An Act to provide for the Australian Securities and Investments Commission and certain other bodies, and for other purposes
Part 1—Preliminary
Division 1—Objects
1 Objects
(1) The objects of this Act are:
(a) to provide for the Australian Securities and Investments Commission (ASIC) which will administer such laws of the Commonwealth, a State or a Territory as confer functions and powers under those laws on ASIC; and
(b) to provide for ASIC’s functions, powers and business; and
(d) to establish a Takeovers Panel, a Companies Auditors Disciplinary Board, a Financial Reporting Council, an Australian Accounting Standards Board, an Auditing and Assurance Standards Board and a Parliamentary Joint Committee on Corporations and Financial Services.
(2) In performing its functions and exercising its powers, ASIC must strive to:
(a) maintain, facilitate and improve the performance of the financial system and the entities within that system in the interests of commercial certainty, reducing business costs, and the efficiency and development of the economy; and
(b) promote the confident and informed participation of investors and consumers in the financial system; and
(d) administer the laws that confer functions and powers on it effectively and with a minimum of procedural requirements; and
(e) receive, process and store, efficiently and quickly, the information given to ASIC under the laws that confer functions and powers on it; and
(f) ensure that information is available as soon as practicable for access by the public; and
(g) take whatever action it can take, and is necessary, in order to enforce and give effect to the laws of the Commonwealth that confer functions and powers on it.
(3) This Act has effect, and is to be interpreted, accordingly.
Division 2—Citation
1A Short title
This Act may be cited as the Australian Securities and Investments Commission Act 2001.
Division 3—Commencement and application
2 Commencement
This Act commences at the same time as the Corporations Act 2001.
4 Application of this Act
(1) This Act applies:
(a) in this jurisdiction; and
(b) in a State that is not a referring State (but only to the extent to which the application would be within the legislative powers of the Parliament (including powers it has under paragraphs 51(xxxvii) and (xxxix) of the Constitution)); and
(c) in such external Territories (if any) as are prescribed.
(1A) Subject to paragraph (1)(c), this Act does not apply in Norfolk Island, the Territory of Christmas Island or the Territory of Cocos (Keeling) Islands.
(1B) For the purposes of subsection (1A), it does not matter whether paragraph (1)(c) operates because of regulations made before, on or after the commencement of that subsection.
(2) Without limiting paragraph (1)(c), if an external Territory is prescribed, regulations prescribing the external Territory may provide:
(a) that only some of the provisions of this Act apply in the external Territory; and
(b) that provisions that apply in the external Territory only apply in specified circumstances.
(3) If:
(a) an external Territory is prescribed; and
(b) in a provision of this Act that applies (either generally or in particular circumstances) in the external Territory, there is:
(i) a reference to “Australia” or “this jurisdiction”; or
(ii) a reference to a term the definition of which includes a reference to “Australia” or “this jurisdiction”;
then, unless a contrary intention appears, the reference to “Australia” or “this jurisdiction” in that provision as so applying, or in that definition as applying for the purposes of that provision as so applying, includes a reference to that external Territory.
4A Application of the Criminal Code
Chapter 2 of the Criminal Code applies to all offences against this Act.
Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
Division 4—Interpretation
5 Interpretation
(1) In this Act, unless the contrary intention appears:
AASB means the Australian Accounting Standards Board.
absent from office, in relation to a holder of an office, means:
(a) absent from duty or from Australia; or
(b) unable, for any reason, to perform the functions of the office.
accounting member of the Disciplinary Board has the meaning given by subsection 203(1A).
affairs, in relation to a body corporate, has the same meaning as in section 232 of the Corporations Act.
APRA means the Australian Prudential Regulation Authority.
ASIC means the Australian Securities and Investments Commission.
ASIC delegate means a person to whom, or a body to which, a function or power is delegated under section 102.
assist, in relation to an ASIC delegate, means:
(a) to perform functions:
(i) as a member, officer or employee of the ASIC delegate; and
(ii) in connection with the ASIC delegate’s performance or exercise of a function or power delegated under section 102; or
(b) to perform services for the ASIC delegate in connection with the ASIC delegate’s performance or exercise of a function or power delegated under section 102.
AUASB means the Auditing and Assurance Standards Board.
audit deficiency report has the meaning given by subsection 50C(1).
Australia has a meaning affected by subsection 4(3).
Australian auditor means:
(a) an individual auditor; or
(b) an audit firm; or
(c) an audit company;
that is conducting, or that has conducted, audits undertaken for the purposes of the Australian Charities and Not‑for‑profits Commission Act 2012 or the Corporations Act and includes a registered company auditor who is participating in, or has participated in, audits of that kind.
books includes:
(a) a register; and
(b) financial reports or financial records, however compiled, recorded or stored; and
(c) a document; and
(d) banker’s books; and
(e) any other record of information.
business member of the Disciplinary Board has the meaning given by subsection 203(1A).
Chairperson means:
(a) except in Part 11 or in relation to the Disciplinary Board—the Chairperson of ASIC; and
(b) in Part 11 or in relation to the Disciplinary Board—the Chairperson of the Disciplinary Board.
contravention, in relation to a law, includes an ancillary offence relating to an offence against that law.
Corporations Act means the Corporations Act 2001 and regulations and rules made under that Act.
corporations legislation means:
(a) this Act; and
(b) the Corporations Act.
court, except in section 248, includes a tribunal having power to require the production of documents or the answering of questions.
crowd‑funding service has the same meaning as in Chapter 7 of the Corporations Act 2001.
CSC (short for Commonwealth Superannuation Corporation) has the same meaning as in the Governance of Australian Government Superannuation Schemes Act 2011.
Deputy Chairperson means the Deputy Chairperson of ASIC.
Disciplinary Board means the Companies Auditors Disciplinary Board.
eligible employee has the same meaning as in the Superannuation Act 1976.
eligible person, in relation to a person, means a person who:
(a) if the first‑mentioned person is a body corporate—is or has been an officer of the body within the meaning of the corporations legislation (other than the excluded provisions); or
(b) in any case:
(i) is or has been an employee, agent, banker, solicitor or auditor of; or
(ii) is acting, or has acted, in any other capacity on behalf of;
the first‑mentioned person.
engage in conduct:
(a) in Division 2 of Part 2—has the meaning given by subsection 12BA(2); and
(b) in the other provisions of this Act—means do an act or omit to do an act.
examination means an examination of a person pursuant to a requirement made under section 19.
excluded provisions means section 12A and Division 2 of Part 2.
expenses, in relation to an investigation under Division 1 of Part 3, includes costs and expenses incurred in relation to a proceeding begun under section 50 as a result of the investigation.
fail means refuse or fail.
financial product:
(a) in Division 2 of Part 2—has the meaning given by section 12BAA; and
(b) in the other provisions of this Act—has the same meaning as it has in Chapter 7 of the Corporations Act.
financial service:
(a) in Division 2 of Part 2—has the meaning given by section 12BAB; and
(b) in the other provisions of this Act—has the same meaning as it has in Chapter 7 of the Corporations Act.
foreign business law means:
(a) a law of a foreign country that regulates, or relates to the regulation of, business or persons engaged in business; or
(b) a law, or rules or regulations (however described), that an international business regulator administers or enforces.
foreign country includes:
(a) a part of a foreign country; and
(b) when used in a provision of this Act that does not apply (either generally or in particular circumstances) to a particular external Territory—that external Territory (but only to the extent that the provision does not apply in that external Territory).
FRC means the Financial Reporting Council.
give has:
(a) in relation to a document—a meaning affected by section 86; and
(b) in relation to information—a meaning affected by section 6.
hearing, in this section and Part 3, means a hearing before ASIC and, in sections 52, 54, 55 and 56, includes a part of such a hearing.
House means a House of the Parliament.
information has a meaning affected by section 6.
international accounting standards means accounting standards made by:
(a) the International Accounting Standards Board; or
(b) another body specified by the regulations.
international auditing standards means auditing standards made by:
(a) the International Auditing and Assurance Standards Board; or
(b) another body specified by the regulations.
international business regulator means a body that satisfies the following conditions:
(a) the body has functions relating to the regulation, in 2 or more countries, of business, or persons engaged in business;
(b) those functions are conferred on the body by:
(i) a law or laws in force in those countries; or
(ii) a treaty, or other international agreement, to which those countries are parties; or
(iii) without limiting subparagraphs (i) and (ii)—a parliament or other body established by or under a treaty, or other international agreement, to which those countries are parties.
investigate, in relation to ASIC, means investigate in the course of performing or exercising any of ASIC’s functions and powers.
meeting means:
(a) in Part 4—a meeting of ASIC;
(c) in Part 11—a meeting of the Disciplinary Board.
member means:
(a) except in Division 2 of Part 4, in Part 10, 11, 12 or 14, or in relation to a Division, the Panel, the Disciplinary Board, the FRC, the AASB or the Parliamentary Committee—a member of ASIC; and
(c) in Part 10 or in relation to the Panel—a member of the Panel; and
(d) in Part 11 or in relation to the Disciplinary Board—the Chairperson or any other member of the Disciplinary Board; and
(e) in relation to the FRC—a member of the FRC; and
(ea) in relation to the AASB—a member of the AASB; and
(eb) in relation to the AUASB—a member of the AUASB; and
(f) in Part 14 or in relation to the Parliamentary Committee—a member of the Parliamentary Committee.
Office of the AASB means the Office of the Australian Accounting Standards Board.
Office of the AUASB means the Office of the Auditing and Assurance Standards Board.
officer means:
(a) an officer within the meaning of the Corporations Act; or
(b) a provisional liquidator.
old ASIC Act means the Australian Securities and Investments Commission Act 1989 as in force from time to time before the commencement of this Act.
Panel means the Takeovers Panel.
Panel of the Disciplinary Board means a Panel constituted by the Chairperson of the Disciplinary Board under section 210A to hear a particular matter.
Panel proceedings means proceedings before the Panel on:
(a) an application made to the Panel under the Corporations Act; or
(b) a reference of a decision to the Panel for review under the Corporations Act.
Parliamentary Committee means the Parliamentary Joint Committee on Corporations and Financial Services.
power includes an authority.
prescribed means prescribed by this Act or the regulations.
President means the President of the Panel.
proceeding means:
(a) a proceeding in a court; or
(b) a proceeding or hearing before, or an examination by or before, a tribunal;
whether the proceeding, hearing or examination is of a civil, administrative, criminal, disciplinary or other nature.
produce, except in Part 3, includes permit access to.
professional accounting body means a body prescribed by the regulations for the purposes of this definition.
property means any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action and money.
record, in relation to an examination, means the whole or a part of a record made under section 24 of statements made at the examination.
regulations means regulations made under this Act.
report includes an interim report.
Schedule 2 to the Corporations Act means Schedule 2 to the Corporations Act 2001 and rules made under that Schedule.
staff member means:
(a) a member of the staff referred to in subsection 120(1) or a person employed under subsection 120(3); or
(b) a person engaged under subsection 121(1); or
(c) any of the officers, employees and persons who under section 122 are to assist ASIC.
statement, in relation to an examination, includes a question asked, an answer given, and any other comment or remark made, at the examination.
superannuation benefits includes:
(a) benefits in the nature of superannuation benefits; and
(b) benefits similar to benefits provided under the Superannuation Act 1976; and
(c) benefits similar to the benefits provided under the Superannuation Act 1990.
Territory has the meaning given by the following paragraphs:
(a) a reference in a provision of this Act to a Territory covers the Capital Territory and the Northern Territory;
(b) if the reference is in a provision of this Act that applies (either generally or in particular circumstances) to a particular external Territory—the reference also covers that external Territory, but only to the extent that the provision applies in that external Territory;
(c) if the reference is to a Territory in a geographical sense—the reference also covers, for each Territory that the reference covers because of paragraph (a) or (b), to the same extent that the reference covers the Territory, that Territory’s coastal sea.
this Act includes the regulations.
this jurisdiction means:
(a) each referring State (including its coastal sea); and
(b) the Capital Territory (including the coastal sea of the Jervis Bay Territory); and
(c) the Northern Territory (including its coastal sea).
Its meaning is also affected by subsection 4(3) (relating to external Territories).
traditional trustee company services has the same meaning as in Chapter 5D of the Corporations Act.
tribunal means:
(a) a tribunal in Australia; or
(b) any other body, authority or person in Australia having power, by law or by consent of parties, to hear, receive or examine evidence.
trustee company has the same meaning as in Chapter 5D of the Corporations Act.
trust property, in relation to a trustee company, means property that is or was held by the trustee company as trustee.
witness:
(a) in relation to a hearing before ASIC, means a person appearing at the hearing to give evidence; or
(b) in relation to Panel proceedings, means a person appearing in the proceedings to give evidence.
written record, in relation to an examination, means:
(a) a record of the examination:
(i) that is made in writing; or
(ii) as reduced to writing; or
(b) a part of such a record.
(2) Unless the contrary intention appears:
(a) an expression that:
(i) is used, but not defined, in this Act; and
(ii) is defined in section 761A of the Corporations Act (regardless of whether it is also defined in another section of that Act);
has the same meaning in this Act as in section 761A of the Corporations Act; and
(b) an expression that:
(i) is used, but not defined, in this Act; and
(ii) is not defined in section 761A of the Corporations Act; and
(ii) is used in the Corporations Act;
has the same meaning in this Act as in the Corporations Act.
(3) Except so far as the contrary intention appears in this Act, Parts 1.2 and 1.3 of the Corporations Act apply for the purposes of this Act as if the provisions of this Act were provisions of that Act.
5A Application of the Acts Interpretation Act 1901
(1) Until the date of commencement of section 4 of the Legislative Instruments (Transitional and Consequential Amendments) Act 2003 (the Legislative Instruments commencement day), the Acts Interpretation Act 1901 as in force on 1 November 2000 applies to this Act.
(2) On and after the Legislative Instruments commencement day, the Acts Interpretation Act 1901 as in force on that day applies to this Act.
(3) Amendments of the Acts Interpretation Act 1901 made after the Legislative Instruments commencement day do not apply to this Act.
6 Giving information
A reference in this Act to giving information includes a reference to:
(a) explaining or stating a matter; or
(b) identifying a person, matter or thing; or
(c) disclosing information; or
(d) answering a question.
Part 2—Australian Securities and Investments Commission and consumer protection in relation to financial services
Division 1—Australian Securities and Investments Commission
8 ASIC is a body corporate
(1) ASIC:
(a) is a body corporate, with perpetual succession; and
(b) has a common seal; and
(c) may, subject to subsection (5), acquire, hold and dispose of real and personal property; and
(ca) may enter into contracts; and
(d) may sue and be sued in its corporate name.
Note: ASIC was established by section 7 of the Australian Securities and Investments Commission Act 1989 and is continued in existence by section 261 of this Act.
(1A) However, ASIC is taken, for the purposes of the finance law (within the meaning of the Public Governance, Performance and Accountability Act 2013):
(a) to be a non‑corporate Commonwealth entity, and not to be a corporate Commonwealth entity; and
(b) to be a part of the Commonwealth; and
(c) not to be a body corporate.
(2) ASIC may enter into contracts in its own right.
Note: The Chairperson of ASIC may also enter into contracts on behalf of the Commonwealth. See section 44 of the Financial Management and Accountability Act 1997.
(3) Any real or personal property held by ASIC is held for and on behalf of the Commonwealth.
(4) Any money received by ASIC is received for and on behalf of the Commonwealth.
(5) ASIC cannot hold real or personal property or money on trust.
Note: Any real or personal property or money that ASIC would otherwise hold on trust is held by the Commonwealth on trust.
(6) Despite any rule of equity, ASIC may, for and on behalf of the Commonwealth, perform all the duties and exercise all the powers of the Commonwealth as trustee in relation to any real or personal property or money held on trust by the Commonwealth.
(7) To avoid doubt, a right to sue is taken not to be personal property for the purposes of subsection (3).
8A ASIC’s liabilities are Commonwealth liabilities
(1) Any financial liabilities of ASIC are taken to be liabilities of the Commonwealth.
(2) For the purposes of this section:
financial liability means a liability to pay a person an amount where the amount, or the method for working out the amount, has been determined.
9 Membership
(1) ASIC is to consist of not fewer than 3 nor more than 8 members.
(2) The Governor‑General appoints the members on the nomination of the Minister.
(3) At least 3 of the members must be appointed as full‑time members and each of the remaining members (if any) may be appointed as a full‑time member or as a part‑time member.
(4) The Minister is to nominate a person as a member only if the Minister is satisfied that the person is qualified for appointment by virtue of his or her knowledge of, or experience in, one or more of the following fields, namely:
(a) business;
(b) administration of companies;
(c) financial markets;
(d) financial products and financial services;
(e) law;
(f) economics;
(g) accounting.
(5) The performance of ASIC’s functions or the exercise of ASIC’s powers is not affected by reason only that the number of members, or the number of full‑time members, is less than 3 unless a continuous period of 3 months has elapsed since the number of members, or the number of full‑time members, as the case may be, fell below 3.
(6) For the purposes of subsection (5), an acting member is taken to be a member.
9A Application of the finance law
For the purposes of the finance law (within the meaning of the Public Governance, Performance and Accountability Act 2013):
(a) ASIC is a listed entity; and
(b) the Chairperson is the accountable authority of ASIC; and
(c) the following persons are officials of ASIC:
(i) the Chairperson;
(ii) the other members of ASIC;
(iii) staff members; and
(d) the purposes of ASIC include the functions of ASIC referred to in sections 11 and 12A.
10 Chairperson and Deputy Chairperson
The Governor‑General is to appoint as Chairperson of ASIC a person who is, or is to be, a full‑time member and may appoint as Deputy Chairperson of ASIC a person (other than the Chairperson) who is, or is to be, a full‑time member.
Note: For the manner in which the Chairperson and Deputy Chairperson may be referred to, see section 18B of the Acts Interpretation Act 1901.
10A Chairperson not subject to direction by ASIC on certain matters
The Chairperson of ASIC is not subject to direction by ASIC in relation to the Chairperson’s performance of functions, or exercise of powers, under:
(a) the Public Governance, Performance and Accountability Act 2013; or
(b) the Public Service Act 1999;
in relation to ASIC.
11 Corporations legislation functions and powers and other functions and powers
(1) ASIC has such functions and powers as are conferred on it by or under the corporations legislation (other than the excluded provisions).
(2) ASIC also has the following functions:
(a) to provide such staff and support facilities to the Panel, the Disciplinary Board and the Review Board as are necessary or desirable for the performance and exercise by the Panel, the Disciplinary Board and the Review Board of their respective functions and powers;
(b) to advise the Minister about any changes to the corporations legislation (other than the excluded provisions) that, in ASIC’s opinion, are needed to overcome, or would assist in overcoming, any problems that ASIC has encountered in the course of performing or exercising any of its functions and powers.
(3) ASIC may, on its own initiative or when requested by the Minister, advise the Minister, and make to the Minister such recommendations as it thinks fit, about any matter connected with:
(a) a proposal to make corporations legislation, or to make amendments of the corporations legislation (other than the excluded provisions); or
(b) the operation or administration of the corporations legislation (other than the excluded provisions); or
(c) law reform in relation to the corporations legislation (other than the excluded provisions); or
(d) companies or a segment of the financial products and financial services industry; or
(e) a proposal for improving the efficiency of the financial markets.
(4) ASIC has power to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions.
(6) Subject to this Act, ASIC has the general administration of this Act.
(8) ASIC may, with the consent of the Minister, enter into an agreement or arrangement with a State or Territory for the performance of functions or the exercise of powers by ASIC as an agent of the State or Territory.
(9) ASIC has such functions and powers as are referred to in such an agreement or arrangement. However, ASIC is not under a duty to perform such functions or exercise such powers.
(9A) ASIC may have functions or powers conferred on it by or under a law of a State or Territory if:
(a) that law provides for, or relates to, the repeal, amendment or termination (however described) of the operation of, any of the replaced legislation within the meaning of item 22 of Schedule 8 to the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999; and
(b) the conferral of the powers or functions is in accordance with:
(i) provisions of an agreement entered into by the Commonwealth and the State or Territory, being provisions approved by the Minister for the purposes of this subsection; or
(ii) an approval given by the Minister for the purposes of this subsection.
ASIC has the functions and powers so conferred by that law. However, ASIC is not under a duty to perform such functions or exercise such powers.
(10) ASIC may, with the written consent of the Minister, enter into an agreement or arrangement with a regulatory body of a foreign country under which ASIC undertakes to assist that regulatory body to ascertain whether Australian auditors comply with audit requirements that are:
(a) imposed by or under laws of that foreign country; or
(b) adopted as professional standards in that foreign country.
(11) The Minister may, in writing, vary or revoke the Minister’s consent mentioned in subsection (10).
(12) If ASIC enters into an agreement or arrangement with a regulatory body under subsection (10), it must, as soon as practicable after entering into that agreement or arrangement, by notice published in the Gazette:
(a) set out the identifying particulars of the regulatory body; and
(b) give brief particulars of the agreement or arrangement entered into; and
(c) identify the audit requirements to which the agreement or arrangement relates.
(13) A notice published under subsection (12) is not a legislative instrument.
(14) ASIC has the following functions:
(a) to assist a regulatory body with which it has entered into an agreement or arrangement under subsection (10) to examine the policies and working practices of an Australian auditor, so as to help the regulatory body to ascertain compliance with audit requirements to which the agreement or arrangement relates;
(b) to disclose to a regulatory body with which it has entered into an agreement or arrangement under subsection (10) the information that ASIC has obtained in assisting in such an examination.
(15) In performing the function referred to in paragraph (14)(a), ASIC may examine policies and working practices of an auditor in general or in their application to particular audits or in both of those respects.
