December 2006
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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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.
The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and the Anti-Money Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential Amendments) Act 2006 have been enacted. For a copy of the Acts and their explanatory memoranda, go to:
The Independent Contractors Act 2006 and Workplace Relations Legislation Amendment (Independent Contractors) Act 2006 have both passed into law. For a copy of the Acts and their explanatory memoranda, go to:
The Copyright Amendment Act 2006 has passed into law. For a copy of the Act and its explanatory memorandum, go to:
The Privacy Legislation Amendment (Emergencies and Disasters) Act 2006 has also been enacted. For a copy of the Act and its explanatory memorandum, go to:
Legislation has been passed to facilitate the privatisation of Medibank Private. For a copy of the Medibank Private Sale Act 2006 and its explanatory memorandum, go to:
A Bill has been introduced to amend the Native Title Act 1993. For a copy of the Native Title Amendment Bill 2006 and its explanatory memorandum, go to:
ACCC has issued a new guide for consumers, entitled Know how to complain. For a copy, go to:
ACCC has issued a draft guideline on deferral of arbitrations and backdating of determinations under Part IIIA of the Trade Practices Act. For a copy go to:
Woolworths has been penalised $7 million for entering into and giving effect to illegal anti-competitive agreements with small business liquor licence applicants. See Media Release 328/06:
http://www.accc.gov.au/content/index.phtml/itemId/773813/fromItemId/2332
ASIC has updated Policy Statement 67 Real Estate companies to reflect recent changes to the Corporations Act. For a copy of the updated Policy Statement, go to:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/ps67.pdf/$file/ps67.pdf
ASIC has released a consultation paper on a proposed policy for on-market buy-backs by managed investment schemes listed on the ASX. For a copy, go to:
ASIC has extended the transitional compensation arrangements under section 912B of the Corporations Act until 30 June 2007 to give the Government time to finalise the compensation regime under that section. See Information Release IR 06-45:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/E87D436EDEE43C16CA25724A000C90D1?opendocument
ASIC has also extended to 30 June 2007 the interim relief for actuaries from the requirement to hold an Australian financial services licence, while the Federal Government finalises its regulations for actuaries. See Information Release IR 06-46:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/6FB45CA800A8B6E6CA25724A000D8977?opendocument
ASIC has granted general relief from the product disclosure statement provisions of the Corporations Act for financial services licensees who are deemed to be issuers of exchange traded derivatives by s761E(6) of the Act so that consumers only receive a single PDS. See Information Release IR 06-43:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/3AF723C2B7E3F5D7CA25724800173D34?opendocument
ASIC has sought injunctive relief against a prominent mortgage broker from engaging in misleading or deceptive conduct. Amongst the allegations are that the broker misled clients by: (a) claiming that switching to a loan arranged by the broker would save money and enable them to pay off their home loans sooner without explaining that to obtain this benefit borrowers would need to make extra repayments; (b) claiming that certain named clients received benefits in switching to such loans when in fact those clients did not exist; and (c) claiming that the whole market of lenders would be reviewed to find an appropriate lender for a potential borrower, when the broker in fact had a panel of only nine lenders. See Media Release 06-430:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/E3E76267F508D341CA25724100089D63?opendocument
Another casualty in ASIC's campaign for better market disclosure. Listed biotechnology company Avantogen Limited has paid a $33,000 fine following an investigation by ASIC into an alleged failure to properly inform the market about the unsuccessful outcome of a clinical trial of an anti-cancer vaccine. See Media Release 06-428:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/2C1F1B806FC00414CA25723E002C9A10?opendocument
ASX has released a consultation paper entitled Amendments to ASX Supervisory Powers and Processes. The paper proposes changes to various supervisory processes and powers. A copy is available at:
http://www.asx.com.au/supervision/pdf/ASX_supervisory_powers_processes.pdf
ASX has changed the special size thresholds for options transactions. The new special size for category 1 is $500,000 and for category 2 $250,000. The special size for LEPOs remains at $1,000,000. See Market Circular 739/06 and attachments:
The Federal Government has introduced a Bill (the Tax Laws Amendment (2006 Measures No 7) Bill 2006) which, if passed, may affect syndicated loans documented or drawn down from the date of introduction of the Bill. The Bill is designed to stop the spread of arrangements exploiting the public offer exemption from interest withholding tax in sections 128F and 128FA of the Income Tax Assessment Act 1936. For details, see Allens Arthur Robinson, Client Update: Banking & Finance – 7 December 2006:
http://www.aar.com.au/pubs/baf/cubafdec06.htm
Clayton Utz, Banking & Financial Services Insights - 12 December 2006 discusses recent cases considering the scope of a fixed charge. See:
http://www.claytonutz.com.au/areas_of_law/controller.asp?aolstring=3&na=1374
The Australian Communications and Media Authority has released for public comment a draft industry standard establishing a minimum set of requirements for making telemarketing and research calls. For a copy of the draft Telecommunications (Do Not Call Register) (Telemarketing and Research Calls) Industry Standard 2006, go to:
For a general discussion of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations - December 2006:
http://www.aar.com.au/pubs/pdf/wr/fowrdec06.pdf
Blake Dawson Waldron, IR Bulletin - December 2006 has a useful outline of the unfair dismissal provisions now operative under the Workplace Relations Act 1996. See
http://www.bdw.com/publications/ir/ir122006.pdf
Blake Dawson Waldron, Industrial Relations & Employment Alert - December 2006 (#1 and #2) respectively summarise the main features of the Independent Contractors Act 2006 and the December 2006 amendments to the Workplace Relations Act 1996. See:
http://www.bdw.com/publications/irca/irca122006.pdf
http://www.bdw.com/publications/irca/irca122006-2.pdf
Minter Ellison, HR and IR Update - 4 December 2006 also outlines some important developments in NSW employee relations legislation. See:
For a summary of the key obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) that commenced on 13 December 2006, the day after the Act's Royal Assent, see Mallesons, AML/CTF Act has commenced - December 2006:
http://www.mallesons.com/publications/2006/Dec/8733036W.htm
Allens Arthur Robinson, Focus: Anti-money Laundering – December 2006 outlines the new civil penalty provisions in Anti-Money Laundering and Counter-Terrorism Financing Act 2006. See:
http://www.aar.com.au/pubs/pdf/fmres/foamldec06.pdf
Allens Arthur Robinson, Focus: Financial Services – December 2006 summarises the Government's proposed regulatory changes in the Corporate and Financial Services Regulation Review Proposals Paper released in November 2006 release. See:
http://www.aar.com.au/pubs/pdf/fmres/fofsdec06.pdf
Allens Arthur Robinson, In the Money - December 2006 discusses a recent case arising from the Westpoint collapse and the light it sheds on the meaning of financial product' in the Corporations Act. See:
http://www.aar.com.au/pubs/pdf/itm/dec06.pdf
For a general discussion of recent developments in IP law, see Allens Arthur Robinson, Intellectual Property Bulletin - December 2006:
http://www.aar.com.au/pubs/pdf/ip/ipbulldec06.pdf
Following the Cole Commission into the AWB Oil–for–food program, the Commonwealth Attorney-General has announced an inquiry by the Australian Law Reform Commission into legal professional privilege as it relates to the activities of Commonwealth investigatory agencies. See Deacons, Legal Update: Review of Legal Professional Privilege Announced - 7 December 2006:
http://www.deacons.com.au/NewsUpdates/Newsroom/LegalUpdates.cfm?objid=5860%20
The Australian Law Reform Commission has invited comment on an Issues Paper 32 Review of Privacy - Credit Reporting Provisions. A copy can be downloaded from:
http://www.austlii.edu.au/au/other/alrc/publications/issues/32/
In Bundaberg Sugar Ltd v Isis Central Sugar Mill Co Ltd [2006] QSC 358, the constitution of the defendant, a co-operative company, authorised the directors to forfeit the shares of a member if, among other things, the member ceased to be supplier to the company. The directors purported to exercise that power in relation to the plaintiff. The plaintiff challenged the validity of the article. The Supreme Court of Queensland held that the article was valid provided the forfeited shares were sold and the proceeds accounted for to the member but invalid in so far as the shares might be forfeited without compensation. The decision can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/qld/2006/december/2006qsc358.htm
In Financial Industry Complaints Service Ltd v Deakin Financial Services Pty Ltd [2006] FCA 1805, the Federal Court held that the constitution of Financial Industry Complaints Service Ltd, an approved external complaints resolution scheme under Chapter 7 of the Corporations Act, was not binding upon members in so far as it purported to require them to arbitrate disputes with customers. This was because the constitution of a company can only bind members in their capacity as members and not in some other capacity. However, the member in this case was bound by a separate agreement, signed when they agreed to become a member, to comply with the constitution. The decision can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/federal/2006/december/2006fca1805.htm
Financial Services - promissory notes are financial products
The decision in Financial Industry Complaints Service Ltd v Deakin Financial Services Pty Ltd [2006] FCA 1805 (above) is notable in another significant respect. The court held that a promissory note with a face vale of more than $50,000 is a financial product for the purposes of the Corporations Act, under the general definition of that term in the Act. This is a view which this writer has long argued but on which ASIC has taken a contrary view (see respectively Lewis, "When is a Financial Product not a Financial Product?" (2004) 22 CSLJ 103) and ASIC FAQ QFS 115: Is a promissory note a financial product?). Holders of Australian financial services licences who advise on or deal in promissory notes should be reviewing their licences to ensure that they have the appropriate authority. In this writer's view, the same also applies to bills of exchange, which ASIC has insisted are not financial products but which seem fairly clearly to fall within the general definition of 'financial product' in the Corporations Act (see the previous article and ASIC FAQ QFS 132: Is a bill of exchange a financial product?).
The High Court has confirmed that employees are personally liable under State fair trading legislation for misleading and deceptive conduct done in the course of their employment, as well as their employers. The decision in Houghton v Arms [2006] HCA 59 can be viewed at:
http://www.austlii.edu.au/au/cases/cth/high_ct/2006/59.html
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