BILLS DIGEST NO. 82, 2014–15              19 March 2015

Australian River Co. Limited Bill 2015

Tyler Fox
Law and Bills Digest Section 

Date introduced: 26 February 2015

House:  House of Representatives

Portfolio: Finance

Commencement:  Sections 1–4 commence on Royal Assent. Schedule 1 commences on a day to be fixed by Proclamation. However, if proclamation does not occur within 12 months of Royal Assent, Schedule 1 is repealed.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website.

Purpose of the Bill

The purpose of the Australian River Co. Limited Bill 2015 (the Bill) is to abolish or merge the functions and activities of the Australian River Co. Limited (ARCo) and transfer its assets and remaining liabilities to the Commonwealth. This will allow ARCo’s voluntary deregistration under the Corporations Act 2001 (Cth) to be finalised.[1]

Structure of the Bill

The Bill contains one Schedule, divided into four parts. Part 1 is concerned with the definitions of terms essential to interpreting the Bill. Part 2 facilitates the transfer of ARCo’s assets and liabilities. Part 3 is concerned with the transfer of other matters relating to ARCo (such as civil proceedings in which it is involved) to the Commonwealth. Part 4 contains miscellaneous provisions, like the remaining governance arrangements, corporate obligations, and the application of taxes and stamp duties.

Background

The 2014–15 Budget announced the ARCo’s abolition and merger into the Commonwealth.[2] The ARCo was created in 1997 to ‘hold the residual assets and liabilities’ of the then-government owned shipping company Australian National Line Limited (ANL), following its partial sale in 1998.[3]

On 3 May 2002, the then Parliamentary Secretary to the Minister for Finance and Administration wrote to the ARCo board (Board) requesting that ‘the company be managed with a view to winding it down at the earliest opportunity on a commercially supportable basis’, including pursuit of any sale opportunities.[4] Since August 2012, ARCo has ceased to trade because of the sale of its last bulk ore carrier.[5] In November 2013, ARCo had no employees and no premises.[6]

It currently manages residual assets and liabilities, mainly workers compensation entitlements.[7] ARCo has put in place fully paid up insurance arrangements to cover those claims.[8]

Committee consideration

Selection of Bills Committee

The Bill has not been referred to a committee for consideration.[9]

Policy position of non-government parties/independents

No policy position on the Bill has been announced by Labor, other non-government parties or the independents.

Position of major interest groups

No position on the Bill has been announced by any major interest groups.

Financial implications

The effect of the Bill is to transfer ARCo’s residual functions, assets and liabilities to the Commonwealth, to allow for ARCo’s winding up.[10] Any financial impact on the Commonwealth or the community ‘is low’.[11]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[12]

The Parliamentary Joint Committee on Human Rights considers that the Bill does not raise human rights concerns.[13]

Key issues and provisions

Schedule 1 of the Bill contains its operative provisions.

Item 1 provides the definitions to be used throughout the Bill.

‘Transfer time’ is defined as when Schedule 1 commences. Clause 2 of the Bill provides that Schedule 1 will commence on proclamation, but if it does not commence within 12 months of the day of Royal Assent then its provisions will be repealed. The Explanatory Memorandum provides:

The commencement of Schedule 1 is dependent on other factors relating to the Commonwealth’s commitment to effecting the deregistration of ARCo and, in particular, the satisfactory completion of the Commonwealth’s due diligence into the assets and liabilities of ARCo. The date of commencement will only be fixed by Proclamation once the Commonwealth has resolved any issues identified during this process.

If, after 12 months have passed since Royal Assent, the Commonwealth has not been able to resolve any outstanding matters relating to ARCo’s assets and liabilities, the provisions of the Schedule will be repealed and ARCo will remain in existence.[14]

‘Asset’, ‘land’, and ‘liability’ are given broad and beneficial definitions:

•       an asset is any legal or equitable estate or interest in real or personal property, whether actual, contingent or prospective and any right, power, privilege or immunity, whether actual, contingent or prospective

•       an assets official is a person with the legal authority, by whatever means, who has the responsibility for keeping a register in relation to assets of the kind concerned

•       land is any legal or equitable estate or interest in real property, whether actual, contingent or prospective

•       land registration official is defined as the Registrar of Titles or other proper officer in whichever state or territory on which land is located.

Item 2 establishes that, at the transfer time, ARCo’s assets and liabilities cease to be ARCo’s and become the Commonwealth’s without any conveyance, transfer or assignment. This would make the Commonwealth the successor in law in relation to those assets.

Item 3 states that a land registration official may deal with any land that vests in the Commonwealth due to the operation of item 2 in the usual way that land is registered, if provided with a certificate signed by the Minister that identifies the land and states that it has become vested in the Commonwealth. This certificate would not be a legislative instrument.