(16) ASIC is not under a duty to perform a function referred to in subsection (14) or to exercise a power in relation to such a function.
(17) ASIC is not subject to any directions of the Minister in relation to:
(a) entering into an agreement or arrangement under subsection (8) or (10); or
(b) performing functions or exercising powers referred to in subsection (9); or
(c) performing functions conferred under subsection (9A) or (14) or exercising any related powers.
12 Directions by Minister
(1) The Minister may give ASIC a written direction about policies it should pursue, or priorities it should follow, in performing or exercising any of its functions or powers under the corporations legislation (other than the excluded provisions).
(2) The Minister must not give a direction under subsection (1) unless he or she has:
(a) notified ASIC in writing that he or she is considering giving the direction; and
(b) given the Chairperson an adequate opportunity to discuss with the Minister the need for the proposed direction.
(3) The Minister must not give a direction under subsection (1) about a particular case.
(4) ASIC must comply with a direction under subsection (1).
(5) The Minister must cause a copy of an instrument under subsection (1):
(a) to be published in the Gazette within 21 days after the instrument is made; and
(b) to be laid before each House of the Parliament within 15 sitting days of that House after the publication;
but failure of the Minister to do so does not affect the instrument’s validity.
12A Other functions and powers
(1) ASIC has the functions and powers that are conferred on it by or under Division 2 of Part 2 of this Act and by or under the following Acts:
(a) the ASIC Supervisory Cost Recovery Levy Act 2017;
(b) the ASIC Supervisory Cost Recovery Levy (Collection) Act 2017;
(c) the Insurance Contracts Act 1984;
(d) the Superannuation (Resolution of Complaints) Act 1993;
(e) the Life Insurance Act 1995;
(f) the Retirement Savings Accounts Act 1997;
(g) the Superannuation Industry (Supervision) Act 1993;
(i) the National Consumer Credit Protection Act 2009;
(j) the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009;
(k) the Business Names Registration Act 2011;
(l) the Business Names Registration (Transitional and Consequential Provisions) Act 2011.
(2) ASIC has the function of monitoring and promoting market integrity and consumer protection in relation to the Australian financial system.
(3) ASIC has the function of monitoring and promoting market integrity and consumer protection in relation to the payments system by:
(a) promoting the adoption of approved industry standards and codes of practice; and
(b) promoting the protection of consumer interests; and
(c) promoting community awareness of payments system issues; and
(d) promoting sound customer‑banker relationships, including through:
(i) monitoring the operation of industry standards and codes of practice; and
(ii) monitoring compliance with such standards and codes.
(4) Subsections (2) and (3) confer functions and powers to the extent to which they are not in excess of the legislative power of the Commonwealth.
(5) ASIC may:
(a) advise the Minister about any changes to a law listed in subsection (1) that ASIC thinks are needed to help overcome any problems that ASIC has encountered in the course of performing its functions or exercising any of its powers under that law; and
(b) advise the Minister and make such recommendations as it thinks fit about any matter relating to its functions in subsections (2) and (3).
(6) ASIC has power to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions.
Division 2—Unconscionable conduct and consumer protection in relation to financial services
Subdivision A—Application
12AC Division extends to some conduct outside Australia
(1) This Division extends to the engaging in conduct outside Australia by:
(a) bodies corporate incorporated or carrying on business within Australia; or
(b) Australian citizens; or
(c) persons ordinarily resident within Australia.
(2) If a claim under section 12GF is made in a proceeding, a person may rely at a hearing in respect of that proceeding on conduct to which a provision of this Division extends because of subsection (1) of this section only if the Minister consents in writing to the reliance.
(3) A person other than the Minister or ASIC may apply to the Court for an order under subsection 12GM(1) or (2) in a proceeding in respect of conduct to which a provision of this Division extends because of subsection (1) of this section only if the Minister consents in writing to the application.
(4) The Minister must give a consent under subsection (2) or (3) in respect of a proceeding unless, in the Minister’s opinion:
(a) the law of the country in which the conduct concerned was engaged in required or specifically authorised the engaging in of the conduct; and
(b) it is not in the national interest to give the consent.
12AD Application of Division to Commonwealth and Commonwealth authorities
(1) Subject to this section, this Division binds the Crown in right of the Commonwealth in so far as the Crown in right of the Commonwealth carries on a business, either directly or by an authority of the Commonwealth.
(3) Nothing in this Division makes the Crown in right of the Commonwealth liable to a pecuniary penalty or to be prosecuted for an offence.
(4) The protection in subsection (3) does not apply to an authority of the Commonwealth.
(5) For the purposes of this section, the following transactions do not amount to carrying on a business:
(a) a transaction involving only persons who are all acting for the Crown in right of the Commonwealth (and none of whom is an authority of the Commonwealth);
(b) a transaction involving only persons who are all acting for the same authority of the Commonwealth;
(c) a transaction involving only the Crown in right of the Commonwealth and one or more non‑commercial authorities of the Commonwealth;
(d) a transaction involving only non‑commercial authorities of the Commonwealth.
(6) Subsection (5) does not limit the things that do not amount to carrying on a business for the purposes of this section.
(7) For the purposes of this section, an authority of the Commonwealth is non‑commercial if:
(a) it is constituted by only one person; and
(b) it is neither a trading corporation nor a financial corporation.
12AE Saving of other laws and remedies
(1) Except as provided by subsection (2), Subdivision BA (sections 12BF to 12BM), Subdivision C (sections 12CA to 12CC), Subdivision D (sections 12DA to 12DN) and Subdivision E (sections 12EA to 12ED) are not intended to exclude or limit the concurrent operation of any law of a State or Territory.
(2) If:
(a) an act or omission of a person is both an offence against section 12GB and an offence under the law of a State or Territory; and
(b) the person is convicted of either of those offences;
the person is not liable to be convicted of the other of those offences.
(3) Except as expressly provided by Subdivision BA (sections 12BF to 12BM), Subdivision C (sections 12CA to 12CC), Subdivision D (sections 12DA to 12DN) or Subdivision E (sections 12EA to 12ED), nothing in those Subdivisions is taken to limit, restrict or otherwise affect any right or remedy a person would have had if that Subdivision had not been enacted.
(4) This Division does not affect the operation of:
(a) the law relating to restraint of trade in so far as that law is capable of operating concurrently with this Division; or
(b) the law relating to breaches of confidence;
but nothing in the law referred to in paragraph (a) or (b) affects the interpretation of this Division.
Subdivision B—Interpretation
12BA Interpretation
(1) In this Division, unless the contrary intention appears:
acquire, in relation to services, includes accept.
acquisition of services has the meaning given by section 12BD.
assert a right to payment has the meaning given by section 12BEA.
authority, in relation to a State or Territory (including an external Territory), means:
(a) a body corporate established for a purpose of the State or the Territory by or under a law of the State or Territory; or
(b) an incorporated company in which the State or the Territory, or a body corporate referred to in paragraph (a), has a controlling interest.
authority of the Commonwealth means:
(a) a body corporate established for a purpose of the Commonwealth by or under a law of the Commonwealth or a law of a Territory; or
(b) an incorporated company in which the Commonwealth, or a body corporate referred to in paragraph (a), has a controlling interest.
business includes a business not carried on for profit.
conduct has the meaning given by subsection (2).
consumer has the meaning given by section 12BC.
consumer contract has the meaning given by subsection 12BF(3).
contract has the meaning given by section 12BE.
covenant means a covenant (including a promise not under seal) annexed to or running with an estate or interest in land (whether at law or in equity and whether or not for the benefit of other land) and proposed covenant has a corresponding meaning.
enforcement proceeding means a proceeding instituted under Subdivision G of Division 2 of Part 2 (other than section 12GNB).
engage in conduct has the meaning given by subsection (2).
Family Court Judge means a Judge of the Family Court (including the Chief Justice, the Deputy Chief Justice or a Senior Judge).
financial corporation:
(a) means a financial corporation within the meaning of paragraph 51(xx) of the Constitution; and
(b) includes a body corporate that carries on as its sole or principal business the business of:
(i) banking (other than State banking not extending beyond the limits of the State concerned); or
(ii) insurance (other than State insurance not extending beyond the limits of the State concerned).
financial product has the meaning given by section 12BAA.
financial service has the meaning given by section 12BAB.
infringement notice means an infringement notice issued under section 12GXA.
infringement notice compliance period for an infringement notice has the meaning given by section 12GXF.
infringement notice provision means a provision of Subdivision C, D or GC (other than section 12DA, section 12DE, subsection 12DG(1) or section 12DI or 12DM).
misleading includes the meaning given by section 12BB.
non‑party consumer means:
(a) in relation to conduct referred to in subparagraph 12GNB(1)(a)(i)—a person who is not, or has not been, a party to an enforcement proceeding in relation to the conduct; and
(b) in relation to a term of a contract referred to in subparagraph 12GNB(1)(a)(ii)—a person who is not, or has not been, a party to an enforcement proceeding in relation to the term.
price includes a charge of any description.
provision, in relation to an understanding, means any matter forming part of the understanding.
rely on, in relation to a term of a consumer contract or small business contract, includes the following:
(a) attempt to enforce the term;
(b) attempt to exercise a right conferred, or purportedly conferred, by the term;
(c) assert the existence of a right conferred, or purportedly conferred, by the term.
re‑supply of services has the meaning given by section 12BD.
send includes deliver, and sent and sender have corresponding meanings.
services includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce but does not include:
(a) the supply of goods within the meaning of the Competition and Consumer Act 2010; or
(b) the performance of work under a contract of service.
small business contract has the meaning given by subsection 12BF(4).
standard form contract has a meaning affected by section 12BK.
substantiation notice means a notice under section 12GY.
substantiation notice compliance period for a substantiation notice has the meaning given by subsection 12GYB(2).
supply:
(a) includes provide, grant or confer when used as a verb in relation to services; and
(b) has a corresponding meaning when used as a noun;
and supplied and supplier have corresponding meanings.
supply of services has the meaning given by section 12BD.
the Court or the Federal Court means the Federal Court of Australia.
trade or commerce means trade or commerce within Australia or between Australia and places outside Australia.
trading corporation means a trading corporation within the meaning of paragraph 51(xx) of the Constitution.
transparent, in relation to a term of a consumer contract or small business contract, has the meaning given by subsection 12BG(3).
unfair, in relation to a term of a consumer contract or small business contract, has the meaning given by subsection 12BG(1).
unsolicited financial products means financial products supplied to a person without any request made by the person or on the person’s behalf.
unsolicited financial services means financial services supplied to a person without any request made by the person or on the person’s behalf.
upfront price has the meaning given by subsection 12BI(2).
(2) In this Division:
(a) a reference to engaging in conduct is a reference to doing or refusing to do any act, including:
(i) making, or giving effect to a provision of, a contract or arrangement; or
(ii) arriving at, or giving effect to a provision of, an understanding; or
(iii) requiring the giving of, or giving, a covenant; and
(b) a reference to conduct, when that expression is used as a noun otherwise than as mentioned in paragraph (a), is a reference to doing or refusing to do any act, including:
(i) making, or giving effect to a provision of, a contract or arrangement; or
(ii) arriving at, or giving effect to a provision of, an understanding; or
(iii) requiring the giving of, or giving, a covenant; and
(c) a reference to refusing to do an act includes a reference to:
(i) refraining (otherwise than inadvertently) from doing that act; or
(ii) making it known that that act will not be done; and
(d) a reference to a person offering to do an act, or to do an act on a particular condition, includes a reference to the person making it known that the person will accept applications, offers or proposals for the person to do that act or to do that act on that condition, as the case may be.
12BAA Definition of financial product
General definition of financial product
(1) Subject to subsection (8), for the purposes of this Division, a financial product is a facility through which, or through the acquisition of which, a person does one or more of the following:
(a) makes a financial investment (see subsection (4));
(b) manages financial risk (see subsection (5));
(c) makes non‑cash payments (see subsection (6)).
(2) Subject to subsection (8), for the purposes of this Division, a particular facility that is of a kind through which people commonly make financial investments, manage financial risks or make non‑cash payments is a financial product even if that facility is acquired by a particular person for some other purpose.
(3) A facility does not cease to be a financial product merely because:
(a) the facility has been acquired by a person other than the person to whom it was originally issued; and
(b) that person, in acquiring the product, was not making a financial investment or managing a financial risk.
Meaning of makes a financial investment
(4) For the purposes of this section, a person (the investor) makes a financial investment if:
(a) the investor gives money or money’s worth (the contribution) to another person and any of the following apply:
(i) the other person uses the contribution to generate a financial return, or other benefit, for the investor;
(ii) the investor intends that the other person will use the contribution to generate a financial return, or other benefit, for the investor (even if no return or benefit is in fact generated);
(iii) the other person intends that the contribution will be used to generate a financial return, or other benefit, for the investor; and
(b) the investor has no day‑to‑day control over the use of the contribution to generate the return or benefit.
Note 1: Examples of actions that constitute making a financial investment under this subsection are:
(a) a person paying money to a company for the issue to the person of shares in the company (the company uses the money to generate dividends for the person and the person, as a shareholder, does not have control over the day‑to‑day affairs of the company); or
(b) a person contributing money to acquire interests in a registered scheme from the responsible entity of the scheme (the scheme uses the money to generate financial or other benefits for the person and the person, as a member of the scheme, does not have day‑to‑day control over the operation of the scheme).
Note 2: Examples of actions that do not constitute making a financial investment under this subsection are:
(a) a person purchasing real property or bullion (while the property or bullion may generate a return for the person, it is not a return generated by the use of the purchase money by another person); or
(b) a person giving money to a financial services licensee who is to use it to purchase shares for the person (while the purchase of the shares will be a financial investment made by the person, the mere act of giving the money to the licensee will not of itself constitute making a financial investment).
Meaning of manages a financial risk
(5) For the purposes of this section, a person manages financial risk if they:
(a) manage the financial consequences to them of particular circumstances happening; or
(b) avoid or limit the financial consequences of fluctuations in, or in the value of, receipts or costs (including prices and interest rates).
Note 1: Examples of actions that constitute managing a financial risk are:
(a) taking out insurance; or
(b) hedging a liability by acquiring a futures contract or entering into a currency swap.
Note 2: An example of an action that does not constitute managing a financial risk is employing a security firm (while that is a way of managing the risk that thefts will happen, it is not a way of managing the financial consequences if thefts do occur).
Meaning of makes non‑cash payments
(6) For the purposes of this section, a person makes non‑cash payments if they make payments, or cause payments to be made, otherwise than by the physical delivery of Australian currency in the form of notes and/or coins.
Note: Examples of actions that constitute making non‑cash payments are:
(a) making payments by means of a facility for direct debit of a deposit account; or
(b) making payments by means of a facility for the use of cheques; or
(c) making payments by means of a purchased payment facility within the meaning of the Payment Systems (Regulation) Act 1998, such as a smart card; or
(d) making payments by means of traveller’s cheques in Australian currency.
Specific things that are financial products (subject to subsection (8))
(7) Subject to subsection (8), the following are financial products for the purposes of this Division:
(a) a security;
(b) any of the following in relation to a managed investment scheme:
(i) an interest in the scheme;
(ii) a legal or equitable right or interest in an interest covered by subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered by subparagraph (i) or (ii);
(c) a derivative;
(d) a contract of insurance (see subsection (9)) other than:
(i) health insurance provided as part of a health insurance business (as defined by Division 121 of the Private Health Insurance Act 2007); or
(ii) insurance provided as part of a health‑related business (as defined by section 131‑15 of that Act) that is conducted through a health benefits fund (as defined by section 131‑10 of that Act);
(e) a life policy, or a sinking fund policy, within the meaning of the Life Insurance Act 1995, that is not a contract of insurance (see subsection (9));
(f) a beneficial interest in a superannuation fund (as defined by section 10 of the Superannuation Industry (Supervision) Act 1993);
(g) an RSA (retirement savings account) within the meaning of the Retirement Savings Accounts Act 1997;
(h) any deposit‑taking facility made available by an ADI (within the meaning of the Banking Act 1959) in the course of its banking business (within the meaning of that Act), other than an RSA (RSAs are covered by paragraph (g));
(i) a debenture, stock or bond issued or proposed to be issued by a government;
(j) a foreign exchange contract;
(k) a credit facility (within the meaning of the regulations);
(l) an Australian carbon credit unit;
(la) an eligible international emissions unit;
(m) anything declared by the regulations to be a financial product for the purposes of this subsection.
Note: Even though something is expressly excluded from one of these paragraphs, it may still be a financial product (subject to subsection (8)) either because:
(a) it is covered by another of these paragraphs; or
(b) it is covered by the general definition in subsection (1).
Specific things that are not financial products
(8) Despite anything else in this section, the following are not financial products for the purposes of this Division:
(a) an excluded security;
(b) health insurance provided as part of a health insurance business (as defined in Division 121 of the Private Health Insurance Act 2007);
(ba) insurance provided as part of a health‑related business (as defined by section 131‑15 of that Act) that is conducted through a health benefits fund (as defined by section 131‑10 of that Act);
(c) State insurance or Northern Territory insurance, including insurance entered into by:
(i) a State or the Northern Territory; and
(ii) some other insurer;
as joint insurers;
(d) a facility:
(i) that is an approved RTGS system for the purposes of the Payment Systems and Netting Act 1998; or
(ii) for the transmission and reconciliation of non‑cash payments (see subsection (6)), and the establishment of final positions, for settlement through an approved RTGS system within the meaning of the Payment Systems and Netting Act 1998;
(e) a facility that is a designated payment system for the purposes of the Payment Systems (Regulation) Act 1998;
(f) a facility for the exchange and settlement of non‑cash payments (see subsection (6)) between providers of non‑cash payment facilities;
(g) a facility that is:
(i) a financial market; or
(ii) a clearing and settlement facility; or
(iii) a payment system operated as part of a clearing and settlement facility; or
(iv) a derivative trade repository;
(h) so much of an arrangement as is not a derivative within the meaning of the Corporations Act because of paragraph 761D(3)(a) of that Act;
(i) an arrangement that is not a derivative within the meaning of the Corporations Act because of paragraph 761D(3)(b) of that Act;
(j) an arrangement that is not a derivative within the meaning of the Corporations Act because of subsection 761D(4) of that Act;
(k) any of the following:
(i) an interest in something that is not a managed investment scheme within the meaning of the Corporations Act because of paragraph (c), (e), (f), (k), (l) or (m) of the definition of managed investment scheme in section 9 of that Act;
(ii) a legal or equitable right or interest in an interest covered by subparagraph (i);
(iii) an option to acquire, by way of issue, an interest or right covered by subparagraph (i);
(m) a deposit‑taking facility that is used for State banking;
(n) equipment or infrastructure by which something else that is a financial product is provided;
(o) a funeral benefit;
(p) a facility, interest or other thing declared by regulations made for the purposes of this subsection not to be a financial product.
(9) For the purpose of paragraphs (7)(d) and (e), contract of insurance includes:
(a) a contract that would ordinarily be regarded as a contract of insurance even if some of its provisions are not by way of insurance; and
(b) a contract that includes provisions of insurance in so far as those provisions are concerned, even if the contract would not ordinarily be regarded as a contract of insurance.
12BAB Meaning of financial service
When does a person provide a financial service?
(1) For the purposes of this Division, subject to paragraph (2)(b), a person provides a financial service if they:
(a) provide financial product advice (see subsection (5)); or
(b) deal in a financial product (see subsection (7)); or
(c) make a market for a financial product (see subsection (11)); or
(d) operate a registered scheme; or
(e) provide a custodial or depository service (see subsection (12)); or
(f) operate a financial market (see subsection (15)) or clearing and settlement facility (see subsection (17)); or
(g) provide a service (not being the operation of a derivative trade repository) that is otherwise supplied in relation to a financial product (other than an Australian carbon credit unit or an eligible international emissions unit); or
(h) engage in conduct of a kind prescribed in regulations made for the purposes of this paragraph.
(1A) Subject to paragraph (2)(b), the provision by a trustee company of a traditional trustee company service constitutes the provision, by the company, of a financial service for the purposes of this Division.
Note: Trustee companies may also provide other kinds of financial service mentioned in subsection (1).
(1B) The regulations may, in relation to a traditional trustee company service of a particular class, prescribe the person or persons to whom a service of that class is taken to be provided or supplied for the purposes of this Division. This subsection does not limit (and is not limited by) subsection (2).
Meaning of provides a crowd‑funding service
(1C) Subject to paragraph (2)(b), the provision by a person of a crowd‑funding service constitutes the provision, by the person, of a financial service for the purposes of this Division.
(1D) For the purposes of this Division, the persons to whom, and time when, a crowd‑funding service is provided are as specified in subsections 766F(3) and (4) of the Corporations Act 2001.
(2) The regulations may set out:
(a) the circumstances in which persons facilitating the provision of a financial service (for example, by publishing information) are taken also to provide that service; or
(b) the circumstances in which persons are taken to provide, or are taken not to provide, a financial service.
(4) For the purposes of this section, a person is not operating a registered scheme merely because:
(a) they are acting as an agent or employee of another person; or
(b) they are taking steps to wind up the scheme.
Meaning of financial product advice
(5) For the purposes of this section, financial product advice means a recommendation or a statement of opinion, or a report of either of those things, that:
(a) is intended to influence a person or persons in making a decision in relation to a particular financial product or class of financial products, or an interest in a particular financial product or class of financial products; or
(b) could reasonably be regarded as being intended to have such an influence;
but does not include anything in:
(c) a document prepared in accordance with requirements of Chapter 7 of the Corporations Act, other than a document of a kind prescribed by regulations made for the purposes of this paragraph; or
(d) any other document of a kind prescribed by regulations made for the purposes of this paragraph.
