June 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 Generally, it is too onerous a task for us to check and update these and so if a hyperlink is no longer valid, please accept our apologies.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 government has introduced a Bill to exclude independent contractors from the operation of State industrial awards. For a copy of the Independent Contractors Bill 2006 and the Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006, go to:
The government has introduced to Bill to amend the Privacy Act 1988 to remove the exemption currently provided for political acts and practices so that information about these will be subject to privacy laws. For a copy of the Privacy (Extension to Political Acts and Practices) Amendment Bill 2006, go to:
A Bill to amend the Trade Practices Act 1974 to include the so-called Dawson amendments has been re-introduced into Parliament. If enacted, the Bill will, amongst other things, remove related bodies corporate from the prohibition against exclusive dealing in section 47 and insert new defences for joint ventures and dual listed companies in relation to price fixing. For a copy of the Trade Practices Legislation Amendment Bill 2006, go to:
The government is proposing to vary the amendments to the Financial Transaction Reports Act 1988 made by the Anti-Terrorism (No.2) Act 2005 to remove certain anomalies related to the reporting of international financial transactions. For a copy of the Financial Transaction Reports Amendment Bill 2006, go to:
ACCC has issued new Merger Review Process Guidelines. A copy can be downloaded at:
ACCC has published reference guides for people buying or starting a small business or looking to join a franchise system to assist them in their investment decision. For a copy of the Trade Practices Start-up Checklist for Small Business and the Franchisee Start-up Checklist, go to:
APRA has released an information paper on liability insurance for superannuation trustees. A copy of the paper can be downloaded from:
http://www.apra.gov.au/Superannuation/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=11691
To maintain the current minimum compensation requirements while the Government considers its position on a final compensation regime, ASIC has issued new class order CO 06/495 extending the transitional compensation arrangements under section 912B of the Corporations Act until 31 December 2006. See Information Release IR 06-21:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/532572015D625A9ECA257195007DBFFD?opendocument
ASIC has issued new class order relief CO 06/476, which grants permanent unconditional relief to issuers of deposit products from the requirement to include termination values in periodic statements. It also grants permanent conditional relief to issuers of deposit products from the requirement to disclose interest rates in PDSs and extends the transitional relief to issuers of deposit products from the dollar disclosure requirements from 1 July 2006 to 31 March 2007. See Information Release IR 06-20:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/1DAB8208A5F06254CA257193001666F4?opendocument
ASIC has extended the interim relief for actuaries from the requirement to hold an Australian financial services licence until 31 December 2006 while the government continues its consultation with industry on the application of the licensing provisions. It has also extended the relief for issuers of general insurance products from dollar disclosure requirements until March 2007 while the government considers the application of these requirements to general insurance PDSs. See Information Release IR 06-19:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/4B812EF0126975CFCA2571930018699C?opendocument
ASIC has extended the interim relief for superannuation trustees delaying the commencement of the product disclosure requirements in section 1012IA of the Corporations Act regarding choice of investment strategy from 30 June 2006 to 30 June 2007. See Information Release IR 06-22:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/8EF82BCAEB70B300CA257196000CCE0F?opendocument
ASIC has brought criminal charges against 2 executives of failed accounting group Harts Australasia Limited, alleging they were knowingly concerned in its failure to keep the market informed of the group’s unexpected loss of $9.7 million in 2001. ASIC has also settled civil penalty proceedings against listed company Chemeq Limited, regarding its failure to tell ASX about the increased costs of constructing and commissioning one of its manufacturing facilities and certain information concerning a US patent. See Media Releases 06-176 and 06-214:
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/B9FF4F2130962C0DCA257181001E1F6D?opendocument
http://www.asic.gov.au/asic/ASIC_PUB.NSF/byid/AD83CF1753F3D884CA25719D0000CB99?opendocument
ASX has amended ASX Market Rules 14.2.6 and 32 and ASX Market Rule Procedure 14.2.6 to make changes to the rules regarding automatic cancellation of orders. It has also amended Market Rule 4.9 to modify the format of auditor's reports on financial information and internal controls and to simplify the completion of the key risks and internal systems statement. See ASX Circular 330/06 and 334/06 and their respective attachments:
ASX has confirmed it will retain the 2 month deadline for listed entities to report their full-year and interim financial results. See ASX Media Release 8 June 2006 and attachments:
