February 2005
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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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.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 Government has re-introduced into Parliament the Bill to enact the Dawson Committee reforms to the Trade Practices Act. A copy of the Trade Practices Legislation Amendment Bill (No. 1) 2005 and its Explanatory Memorandum can be downloaded from:
http://parlinfoweb.aph.gov.au/piweb/Repository/Legis/Bills/Linked/17020505.pdf
http://parlinfoweb.aph.gov.au/piweb/Repository/Legis/ems/Linked/17020506.pdf
ACCC has published a new guide for comparison price advertising for retailers, which sets out its position on comparative advertising claims such 'Was $X, Now $Y', '25% OFF' and '$Y, SAVE $X'. For a copy of the guide, go to:
ACCC and ASIC have issued a joint draft debt collection guideline for public consultation. For a copy of the proposed guideline and the related discussion paper, go to:
APRA has released the first of two discussion papers setting out its proposed prudential response to the adoption of International Financial Reporting Standards by APRA regulated institutions. A copy of the paper is available at:
http://www.apra.gov.au/ADI/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=8324
APRA has issued a discussion paper outlining changes to its proposed reforms to the capital and reporting framework for lenders mortgage insurers. The discussion paper is available at:
http://www.apra.gov.au/RePEc/RePEcDocs/Archive/discussion_papers/dp0015.pdf
APRA has also issued a discussion paper proposing to exempt from prudential regulation captive general insurers whose business is limited to the provision of non-statutory insurance within a wholly-owned corporate group and does not affect third-party policyholders. The discussion paper is available at:
http://www.apra.gov.au/General/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=8318
A successful month for ASIC on the insider trading front. A Sydney real estate agent has been sentenced to 350 hours community service, fined $30,000 and ordered to pay a pecuniary penalty of $37,255.25 in relation to insider trading in Qantas shares. In ASIC's first civil penalty proceedings for insider trading, two Melbourne business men have each consented to a declaration that they contravened the insider trading provisions of the Corporations Act 2001 in purchasing exchange-traded call options of BRL Hardy and been ordered to pay pecuniary penalties of $75,000 and $65,000 respectively, compensation of $128,495.15 (the amount they profited as a result of their contraventions) and ASIC's costs. See Media Releases 05-23 and 05-27 (a link to the decisions appears below):
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/9874DF5DB20C7F3FCA256FA5000F4DFD?opendocument
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/1EBB644A2F7FD413CA256FA9001BA9BE?opendocument
ASX has released the findings of the latest Share Ownership Study, showing that 55% of adult Australians now own shares either directly or indirectly via a managed fund or personal superannuation fund, which is believed to be the highest reported level of retail share ownership in the world. The media release, highlights, presentation to media and background information are available at:
http://www.asx.com.au/about/pdf/ShareStudy2004mediarelease.pdf
http://www.asx.com.au/about/pdf/Sharestudy2004highlights.pdf
http://www.asx.com.au/about/pdf/ShareStudy2004presentation.pdf
http://www.asx.com.au/about/pdf/ShareStudy2004PresentationBackgroundInfo.pdf
Austrac has issued Information Circular 41 regarding the verification requirements for third party signatories on cash accounts. A copy of the circular can be viewed at:
Changes have recently been made to the Operating Rules of the SFE and SFE Clearing Corporation to obviate the need for SFE and market participants to enter into individual contracts for the provision by SFE of equipment and software licences to participants and which provide that no liability arises on the part of SFE in respect of decisions made in good faith pursuant to the exercise of a regulatory function or power. See SFE Bulletin 07/05:
http://www.sfe.com.au/content/bulletins/sfe/2005/sfe2005_007.pdf
SFE has issued a bulletin clarifying the market practices applicable to pre-negotiated business orders and custom market messaging. See SFE Bulletin 11/05:
http://www.sfe.com.au/content/bulletins/sfe/2005/sfe2005_011.pdf
For an interesting discussion of various issues arising in relation to D & O Policies and the liability of directors and officers, see Allens Arthur Robinson, Directors' and Officers' Insurance - 18 February 2005:
http://www.aar.com.au/pubs/pdf/insur/pap16feb05.pdf
For a general discussion of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations – February 2005:
http://www.aar.com.au/pubs/wr/fowrfeb05.htm
For an outline of the decision in Unilever Australia, the latest case concerning the liability for redundancy payments on a transmission of business, see Allens Arthur Robinson, Client Update: Unilever Litigation Result - February 2005:
http://www.aar.com.au/pubs/wr/cuwrfeb05.htm
For a discussion of the Commonwealth Government's policy on the Kyoto Protocol and its likely implications for Australian business, see Freehills, Kyoto Protocol Now in Force: Implications for Australian Business - 25 February 2005:
The Federal Parliament has finally passed the Tax Laws Amendment (Long-Term Non-Reviewable Contracts) Bill 2004, which will govern the GST treatment for long-term non-reviewable contracts beyond 1 July 2005. See Allens Arthur Robinson, Focus: Tax - 16 February 2005:
http://www.aar.com.au/pubs/pdf/tax/fotfeb05.pdf
For a summary of the changes proposed in the Trade Practices Legislation Amendment Bill (No. 1) 2005 (referred to above), see Minter Ellison, News Alert: TPA Amendment Bill introduced into Parliament - 18 February 2005:
In ICAP Australia Pty Limited v BGC Partners (Australia) Pty Limited [2005] FCA 130, 14 employees from the ICAP futures desk resigned en masse to join a competitor. Five other employees joined them subsequently. The employer took action against them and the competitor seeking an interlocutory injunction restraining them from starting work at the competitor in reliance on the so-called "springboard doctrine" (ie that a person who has obtained information in confidence should not be allowed to use it as a springboard for activities detrimental to the person who made the confidential communication). The court declined the relief, holding that the springboard doctrine does not apply outside the field of confidential information (or at least there was not a sufficiently strongly arguable case that the doctrine applies to justify the granting of interlocutory relief). The court noted that because the trial would take place after the period of notice for most of the employees would have expired, the plaintiff could not succeed at trial in getting an injunction to restrain the employees from working for the competitor and that was also sufficient reason to justify declining the relief. The judgment is available at:
http://cclsr.law.unimelb.edu.au/judgments/states/federal/2005/february/2005fca130.htm
For those interested, the judgments in the successful criminal and civil prosecutions for insider trading referred to above (R v Doff [2005] NSWSC 50 and ASIC v Petsas [2005] FCA 88) are available at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2005/february/2005nswsc50.htm
http://cclsr.law.unimelb.edu.au/judgments/states/federal/2005/february/2005fca88.htm
In the first decision on the new definition of "derivative" in Chapter 7 of the Corporations Act 2001, the Federal Court has held that exchange traded options and exchange traded index options are derivatives and therefore financial products. The judgment in ASIC re Giann & Giann Pty Ltd [2005] FCA 81 is available at:
http://cclsr.law.unimelb.edu.au/judgments/states/federal/2005/february/2005fca81.htm
In Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd [2005] HCA 3, a share acquisition agreement was structured so that the company paid a dividend to the vendor of the shares before the purchase took effect, with the purchase price being reduced accordingly. The purchaser covenanted to provide funding to the company to pay the dividend. A majority of the High Court held that value of the dividend formed part of the consideration for the transfer and therefore should bear stamp duty. The judgment is available at:
http://www.austlii.edu.au/au/cases/cth/high_ct/2005/3.html
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