(6) Advice given by a lawyer in his or her professional capacity about matters of law, legal interpretation or the application of the law to any facts is not financial product advice.
Meaning of dealing
(7) For the purposes of this section, the following conduct constitutes dealing in a financial product:
(a) applying for or acquiring a financial product;
(b) issuing a financial product;
(c) in relation to securities or managed investment interests—underwriting the securities or interests;
(d) varying a financial product;
(e) disposing of a financial product.
(8) Arranging for a person to engage in conduct referred to in subsection (7) is also dealing in a financial product, unless the actions concerned amount to providing financial product advice.
(9) A person is taken not to deal in a financial product if the person deals in the product on their own behalf, unless:
(a) the person is an issuer of financial products; and
(b) the dealing is in relation to one or more of those products.
(10) The regulations may prescribe conduct that is taken to be, or not to be, dealing in a financial product. Regulations made for the purposes of this subsection have effect despite anything else in this section.
Meaning of makes a market for a financial product
(11) For the purposes of this section, a person makes a market for a financial product if:
(a) either through a facility, at a place or otherwise, the person regularly states the prices at which they propose to acquire or dispose of financial products on their own behalf; and
(b) other persons have a reasonable expectation that they will be able to regularly effect transactions at the stated prices; and
(c) the actions of the person do not, or would not if they happened through a facility or at a place, constitute operating a financial market because of the effect of paragraph (16)(a).
Meaning of provide a custodial or depository service
(12) For the purposes of this section, a person (the provider) provides a custodial or depository service to another person (the client) if, under an arrangement between the provider and the client, or between the provider and another person with whom the client has an arrangement, (whether or not there are also other parties to any such arrangement), a financial product, or a beneficial interest in a financial product, is held by the provider in trust for, or on behalf of, the client or another person nominated by the client.
(14) However, the following conduct does not constitute providing a custodial or depository service:
(a) the operation of a clearing and settlement facility;
(b) the operation of a registered scheme, or the holding of the assets of a registered scheme;
(c) the operation of a regulated superannuation fund, an approved deposit fund or a pooled superannuation trust (within the meaning of the Superannuation Industry (Supervision) Act 1993);
(d) the provision of services to a related body corporate;
(e) any other conduct of a kind prescribed by regulations made for the purposes of this paragraph.
Meaning of financial market
(15) For the purposes of this section, a financial market is a facility through which:
(a) offers to acquire or dispose of financial products are regularly made or accepted; or
(b) offers or invitations are regularly made to acquire or dispose of financial products that are intended to result or may reasonably be expected to result, directly or indirectly, in:
(i) the making of offers to acquire or dispose of financial products; or
(ii) the acceptance of such offers.
(16) However, the following conduct does not constitute operating a financial market for the purposes of this section:
(a) a person making or accepting offers or invitations to acquire or dispose of financial products on the person’s own behalf, or on behalf of one party to the transaction only;
(b) conducting treasury operations between related bodies corporate;
(c) conducting an auction of forfeited shares;
(d) any other conduct of a kind prescribed by regulations made for the purposes of this paragraph.
Meaning of clearing and settlement facility
(17) For the purposes of this section, a clearing and settlement facility is a facility that provides a regular mechanism for the parties to transactions relating to financial products to meet obligations to each other that:
(a) arise from entering into the transactions; and
(b) are of a kind prescribed by regulations made for the purposes of this paragraph.
(18) However, the following conduct does not constitute operating a clearing and settlement facility for the purposes of this section:
(a) an ADI (within the meaning of the Banking Act 1959) acting in the ordinary course of its banking business;
(b) a person acting on their own behalf, or on behalf of one party to a transaction only;
(c) a person who provides financial services to another person dealing with the other person’s accounts in the ordinary course of the first person’s business activities;
(d) the actions of a participant in a clearing and settlement facility who has taken on the delivery or payment obligations, in relation to a particular financial product, of another person who is a party to a transaction relating to a financial product;
(e) conducting treasury operations between related bodies corporate;
(h) operating a facility for the exchange and settlement of non‑cash payments between providers of non‑cash payment facilities;
(i) any other conduct of a kind prescribed by regulations made for the purposes of this paragraph.
12BB Misleading representations with respect to future matters
(1) If:
(a) a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and
(b) the person does not have reasonable grounds for making the representation;
the representation is taken, for the purposes of Subdivision D (sections 12DA to 12DN), to be misleading.
(2) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by:
(a) a party to the proceeding; or
(b) any other person;
the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary.
(3) To avoid doubt, subsection (2) does not:
(a) have the effect that, merely because such evidence to the contrary is adduced, the person who made the representation is taken to have had reasonable grounds for making the representation; or
(b) have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making the representation.
(4) Subsection (1) does not by implication limit the meaning of a reference in this Division to:
(a) a misleading representation; or
(b) a representation that is misleading in a material particular; or
(c) conduct that is misleading or is likely or liable to mislead;
and, in particular, does not imply that a representation that a person makes with respect to any future matter is not misleading merely because the person has reasonable grounds for making the representation.
12BC Consumers
(1) For the purposes of this Division, unless the contrary intention appears, a person is taken to have acquired particular financial services as a consumer if, and only if:
(a) the price of the services did not exceed the prescribed amount; or
(b) if the price of the services exceeded the prescribed amount—the services were of a kind ordinarily acquired for personal, domestic or household use or consumption; or
(c) if the services were acquired for use or consumption in connection with a small business (see subsection (2)) and the price of the services exceeded the prescribed amount—the services were of a kind ordinarily acquired for business use or consumption.
(2) For the purposes of subsection (1):
small business means a business employing less than:
(a) if the business is or includes the manufacture of goods—100 people; or
(b) otherwise—20 people.
(3) For the purposes of subsection (1):
(a) the prescribed amount is:
(i) $40,000; or
(ii) if a greater amount is prescribed for the purposes of this paragraph—that greater amount; and
(b) subject to paragraph (c), the price of services purchased by a person is taken to have been the amount paid or payable by the person for the services; and
(c) if a person purchased services together with other property or services, or with both other property and services, and a specified price was not allocated to the services in the contract under which they were purchased, the price of the services is taken to have been:
(i) the price at which, at the time of the acquisition, the person could have purchased the services from the supplier without the other property or services; or
(ii) if, at the time of the acquisition, the services were only available for purchase from the supplier together with the other property or services but, at that time, services of the kind acquired were available for purchase from another supplier without other property or services—the lowest price at which the person could, at that time, reasonably have purchased services of that kind from another supplier; or
(iii) if, at the time of the acquisition, services of the kind acquired were not available for purchase from any supplier except together with other property or services—the value of the services at that time; and
(d) if a person acquired services otherwise than by way of purchase, the price of the services is taken to have been:
(i) the price at which, at the time of the acquisition, the person could have purchased the services from the supplier; or
(ii) if, at the time of the acquisition, the services were not available for purchase from the supplier, or were available only together with other property or services, but, at that time, services of the kind acquired were available for purchase from another supplier—the lowest price at which the person could, at that time, reasonably have purchased services of that kind from another supplier; or
(iii) if services of the kind acquired were not available, at the time of the acquisition, for purchase from any supplier, or were not available except together with other property or services—the value of the services at that time; and
(e) without limiting by implication the meaning of the expression services in subsection 12BA(1), the obtaining of credit by a person in connection with the person’s acquisition of services is taken to be the acquisition by the person of a service and any amount by which the amount paid or payable by the person for the services is increased by reason of the person’s so obtaining credit is taken to be paid or payable by the person for that service.
(4) If it is alleged in a proceeding under this Division, or in any other proceeding in respect of a matter arising under this Division, that a person was a consumer in relation to particular services, it is presumed that the person was a consumer in relation to those services unless the contrary is established.
12BD Acquisition, supply and re‑supply
In this Division, unless the contrary intention appears:
(a) a reference to the supply or acquisition of services includes a reference to agreeing to supply or acquire services; and
(b) a reference to the supply or acquisition of services includes a reference to the supply or acquisition of services together with property or other services, or both; and
(c) a reference to the re‑supply of services (the original services) acquired from a person (the original supplier) includes a reference to:
(i) a supply of the original services to another person in an altered form or condition; and
(ii) a supply to another person of other services that are substantially similar to the original services and could not have been supplied if the original services had not been acquired by the person who acquired them from the original supplier.
12BE Application of Division in relation to leases and licences of land and buildings
In this Division:
(a) a reference to a contract includes a reference to a lease of, or a licence in respect of, land or a building or part of a building (despite the express references in this Division to such leases or licences); and
(b) a reference to making or entering into a contract, in relation to such a lease or licence, is a reference to granting or taking the lease or licence.
12BEA Asserting a right to payment
(1) For the purposes of this Division, a person is taken to assert a right to payment from another person if the person:
(a) makes a demand for the payment or asserts a present or prospective right to the payment; or
(b) threatens to bring any legal proceedings with a view to obtaining the payment; or
(c) places or causes to be placed the name of the other person on a list of defaulters or debtors, or threatens to do so, with a view to obtaining the payment; or
(d) invokes or causes to be invoked any other collection procedure, or threatens to do so, with a view to obtaining the payment; or
(e) sends any invoice or other document that:
(i) states the amount of the payment; or
(ii) sets out the price of unsolicited financial services; or
(iii) sets out the charge for an advertisement, for financial services or financial products, that has been published;
and does not contain a statement, to the effect that the document is not an assertion of a right to a payment, that complies with any requirements prescribed by the regulations.
(2) For the purposes of this section, an invoice or other document purporting to have been sent by or on behalf of a person is taken to have been sent by that person unless the contrary is established.
Subdivision BA—Unfair contract terms
12BF Unfair terms of consumer contracts and small business contracts
(1) A term of a consumer contract or small business contract is void if:
(a) the term is unfair; and
(b) the contract is a standard form contract; and
(c) the contract is:
(i) a financial product; or
(ii) a contract for the supply, or possible supply, of services that are financial services.
(2) The contract continues to bind the parties if it is capable of operating without the unfair term.
(3) A consumer contract is a contract at least one of the parties to which is an individual whose acquisition of what is supplied under the contract is wholly or predominantly an acquisition for personal, domestic or household use or consumption.
(4) A contract is a small business contract if:
(a) at the time the contract is entered into, at least one party to the contract is a business that employs fewer than 20 persons; and
(b) either of the following applies:
(i) the upfront price payable under the contract does not exceed $300,000;
(ii) the contract has a duration of more than 12 months and the upfront price payable under the contract does not exceed $1,000,000.
(5) In counting the persons employed by a business for the purposes of paragraph (4)(a), a casual employee is not to be counted unless he or she is employed by the business on a regular and systematic basis.
(6) For the purposes of subsection (4) and despite subsection 12BI(3), in working out the upfront price payable under a contract under which credit is or is to be provided, disregard any interest payable under the contract.
12BG Meaning of unfair
(1) A term of a contract referred to in subsection 12BF(1) is unfair if:
(a) it would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and
(b) it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
(c) it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
(2) In determining whether a term of a contract is unfair under subsection (1), a court may take into account such matters as it thinks relevant, but must take into account the following:
(b) the extent to which the term is transparent;
(c) the contract as a whole.
(3) A term is transparent if the term is:
(a) expressed in reasonably plain language; and
(b) legible; and
(c) presented clearly; and
(d) readily available to any party affected by the term.
(4) For the purposes of paragraph (1)(b), a term of a contract is presumed not to be reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise.
12BH Examples of unfair terms
(1) Without limiting section 12BG, the following are examples of the kinds of terms of a contract referred to in subsection 12BF(1) that may be unfair:
(a) a term that permits, or has the effect of permitting, one party (but not another party) to avoid or limit performance of the contract;
(b) a term that permits, or has the effect of permitting, one party (but not another party) to terminate the contract;
(c) a term that penalises, or has the effect of penalising, one party (but not another party) for a breach or termination of the contract;
(d) a term that permits, or has the effect of permitting, one party (but not another party) to vary the terms of the contract;
(e) a term that permits, or has the effect of permitting, one party (but not another party) to renew or not renew the contract;
(f) a term that permits, or has the effect of permitting, one party to vary the upfront price payable under the contract without the right of another party to terminate the contract;
(g) a term that permits, or has the effect of permitting, one party unilaterally to vary financial services to be supplied under the contract;
(h) a term that permits, or has the effect of permitting, one party unilaterally to determine whether the contract has been breached or to interpret its meaning;
(i) a term that limits, or has the effect of limiting, one party’s vicarious liability for its agents;
(j) a term that permits, or has the effect of permitting, one party to assign the contract to the detriment of another party without that other party’s consent;
(k) a term that limits, or has the effect of limiting, one party’s right to sue another party;
(l) a term that limits, or has the effect of limiting, the evidence one party can adduce in proceedings relating to the contract;
(m) a term that imposes, or has the effect of imposing, the evidential burden on one party in proceedings relating to the contract;
(n) a term of a kind, or a term that has an effect of a kind, prescribed by the regulations.
(2) Before the Governor‑General makes a regulation for the purposes of paragraph (1)(n) prescribing a kind of term, or a kind of effect that a term has, the Minister must take into consideration:
(a) the detriment that a term of that kind would cause to consumers; and
(aa) the detriment that a term of that kind would cause to businesses employing fewer than 20 persons; and
(b) the impact on business generally of prescribing that kind of term or effect; and
(c) the public interest.
12BI Terms that define main subject matter of consumer contracts or small business contracts etc. are unaffected
(1) Section 12BF does not apply to a term of a contract referred to in subsection (1) of that section to the extent that, but only to the extent that, the term:
(a) defines the main subject matter of the contract; or
(b) sets the upfront price payable under the contract; or
(c) is a term required, or expressly permitted, by a law of the Commonwealth or a State or Territory.
(2) The upfront price payable under a contract is the consideration that:
(a) is provided, or is to be provided, for the supply under the contract; and
(b) is disclosed at or before the time the contract is entered into;
but does not include any other consideration that is contingent on the occurrence or non‑occurrence of a particular event.
(3) To avoid doubt, if a contract is a contract under which credit is provided or is to be provided, the consideration referred to in subsection (2) of this section includes the total amount of principal that is owed under the contract.
12BK Standard form contracts
(1) If a party to a proceeding alleges that a contract is a standard form contract, it is presumed to be a standard form contract unless another party to the proceeding proves otherwise.
(2) In determining whether a contract is a standard form contract, a court may take into account such matters as it thinks relevant, but must take into account the following:
(a) whether one of the parties has all or most of the bargaining power relating to the transaction;
(b) whether the contract was prepared by one party before any discussion relating to the transaction occurred between the parties;
(c) whether another party was, in effect, required either to accept or reject the terms of the contract (other than the terms referred to in subsection 12BI(1)) in the form in which they were presented;
(d) whether another party was given an effective opportunity to negotiate the terms of the contract that were not the terms referred to in subsection 12BI(1);
(e) whether the terms of the contract (other than the terms referred to in subsection 12BI(1)) take into account the specific characteristics of another party or the particular transaction;
(f) any other matter prescribed by the regulations.
12BL Contracts to which this Subdivision does not apply
(1) This Subdivision does not apply to a contract that is the constitution of a company, managed investment scheme or other kind of body.
(2) This Subdivision does not apply to a small business contract to which a prescribed law of the Commonwealth, a State or a Territory applies.
(3) Before the Governor‑General makes a regulation prescribing a law for the purposes of subsection (2):
(a) the Minister must be satisfied that the law provides enforceable protections for businesses employing fewer than 20 persons that are equivalent to the protections provided by this Subdivision together with Subdivision G; and
(b) the Minister must take into consideration:
(i) any detriment to businesses of that kind resulting from prescribing the law; and
(ii) the impact on business generally resulting from prescribing the law; and
(iii) the public interest.
12BM Contraventions of this Subdivision etc.
Conduct is not taken, for the purposes of this Act, to contravene this Subdivision (or this Division) merely because of subsection 12BF(1).
Subdivision C—Unconscionable conduct
12CA Unconscionable conduct within the meaning of the unwritten law of the States and Territories
(1) A person must not, in trade or commerce, engage in conduct in relation to financial services if the conduct is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories.
(2) This section does not apply to conduct that is prohibited by section 12CB.
12CB Unconscionable conduct in connection with financial services
(1) A person must not, in trade or commerce, in connection with:
(a) the supply or possible supply of financial services to a person (other than a listed public company); or
(b) the acquisition or possible acquisition of financial services from a person (other than a listed public company);
engage in conduct that is, in all the circumstances, unconscionable.
(2) This section does not apply to conduct that is engaged in only because the person engaging in the conduct:
(a) institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or
(b) refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition.
(3) For the purpose of determining whether a person has contravened subsection (1):
(a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and
(b) the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.
(4) It is the intention of the Parliament that:
(a) this section is not limited by the unwritten law of the States and Territories relating to unconscionable conduct; and
(b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and
(c) in considering whether conduct to which a contract relates is unconscionable, a court’s consideration of the contract may include consideration of:
(i) the terms of the contract; and
(ii) the manner in which and the extent to which the contract is carried out;
and is not limited to consideration of the circumstances relating to formation of the contract.
(5) In this section:
listed public company has the same meaning as it has in the Income Tax Assessment Act 1997.
12CC Matters the court may have regard to for the purposes of section 12CB
(1) Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 12CB in connection with the supply or possible supply of financial services to a person (the service recipient), the court may have regard to:
(a) the relative strengths of the bargaining positions of the supplier and the service recipient; and
(b) whether, as a result of conduct engaged in by the supplier, the service recipient was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and
(c) whether the service recipient was able to understand any documents relating to the supply or possible supply of the financial services; and
(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the service recipient or a person acting on behalf of the service recipient by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the financial services; and
(e) the amount for which, and the circumstances under which, the service recipient could have acquired identical or equivalent financial services from a person other than the supplier; and
(f) the extent to which the supplier’s conduct towards the service recipient was consistent with the supplier’s conduct in similar transactions between the supplier and other like service recipients; and
(g) if the supplier is a corporation—the requirements of any applicable industry code (see subsection (3)); and
(h) the requirements of any other industry code (see subsection (3)), if the service recipient acted on the reasonable belief that the supplier would comply with that code; and
(i) the extent to which the supplier unreasonably failed to disclose to the service recipient:
(i) any intended conduct of the supplier that might affect the interests of the service recipient; and
(ii) any risks to the service recipient arising from the supplier’s intended conduct (being risks that the supplier should have foreseen would not be apparent to the service recipient); and
(j) if there is a contract between the supplier and the service recipient for the supply of the financial services:
(i) the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the service recipient; and
(ii) the terms and conditions of the contract; and
(iii) the conduct of the supplier and the service recipient in complying with the terms and conditions of the contract; and
(iv) any conduct that the supplier or the service recipient engaged in, in connection with their commercial relationship, after they entered into the contract; and
(k) without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the service recipient for the supply of the financial services; and
(l) the extent to which the supplier and the service recipient acted in good faith.
(2) Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the acquirer) has contravened section 12CB in connection with the acquisition or possible acquisition of financial services from a person (the supplier), the court may have regard to:
(a) the relative strengths of the bargaining positions of the acquirer and the supplier; and
(b) whether, as a result of conduct engaged in by the acquirer, the supplier was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the acquirer; and
(c) whether the supplier was able to understand any documents relating to the acquisition or possible acquisition of the financial services; and
(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the supplier or a person acting on behalf of the supplier by the acquirer or a person acting on behalf of the acquirer in relation to the acquisition or possible acquisition of the financial services; and
(e) the amount for which, and the circumstances in which, the supplier could have supplied identical or equivalent financial services to a person other than the acquirer; and
(f) the extent to which the acquirer’s conduct towards the supplier was consistent with the acquirer’s conduct in similar transactions between the acquirer and other like suppliers; and
(g) the requirements of any applicable industry code (see subsection (3)); and
(h) the requirements of any other industry code (see subsection (3)), if the supplier acted on the reasonable belief that the acquirer would comply with that code; and
(i) the extent to which the acquirer unreasonably failed to disclose to the supplier:
(i) any intended conduct of the acquirer that might affect the interests of the supplier; and
(ii) any risks to the supplier arising from the acquirer’s intended conduct (being risks that the acquirer should have foreseen would not be apparent to the supplier); and
(j) if there is a contract between the acquirer and the supplier for the acquisition of the financial services:
(i) the extent to which the acquirer was willing to negotiate the terms and conditions of the contract with the supplier; and
(ii) the terms and conditions of the contract; and
(iii) the conduct of the acquirer and the supplier in complying with the terms and conditions of the contract; and
(iv) any conduct that the acquirer or the supplier engaged in, in connection with their commercial relationship, after they entered into the contract; and
(k) without limiting paragraph (j), whether the acquirer has a contractual right to vary unilaterally a term or condition of a contract between the acquirer and the supplier for the acquisition of the financial services; and
(l) the extent to which the acquirer and the supplier acted in good faith.
(3) In this section:
applicable industry code, in relation to a corporation, has the same meaning as it has in subsection 51ACA(1) of the Competition and Consumer Act 2010.
industry code has the same meaning as it has in subsection 51ACA(1) of the Competition and Consumer Act 2010.
Subdivision D—Consumer protection
12DA Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive.
(1A) Conduct:
(a) that contravenes:
(i) section 670A of the Corporations Act (misleading or deceptive takeover document); or
(ii) section 728 of the Corporations Act (misleading or deceptive fundraising document); or
(iii) section 738Y of the Corporations Act (other liabilities relating to CSF offer documents); or
(b) in relation to a disclosure document or statement within the meaning of section 953A of the Corporations Act; or
(c) in relation to a disclosure document or statement within the meaning of section 1022A of the Corporations Act;
does not contravene subsection (1). For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence.