Item 4 states that a similar procedure is to apply with assets other than land when dealt with by an assets official.

Item 5 is a transitional provision, which applies to a thing done by or in relation to ARCo before the transfer time. The Minister may determine, in writing, that a thing is taken, at and before the transfer time, to have been done by, or in relation to, the Commonwealth.

Item 6 is a similar deeming provision that applies to instruments that reference ARCo.

Item 7 provides that the Commonwealth takes the place of ARCo in any legal proceedings that are pending at the transfer time.

Item 8 states that records in ARCo’s custody are to be transferred to the Commonwealth.

Other provisions

The Explanatory Memorandum contains an accurate and detailed explanation of the remaining provisions in Schedule 1 of the Bill.[15]

Section 601AD of the Corporations Act 2001 sets out the impact of deregistration of a company. Subsection 601AD(5) requires the people who were the directors of the company immediately before its deregistration to keep the company’s books for three years after deregistration.[16] Item 10 provides that the obligation under subsection 601AD(5), which would otherwise attach personally to the directors of ARCo, instead attaches to the Commonwealth. As set out in the Explanatory Memorandum:

This ensures that the directors of ARCo, who are public servants serving in an ex officio capacity, do not personally have any ongoing responsibilities to maintain such records [in circumstances where] the Commonwealth will have custody of relevant papers pursuant to the Bill (and also in accordance with the Archives Act 1983).[17]

Item 11 exempts vesting of assets or liability under item 2 from state or territory stamp duty and other taxes. This is a standard provision in Bills that abolish Commonwealth bodes, which ensures that state and territory taxes will not apply to the transfer of assets and liabilities from ARCo to the Commonwealth.[18]

Item 13 deals with acquisition of property, and provides that if property is acquired from a person on terms that are not just, the Commonwealth must pay compensation to the person from who the property is acquired. Further, if there is a disagreement about the amount of compensation payable by the Commonwealth, the Federal Court may determine the amount of compensation payable for the acquisition of the property.[19] This is a standard provision found in many Commonwealth Acts.

Item 14 allows the Minister to delegate, in writing, any or all of his powers and functions under the Bill (except Item 15 below) to the Secretary of the Department of Finance or an SES employee, or acting SES employee, in the Department.

Item 15 gives the Minister the power to make rules regarding what is to be done under the Bill. The rules may prescribe matters in relation to much of what has been described above (for example, ARCo’s deregistration, matters that occur before the transfer time, and reports that are legally required). The rules may not create a criminal offence or a civil penalty, provide powers of arrest or detention, entry, search or seizure, impose a tax or set an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in this Bill. The rules must not amend the Bill.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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[1].              Corporations Act 2001 (Cth), accessed 16 March 2015.

[2].              Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2014–15, p. 71, accessed 6 March 2015.

[3].              M McCormack, ‘Second reading speech: Australian River Co. Limited Bill 2015’, House of Representatives, Debates, 26 February 2015, p. 8, accessed 15 March 2015; ANL Sale Act 1995, accessed 6 March 2015; J Fahey (Minister for Finance and Administration), Trans-United sale agreement, media release, 2 March 1999, accessed 6 March 2015; ANL (Conversion into Public Company) Act 1988, accessed 6 March 2015; B Bennett, ANL Sale Bill 1997, Bills digest, 155, 1997–1998, Parliamentary Library, Canberra, 1998, accessed 6 March 2015.

[4].              Australian River Co. Limited, 2013 annual report, 24 February 2014, p. 1, accessed 6 March 2015.

[5].              Ibid.

[6].              Ibid., p. 2.

[7].              M McCormack, ‘Second reading speech: Australian River Co. Limited Bill 2015’, op. cit., p. 8.

[8].              Explanatory Memorandum, Australian River Co. Limited Bill 2015, p. 1, accessed 15 March 2015.

[9].              Selection of Bills Committee, Report No. 2 of 2015, The Senate, Canberra, 5 March 2015, accessed 6 March 2015.

[10].              Explanatory Memorandum, Australian River Co. Limited Bill 2015, op. cit., p. 1.

[11].              Ibid.

[12].              The Statement of Compatibility with Human Rights can be found at page 1 of the Explanatory Memorandum to the Bill.

[13].              Parliamentary Joint Committee on Human Rights, Twentieth report of the 44th Parliament, The Senate, Canberra, 18 March 2015, accessed 18 March 2015.

[14].              Explanatory Memorandum, op. cit., p. 3.

[15].              Explanatory Memorandum, op. cit., pp. 4 to 8.

[16].              Section 601AD of the Corporations Act 2001, accessed 18 March 2015.

[17].              Explanatory Memorandum, Australian River Co. Limited Bill 2015, op. cit., pp. 6–7.

[18].              Ibid., p. 7.

[19].              Ibid.