http://www.asx.com.au/about/pdf/mr20060608_reporting_deadlines.pdf
http://www.asx.com.au/about/pdf/mr20060608_reporting_deadlines_attachment_%20table.pdf
http://www.asx.com.au/about/pdf/consultation_paper_reporting_deadlines_appendices4d_4e.pdf
The Treasurer has approved ASX’s application to have 100% of the voting power in SFE and its subsidiaries. See ASX Media Release 6 June 2006:
http://www.asx.com.au/about/pdf/mr20060606_response_treasury_decision.pdf
For a general discussion of recent developments in banking and financial services law, see Clayton Utz, Banking & Financial Services Insights - 28 June 2006:
http://www.claytonutz.com.au/areas_of_law/controller.asp?aolstring=&ns=253
And for a brief summary of recent banking and finance cases, see Allens Arthur Robinson, Banking & Finance Update – June 2006:
http://www.aar.com.au/pubs/baf/bafujun06.htm
The NSW government has introduced a Bill with significant amendments to the mortgage duty provisions in the Duties Act 1997 (NSW) that may impact deals currently being negotiated, where securities are to be executed or funding is to be provided on or after 1 July 2006. See Mallesons, New South Wales Duties (Abolition of State Taxes) Bill - 19 June 2006:
http://www.mallesons.com/publications/2006/Jun/8463993W.htm
Blake Dawson Waldron, Company Law & Governance Update - June 2006 has an interesting article on the issues involved in hedging executive share and option entitlements. See:
http://www.bdw.com.au/publications/governance/governance062006.pdf
For a general discussion of recent developments in employee relations law, see Allens Arthur Robinson, Focus: Workplace Relations - June 2006:
http://www.aar.com.au/pubs/pdf/wr/fowrjun06.pdf
For a summary of the changes to be introduced by the Independent Contractors Bill 2006, designed to exclude the application of state industrial awards to independent contractor relationships, see Blake Dawson Waldron, Industrial Relations and Employment Alert - June 2006:
http://www.bdw.com.au/publications/irca/irca062006.pdf
Minter Ellison, Massive Damages Awards for Breach of Employment Contracts: the Brave New World? - 29 June 2006 has an interesting discussion of 2 recent Federal Court decisions concerning breach of employment contracts where significant damages were awarded to senior executives. See:
The government has amended the Workplace Relations Regulations 2006, with the most significant amendments being changes to record-keeping obligations for employers, removing the onerous time-recording requirements in respect of some more highly paid employees. For details, see Minter Ellison, Amendment to Record Keeping Obligations for Employers - 6 June 2006:
The Tax Laws Amendment (2006 Measures No 4) Bill 2006 proposes changes to Australian capital gains tax for foreign residents, providing them with greater flexibility and efficiency in structuring their Australian investments and aligning Australia’s tax policy with current OECD practice. See Phillips Fox, Tax Update - 30 June 2006:
http://www.phillipsfox.com/vbscript/displaydoc.asp?ndocid=115503543
The High Court has reinforced the breadth of the 'external affairs' power in the Commonwealth constitution, upholding the validity of a federal law prohibiting an Australian from engaging in sexual activity with a child under 16 years while outside Australia. The decision in XYZ v The Commonwealth [2006] HCA 25 can be viewed at:
http://www.austlii.edu.au/au/cases/cth/high_ct/2006/25.html
For those interested, Mr Bradley Cooper has received an 8 year jail term for his conviction on 6 charges of corruptly giving a series of cash benefits to influence an agent of HIH Insurance Limited and on 7 charges of publishing false or misleading statements with intent to obtain a financial advantage. The decision in R v Cooper [2006] NSWSC 609 can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/nsw/2006/june/2006nswsc609.htm
In Emu Brewery Mezzanine Ltd (In Liq) v ASIC [2006] WASCA 105, a majority of the Western Australian Court of Appeal has ruled that promissory notes issued by a Westpoint subsidiary with a face value of at least $50,000 were not debentures for the purposes of the Corporations Act and therefore were not securities requiring the issue of a prospectus. See:
http://cclsr.law.unimelb.edu.au/judgments/states/wa/2006/june/2006wasca105.htm
In ASIC v PFS Business Development Group Pty Ltd [2006] VSC 192, the Supreme Court of Victoria has held that companies engaged in establishing and marketing self-managed superannuation funds were carrying on a "financial services business" that required the holding of an Australian financial services licence. See:
http://cclsr.law.unimelb.edu.au/judgments/states/vic/2006/may/2006vsc192.htm
In ASIC v Mercorella (No 3) [2006] FCA 772, the Federal Court has rejected a claim of legal professional privilege for advice sought by creditors from a solicitor on obtaining security over a debt owed by the operator of managed investment scheme. The creditors knew the operator to be in financial difficulty and the court found they were seeking the security to obtain an unfair advantage over other creditors. The security documents were therefore brought into existence for an improper purpose and communications between the creditors and their solicitor concerning the creation of those documents were not privileged. The decision can be viewed at:
http://cclsr.law.unimelb.edu.au/judgments/states/federal/2006/june/2006fca772.htm
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