(2) Nothing in sections 12DB to 12DN limits by implication the generality of subsection (1).
12DB False or misleading representations
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of financial services, or in connection with the promotion by any means of the supply or use of financial services:
(a) make a false or misleading representation that services are of a particular standard, quality, value or grade; or
(b) make a false or misleading representation that a particular person has agreed to acquire services; or
(c) make a false or misleading representation that purports to be a testimonial by any person relating to services; or
(d) make a false or misleading representation concerning:
(i) a testimonial by any person; or
(ii) a representation that purports to be such a testimonial;
relating to services; or
(e) make a false or misleading representation that services have sponsorship, approval, performance characteristics, uses or benefits; or
(f) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or
(g) make a false or misleading representation with respect to the price of services; or
(h) make a false or misleading representation concerning the need for any services; or
(i) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including an implied warranty under section 12ED); or
(j) make a false or misleading representation concerning a requirement to pay for a contractual right that:
(i) is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy (including an implied warranty under section 12ED); and
(ii) a person has under a law of the Commonwealth, a State or a Territory (other than an unwritten law).
Note: Failure to comply with this subsection is an offence (see section 12GB).
(1A) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation of a kind referred to in paragraph (1)(c) or (d), the representation is taken to be misleading unless evidence is adduced to the contrary.
(1B) To avoid doubt, subsection (1A) does not:
(a) have the effect that, merely because such evidence to the contrary is adduced, the representation is not misleading; or
(b) have the effect of placing on any person an onus of proving that the representation is not misleading.
(2) Conduct:
(a) that contravenes:
(i) section 670A of the Corporations Act (misleading or deceptive takeover document); or
(ii) section 728 of the Corporations Act (misleading or deceptive fundraising document); or
(iii) section 738Y of the Corporations Act (other liabilities relating to CSF offer documents); or
(b) in relation to a disclosure document or statement within the meaning of section 953A of the Corporations Act; or
(c) in relation to a disclosure document or statement within the meaning of section 1022A of the Corporations Act;
does not contravene subsection (1). For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence.
(3) An offence under subsection 12GB(1) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
12DC False or misleading representations in relation to financial products that involve interests in land
(1) A person must not, in trade or commerce, in connection with the sale or grant, or the possible sale or grant, of a financial product that consists of, or includes, an interest in land, or in connection with the promotion by any means of a financial product that consists of, or includes, an interest in land:
(a) represent that the person has a sponsorship, approval or affiliation it does not have; or
(b) make a false or misleading representation concerning the nature of the interest in the land, the price payable for the financial product, the location of the land, the characteristics of the land, the use to which the land is capable of being put or may lawfully be put or the existence or availability of facilities associated with the land.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(1A) An offence under subsection 12GB(1) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2A) A person contravenes this subsection if:
(a) a person uses physical force or undue harassment or coercion; and
(b) the person uses such force, harassment or coercion in connection with the sale or grant, or the possible sale or grant, of a financial product mentioned in subsection (1), or the payment for such a financial product.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2C) For the purposes of the application of the Criminal Code in relation to an offence under subsection 12GB(1), strict liability applies to paragraph (2A)(b) of this section.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2D) Nothing in this section is to be taken as implying that other provisions in this Subdivision do not apply in relation to the supply or acquisition, or the possible supply or acquisition, of a financial product mentioned in subsection (1).
(3) In this section:
interest, in relation to land, means:
(a) a legal or equitable estate or interest in the land; or
(b) a right of occupancy of the land, or of a building or part of a building erected on the land, arising by virtue of the holding of shares, or by virtue of a contract to purchase shares, in an incorporated company that owns the land or building; or
(c) a right, power or privilege over, or in connection with, the land.
12DD Cash price to be stated in certain circumstances
(1) A person must not, in trade or commerce, in connection with:
(a) the supply or possible supply of financial services; or
(b) the promotion by any means of the supply or use of financial services;
make a representation about an amount that, if paid, would constitute a part of the consideration for the supply of the services unless the person also specifies the cash price for the services.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) This section does not apply to dealings in securities (within the meaning of Chapter 6 of the Corporations Act).
(3) An offence under subsection 12GB(1) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
12DE Offering rebates, gifts, prizes etc.
(1) A person contravenes this subsection if:
(a) the person offers any rebate, gift, prize or other free item; and
(b) the person offers the rebate, gift, prize or other free item in trade or commerce, in connection with:
(i) the supply or possible supply of financial services; or
(ii) the promotion by any means of the supply or use of financial services; or
(iii) the sale or grant, or the possible sale or grant, of a financial product that consists of, or includes, an interest in land; or
(iv) the promotion by any means of a financial product that consists of, or includes, an interest in land; and
(c) when the person so offers it, the person intends not to provide it, or not to provide it as offered.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) For the purposes of the application of the Criminal Code in relation to subsection (1), paragraphs (1)(b) and (c) are taken to be circumstances in which the conduct described in paragraph (1)(a) occurs.
(2A) A person contravenes this subsection if:
(a) the person offers any rebate, gift, prize or other free item; and
(b) the person offers the rebate, gift, prize or other free item in trade or commerce, in connection with:
(i) the supply or possible supply of financial services; or
(ii) the promotion by any means of the supply or use of financial services; or
(iii) the sale or grant, or the possible sale or grant, of a financial product that consists of, or includes, an interest in land; or
(iv) the promotion by any means of a financial product that consists of, or includes, an interest in land; and
(c) the person fails, within the time specified in the offer or (if no such time is specified) within a reasonable time after making the offer, to provide the rebate, gift, prize or other free item in accordance with the offer.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2B) Subsection (2A) does not apply if:
(a) the person’s failure to provide the rebate, gift, prize or other free item in accordance with the offer was due to the act or omission of another person, or to some other cause beyond the person’s control; and
(b) the person took reasonable precautions and exercised due diligence to avoid the failure.
(2C) Subsection (2A) does not apply to an offer that the person makes to another person if:
(a) the person offers to the other person a different rebate, gift, prize or other free item as a replacement; and
(b) the other person agrees to receive the different rebate, gift, prize or other free item.
(2D) For the purposes of the application of the Criminal Code in relation to subsection (2A), paragraph (2A)(b) is taken to be a circumstance in which the conduct described in paragraph (2A)(a) occurs.
(3) For the purposes of the application of the Criminal Code in relation to an offence under subsection 12GB(1), strict liability applies in relation to paragraphs (1)(b) and (2A)(b) and (c) of this section.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) In this section:
interest, in relation to land, has the same meaning as in subsection 12DC(3).
12DF Certain misleading conduct in relation to financial services
(1) A person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quantity of any financial services.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) An offence under subsection 12GB(1) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
12DG Bait advertising
(1) A person must not, in trade or commerce, advertise financial services for supply at a specified price, if there are reasonable grounds, of which the person is aware or ought reasonably to be aware, for believing that the person will not be able to offer for supply those services at that price:
(a) for a period that is; and
(b) in quantities that are;
reasonable having regard to the nature of the market in which the person carries on business and the nature of the advertisement.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) A person that has, in trade or commerce, advertised financial services for supply at a specified price must offer such services for supply at that price:
(a) for a period that is; and
(b) in quantities that are;
reasonable having regard to the nature of the market in which the person carries on business and the nature of the advertisement.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2A) An offence under subsection 12GB(1) relating to subsection (1) or (2) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) In a prosecution of a person under Subdivision G (sections 12GA to 12GO) in relation to a failure to offer financial services to a person (the customer) in accordance with subsection (2), it is a defence if the person establishes that:
(a) it offered to supply, or to procure an alternative supplier to supply, services of the kind advertised to the customer within a reasonable time, in a reasonable quantity and at the advertised price; or
(b) it offered to supply immediately, or to procure an alternative supplier to supply within a reasonable time, equivalent services to the customer in a reasonable quantity and at the price at which the first‑mentioned services were advertised;
and, in either case, if the offer was accepted by the customer, the person has so supplied, or procured an alternative supplier to supply, services.
Note: A defendant bears a legal burden in relation to the matters in subsection (3), see section 13.4 of the Criminal Code.
12DH Referral selling
(1) A person must not, in trade or commerce, induce a consumer to acquire financial services by representing that the consumer will, after the contract to acquire the services is made, receive a rebate, commission or other benefit in return for:
(a) giving the person the names of prospective customers; or
(b) otherwise assisting the person to supply financial services to other consumers;
if receipt of the rebate, commission or other benefit is contingent on an event occurring after that contract is made.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) An offence under subsection 12GB(1) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
12DI Accepting payment without intending or being able to supply as ordered
(1) A person contravenes this subsection if:
(a) the person, in trade or commerce, accepts payment or other consideration for financial services; and
(b) at the time of acceptance, the person intends:
(i) not to supply the financial services; or
(ii) to supply financial services materially different from the financial services in respect of which the payment or other consideration is accepted.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) For the purposes of the application of the Criminal Code in relation to an offence under subsection 12GB(1), strict liability applies to paragraph (1)(a) of this section.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) A person contravenes this subsection if:
(a) the person, in trade or commerce, accepts payment or other consideration for financial services; and
(b) at the time of acceptance, there are reasonable grounds for believing that the person will not be able to supply the financial services within the period specified by the person or, if no period is specified, within a reasonable time.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(4) An offence under subsection 12GB(1) relating to subsection (3) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
12DJ Harassment and coercion
(1) A person contravenes this subsection if:
(a) the person uses physical force or undue harassment or coercion; and
(b) the person uses such force, harassment or coercion in connection with the supply or possible supply of financial services to a consumer, or the payment for financial services by a consumer.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) Strict liability applies to paragraph (1)(b).
Note: For strict liability, see section 6.1 of the Criminal Code.
12DK Pyramid selling of financial products
(1) A person contravenes this section if:
(a) the person is the promoter of, or (if there are more than one) one of the promoters of, or is a participant in, a trading scheme to which this section applies; and
(b) another person (the targeted person), who is a participant in that trading scheme, or has applied or been invited to become a participant in that trading scheme, makes any payment to or for the benefit of the person; and
(c) the targeted person is induced to make the payment because the prospect is held out to him or her of receiving payments or other benefits in respect of the introduction (whether by himself or herself or by another person) of other persons who become participants in that trading scheme.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) A person also contravenes this section if:
(a) the person is the promoter of, or (if there are more than one) one of the promoters of, is a participant in, or is otherwise acting in accordance with, a trading scheme to which this section applies; and
(b) the person, by holding out to another person (the targeted person) the prospect of receiving payments or other benefits in respect of the introduction (whether by the targeted person or by another person) of other persons who become participants in that trading scheme, attempts to induce the targeted person:
(i) if the targeted person is already a participant in that trading scheme, to make any payment to or for the benefit of the promoter or any of the promoters or to or for the benefit of a participant in that trading scheme; or
(ii) if the targeted person is not already a participant in that trading scheme, to become such a participant and to make a payment of a kind mentioned in subparagraph (i).
Note: Failure to comply with this subsection is an offence (see section 12GB).
(3) A person (the promoter) also contravenes this section if the promoter promotes, or takes part in the promotion of, a scheme under which:
(a) a payment is to be made by another person (the targeted person) who participates, or who has applied or been invited to participate, in the scheme to or for the benefit of the promoter or another person who takes part in the promotion of the scheme or to or for the benefit of any person other than the targeted person who participates in the scheme; and
(b) the inducement for making the payment is the holding out to the targeted person the prospect of receiving payments from other persons who may participate in the scheme.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(3A) An offence under subsection 12GB(1) relating to subsection (1), (2) or (3) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) For the purposes of subsection (1), (2) or (3):
(a) a prospect of a kind mentioned in that subsection is taken to be held out to a person whether it is held out so as to confer on him or her a legally enforceable right or not; and
(b) in determining whether an inducement or attempt to induce is made by holding out a prospect of a kind mentioned in that subsection, it is sufficient if a prospect of that kind constitutes or would constitute a substantial part of the inducement; and
(c) any reference to the making of a payment to or for the benefit of a person includes a reference to the making of a payment partly to or for the benefit of that person and partly to or for the benefit of one or more other persons.
(5) For the purposes of this section, a scheme is a trading scheme to which this section applies if the scheme includes the following elements:
(a) financial products are to be provided by the person promoting the scheme (the promoter) or, in the case of a scheme promoted by 2 or more persons acting in concert (the promoters), are to be provided by one or more of those persons; and
(b) the financial products so provided are to be supplied to or for other persons under transactions arranged or effected by persons who participate in the scheme (each of whom is in this section referred to as a participant), being persons not all of whom are promoters.
(6) For the purposes of subsection (5):
(a) a scheme is taken to include the element referred to in paragraph (5)(b) whether a participant who is not a promoter acts in relation to a transaction referred to in that paragraph in the capacity of an employee or agent of the promoter or of one of the promoters or in any other capacity; and
(b) a scheme includes any arrangements made in connection with the carrying on of a business, whether those arrangements are made or recorded wholly or partly in writing or not; and
(c) a reference to the provision of a financial product by a person includes a reference to the provision of a financial product under arrangements to which that person is a party.
12DL Unsolicited credit cards and debit cards
(1) A person must not send another person (the targeted person) a credit card or a debit card except in accordance with subsection (2).
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) A person may send the targeted person the card:
(a) in pursuance of a request in writing by the person (the liable person) who will be under a liability to the issuer of the card in respect of the use of the card; or
(b) in renewal or replacement of, or in substitution for:
(i) a card of the same kind previously sent to the targeted person in pursuance of a request in writing by the liable person to the issuer of the previous card; or
(ii) a card of the same kind previously sent to the targeted person and used for a purpose for which it was intended to be used.
Note: A defendant bears an evidential burden in relation to the matter in this subsection, see subsection 13.3(3) of the Criminal Code.
(3) Subsection (1) applies only in relation to the sending of a card by or on behalf of the issuer of the card.
(4) A person must not take any action that enables:
(a) another person who has a credit card to use the card as a debit card; or
(b) another person who has a debit card to use the card as a credit card;
except in accordance with a request in writing by the other person.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(4A) An offence under subsection 12GB(1) relating to subsection (1) or (4) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) In this section:
article includes a token, card or document.
credit card means an article that:
(a) is of a kind described in one or more of the following subparagraphs:
(i) an article of a kind commonly known as a credit card;
(ii) a similar article intended for use in obtaining cash, goods or services on credit;
(iii) an article of a kind that persons carrying on business commonly issue to their customers or prospective customers for use in obtaining goods or services from those persons on credit; and
(b) is part of, or provides access to, a credit facility that is a financial product;
or an article that may be used as an article referred to in paragraphs (a) and (b).
debit card means:
(a) an article intended for use by a person in obtaining access to an account that is:
(i) held by the person for the purpose of withdrawing or depositing cash or obtaining goods or services; and
(ii) a financial product; or
(b) an article that may be used as an article referred to in paragraph (a).
12DM Assertion of right to payment for unsolicited financial services etc.
(1) A person must not, in trade or commerce, assert a right to payment from another person for unsolicited financial services or unsolicited financial products.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(1A) Subsection (1) does not apply if the person had reasonable cause to believe that there was a right to payment.
Note: A defendant bears an evidential burden in relation to the matter in subsection (1A), see subsection 13.3(3) of the Criminal Code.
(1AA) A person must not, in trade or commerce, send to another person an invoice or other document that:
(a) states the amount of a payment, or sets out the charge, for supplying unsolicited financial services or unsolicited financial products; and
(b) does not contain a warning statement that complies with the requirements set out in the regulations.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(1AB) Subsection (1AA) does not apply if the person had reasonable cause to believe that there was a right to the payment or charge.
Note: A defendant bears an evidential burden in relation to the matter in subsection (1AB), see subsection 13.3(3) of the Criminal Code.
(1B) An offence under subsection 12GB(1) relating to subsection (1) or (1AA) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) In a proceeding against a person in respect of a contravention of this section, the burden lies on the person of proving that the person had reasonable cause to believe that there was a right to payment.
12DMA Liability of recipient for unsolicited financial services etc.
If a person, in trade or commerce, supplies unsolicited financial services or unsolicited financial products to another person, the other person:
(a) is not liable to make any payment for the services or products; and
(b) is not liable for loss or damage as a result of the supply of the services or products.
12DMB Assertion of right to payment for unauthorised advertisements
(1) A person must not assert a right to payment from another person of a charge for placing, in a publication, an advertisement, for financial services or financial products, relating to:
(a) the other person; or
(b) the other person’s profession, business, trade or occupation;
unless the person knows, or has reasonable cause to believe, that the other person authorised the placing of the advertisement.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(2) A person must not send to another person an invoice or other document that:
(a) states the amount of a payment, or sets out the charge for placing, in a publication, an advertisement, for financial services or financial products, relating to:
(i) the other person; or
(ii) the other person’s profession, business, trade or occupation; and
(b) does not contain a warning statement that complies with the requirements set out in the regulations;
unless the person knows, or has reasonable cause to believe, that the other person authorised the placing of the advertisement.
Note: Failure to comply with this subsection is an offence (see section 12GB).
(3) Subsections (1) and (2) do not apply to an advertisement that is placed in a publication published by a person who is:
(a) the publisher of a publication that has an audited circulation of 10,000 copies or more per week, as confirmed by the most recent audit of the publication by a body specified in the regulations; or
(b) a body corporate related to such a publisher; or
(c) the Commonwealth, a State or a Territory, or an authority of the Commonwealth, a State or a Territory; or
(d) a person specified in the regulations.
Note: A defendant bears an evidential burden in relation to the matter in subsection (3): see subsection 13.3(3) of the Criminal Code.
(4) A person:
(a) is not liable to make any payment to another person; and
(b) is entitled to recover by action in a court of competent jurisdiction against another person any payment made by the person to the other person;
in full or part satisfaction of a charge for placing, in a publication, an advertisement for financial services or financial products, unless the person has authorised the publishing of the advertisement.
(5) A person is not taken for the purposes of this section to have authorised the placing, in a publication, of an advertisement, unless:
(a) a document authorising the placing of the advertisement has been signed by the person or by another person authorised by him or her; and
(b) a copy of the document has been given to the person before the right to payment of a charge for the placing of the advertisement is asserted; and
(c) the document specifies:
(i) the name and address of the person placing the advertisement; and
(ii) particulars of the advertisement; and
(iii) the amount of the charge for the placing of the advertisement, or the basis on which the charge is, or is to be, calculated.
(6) In a proceeding against a person in relation to a contravention of this section, the person bears the onus of proving that the person knew or had reasonable cause to believe that the person against whom a right to payment was asserted had authorised the placing of the advertisement.
12DN Application of provisions of this Division to information providers
General rule
(1) Sections 12DA, 12DB, 12DC and 12DF do not apply to a publication of matter by an information provider if:
(a) in any case—the information provider made the publication in the course of carrying on a business of providing information; or
(b) if the information provider is the Australian Broadcasting Corporation, the Special Broadcasting Service Corporation or the holder of a licence granted under the Broadcasting Services Act 1992—the publication was by way of a radio or television broadcast by the information provider.
Exception—advertisements
(2) Subsection (1) does not apply to a publication of an advertisement.
Exception—information provider connected with supply of financial services
(3) Subsection (1) does not apply to a publication of matter in connection with the supply or possible supply of, or the promotion by any means of the supply or use of, financial services (the publicised financial services), if:
(a) the publicised financial services were services of a kind supplied by the information provider or, if the information provider is a body corporate, by a body corporate that is related to the information provider; or
(b) the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with, a person who supplies financial services of the same kind as the publicised financial services; or
(c) the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with, a body corporate that is related to a body corporate that supplies financial services of the same kind as the publicised financial services.
Exception—information provider connected with sale etc. of financial products consisting of etc. interests in land
(4) Subsection (1) does not apply to a publication of matter in connection with the sale or grant, or possible sale or grant, of financial products that consist of, or include, interests in land, or the promotion by any means of the sale or grant of financial products that consist of, or include, interests in land (the publicised financial products), if:
(a) the publicised financial products were interests of a kind sold or granted by the information provider or, if the information provider is a body corporate, by a body corporate that is related to the information provider; or
(b) the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with, a person who sells or grants financial products of the same kind as the publicised financial products; or
(c) the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with, a body corporate that is related to a body corporate that sells or grants financial products of the same kind as the publicised financial products.
Definitions
(5) In this section:
information provider means a person who carries on a business of providing information.
interest, in relation to land, has the same meaning as in subsection 12DC(3).
(6) Without limiting subsection (5), each of the following is an information provider:
(a) the holder of a licence granted under the Broadcasting Services Act 1992;
(b) a person who is the provider of a broadcasting service under a class licence under that Act;
(c) the holder of a licence continued in force by section 5(1) of the Broadcasting Services (Transitional Provisions and Consequential Amendments) Act 1992;
(d) the Australian Broadcasting Corporation;
(e) the Special Broadcasting Service Corporation.
Subdivision E—Conditions and warranties in consumer transactions
12EA Conflict of laws
If:
(a) the proper law of a contract for the supply by a person of financial services to a consumer would, but for a term that it should be the law of some other country or a term to the like effect, be the law of any part of Australia; or
(b) a contract for the supply by a person of financial services to a consumer contains a term that purports to substitute, or has the effect of substituting, provisions of the law of some other country, or of a State or Territory, for all or any of the provisions of this Subdivision (sections 12EA to 12ED);
this Subdivision applies to the contract notwithstanding that term.
