mallesons.com/publications/alerts/Banking_and_Finance_Article_April_2003.pdf
For a useful tabular summary of the new ASX Corporate Governance Best Practice Recommendations, see Blake Dawson Waldron, Corporate Governance Update - March/April 2003:
http://www.bdw.com.au/publications/governance/governance042003.pdf
Allens Arthur Robinson, Focus: Commercial Litigation - April 2003 has an interesting article on the limits of legal professional privilege and the steps a company can take to ensure the maximum application of legal professional privilege to its communications with non-legal experts. For a copy, go to:
http://www.aar.com.au/pubs/pdf/ldr/focnapr03.pdf
Minter Ellison, Privacy Update - April 2003 summarises an information sheet issued by the Privacy Commissioner clarifying how the Privacy Act applies to the handling of publicly available information and what is believed to be the first payout for breach of privacy laws. For a copy, go to:
http://www.minterellison.com.au/ajpe/resources/file/eb02ca494b9dd58/Privacy-Update_0304.pdf
In Harris v Digital Pulse Pty Ltd [2003] NSWCA 10, the NSW Court of Appeal overturned the decision of the lower court (mentioned in our February 2002 Inhouse Update) awarding exemplary or punitive damages against employees who had set up their own company in competition with their employer. It held that there is no power in equity to award exemplary damages for breach of fiduciary duty by an employee. The full text of the judgment can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2003/february/2003nswca10.htm
In Hellmann Insurance Brokers v Peterson [2003] NSWSC 242, the Supreme Court of NSW (Campbell J) held that whether an employee is soliciting a former client, in breach of a contractual covenant in that regard, is not something which depends on whether it is the employee who telephones or arranges to meet the former client, or the other way around. Rather, whether solicitation occurs depends on the substance of what passes between them once they are in contact with each other. There is solicitation of a client by a former employee if the former employee in substance conveys the message that the former employee is willing to deal with the client and, by whatever means, encourages the client to do so. The full text of the judgment can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2003/march/2003nswsc242.htm
In ACCC v CG Berbatis Holdings Pty Ltd [2003] HCA 18, a majority of the High Court found that the lessors of premises in a shopping centre had not breached section 51AA of the Trade Practices Act when they stipulated, as a condition of their consent to a proposed renewal of a lease, a requirement that the lessees abandon certain legal claims against them. The lessees, who were trying to secure an extension of their lease to facilitate a sale of their business on advantageous terms, had no option to renew their lease and were therefore in a difficult bargaining position. However, the fact that the lessors exploited that did not involve them taking advantage of some special disability or disadvantage of the lessees and therefore was not "unconscionable within the meaning of the unwritten law of the States", as referred to in section 51AA. The full text of the judgment can be viewed at:
http://www.austlii.edu.au/au/cases/cth/high_ct/2003/18.html
Copyright © 2003 Inhouse Legal Solutions Pty Limited ("ILS") ABN 16 003 663 456.
This newsletter is a summary only of the subject matter covered and is not intended to be, nor should it be relied upon as, a substitute for legal or other professional advice. It is made available without the assumption of a duty of care by ILS, or the officers, employees or agents of ILS who were involved in its preparation and without any representation or warranty as to accuracy or completeness. ILS is not responsible for, and gives no representations or warranties regarding, the source, quality, accuracy or completeness of the materials on any website to which a hyperlink is provided above.