12EB Application of provisions not to be excluded or modified
(1) A term of a contract (including a term that is not set out in the contract but is incorporated in the contract by another term of the contract) is void if it purports to exclude, restrict or modify or has the effect of excluding, restricting or modifying:
(a) the application of all or any of the provisions of this Subdivision (sections 12EA to 12ED); or
(b) the exercise of a right conferred by such a provision; or
(c) any liability of the person for breach of a condition or warranty implied by such a provision.
(2) A term of a contract is not taken to exclude, restrict or modify the application of a provision of this Subdivision unless the term does so expressly or is inconsistent with that provision.
12EC Limitation of liability for breach of certain conditions or warranties
(1) Subject to this section, a term of a contract for the supply by a person (the supplier) of financial services other than services of a kind ordinarily acquired for personal, domestic or household use is not void under section 12EB merely because the term limits the liability of the supplier for a breach of a condition or warranty to:
(a) the supplying of the services again; or
(b) the payment of the cost of having the services supplied again.
(2) Subsection (1) does not apply in relation to a term of a contract if the person to whom the services were supplied establishes that it is not fair or reasonable for the supplier to rely on that term of the contract.
(3) In determining for the purposes of subsection (2) whether or not reliance on a term of a contract is fair or reasonable, a court must have regard to all the circumstances of the case and, in particular, to the following matters:
(a) the strength of the bargaining positions of the supplier and the person to whom the services were supplied (the buyer) relative to each other, taking into account, among other things, the availability of equivalent services and suitable alternative sources of supply;
(b) whether the buyer received an inducement to agree to the term or, in agreeing to the term, had an opportunity to acquire the services or equivalent services from any source of supply under a contract that did not include that term;
(c) whether the buyer knew or ought reasonably to have known of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties).
12ED Warranties in relation to the supply of financial services
(1) In every contract for the supply of financial services by a person to a consumer in the course of a business, there is an implied warranty that:
(a) the services will be rendered with due care and skill; and
(b) any materials supplied in connection with those services will be reasonably fit for the purpose for which they are supplied.
(2) If:
(a) a person supplies financial services to a consumer in the course of a business; and
(b) the consumer, expressly or by implication, makes known to the person:
(i) any particular purpose for which the services are required; or
(ii) the result that he or she desires the services to achieve;
there is an implied warranty that:
(c) the services supplied under the contract for the supply of the services; and
(d) any materials supplied in connection with those services;
will be reasonably fit for that purpose or are of such a nature and quality that they might reasonably be expected to achieve that result, except if the circumstances show that the consumer does not rely, or that it is unreasonable for him or her to rely, on the person’s skill or judgment.
(2A) If:
(a) there is a breach of an implied warranty that exists because of this section in a contract made after the commencement of this subsection; and
(b) the law of a State or Territory is the proper law of the contract;
the law of the State or Territory applies to limit or preclude liability for the breach, and recovery of that liability (if any), in the same way as it applies to limit or preclude liability, and recovery of a liability, for breach of another term of the contract.
(3) A reference in this section to financial services does not include a reference to services that are, or are to be, provided, granted or conferred under a contract of insurance.
Subdivision G—Enforcement and remedies
12GA Interpretation
In this Subdivision, unless the contrary intention appears:
(a) a reference to the Court in relation to a matter is a reference to any court having jurisdiction in the matter; and
(b) a reference to the Federal Court is a reference to the Federal Court of Australia; and
(c) a reference to a judgment is a reference to a judgment, decree or order, whether final or interlocutory.
12GB Offences against Subdivision D
(1) A person who:
(a) contravenes; or
(b) aids, abets, counsels or procures a person to contravene; or
(c) induces, or attempts to induce, a person whether by threats or promises or otherwise, to contravene; or
(d) is in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of; or
(e) conspires with others to contravene;
a provision of Subdivision D (sections 12DA to 12DN) other than section 12DA, is guilty of an offence punishable on conviction:
(f) in the case of a person who is not a body corporate—by a fine not exceeding 2,000 penalty units; or
(g) in the case of a person who is a body corporate—by a fine not exceeding 10,000 penalty units.
(1A) Subsections 11.2(2) to (5) (inclusive) of the Criminal Code apply in relation to paragraph (1)(b) of this section in the same way that they apply in relation to subsection 11.2(1) of the Criminal Code.
(1B) Subsections 11.5(2) to (5) (inclusive) of the Criminal Code apply in relation to paragraph (1)(e) of this section in the same way that they apply in relation to the offence of conspiracy under subsection 11.5(1) of the Criminal Code.
(2) If:
(a) a person is convicted of 2 or more offences constituted by, or relating to, contraventions of the same provision of Subdivision D (sections 12DA to 12DN); and
(b) the contraventions appear to the Court to have been of the same nature or a substantially similar nature and to have occurred at or about the same time;
the Court must not, in respect of the offences, impose on the person fines that, in the aggregate, exceed the maximum fine that would be applicable in respect of one offence by that person against that provision. This applies whether or not the person is also convicted of an offence or offences constituted by, or relating to, another contravention or other contraventions of that provision that were of a different nature or occurred at a different time.
(3) If:
(a) a person is convicted of an offence constituted by, or relating to, a contravention of a provision of Subdivision D (sections 12DA to 12DN); and
(b) a fine has, or fines have, previously been imposed on the person by the Court for an offence or offences constituted by, or relating to, another contravention or other contraventions of the same provision, being a contravention that, or contraventions each of which, appears to the Court to have been of the same nature as, or of a substantially similar nature to, and to have occurred at or about the same time as, the contravention referred to in paragraph (a);
the Court must not, in respect of the offence referred to in paragraph (a), impose on the person a fine that exceeds the amount (if any) by which the maximum fine applicable (under subsection (1)) in respect of the offence referred to in paragraph (a) is greater than the amount of the fine, or the sum of the amounts of the fines, referred to in paragraph (b). This applies whether or not a fine has, or fines have, also previously been imposed on the person for an offence or offences constituted by, or relating to, a contravention or contraventions of that provision that were of a different nature or occurred at a different time.
(4) In proceedings under this section against a person for contravening a provision of Subdivision D (sections 12DA to 12DN), the Court may:
(a) grant an injunction under section 12GD against the person in relation to:
(i) the conduct that constitutes, or is alleged to constitute, the contravention; or
(ii) other conduct of that kind; or
(b) make an order under section 12GLA (non‑punitive orders) in relation to the contravention; or
(c) make an order under section 12GLB (punitive orders requiring adverse publicity) in relation to the contravention.
(5) Sections 11.1, 11.2, 11.3, and 11.4 of the Criminal Code and section 11.6 of the Criminal Code to the extent that it applies in relation to those sections, do not apply in relation to an offence against subsection (1).
(6) A prosecution for an offence against subsection (1) may be commenced within 3 years after the commission of the offence.
12GBA Pecuniary penalties
(1) If the Court is satisfied that a person:
(a) has contravened a provision of Subdivision C, D or GC (other than section 12DA); or
(b) has attempted to contravene such a provision; or
(c) has aided, abetted, counselled or procured a person to contravene such a provision; or
(d) has induced, or attempted to induce, a person, whether by threats or promises or otherwise, to contravene such a provision; or
(e) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or
(f) has conspired with others to contravene such a provision;
the Court may order the person to pay to the Commonwealth such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the Court determines to be appropriate.
(2) In determining the appropriate pecuniary penalty, the Court must have regard to all relevant matters including:
(a) the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission; and
(b) the circumstances in which the act or omission took place; and
(c) whether the person has previously been found by the Court in proceedings under this Subdivision to have engaged in any similar conduct.
(3) The pecuniary penalty payable under subsection (1) is not to exceed the number of penalty units worked out using the following table:
| Number of penalty units |
| Item | For each act or omission to which this section applies that relates to ... | the number of penalty units is not to exceed ... |
| 2 | a provision of Subdivision C or D (other than section 12DA) | (a) if the person is a body corporate—10,000; or (b) if the person is not a body corporate—2,000. |
| 3 | section 12GYB | (a) if the person is a body corporate—150; or (b) if the person is not a body corporate—30. |
| 4 | section 12GYC | (a) if the person is a body corporate—250; or (b) if the person is not a body corporate—50. |
(4) If conduct constitutes a contravention of 2 or more provisions referred to in paragraph (1)(a):
(a) a proceeding may be instituted under this Act against a person in relation to the contravention of any one or more of the provisions; but
(b) a person is not liable to more than one pecuniary penalty under this section in respect of the same conduct.
12GBB Pecuniary penalties and offences
(1) The Court must not make an order under section 12GBA against a person in relation to either of the following matters (a consumer protection breach):
(a) a contravention of a provision referred to in paragraph 12GBA(1)(a);
(b) conduct referred to in paragraph 12GBA(1)(b), (c), (d), (e) or (f) that relates to a contravention of a provision referred to in paragraph 12GBA(1)(a);
if the person has been convicted of an offence constituted by conduct that is substantially the same as the conduct constituting the consumer protection breach.
(2) Proceedings for an order under section 12GBA against a person in relation to a consumer protection breach are stayed if:
(a) criminal proceedings are started or have already been started against the person for an offence; and
(b) the offence is constituted by conduct that is substantially the same as the conduct alleged to constitute the consumer protection breach.
The proceedings for the order may be resumed if the person is not convicted of the offence. Otherwise, the proceedings are dismissed.
(3) Criminal proceedings may be started against a person for conduct that is substantially the same as conduct constituting a consumer protection breach regardless of whether an order under section 12GBA has been made against the person in respect of the breach.
(4) Evidence of information given, or evidence of production of documents, by an individual is not admissible in criminal proceedings against the individual if:
(a) the individual previously gave the evidence or produced the documents in proceedings for an order under section 12GBA against the individual in relation to a consumer protection breach (whether or not the order was made); and
(b) the conduct alleged to constitute the offence is substantially the same as the conduct that was claimed to constitute the consumer protection breach.
However, this does not apply to a criminal proceeding in respect of the falsity of the evidence given by the individual in the proceedings for the order.
12GBC Civil action for recovery of pecuniary penalties
(1) ASIC may institute a proceeding in the Court for the recovery on behalf of the Commonwealth of a pecuniary penalty referred to in section 12GBA.
(2) A proceeding under subsection (1) may be commenced within 6 years after the contravention.
12GBD Indemnification of officers
Officers not to be indemnified
(1) A body corporate (the first body), or a body corporate related to the first body, must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against any of the following liabilities incurred as an officer of the first body:
(a) a liability to pay a pecuniary penalty under section 12GBA;
(b) legal costs incurred in defending or resisting proceedings in which the person is found to have such a liability.
Penalty: 25 penalty units.
(2) For the purposes of subsection (1), the outcome of proceedings is the outcome of the proceedings and any appeal in relation to the proceedings.
(3) Subsection (1) does not authorise anything that would otherwise be unlawful.
Indemnities are void
(4) Anything that purports to indemnify a person against a liability is void to the extent that it contravenes subsection (1).
Application of this section to a person other than a body corporate
(5) If, as a result of the operation of Part 2.4 of the Criminal Code, a person other than a body corporate is:
(a) convicted of an offence (the relevant offence) against subsection (1) of this section; or
(b) convicted of an offence (the relevant offence) against section 11.4 of the Criminal Code in relation to an offence referred to in subsection (1) of this section;
the relevant offence is taken to be punishable on conviction by a fine not exceeding 5 penalty units.
12GC Enforcement and recovery of certain fines
(1) If a person on whom a fine has been imposed for an offence against section 12GB or subsection 12GN(5) defaults in payment of the fine, a Court may:
(a) exercise any power that the Court has apart from this section with respect to the enforcement and recovery of fines imposed by the Court; or
(b) make an order, on the application of the Minister or ASIC, declaring that the fine is to have effect, and may be enforced, as if it were a judgment debt under a judgment of the Court.
(2) If a person in relation to whom an order is made under subsection (1) in respect of a fine gives security for the payment of the fine, the Court must cancel the order in respect of the fine.
(3) If the Court makes an order in relation to a person in respect of a fine, the Court may, at any time before the order is executed in respect of the fine, allow the person a specified time in which to pay the fine or allow the person to pay the fine by specified instalments, and, in that case:
(a) the order must not be executed unless the person fails to pay the fine within that time or fails to pay an instalment at or before the time when it becomes payable, as the case may be; and
(b) if the person pays the fine within that time or pays all the instalments, as the case may be, the order is taken to have been discharged in respect of the fine.
(4) Subject to subsection (7), an order under subsection (1) in respect of a fine ceases to have effect:
(a) on payment of the fine; or
(b) if the fine is not paid—on full compliance with the order.
(5) The term of a sentence of imprisonment imposed by an order under a law of a State or Territory applied by section 15A of the Crimes Act 1914 in respect of a fine must be calculated at the rate of one day’s imprisonment for each $25 of the amount of the fine that is from time to time unpaid.
(6) Subject to subsection (7), if a person is required to serve periods of imprisonment under an order or orders under subsection (1) in respect of 2 or more fines, those periods of imprisonment must be served consecutively.
(7) Subject to subsection (8), if:
(a) a person would, but for this subsection, be required under an order or orders under subsection (1) in respect of 3 or more fines to serve periods of imprisonment in respect of those fines exceeding in the aggregate 3 years; and
(b) those fines were imposed (whether or not in the same proceedings) for offences constituted by contraventions that occurred within a period of 2 years, being contraventions that appear to the Court to have been of the same nature or a substantially similar nature;
the Court must, by order, declare that the order or orders are to cease to have effect in respect of those fines after the person has served an aggregate of 3 years’ imprisonment in respect of those fines.
(8) If subsection (7) would, but for this subsection, apply to a person with respect to offences committed by the person within 2 or more overlapping periods of 2 years, the Court must make an order under that subsection with respect to one only of those periods, being whichever period would give the person the maximum benefit from the application of that subsection.
(9) For the purposes of subsection (8), the Court may vary or revoke an order made under subsection (7).
(10) Paragraphs 15A(1)(b), (c) and (d) of the Crimes Act 1914 do not apply with respect to fines referred to in subsection (1).
12GCA Preference must be given to compensation for victims
If:
(a) the Court considers that it is appropriate:
(i) to impose a fine under section 12GB on a person (the defendant); or
(ii) to order a person (the defendant) to pay a pecuniary penalty under section 12GBA;
in respect of a contravention, or an involvement in a contravention, of this Division; and
(b) it is appropriate to order the defendant to pay compensation to a person who has suffered loss or damage in respect of the contravention or the involvement; and
(c) the defendant does not have sufficient financial resources to pay both the pecuniary penalty or fine and the compensation;
the Court must give preference to making an order for compensation.
12GD Injunctions
(1) If, on the application of the Minister, ASIC or any other person, the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:
(a) a contravention of a provision of this Division; or
(b) attempting to contravene such a provision; or
(c) aiding, abetting, counselling or procuring a person to contravene such a provision; or
(d) inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision; or
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or
(f) conspiring with others to contravene such a provision;
the Court may grant an injunction in such terms as the Court determines to be appropriate.
(2) If an application for an injunction under subsection (1) has been made, the Court may, if the Court determines it to be appropriate, grant an injunction by consent of all the parties to the proceedings, whether or not the Court is satisfied that a person has engaged, or is proposing to engage, in conduct of a kind mentioned in subsection (1).
(3) If in the opinion of the Court it is desirable to do so, the Court may grant an interim injunction pending determination of an application under subsection (1).
(4) The Court may rescind or vary an injunction granted under subsection (1) or (3).
(5) The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised:
(a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind; and
(b) whether or not the person has previously engaged in conduct of that kind; and
(c) whether or not there is an imminent danger of substantial damage to any person if the first‑mentioned person engages in conduct of that kind.
(6) The power of the Court to grant an injunction requiring a person to do an act or thing may be exercised:
(a) whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and
(b) whether or not the person has previously refused or failed to do that act or thing; and
(c) whether or not there is an imminent danger of substantial damage to any person if the first‑mentioned person refuses or fails to do that act or thing.
(7) If the Minister or ASIC makes an application to the Court for the grant of an injunction under this section, the Court must not require the applicant or any other person, as a condition of granting an interim injunction, to give any undertakings as to damages.
(8) If, in a case to which subsection (7) does not apply:
(a) the Court would, but for this subsection, require a person to give an undertaking as to damages or costs; and
(b) the Minister gives the undertaking;
the Court must accept the undertaking by the Minister and must not require a further undertaking from any other person.
(9) A reference in this section to a contravention of a provision of this Division includes a reference to applying or relying on, or purporting to apply or rely on, a term of a contract that the Court has declared under section 12GND to be an unfair term.
12GF Actions for damages
(1) A person who suffers loss or damage by conduct of another person that contravenes a provision of Subdivision C (sections 12CA to 12CC) or Subdivision D (sections 12DA to 12DN) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
(1A) Subsection (1) has effect subject to section 12GNA.
Note: Section 12GNA may limit the amount that the person may recover for a contravention of section 12DA (Misleading or deceptive conduct) from the other person or from another person involved in the contravention.
(1B) Despite subsection (1), if:
(a) a person (the claimant) makes a claim under subsection (1) in relation to:
(i) economic loss; or
(ii) damage to property;
caused by conduct of another person (the defendant) that was done in contravention of section 12DA; and
(b) the claimant suffered the loss or damage:
(i) as a result partly of the claimant’s failure to take reasonable care; and
(ii) as a result partly of the conduct referred to in paragraph (a); and
(c) the defendant:
(i) did not intend to cause the loss or damage; and
(ii) did not fraudulently cause the loss or damage;
the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks just and equitable having regard to the claimant’s share in the responsibility for the loss or damage.
Note: Subdivision GA also applies proportionate liability to a claim for damages under this section for a contravention of section 12DA.
(2) An action under subsection (1) may be commenced within 6 years after the day on which the cause of action that relates to the conduct accrued.
12GG Finding in proceedings to be evidence
In a proceeding against a person under section 12GF or in an application under subsection 12GM(2) or 12GNB(1) for an order against a person, a finding of any fact by a court made in proceedings under section 12GBC, 12GD, 12GLA or 12GLB, or for an offence against section 12GB, in which that person has been found to have contravened, or to have been involved in a contravention of, a provision of this Division is prima facie evidence of that fact. The finding may be proved by production of a document under the seal of the court from which the finding appears.
12GH Conduct by directors, employees or agents
(1) If, in a proceeding under this Subdivision in respect of conduct engaged in by a body corporate, being conduct in relation to which the Division applies, it is necessary to establish the state of mind of the body corporate, it is sufficient to show that a director, employee or agent of the body corporate, being a director, employee or agent by whom the conduct was engaged in within the scope of the person’s actual or apparent authority, had that state of mind.
(2) Any conduct engaged in on behalf of a body corporate:
(a) by a director, employee or agent of the body corporate within the scope of the person’s actual or apparent authority; or
(b) by any other person at the direction or with the consent or agreement (whether express or implied) of a director, employee or agent of the body corporate, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, employee or agent;
is taken, for the purposes of this Division, to have been engaged in also by the body corporate.
(3) If, in a proceeding under this Subdivision in respect of conduct engaged in by a person other than a body corporate, being conduct in relation to which a provision of this Division applies, it is necessary to establish the state of mind of the person, it is sufficient to show that an employee or agent of the person, being an employee or agent by whom the conduct was engaged in within the scope of the employee’s or agent’s actual or apparent authority, had that state of mind.
(4) Conduct engaged in on behalf of a person (the principal) other than a body corporate:
(a) by an employee or agent of the person within the scope of the actual or apparent authority of the employee or agent; or
(b) by any other person at the direction or with the consent or agreement (whether express or implied) of an employee or agent of the principal, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the employee or agent;
is taken, for the purposes of this Division, to have been engaged in also by the principal.
(5) A reference in this section to the state of mind of a person includes a reference to the knowledge, intention, opinion, belief or purpose of the person and the person’s reasons for the person’s intention, opinion, belief or purpose.
(6) Part 2.5 of the Criminal Code does not apply in relation to an offence against a provision of this Subdivision.
12GI Defences
(1) Subject to subsection (3), in a prosecution under this Subdivision in relation to a contravention of a provision of Subdivision D (sections 12DA to 12DN), it is a defence if the defendant establishes:
(a) that the contravention in respect of which the proceeding was instituted was due to reasonable mistake; or
(b) that the contravention in respect of which the proceeding was instituted was due to reasonable reliance on information supplied by another person; or
(c) that:
(i) the contravention in respect of which the proceeding was instituted was due to the act or default of another person, to an accident or to some other cause beyond the defendant’s control; and
(ii) the defendant took reasonable precautions and exercised due diligence to avoid the contravention.
Note: A defendant bears a legal burden in relation to the matters in subsection (1) (see section 13.4 of the Criminal Code).
(1A) Paragraph (1)(a) is to be interpreted as having the same effect in relation to a contravention of a provision of this Subdivision as section 9.2 of the Criminal Code has in relation to offences of strict liability.
(2) In paragraphs (1)(b) and (c), another person does not include a person who was:
(a) an employee or agent of the defendant; or
(b) in the case of a defendant being a body corporate, a director, employee or agent of the defendant;
at the time when the contravention occurred.
(3) If a defence provided by subsection (1) involves an allegation that a contravention was due to reliance on information supplied by another person or to the act or default of another person, the defendant is not, without leave of the Court, entitled to rely on that defence unless he or she has, not later than 7 days before the day on which the hearing of the proceeding commences, served on the person by whom the proceeding was instituted a notice in writing giving such information that would identify or assist in the identification of the other person as was then in his or her possession.
(4) In a proceeding under this Subdivision in relation to a contravention of a provision of Subdivision D (sections 12DA to 12DN) committed by the publication of an advertisement, it is a defence if the defendant establishes that he or she is a person whose business it is to publish or arrange for the publication of advertisements and that he or she received the advertisement for publication in the ordinary course of business and did not know and had no reason to suspect that its publication would amount to a contravention of a provision of Subdivision D.
Note: A defendant bears a legal burden in relation to the matters in subsection (4) (see section 13.4 of the Criminal Code).
(5) If, in proceedings under section 12GBA against a person other than a body corporate, it appears to the Court that the person has, or may have:
(a) engaged in conduct in contravention of a provision referred to in paragraph (1)(a) of that section; or
(b) engaged in conduct referred to in paragraph (1)(b), (c), (d), (e) or (f) of that section that relates to a contravention of such a provision;
but that the person acted honestly and reasonably and, having regard to all the circumstances of the case, ought fairly to be excused, the Court may relieve the person either wholly or partly from liability to pay a pecuniary penalty under that section.
12GJ Jurisdiction of courts
(1) Jurisdiction is conferred on the Federal Court in any matter:
(a) arising under this Division; or
(b) arising under Part 3 in its application in relation to an investigation of a contravention of this Division;
in respect of which a civil proceeding may be instituted under this Subdivision or under Part 3 as so applying.
(2) With respect to any matter:
(a) arising under this Division; or
(b) arising under Part 3 in its application in relation to an investigation of a contravention of this Division;
in respect of which a civil proceeding is instituted under this Subdivision or under Part 3 as so applying:
(c) the several courts of the States are invested with federal jurisdiction within the limits of their several jurisdictions, whether those limits are as to locality, subject‑matter or otherwise; and
(d) subject to the Constitution, jurisdiction is conferred on the several courts of the Territories.
(3) Nothing in subsection (2) is taken to enable an inferior court of a State or Territory to grant a remedy other than a remedy of a kind that the court is able to grant under the law of that State or Territory.
(4) The jurisdiction conferred by subsection (1) on the Federal Court is exclusive of the jurisdiction of any other court other than the jurisdiction of the several courts of the States and Territories under subsection (2) and the jurisdiction of the High Court under section 75 of the Constitution.
12GK Transfer of matters
(1) If:
(a) a civil proceeding instituted by a person is pending in the Federal Court; and
(b) a matter for determination in the proceeding arose under:
(i) this Division; or
(ii) Part 3 in its application in relation to an investigation of a contravention of this Division;
the Federal Court may, subject to subsection (2), upon the application of a party or of the Federal Court’s own motion, transfer the matter to a court of a State or Territory and may also transfer to that court any other matter for determination in the proceeding.
(2) The Federal Court must not transfer a matter to another court under subsection (1) unless the other court has power to grant the remedies sought before the Federal Court in the matter and it appears to the Federal Court that:
(a) the matter arises out of or is related to a proceeding that is pending in the other court; or
(b) it is otherwise in the interests of justice that the matter be determined by the other court.
(3) If the Federal Court transfers a matter to another court under subsection (1):
(a) further proceedings in the matter must be as directed by the other court; and
(b) the judgment of the other court in the matter is enforceable throughout Australia and the external Territories as if it were a judgment of the Federal Court.
(4) If:
(a) a proceeding is pending in a court (other than the Supreme Court) of a State or Territory; and
(b) a matter for determination in the proceeding arose under:
(i) this Division; or
(ii) Part 3 in its application in relation to an investigation of a contravention of this Division;
the court must, if directed to do so by the Federal Court, transfer to the Federal Court the matter and such other matters for determination in the proceeding, as the Federal Court decides, the determination of which would, apart from any law of a State or of the Northern Territory relating to cross‑vesting of jurisdiction, be within the jurisdiction of the Federal Court.
(5) If:
(a) a proceeding is pending in a court (other than the Supreme Court) of a State or Territory; and
(b) a matter for determination in the proceeding arose under:
(i) this Division; or
(ii) Part 3 in its application in relation to an investigation of a contravention of this Division;
the court may, subject to subsection (6), upon the application of a party or of the court’s own motion, transfer the matter to a court (other than the Supreme Court) of a State or Territory other than the State or Territory referred to in paragraph (a).
(6) The court must not transfer the matter to another court under subsection (5) unless the other court has power to grant the remedies sought in the matter and it appears to the court that:
(a) the matter arises out of or is related to a proceeding that is pending in the other court; or
(b) it is otherwise in the interests of justice that the matter be determined by the other court.
(7) If a court transfers a matter to another court under subsection (5), further proceedings in the matter must be as directed by the other court.
12GL Transfer of certain proceedings to Family Court
(1) If:
(a) a civil proceeding is pending in the Federal Court; and
(b) a matter for determination in the proceeding arises under this Division;
the Federal Court may, on the application of a party to the proceeding or of its own motion, transfer the proceeding to the Family Court.
(3) Subject to subsection (4), if a proceeding is transferred to the Family Court:
(a) the Family Court has jurisdiction to hear and determine the proceeding; and
(b) the Family Court also has jurisdiction to hear and determine matters not otherwise within its jurisdiction (whether under paragraph (a) or otherwise):
(i) that are associated with matters arising in the proceeding; or
(ii) that, apart from subsection 32(1) of the Federal Court of Australia Act 1976, the Federal Court would have had jurisdiction to hear and determine in the proceeding; and
(c) the Family Court may, in and in relation to the proceeding:
(i) grant such remedies; and
(ii) make orders of such kinds; and
(iii) issue, and direct the issue of, writs of such kinds;
as the Federal Court could have in and in relation to the proceeding; and
(d) remedies, orders and writs granted, made or issued by the Family Court in and in relation to the proceeding have effect, and may be enforced by the Family Court, as if they had been granted, made or issued by the Federal Court; and
(e) appeals lie from judgments of the Family Court given in and in relation to the proceeding as if the judgments were judgments of the Federal Court constituted by a single Judge of that Court, and do not otherwise lie; and
(f) subject to paragraphs (a) to (e) (inclusive), this Division, the regulations, the Federal Court of Australia Act 1976, the Rules of Court made under that Act, and other laws of the Commonwealth, apply in and in relation to the proceeding as if:
(i) a reference to the Federal Court (other than in the expression the Court or a Judge) included a reference to the Family Court; and
(ii) a reference to a Judge of the Federal Court (other than in the expression the Court or a Judge) included a reference to a Family Court Judge; and
(iii) a reference to the expression the Court or a Judge when used in relation to the Federal Court included a reference to a Family Court Judge sitting in Chambers; and
(iv) a reference to a Registrar of the Federal Court included a reference to a Registrar of the Family Court; and
(v) any other necessary changes were made.
(4) If any difficulty arises in the application of paragraphs (3)(c), (d) and (f) in or in relation to a particular proceeding, the Family Court may, on the application of a party to the proceeding or of its own motion, give such directions, and make such orders, as it considers appropriate to resolve the difficulty.
(5) An appeal does not lie from a decision of the Federal Court in relation to the transfer of a proceeding under this Division to the Family Court.
12GLA Non‑punitive orders
(1) The Court may, on application by ASIC, make one or more of the orders mentioned in subsection (2) in relation to a person who has engaged in contravening conduct.
(2) The orders that the Court may make in relation to the person are:
(a) a community service order; and
(b) a probation order for a period of no longer than 3 years; and
(c) an order requiring the person to disclose, in the way and to the persons specified in the order, such information as is so specified, being information that the person has possession of or access to; and
(d) an order requiring the person to publish, at the person’s expense and in the way specified in the order, an advertisement in the terms specified in, or determined in accordance with, the order.
(3) This section does not limit the Court’s powers under any other provision of this Act.
(4) In this section:
community service order, in relation to a person who has engaged in contravening conduct, means an order directing the person to perform a service that:
(a) is specified in the order; and
(b) relates to the conduct;
for the benefit of the community or a section of the community.
Example: The following are examples of community service orders:
(a) an order requiring a person who has made false representations to make available a training video which explains advertising obligations under this Act; and
(b) an order requiring a person who has engaged in misleading or deceptive conduct in relation to a financial product to carry out a community awareness program to address the needs of consumers when purchasing the financial product.
contravening conduct means conduct that:
(a) contravenes a provision of Subdivision C (sections 12CA to 12CC); or
(b) contravenes a provision of Subdivision D (sections 12DA to 12DN); or
(c) contravenes a provision of Subdivision E (sections 12EA to 12ED); or
(d) constitutes an involvement in a contravention of any of those provisions.
probation order, in relation to a person who has engaged in contravening conduct, means an order that is made by the Court for the purpose of ensuring that the person does not engage in the contravening conduct, similar conduct or related conduct during the period of the order, and includes:
(a) an order directing the person to establish a compliance program for employees or other persons involved in the person’s business, being a program designed to ensure their awareness of the responsibilities and obligations in relation to the contravening conduct, similar conduct or related conduct; and
(b) an order directing the person to establish an education and training program for employees or other persons involved in the person’s business, being a program designed to ensure their awareness of the responsibilities and obligations in relation to the contravening conduct, similar conduct or related conduct; and
(c) an order directing the person to revise the internal operations of the person’s business which lead to the person engaging in the contravening conduct.
12GLB Punitive orders requiring adverse publicity
(1) The Court may, on application by ASIC, make an adverse publicity order in relation to a person who:
(a) has been ordered to pay a pecuniary penalty under section 12GBA; or
(b) is guilty of an offence under section 12GB.
(2) In this section, an adverse publicity order, in relation to a person, means an order that:
(a) requires the person to disclose, in the way and to third parties specified in the order, such information as is so specified, being information that the person has possession of or access to; and
(b) requires the person to publish, at the person’s expense and in the way specified in the order, an advertisement in the terms specified in, or determined in accordance with, the order.
(3) This section does not limit the Court’s powers under any other provision of this Act.
12GLC ASIC may issue a public warning notice
Contraventions
(1) ASIC may issue to the public a written notice containing a warning about the conduct of a person if:
(a) ASIC has reasonable grounds to suspect that the conduct may constitute a contravention of a provision of Subdivision C or D; and
(b) ASIC is satisfied that one or more other persons has suffered, or is likely to suffer, detriment as a result of the conduct; and
(c) ASIC is satisfied that it is in the public interest to issue the notice.
Substantiation notices
(2) Without limiting subsection (1), if:
(a) a person refuses to respond to a substantiation notice given to the person, or fails to respond to the notice before the end of the substantiation notice compliance period for the notice; and
(b) ASIC is satisfied that it is in the public interest to issue a notice under this subsection;
ASIC may issue to the public a written notice containing a warning that the person has refused or failed to respond to the substantiation notice within that period, and specifying the matter to which the substantiation notice related.
Notice is not a legislative instrument
(3) A notice issued under subsection (1) or (2) is not a legislative instrument.
12GLD Order disqualifying a person from managing corporations
(1) On application by ASIC, the Court may make an order disqualifying a person from managing corporations for a period that the Court considers appropriate if:
(a) the Court is satisfied that the person has committed, has attempted to commit or has been involved in a contravention of a provision of Subdivision C or D (other than section 12DA); and
(b) the Court is satisfied that the disqualification is justified.
Note 1: Section 206EB of the Corporations Act 2001 provides that a person is disqualified from managing corporations if a court order is in force under this section. That Act contains various consequences for persons so disqualified.
Note 2: ASIC must keep a register of persons who have been disqualified from managing corporations (see section 1274AA of the Corporations Act 2001).
(2) In determining under subsection (1) whether the disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation to the management, business or property of any corporation; and
(b) any other matters that the Court considers appropriate.
12GM Other orders
(1) Without limiting the generality of section 12GD, if, in a proceeding instituted under, or for an offence against, this Division, the Court finds that a person who is a party to the proceeding has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in in contravention of a provision of this Division, the Court may, whether or not it grants an injunction under section 12GD or makes an order under section 12GF, 12GLA or 12GLB, make such order or orders as it thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (7) of this section) if the Court considers that the order or orders concerned will compensate the first‑mentioned person in whole or in part for the loss or damage or will prevent or reduce the loss or damage.
(2) Without limiting the generality of section 12GD or 12GNB, the Court may, on the application of:
(a) a person who has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in in contravention of a provision of this Division; or
(b) ASIC in accordance with subsection (3) on behalf of such a person or persons;
make such order or orders as the Court thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (7)) if the Court considers that the order or orders concerned will:
(c) compensate the person who made the application, or the person or any of the persons on whose behalf the application was made, in whole or in part for the loss or damage; or
(d) prevent or reduce the loss or damage suffered, or likely to be suffered, by such a person or persons.
(3) ASIC may only make an application under paragraph (2)(b) on behalf of one or more persons identified in the application who:
(a) have suffered, or are likely to suffer, loss or damage by the conduct of another person that was engaged in in contravention of a provision of this Division; and
(b) have consented in writing to the application being made before it is made.
(4) An application may be made under subsection (2) in relation to a contravention of this Division notwithstanding that a proceeding has not been instituted under another provision of this Part in relation to that contravention.
(5) An application under subsection (2) may be made at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.
(6) For the purpose of determining whether to make an order under this section in relation to a contravention of Subdivision C (sections 12CA to 12CC), the Court may have regard to the conduct of parties to the proceeding since the contravention occurred.
(7) Without limiting the generality of subsections (1) and (2), the orders referred to in those subsections include the following:
(a) an order declaring the whole or any part of a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, or of a collateral arrangement relating to such a contract, to be void and, if the Court thinks fit, to have been void ab initio or at all times on and after a date before the date on which the order is made;
(b) an order varying such a contract or arrangement in such manner as is specified in the order and, if the Court thinks fit, declaring the contract or arrangement to have had effect as so varied on and after a date before the date on which the order is made;
(c) an order refusing to enforce any or all of the provisions of such a contract;
(d) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to refund money or return property to the person who suffered the loss or damage;
(e) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to pay to the person who suffered the loss or damage the amount of the loss or damage;
(f) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, at his or her own expense, to supply specified services to the person who suffered, or is likely to suffer, the loss or damage;
(g) an order, in relation to an instrument creating or transferring an interest in land, directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to execute an instrument that:
(i) varies, or has the effect of varying, the first‑mentioned instrument; or
(ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the first‑mentioned instrument.
(7A) Subsections (1) and (2) have effect subject to section 12GNA.
Note: Section 12GNA may limit the liability, under an order under subsection (1) or (2) of this section, of a person for his or her contravention of section 12DA (Misleading or deceptive conduct) or involvement in such a contravention.
(8) The powers conferred on the Court under this section in relation to a contract or covenant do not affect any powers that any other court may have in relation to the contract or covenant in proceedings instituted in that other court in respect of the contract or covenant.
(9) In subsection (7):
interest, in relation to land, has the same meaning as in subsection 12DC(3).
(10) A reference in this section to a contravention of a provision of this Division includes a reference to applying or relying on, or purporting to apply or rely on, a term of a contract that the Court has declared under section 12GND to be an unfair term.
12GN Power of Court to prohibit payment or transfer of money or other property
(1) If:
(a) proceedings have been commenced against a person for an offence against section 12GB; or
(b) an application has been made under section 12GD for an injunction against a person in relation to a contravention of a provision of this Division; or
(c) an action has been commenced under subsection 12GF(1) against a person in relation to a contravention of a provision of Subdivision D (sections 12DA to 12DN); or
(d) an application for an order under subsection 12GM(2) or (3) or 12GNB(1) has been or may be made against a person in relation to a contravention of a provision of this Division;
the Court may, on the application of the Minister or ASIC, make an order or orders mentioned in subsection (2) if the Court is satisfied that:
(e) it is necessary or desirable to do so for the purpose of preserving money or other property held by or on behalf of a person referred to in paragraph (a), (b), (c) or (d), as the case may be (the relevant person), if the relevant person is liable or may become liable under this Division to pay money by way of a fine, damages, compensation, refund or otherwise or to transfer, sell or refund other property; and
(f) it will not unduly prejudice the rights and interests of any other person.
(2) The orders referred to in subsection (1) are the following:
(a) an order prohibiting, either absolutely or subject to conditions, a person who is indebted to the relevant person or to an associate of the relevant person from making a payment in total or partial discharge of the debt to, or to another person at the direction or request of, the person to whom the debt is owed;
(b) an order prohibiting, either absolutely or subject to conditions, a person who is holding money or other property on behalf of the relevant person or on behalf of an associate of the relevant person from paying all or any of the money, or transferring, or otherwise parting with possession of, the other property, to, or to another person at the direction or request of, the person on whose behalf the money or other property is held;
(c) an order prohibiting, either absolutely or subject to conditions, the taking or sending by any person of money of the relevant person or of an associate of the relevant person to a place outside the State or Territory in which the money is held;
(d) an order prohibiting, either absolutely or subject to conditions, the taking, sending or transfer by any person of other property of the relevant person or of an associate of the relevant person to a place outside the State or Territory in which the other property is located;
(e) an order appointing, if the relevant person is a natural person, a receiver or trustee of the property or of part of the property of the relevant person with such powers as are specified in the order.
(3) Subject to subsection (4), an order under this section may be expressed to operate:
(a) for a period specified in the order; or
(b) until proceedings under any other provision of this Part in relation to which the order was made have been concluded.
(4) An order under this section made on an application ex parte must not be expressed to operate for a period exceeding 30 days.
(5) A person who contravenes or fails to comply with an order by the Court under this section that is applicable to the person is guilty of an offence punishable on conviction:
(a) in the case of a person not being a body corporate—by a fine not exceeding 200 penalty units; or
(b) in the case of a person being a body corporate—by a fine not exceeding 1,000 penalty units.
(5A) Subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) Nothing in this section affects the powers that the Court has apart from this section.
(7) This section has effect subject to the Bankruptcy Act 1966.
(8) A reference in this section to a person who is an associate of a relevant person is a reference to:
(a) a person holding money or other property on behalf of the relevant person; or
(b) if the relevant person is a body corporate—a wholly owned subsidiary of the relevant person.
(9) A reference in paragraph (1)(b) or (d) to a contravention of a provision of this Division includes a reference to applying or relying on, or purporting to apply or rely on, a term of a contract that the Court has declared under section 12GND to be an unfair term.
12GNA Limit on liability for misleading or deceptive conduct
State or Territory professional standards law limits liability
(1) A professional standards law of a State, the Australian Capital Territory or the Northern Territory applies to limit occupational liability relating to an action for contravention of section 12DA in the same way as it limits occupational liability arising under a law of the State or Territory.
Note: Section 12DA prohibits misleading or deceptive conduct by a person in relation to financial services.
(2) However, the professional standards law applies for that purpose:
(a) only in relation to a scheme that was prescribed by the regulations at the time (the contravention time) of the contravention; and
(b) as if the scheme were in force under that law at the contravention time in the form the scheme would have been in if:
(i) the scheme had not been amended or revoked under that law since the scheme was first prescribed; and
(ii) the modifications (if any) prescribed by the regulations at the contravention time had been made to the scheme.
Which State’s or Territory’s professional standards law applies?
(3) For the purposes of working out whether a professional standards law of a particular State or Territory applies under subsection (1) in relation to a particular contravention of section 12DA, choice of law rules operate in relation to the contravention in the same way as they operate in relation to a tort.
Definitions
(4) In this section:
modifications includes additions, omissions and substitutions.
occupation includes profession and trade.
occupational association means a body:
(a) that represents the interests of persons who have the same occupation; and
(b) whose membership is limited principally to such persons.
occupational liability means civil liability arising directly or vicariously from anything done or omitted by a member of an occupational association in the course of his or her occupation.
professional standards law means a law providing for the limitation of occupational liability by reference to schemes for limiting that liability that were formulated and published in accordance with that law.
12GNB Orders to redress loss or damage suffered by non‑party consumers etc.
Orders
(1) Without limiting the generality of section 12GD, if:
(a) a person:
(i) engaged in conduct (the contravening conduct) in contravention of a provision of Subdivision C or D; or
(ii) is a party to a contract who is advantaged by a term (the declared term) of the contract in relation to which the Court has made a declaration under section 12GND; and
(b) the contravening conduct or declared term caused, or is likely to cause, a class of persons to suffer loss or damage; and
(c) the class includes persons who are non‑party consumers in relation to the contravening conduct or declared term;
the Court may, on the application of ASIC, make such order or orders (other than an award of damages) as the Court thinks appropriate against a person referred to in subsection (2) of this section.
Note: The orders that the Court may make include all or any of the orders set out in section 12GNC.
(2) An order under subsection (1) may be made against:
(a) if subparagraph (1)(a)(i) applies—the person who engaged in the contravening conduct, or a person involved in that conduct; or
(b) if subparagraph (1)(a)(ii) applies—a party to the contract who is advantaged by the declared term.
(3) The Court must not make an order under subsection (1) unless the Court considers that the order will:
(a) redress, in whole or in part, the loss or damage suffered by the non‑party consumers in relation to the contravening conduct or declared term; or
(b) prevent or reduce the loss or damage suffered, or likely to be suffered, by the non‑party consumers in relation to the contravening conduct or declared term.
Application for orders
(4) An application may be made under subsection (1) even if an enforcement proceeding in relation to the contravening conduct or declared term has not been instituted.
(5) An application under subsection (1) may be made at any time within 6 years after the day on which:
(a) if subparagraph (1)(a)(i) applies—the cause of action that relates to the contravening conduct accrues; or
(b) if subparagraph (1)(a)(ii) applies—the declaration is made.
Determining whether to make an order
(6) In determining whether to make an order under subsection (1) against a person referred to in paragraph (2)(a), the Court may have regard to the conduct of the person, and of the non‑party consumers in relation to the contravening conduct, since the contravention occurred.
(7) In determining whether to make an order under subsection (1) against a person referred to in paragraph (2)(b), the Court may have regard to the conduct of the person, and of the non‑party consumers in relation to the declared term, since the declaration was made.
(8) In determining whether to make an order under subsection (1), the Court need not make a finding about either of the following matters:
(a) which persons are non‑party consumers in relation to the contravening conduct or declared term;
(b) the nature of the loss or damage suffered, or likely to be suffered, by such persons.
When a non‑party consumer is bound by an order etc.
(9) If:
(a) an order is made under subsection (1) against a person; and
(b) the loss or damage suffered, or likely to be suffered, by a non‑party consumer in relation to the contravening conduct, or declared term, to which the order relates has been redressed, prevented or reduced in accordance with the order; and
(c) the non‑party consumer has accepted the redress, prevention or reduction;
then:
(d) the non‑party consumer is bound by the order; and
(e) any other order made under subsection (1) that relates to that loss or damage has no effect in relation to the non‑party consumer; and
(f) despite any other provision of this Act or any other law of the Commonwealth, or a State or Territory, no claim, action or demand may be made or taken against the person by the non‑party consumer in relation to that loss or damage.
Other
(10) Subsection (1) has effect subject to section 12GNA.
Note: Section 12GNA may limit the liability, under an order made under subsection (1) of this section, of a person for his or her contravention of section 12DA (which is about misleading or deceptive conduct) or involvement in such a contravention.
(11) This section does not apply in relation to contravening conduct that occurred before the commencement of this section.
12GNC Kinds of orders that may be made to redress loss or damage suffered by non‑party consumers etc.
Without limiting subsection 12GNB(1), the orders that the Court may make under that subsection against a person (the respondent) include all or any of the following:
(a) an order declaring the whole or any part of a contract made between the respondent and a non‑party consumer referred to in that subsection, or a collateral arrangement relating to such a contract:
(i) to be void; and
(ii) if the Court thinks fit—to have been void ab initio or void at all times on and after such date as is specified in the order (which may be a date that is before the date on which the order is made);
(b) an order:
(i) varying such a contract or arrangement in such manner as is specified in the order; and
(ii) if the Court thinks fit—declaring the contract or arrangement to have had effect as so varied on and after such date as is specified in the order (which may be a date that is before the date on which the order is made);
(c) an order refusing to enforce any or all of the provisions of such a contract or arrangement;
(d) an order directing the respondent to refund money or return property to a non‑party consumer referred to in that subsection;
(e) an order directing the respondent, at his or her own expense, to repair, or provide parts for, goods that have been supplied under the contract or arrangement to a non‑party consumer referred to in that subsection;
(f) an order directing the respondent, at his or her own expense, to supply specified services to a non‑party consumer referred to in that subsection;
(g) an order, in relation to an instrument creating or transferring an interest in land (within the meaning of section 12DC), directing the respondent to execute an instrument that:
(i) varies, or has the effect of varying, the first‑mentioned instrument; or
(ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the first‑mentioned instrument.
12GND Declarations
(1) The Court may declare that a term of a consumer contract is an unfair term, on application by:
(a) a party to the contract; or
(b) ASIC.
(2) The Court may declare that a term of a small business contract is an unfair term, on application by:
(a) a party to the contract, if the party was a business of the kind referred to in paragraph 12BF(4)(a) at the time the contract was entered into; or
(b) ASIC.
(3) Subsections (1) and (2) do not apply unless the contract is a standard form contract that is:
(a) a financial product; or
(b) a contract for the supply, or possible supply, of services that are financial services.
(4) Subsections (1) and (2) do not apply if Subdivision BA does not apply to the contract.
(5) Subsections (1) and (2) do not limit any other power of the Court to make declarations.
12GO Intervention by ASIC
(1) ASIC may, with the leave of the Court and subject to any conditions imposed by the Court, intervene in any proceeding instituted under this Division.
(2) If ASIC intervenes in a proceeding, it is taken to be a party to the proceeding and has all the rights, duties and liabilities of such a party.
Subdivision GA—Proportionate liability for misleading and deceptive conduct
12GP Application of Subdivision
(1) This Subdivision applies to a claim (an apportionable claim) if the claim is a claim for damages made under section 12GF for:
(a) economic loss; or
(b) damage to property;
caused by conduct that was done in a contravention of section 12DA.
(2) For the purposes of this Subdivision, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).
(3) In this Subdivision, a concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.
(4) For the purposes of this Subdivision, apportionable claims are limited to those claims specified in subsection (1).
(5) For the purposes of this Subdivision, it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died.
12GQ Certain concurrent wrongdoers not to have benefit of apportionment
(1) Nothing in this Subdivision operates to exclude the liability of a concurrent wrongdoer (an excluded concurrent wrongdoer) in proceedings involving an apportionable claim if:
(a) the concurrent wrongdoer intended to cause the economic loss or damage to property that is the subject of the claim; or
(b) the concurrent wrongdoer fraudulently caused the economic loss or damage to property that is the subject of the claim.
(2) The liability of an excluded concurrent wrongdoer is to be determined in accordance with the legal rules (if any) that (apart from this Subdivision) are relevant.
(3) The liability of any other concurrent wrongdoer who is not an excluded concurrent wrongdoer is to be determined in accordance with the provisions of this Subdivision.
12GR Proportionate liability for apportionable claims
(1) In any proceedings involving an apportionable claim:
(a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant’s responsibility for the damage or loss; and
(b) the court may give judgment against the defendant for not more than that amount.
(2) If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim:
(a) liability for the apportionable claim is to be determined in accordance with the provisions of this Subdivision; and
(b) liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Subdivision) are relevant.
(3) In apportioning responsibility between defendants in the proceedings:
(a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and
(b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.
(4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.
(5) A reference in this Subdivision to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Subdivision, under rules of court or otherwise.
12GS Defendant to notify plaintiff of concurrent wrongdoer of whom defendant is aware
(1) If:
(a) a defendant in proceedings involving an apportionable claim has reasonable grounds to believe that a particular person (the other person) may be a concurrent wrongdoer in relation to the claim; and
(b) the defendant fails to give the plaintiff, as soon as practicable, written notice of the information that the defendant has about:
(i) the identity of the other person; and
(ii) the circumstances that may make the other person a concurrent wrongdoer in relation to the claim; and
(c) the plaintiff unnecessarily incurs costs in the proceedings because the plaintiff was not aware that the other person may be a concurrent wrongdoer in relation to the claim;
the court hearing the proceedings may order that the defendant pay all or any of those costs of the plaintiff.
(2) The court may order that the costs to be paid by the defendant be assessed on an indemnity basis or otherwise.
12GT Contribution not recoverable from defendant
A defendant against whom judgment is given under this Subdivision as a concurrent wrongdoer in relation to an apportionable claim:
(a) cannot be required to contribute to any damages or contribution recovered from another concurrent wrongdoer in respect of the apportionable claim (whether or not the damages or contribution are recovered in the same proceedings in which judgment is given against the defendant); and
(b) cannot be required to indemnify any such wrongdoer.
12GU Subsequent actions
(1) In relation to an apportionable claim, nothing in this Subdivision or any other law prevents a plaintiff who has previously recovered judgment against a concurrent wrongdoer for an apportionable part of any damage or loss from bringing another action against any other concurrent wrongdoer for that damage or loss.
(2) However, in any proceedings in respect of any such action, the plaintiff cannot recover an amount of damages that, having regard to any damages previously recovered by the plaintiff in respect of the damage or loss, would result in the plaintiff receiving compensation for damage or loss that is greater than the damage or loss actually sustained by the plaintiff.
12GV Joining non‑party concurrent wrongdoer in the action
(1) The court may give leave for any one or more persons to be joined as defendants in proceedings involving an apportionable claim.
(2) The court is not to give leave for the joinder of any person who was a party to any previously concluded proceedings in respect of the apportionable claim.
12GW Application of Subdivision
Nothing in this Subdivision:
(a) prevents a person being held vicariously liable for a proportion of an apportionable claim for which another person is liable; or
(b) prevents a partner from being held severally liable with another partner for that proportion of an apportionable claim for which the other partner is liable; or
(c) affects the operation of any other Act to the extent that it imposes several liability on any person in respect of what would otherwise be an apportionable claim.
Subdivision GB—Infringement notices
12GX Purpose and effect of this Subdivision
(1) The purpose of this Subdivision is to provide for the issue of an infringement notice to a person for an alleged contravention of an infringement notice provision as an alternative to proceedings for an order under section 12GBA.
(2) This Subdivision does not:
(a) require an infringement notice to be issued to a person for an alleged contravention of an infringement notice provision; or
(b) affect the liability of a person to proceedings under Subdivision G (sections 12GA to 12GO) in relation to an alleged contravention of an infringement notice provision if:
(i) an infringement notice is not issued to the person for the alleged contravention; or
(ii) an infringement notice issued to a person for the alleged contravention is withdrawn under section 12GXG; or
(c) prevent a Court from imposing a higher penalty than the penalty specified in the infringement notice if the person does not comply with the notice.
12GXA Issue of an infringement notice
(1) If ASIC has reasonable grounds to believe that a person has contravened an infringement notice provision, ASIC may issue an infringement notice to the person.
(2) ASIC must not issue more than one infringement notice to the person for the same alleged contravention of the infringement notice provision.
(3) The infringement notice does not have any effect if the notice:
(a) is issued more than 12 months after the day on which the contravention of the infringement notice provision is alleged to have occurred; or
(b) relates to more than one alleged contravention of an infringement notice provision by the person.
12GXB Matters to be included in an infringement notice
An infringement notice must:
(a) be identified by a unique number; and
(b) state the day on which it is issued; and
(c) state the name and address of the person to whom it is issued; and
(d) state that it is being issued by ASIC; and
(e) state how ASIC may be contacted; and
(f) give details of the alleged contravention by the person, including:
(i) the date of the alleged contravention; and
(ii) the particular infringement notice provision that was allegedly contravened; and
(g) state the maximum pecuniary penalty that the Court could order the person to pay under section 12GBA for the alleged contravention; and
(h) specify the penalty that is payable in relation to the alleged contravention; and
(i) state that the penalty is payable within the infringement notice compliance period for the notice; and
(j) state that the penalty is payable to ASIC on behalf of the Commonwealth; and
(k) explain how payment of the penalty is to be made; and
(l) explain the effect of sections 12GXD, 12GXE, 12GXF and 12GXG.
12GXC Amount of penalty
The penalty to be specified in an infringement notice that is to be issued to a person must be a pecuniary penalty equal to the number of penalty units worked out using the following table:
| Number of penalty units |
| Item | If the infringement notice is for an alleged contravention of ... | the number of penalty units is ... |
| 2 | a provision of Subdivision C or D (other than section 12DA, section 12DE, subsection 12DG(1) or section 12DI or 12DM) | (a) if the person is a body corporate—60; or (b) if the person is not a body corporate—12. |
| 3 | section 12GYB | (a) if the person is a body corporate—30; or (b) if the person is not a body corporate—6. |
| 4 | section 12GYC | (a) if the person is a body corporate—50; or (b) if the person is not a body corporate—10. |
12GXD Effect of compliance with an infringement notice
(1) This section applies if:
(a) an infringement notice for an alleged contravention of an infringement notice provision is issued to a person; and
(b) the person pays the penalty specified in the infringement notice within the infringement notice compliance period and in accordance with the notice; and
(c) the infringement notice is not withdrawn under section 12GXG.
(2) The person is not, merely because of the payment, regarded as:
(a) having contravened the infringement notice provision; or
(b) having been convicted of an offence constituted by the same conduct that constituted the alleged contravention of the infringement notice provision.
(3) No proceedings (whether criminal or civil) may be started or continued against the person by, or on behalf of, the Commonwealth or ASIC in relation to:
(a) the alleged contravention of the infringement notice provision; or
(b) an offence constituted by the same conduct that constituted the alleged contravention.
12GXE Effect of failure to comply with an infringement notice
If:
(a) an infringement notice for an alleged contravention of an infringement notice provision is issued to a person; and
(b) the person fails to pay the penalty specified in the infringement notice within the infringement notice compliance period and in accordance with the notice; and
(c) the infringement notice is not withdrawn under section 12GXG;
the person is liable to proceedings under Subdivision G (sections 12GA to 12GO) in relation to the alleged contravention of the infringement notice provision.
12GXF Infringement notice compliance period for infringement notice
(1) Subject to this section, the infringement notice compliance period for an infringement notice is a period of 28 days beginning on the day after the day on which the infringement notice is issued.
(2) ASIC may extend, by notice in writing, the infringement notice compliance period for the infringement notice if ASIC is satisfied that it is appropriate to do so.
(3) Only one extension may be given and the extension must not be for longer than 28 days.
(4) Notice of the extension must be given to the person who was issued the infringement notice.
(5) A failure to comply with subsection (4) does not affect the validity of the extension.
(6) If ASIC extends the infringement notice compliance period for an infringement notice, a reference in this Act to the infringement notice compliance period for an infringement notice is taken to be a reference to the infringement notice compliance period as so extended.
12GXG Withdrawal of an infringement notice
Representations to ASIC
(1) The person to whom an infringement notice has been issued for an alleged contravention of an infringement notice provision may make written representations to ASIC seeking the withdrawal of the infringement notice.
(2) Evidence or information that the person, or a representative of the person, gives to ASIC in the course of making representations under subsection (1) is not admissible in evidence against the person or representative in any proceedings (other than proceedings for an offence based on the evidence or information given being false or misleading).
Withdrawal by ASIC
(3) ASIC may, by written notice (the withdrawal notice) given to a person who has been issued an infringement notice for an alleged contravention of an infringement notice provision, withdraw the infringement notice if ASIC is satisfied that it is appropriate to do so.
(4) Subsection (3) applies whether or not the person has made representations seeking the withdrawal.
Content of withdrawal notices
(5) The withdrawal notice must state:
(a) the name and address of the person; and
(b) the day on which the infringement notice was issued to the person; and
(c) that the infringement notice is withdrawn; and
(d) that proceedings under Subdivision G (sections 12GA to 12GO) may be started or continued against the person in relation to:
(i) the alleged contravention of the infringement notice provision; or
(ii) an offence constituted by the same conduct that constituted the alleged contravention.
Time limit for giving withdrawal notices
(6) To be effective, the withdrawal notice must be given to the person within the infringement notice compliance period for the infringement notice.
Refunds
(7) If the infringement notice is withdrawn after the person has paid the penalty specified in the infringement notice, ASIC must refund to the person an amount equal to the amount paid.
Subdivision GC—Substantiation notices
12GY ASIC may require claims to be substantiated etc.
(1) This section applies if a person has made a claim or representation promoting, or apparently intended to promote, a supply, or possible supply, of financial services by that or any other person.
(2) ASIC may give the person who has made the claim or representation a written notice that requires the person to do one or more of the following:
(a) give information and/or produce documents to ASIC that could be capable of substantiating or supporting the claim or representation;
(b) give information and/or produce documents to ASIC that could be capable of substantiating:
(i) the quantities in which; and
(ii) the period for which;
the person is or will be able to make a supply to which the claim or representation relates (whether or not the claim or representation relates to those quantities or that period);
(c) give information and/or produce documents to ASIC that are of a kind specified in the notice;
within 21 days after the notice is given to the person.
(3) Any kind of information or documents that ASIC specifies under paragraph (2)(c) must be a kind that ASIC is satisfied is relevant to:
(a) substantiating or supporting the claim or representation; or
(b) substantiating the quantities in which, or the period for which, the person is or will be able to make such a supply.
(4) The notice must:
(a) name the person to whom it is given; and
(b) specify the claim or representation to which it relates; and
(c) explain the effect of sections 12GYA, 12GYB and 12GYC.
(5) The notice may relate to more than one claim or representation that the person has made.
(6) This section does not apply to a person in relation to a claim or representation made by the person if the person:
(a) is a prescribed information provider within the meaning of section 12DN; and
(b) made the claim or representation by publishing it on behalf of another person in the course of carrying on a business of providing information; and
(c) does not have a commercial relationship with the other person other than for the purpose of:
(i) publishing claims or representations promoting, or apparently intended to promote, the other person’s business or other activities; or
(ii) the other person supplying financial services to the person.
12GYA Extending periods for complying with substantiation notices
(1) A person who has been given a substantiation notice may, at any time within 21 days after the notice was given to the person, apply in writing to ASIC for an extension of the period for complying with the notice.
(2) ASIC may, by written notice given to the person, extend the period within which the person must comply with the notice.
12GYB Compliance with substantiation notices
(1) A person who is given a substantiation notice must comply with it within the substantiation notice compliance period for the notice.
(2) The substantiation notice compliance period for a substantiation notice is:
(a) the period of 21 days specified in the notice; or
(b) if the period for complying with the notice has been extended under section 12GYA—the period as so extended.
(3) Despite subsection (1), an individual may refuse or fail to give particular information or produce a particular document in compliance with a substantiation notice on the ground that the information or production of the document might tend to incriminate the individual or to expose the individual to a penalty.
12GYC False or misleading information etc.
(1) A person must not, in compliance or purported compliance with a substantiation notice:
(a) give to ASIC false or misleading information; or
(b) produce to ASIC documents that contain false or misleading information.
(2) This section does not apply to:
(a) information that the person could not have known was false or misleading; or
(b) the production to ASIC of a document containing false or misleading information if the document is accompanied by a statement of the person that the information is false or misleading.
Subdivision H—Miscellaneous
12HA Relationship of this Subdivision to Part 3
(1) The powers (and any restrictions on them) in this Subdivision are in addition to any powers ASIC has under Part 3 when investigating a contravention, or suspected contravention, of a provision of this Division. The powers may be used only when ASIC is so investigating.
(2) For the purposes of Part 3, an exercise of a power in this Subdivision is taken to be an exercise of that power under, or for the purposes of, Part 3.
12HB Disclosure of documents by ASIC
(1) If:
(a) a proceeding is instituted against a person under section 12GD; or
(b) an application is made under section 12GLA or 12GLB or subsection 12GM(2), 12GN(1) or 12GNB(1) for an order against a person;
ASIC must, at the request of the person and upon payment of the prescribed fee (if any), give to the person:
(c) a copy of every document that has been given to, or obtained by, ASIC in connection with the matter to which the application, notice or proceeding relates and tends to establish the case of the person; and
(d) a copy of any other document in ASIC’s possession that comes to ASIC’s attention in connection with the matter to which the application, notice or proceeding relates and tends to establish the case of the person;
not being a document obtained from the person or prepared by an officer or professional adviser of ASIC.
(2) If ASIC does not comply with a request under subsection (1), the Court must, subject to subsection (3), upon application by the person who made the request, make an order directing ASIC to comply with the request.
(3) The Court may refuse to make an order under subsection (2) in respect of a document or part of a document if the Court considers it inappropriate to make the order by reason that the disclosure of the contents of the document or part of the document would prejudice any person, or for any other reason.
(4) Before the Court gives a decision on an application under subsection (2), the Court may require any documents to be produced to it for inspection.
(5) An order under this section may be expressed to be subject to conditions specified in the order.
12HC Prosecutions
(1) Prosecutions for offences:
(a) against this Division; or
(b) against Part 3 in its application in relation to an investigation of a contravention of this Division;
must be brought only in the Court.
(2) Jurisdiction is conferred on the Court to hear and determine such prosecutions.
(3) Proceedings before the Court under this section, other than proceedings instituted by:
(a) ASIC; or
(b) a person authorised in writing by ASIC;
must not be instituted except with the consent in writing of the Minister or of a person authorised by the Minister in writing to give such consents.
12HD Jurisdiction of Court to make declarations and orders
(1) Subject to this section, a person may institute a proceeding in the Court seeking, in relation to a matter arising under this Division or under Part 3 in its application in relation to an investigation of a contravention of this Division, the making of:
(a) a declaration in relation to the operation or effect of any provision of:
(i) this Division other than the provisions of Subdivision E (sections 12EA to 12ED); or
(ii) Part 3 as so applying; or
(b) a declaration in relation to the validity of any act or thing done, proposed to be done or purporting to have been done, under this Division or Part 3 as so applying; or
(c) an order by way of, or in the nature of, prohibition, certiorari or mandamus;
or both such a declaration and such an order, and the Court has jurisdiction to hear and determine the proceeding.
(2) The Minister may institute a proceeding in the Court under this section and may intervene in any proceeding instituted in the Court under this section or in a proceeding instituted in any other court in which a party is seeking the making of a declaration or an order of a kind mentioned in subsection (1).
(3) In this section, proceeding includes a cross‑proceeding.
Part 3—Investigations and information‑gathering
Division 1—Investigations
13 General powers of investigation
(1) ASIC may make such investigation as it thinks expedient for the due administration of the corporations legislation (other than the excluded provisions) where it has reason to suspect that there may have been committed:
(a) a contravention of the corporations legislation (other than the excluded provisions); or
(b) a contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that:
(i) concerns the management or affairs of a body corporate or managed investment scheme; or
(ii) involves fraud or dishonesty and relates to a body corporate or managed investment scheme or to financial products.
(2) Where ASIC has reason to suspect that unacceptable circumstances within the meaning of Subdivision B of Division 2 of Part 6.10 of the Corporations Act have, or may have, occurred, ASIC may make such investigation as it thinks expedient:
(a) for the purposes of determining whether or not to make an application under section 657C of that Act; or
(b) otherwise for the due administration of the corporations legislation (other than the excluded provisions).
(3) If ASIC has reason to suspect that a registered liquidator:
(a) has not, or may not have, faithfully performed his or her duties; or
(b) is not, or may not be, faithfully performing his or her duties;
ASIC may make such investigation as it thinks expedient for the due administration of the corporations legislation (other than the excluded provisions).
(6) If ASIC has reason to suspect that a contravention of a provision of Division 2 of Part 2 may have been committed, ASIC may make such investigation as it thinks appropriate.
14 Minister may direct investigations
(1) Where, in the Minister’s opinion, it is in the public interest in respect of this jurisdiction for a particular matter to which subsection (2) applies to be investigated, he or she may by writing direct ASIC to investigate that matter.
(2) This subsection applies to a matter relating to any of the following:
(a) an alleged or suspected contravention of the corporations legislation (other than the excluded provisions);
(b) an alleged or suspected contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that:
(i) concerns the management or affairs of a body corporate; or
(ii) involves fraud or dishonesty and relates to a body corporate or financial products;
(c) the affairs, or particular affairs, of a corporation;
(d) dealing in financial products;
(f) the establishment or conducting of a financial market;
(g) the provision of a clearing and settlement facility;
(ga) the provision of a derivative trade repository;
(j) the giving of advice, analyses or reports about financial products;
(k) the provision of compensation arrangements for a financial market.
(3) ASIC must comply with a direction under subsection (1).
(4) A direction under subsection (1) does not prevent ASIC from delegating a function or power.
15 Investigation after report of receiver or liquidator
If a report or return has been lodged under section 422, 422A, 422B or 533 of the Corporations Act, ASIC may investigate a matter to which the report or return relates for the purpose of determining whether or not a person ought to be prosecuted for an offence against the corporations legislation (other than the excluded provisions).
16 Interim report on investigation
(1) Where, in the course of an investigation under this Division, ASIC forms the opinion that:
(a) a serious contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, has been committed; or
(b) to prepare an interim report about the investigation would enable or assist the protection, preservation or prompt recovery of property; or
(c) there is an urgent need for the corporations legislation (other than the excluded provisions) to be amended;
it must prepare an interim report that relates to the investigation and sets out:
(d) if paragraph (a) applies—its findings about the contravention, and the evidence and other material on which those findings are based; or
(e) if paragraph (b) applies—such matters as, in its opinion, will so enable or assist; or
(f) if paragraph (c) applies—its opinion about amendment of that legislation, and its reasons for that opinion;
and such other matters relating to, or arising out of, the investigation as it thinks fit.
(2) ASIC may prepare an interim report about an investigation under this Division and must do so if the Minister so directs.
(3) A report under subsection (2) must set out such matters relating to, or arising out of, the investigation as ASIC thinks fit or the Minister directs.
17 Final report on investigation
(1) At the end of an investigation under section 13 or 15, ASIC may prepare a report about the investigation and must do so if the Minister so directs.
(2) At the end of an investigation under section 14, ASIC must prepare a report about the investigation.
(3) A report under this section must set out:
(a) ASIC’s findings about the matters investigated; and
(b) the evidence and other material on which those findings are based; and
(c) such other matters relating to, or arising out of, the investigation as ASIC thinks fit or the Minister directs.
18 Distribution of report
(1) As soon as practicable after preparing a report under this Division, ASIC must give a copy of the report to the Minister.
(2) Where a report, or part of a report, under this Division relates to a serious contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, ASIC may give a copy of the whole or a part of the report to:
(a) the Australian Federal Police; or
(b) the Chief Executive Officer of the Australian Crime Commission or a member of the staff of the ACC (within the meaning of the Australian Crime Commission Act 2002); or
(c) the Director of Public Prosecutions; or
(d) a prescribed agency.
(3) Where a report, or part of a report, under this Division relates to a person’s affairs to a material extent, ASIC may, at the person’s request or of its own motion, give to the person a copy of the report or of part of the report.
(4) The Minister may cause the whole or a part of a report under this Division to be printed and published.
Division 2—Examination of persons
19 Notice requiring appearance for examination
(1) This section applies where ASIC, on reasonable grounds, suspects or believes that a person can give information relevant to a matter that it is investigating, or is to investigate, under Division 1.
(2) ASIC may, by written notice in the prescribed form given to the person, require the person:
(a) to give to ASIC all reasonable assistance in connection with the investigation; and
(b) to appear before a specified member or staff member for examination on oath and to answer questions.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(3) A notice given under subsection (2) must:
(a) state the general nature of the matter referred to in subsection (1); and
(b) set out the effect of subsection 23(1) and section 68.
20 Proceedings at examination
The remaining provisions of this Division apply where, pursuant to a requirement made under section 19 for the purposes of an investigation under Division 1, a person (in this Division called the examinee) appears before another person (in this Division called the inspector) for examination.
21 Requirements made of examinee
(1) The inspector may examine the examinee on oath or affirmation and may, for that purpose:
(a) require the examinee to either take an oath or make an affirmation; and
(b) administer an oath or affirmation to the examinee.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(1A) An offence under subsection 63(3) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) The oath or affirmation to be taken or made by the examinee for the purposes of the examination is an oath or affirmation that the statements that the examinee will make will be true.
(3) The inspector may require the examinee to answer a question that is put to the examinee at the examination and is relevant to a matter that ASIC is investigating, or is to investigate, under Division 1.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
22 Examination to take place in private
(1) The examination must take place in private and the inspector may give directions about who may be present during it, or during a part of it.
(2) A person must not be present at the examination unless he or she:
(a) is the inspector, the examinee or a member; or
(b) is a staff member approved by ASIC; or
(c) is entitled to be present by virtue of:
(i) a direction under subsection (1); or
(ii) subsection 23(1).
Penalty: 10 penalty units or imprisonment for 3 months, or both.
(3) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
23 Examinee’s lawyer may attend
(1) The examinee’s lawyer may be present at the examination and may, at such times during it as the inspector determines:
(a) address the inspector; and
(b) examine the examinee;
about matters about which the inspector has examined the examinee.
(2) If, in the inspector’s opinion, a person is trying to obstruct the examination by exercising rights under subsection (1), the inspector may require the person to stop addressing the inspector, or examining the examinee, as the case requires.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(3) An offence under subsection 63(4) relating to subsection (2) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
24 Record of examination
(1) The inspector may, and must if the examinee so requests, cause a record to be made of statements made at the examination.
(2) If a record made under subsection (1) is in writing or is reduced to writing:
(a) the inspector may require the examinee to read it, or to have it read to him or her, and may require him or her to sign it; and
(b) the inspector must, if requested in writing by the examinee to give to the examinee a copy of the written record, comply with the request without charge but subject to such conditions (if any) as the inspector imposes.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(3) An offence under subsection 63(3) relating to paragraph (2)(a) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
25 Giving to other persons copies of record
(1) ASIC may give a copy of a written record of the examination, or such a copy together with a copy of any related book, to a person’s lawyer if the lawyer satisfies ASIC that the person is carrying on, or is contemplating in good faith, a proceeding in respect of a matter to which the examination related.
(2) If ASIC gives a copy to a person under subsection (1), the person, or any other person who has possession, custody or control of the copy or a copy of it, must not, except in connection with preparing, beginning or carrying on, or in the course of, a proceeding:
(a) use the copy or a copy of it; or
(b) publish, or communicate to a person, the copy, a copy of it, or any part of the copy’s contents.
Penalty: 10 penalty units or imprisonment for 3 months, or both.
(2A) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) ASIC may, subject to such conditions (if any) as it imposes, give to a person a copy of a written record of the examination, or such a copy together with a copy of any related book.
26 Copies given subject to conditions
(1) If a copy is given to a person under subsection 24(2) or 25(3) subject to conditions, the person, and any other person who has possession, custody or control of the copy or a copy of it, must comply with the conditions.
Penalty: 10 penalty units or imprisonment for 3 months, or both.
(2) Subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
27 Record to accompany report
(1) If a report about the investigation referred to in section 20 is prepared under section 17, each record (if any) of the examination must accompany the report.
(2) If:
(a) in ASIC’s opinion, a statement made at an examination is relevant to any other investigation under Division 1; and
(b) a record of the statement was made under section 24; and
(c) a report about the other investigation is prepared under section 17;
a copy of the record must accompany the report.
Division 3—Inspection of books and audit information‑gathering powers
28 When certain powers may be exercised
A power conferred by this Division (other than sections 29, 30A, 30B, 35, 36 and 39A) may only be exercised:
(a) for the purposes of the performance or exercise of any of ASIC’s functions and powers under the corporations legislation; or
(b) for the purposes of ensuring compliance with the corporations legislation; or
(c) in relation to:
(i) an alleged or suspected contravention of the corporations legislation; or
(ii) an alleged or suspected contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that concerns the management or affairs of a body corporate, or involves fraud or dishonesty and relates to a body corporate or financial products; or
(d) for the purposes of an investigation under Division 1.
29 ASIC may inspect books without charge
(1) A book that the corporations legislation (other than the excluded provisions) requires a person to keep must be open for inspection (without charge) by a person authorised in writing by ASIC.
(2) A person authorised under this section may require a person in whose possession the book is to make the book available for inspection by the first‑mentioned person.
(2A) An offence under subsection 63(3) relating to subsection (2) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) An authorisation under this section may be of general application or may be limited by reference to the books to be inspected.
30 Notice to produce books about affairs of body corporate or registered scheme
(1) ASIC may give to:
(a) a body corporate that is not an exempt public authority; or
(b) an eligible person in relation to such a body corporate;
a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books relating to affairs of the body.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(2) ASIC may give to:
(a) the responsible entity of a registered scheme; or
(b) an eligible person in relation to the responsible entity;
a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books relating to the operation of the scheme.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
30A Notice to auditors concerning information and books
(1) Subject to subsection (2), ASIC may give an Australian auditor a written notice requiring the auditor:
(a) to give specified information; or
(b) to produce specified books;
to a specified member or staff member at a specified place and time.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(2) The power in subsection (1) may only be exercised:
(a) for the purposes of the performance or exercise of any of ASIC’s functions and powers relating to:
(i) audit‑related matters (Corporations Act audit requirements) under Chapter 2M or Part 9.2 or 9.2A of the Corporations Act or under other provisions of that Act that relate to that Chapter or that Part; or
(ia) audit‑related matters (ACNC audit requirements) under the Australian Charities and Not‑for‑profits Commission Act 2012; or
(ii) audit requirements (overseas audit requirements) referred to in subsection 11(10); or
(b) for the purposes of:
(i) ascertaining compliance with Corporations Act audit requirements or ACNC audit requirements; or
(ii) assisting in ascertaining compliance with overseas audit requirements; or
(c) in relation to:
(i) an alleged or suspected contravention of Corporations Act audit requirements or ACNC audit requirements; or
(ii) an alleged or suspected contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that relates to an audit matter and that either concerns the management or affairs of a body corporate or involves fraud or dishonesty and relates to a body corporate; or
(d) for the purposes of an investigation under Division 1 relating to a contravention referred to in paragraph (c).
(3) Without limiting subsection (1), a notice under that subsection may specify information or books that relate to any or all of the following:
(a) the policies relating to audit that the auditor has adopted or proposes to adopt, or the procedures relating to audit that the auditor has put in place or proposes to put in place;
(b) audits the auditor has conducted or proposes to conduct or in which the auditor has participated or proposes to participate;
(c) any other matter pertaining to audit that is prescribed by the regulations for the purposes of this paragraph.
Note: A person responding to a notice under subsection (1) has qualified privilege in respect of the response (see section 1289 of the Corporations Act).
(4) Without limiting subsection (1), a notice under that subsection may require the auditor to give information or produce books even if doing so would involve a breach of an obligation of confidentiality that the auditor owes an audited body.
(5) ASIC may, by written notice to an Australian auditor who has received a notice under subsection (1), extend the period within which the auditor must give the information or produce the books to which the notice under that subsection relates.
30B Notice to registered liquidators concerning information and books
(1) Subject to subsection (2), ASIC may give a registered liquidator a written notice requiring the liquidator:
(a) to give specified information; and
(b) to produce specified books;
to a specified member or staff member at a specified place and time.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(2) The power in subsection (1) may only be exercised:
(a) for the purposes of the performance or exercise of any of ASIC’s functions and powers in relation to the liquidator requirements; or
(b) for the purposes of ascertaining compliance with the liquidator requirements; or
(c) in relation to:
(i) an alleged or suspected contravention of the liquidator requirements; or
(ii) an alleged or suspected contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that relates to the performance or exercise of a registered liquidator’s functions, duties or powers and that either concerns the management of the affairs of a body corporate or involves fraud or dishonesty and relates to a body corporate; or
(d) for the purposes of an investigation under Division 1 relating to a contravention referred to in paragraph (c).
(3) The liquidator requirements are the requirements in relation to registered liquidators, the external administration of companies or the control of the property of corporations under:
(a) Chapter 5 of the Corporations Act; and
(b) Schedule 2 to the Corporations Act; and
(c) other provisions of the Corporations Act that relate to that Chapter or Schedule.
(4) Without limiting subsection (1), a notice under that subsection may specify information or books that relate to any or all of the following:
(a) the policies relating to the external administration of companies and the control of the property of corporations that the registered liquidator has adopted or proposes to adopt;
(b) the procedures relating to the external administration of companies and the control of the property of corporations that the registered liquidator has put in place or proposes to put in place;
(c) the external administration of a company, or companies, that the registered liquidator has conducted, is conducting or is proposing to conduct;
(d) the control of the property of a corporation, or corporations, that the registered liquidator has conducted, is conducting or is proposing to conduct;
(e) any other matter relating to the external administration of companies or the control of the property of corporations that is prescribed for the purposes of this paragraph.
(5) Without limiting subsection (1), a notice under that subsection may require the registered liquidator to give information or produce books even if doing so would involve a breach of an obligation of confidentiality that the registered liquidator owes to:
(a) a company that is, has been or is likely to be under external administration; or
(b) a corporation the property of which is, has been or is likely to be under control.
(6) ASIC may, by written notice to a registered liquidator who has received a notice under subsection (1), extend the period within which the registered liquidator must give the information or produce the books to which the notice under that subsection relates.
(7) In this section:
control of the property of a corporation means:
(a) the receivership of that property; and
(b) the possession, or control, of that property for the purpose of enforcing a security interest;
and includes any functions or powers in connection with managing the corporation that may be performed or exercised by a receiver or other controller of that property.
external administration of a company has the same meaning as in Schedule 2 to the Corporations Act.
registered liquidator means a person who is registered as a liquidator under Schedule 2 to the Corporations Act.
31 Notice to produce books about financial products
(1) ASIC may give to:
(a) the operator of a financial market, clearing and settlement facility or derivative trade repository; or
(b) a member of the board of the operator of a financial market, clearing and settlement facility or derivative trade repository; or
(c) a person who either carries on or has carried on (either alone or together with any other person or persons) a financial services business, or who is a representative of such a person; or
(d) a nominee controlled by a person of a kind referred to in paragraph (c) or jointly controlled by 2 or more persons at least one of whom is such a person; or
(e) an eligible person in relation to a person of a kind referred to in paragraph (a), (b), (c) or (d); or
(f) any other person who, in ASIC’s opinion, has been a party to a dealing in financial products;
a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books relating to:
(g) the business or affairs of a financial market, clearing and settlement facility or derivative trade repository; or
(h) a dealing in financial products; or
(j) advice given, or an analysis or report issued or published, about financial products; or
(k) the character or financial position of, or a business carried on by, a person of a kind referred to in paragraph (c) or (d); or
(m) an audit of, or a report of an auditor about, a dealing in financial products or accounts or records of a person who either carries on or has carried on (either alone or together with any other person or persons) a financial services business, or who is a representative of such a person.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(2) A reference in subsection (1) to a dealing in financial products, or to a business carried on by a person, includes a reference to a dealing in financial products by a person as a trustee, or to a business carried on by a person as a trustee, as the case may be.
32A Notice to produce books about financial services
For the purposes of Division 2 of Part 2, ASIC may give to:
(a) a person who supplies, or has supplied, a financial service; or
(b) an eligible person in relation to that person;
a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books relating to:
(c) the supply of the financial service; or
(d) the financial service.
Note: Failure to comply with a requirement made under this section is an offence (see section 63).
33 Notice to produce documents in person’s possession
(1) ASIC may give to a person a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books that are in the first‑mentioned person’s possession and relate to:
(a) affairs of a body corporate; or
(ab) affairs of a registered scheme; or
(b) a matter referred to in any of paragraphs 31(1)(g) to (m), inclusive; or
(c) a matter referred to in paragraph 32A(c) or (d).
Note: Failure to comply with a requirement made under this section is an offence (see section 63).
(2) ASIC may give to a person a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books that are in the person’s possession and that relate to the question whether an auditor has complied with Corporations Act audit requirements, ACNC audit requirements, or overseas audit requirements, within the meaning of subsection 30A(2).
(3) ASIC may give to a person a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books that:
(a) are in the person’s possession or control; and
(b) relate to the question whether a registered liquidator has complied with liquidator requirements, within the meaning of subsection 30B(3).
34 ASIC may authorise persons to require production of books, giving of information etc.
(1) ASIC may by writing authorise a member or staff member to make a requirement of a kind that this Division empowers ASIC to make.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(2) An authorisation under this section may be of general application or may be limited by reference to all or any of the following:
(a) the persons of whom requirements may be made;
(b) the books that may be required to be produced;
(c) the information that may be required to be given.
(3) Where an authorisation of a person is in force under this section, the person may make a requirement in accordance with the authorisation as if, in sections 30, 30A, 30B, 31, 32A and 33:
(a) a reference to ASIC were a reference to the person; and
(b) a reference to specified books were a reference to books that the person specifies, whether in the requirement or not and whether orally or in writing, to the person of whom the requirement is made; and
(c) a reference to specified information were a reference to information that the person specifies, whether in the requirement or not and whether orally or in writing, to the person of whom the requirement is made; and
(d) a reference to giving or producing to a specified person were a reference to giving or producing to the first‑mentioned person.
35 Application for warrant to seize books
(1) Where a member or staff member has reasonable grounds to suspect that there are, or may be within the next 3 days, on particular premises in Australia, books whose production could be required under this Division, he or she may:
(a) lay before a magistrate an information on oath or affirmation setting out those grounds; and
(b) apply for the issue of a warrant to search the premises for those books.
(2) On an application under this section, the magistrate may require further information to be given, either orally or by affidavit, in connection with the application.
36 Grant of warrant
(1) This section applies where, on an application under section 35, the magistrate is satisfied that there are reasonable grounds to suspect that there are, or may be within the next 3 days, on particular premises, particular books whose production could be required under this Division.
(2) The magistrate may issue a warrant authorising a member of the Australian Federal Police, whether or not named in the warrant, together with any person so named, with such assistance, and by such force, as is necessary and reasonable:
(a) to enter on or into the premises; and
(b) to search the premises; and
(c) to break open and search anything, whether a fixture or not, in or on the premises; and
(d) to take possession of, or secure against interference, books that appear to be any or all of those books.
(3) If the magistrate issues such a warrant, he or she must set out on the information laid before him or her under subsection 35(2) for the purposes of the application:
(a) which of the grounds set out in the information; and
(b) particulars of any other grounds;
he or she has relied on to justify the issue of the warrant.
(4) A warrant under this section must:
(a) specify the premises and books referred to in subsection (1); and
(b) state whether entry is authorised to be made at any time of the day or night or only during specified hours; and
(c) state that the warrant ceases to have effect on a specified day that is not more than 7 days after the day of issue of the warrant.
36A Execution of warrant
(1) Before any person enters premises under a search warrant issued under section 36, a member of the Australian Federal Police must:
(a) announce that the member is authorised to enter the premises; and
(b) give any person at the premises an opportunity to allow entry to the premises.
(2) However, the member of the Australian Federal Police is not required to comply with subsection (1) if he or she believes on reasonable grounds that immediate entry to the premises is required to ensure that the effective execution of the warrant is not frustrated.
(3) If the occupier of the premises is present at the premises:
(a) the member of the Australian Federal Police must make available to the occupier a copy of the warrant; and
(b) the occupier is entitled to observe the search being conducted.
(4) The occupier’s right to observe the search being conducted ends if the occupier impedes the search.
(5) This section does not prevent 2 or more areas of the premises being searched at the same time.
(6) If books are seized under the warrant, the member of the Australian Federal Police or a person assisting the member must provide a receipt for the books.
(7) If 2 or more books are seized, they may be covered in the one receipt.
37 Powers where books produced or seized
(1) This section applies where:
(a) books are produced to a person under a requirement made under this Division; or
(b) under a warrant issued under section 36, a person:
(i) takes possession of books; or
(ii) secures books against interference; or
(c) by virtue of a previous application of subsection (8) of this section, books are delivered into a person’s possession.
(2) If paragraph (1)(a) applies, the person may take possession of any of the books.
(3) The person may inspect, and may make copies of, or take extracts from, any of the books.
(4) The person may use, or permit the use of, any of the books for the purposes of a proceeding.
(5) The person may retain possession of any of the books for so long as is necessary:
(a) for the purposes of exercising a power conferred by this section (other than this subsection and subsection (7)); or
(b) for any of the purposes referred to in paragraphs 28(a), (b) and (d), 30A(2)(a), (b) and (d) or 30B(2)(a), (b) and (d), as the case requires; or
(c) except in the case of books required to be produced for a purpose specified in subparagraph 30A(2)(a)(ii) or 30A(2)(b)(ii)—for a decision to be made about whether or not a proceeding to which the books concerned would be relevant should be begun; or
(d) for such a proceeding to be begun and carried on.
(6) No‑one is entitled, as against the person, to claim a lien on any of the books, but such a lien is not otherwise prejudiced.
(7) While the books are in the person’s possession, the person:
(a) must permit another person to inspect at all reasonable times such (if any) of the books as the other person would be entitled to inspect if they were not in the first‑mentioned person’s possession; and
(b) may permit another person to inspect any of the books.
(8) Unless subparagraph (1)(b)(ii) applies, the person may deliver any of the books into the possession of ASIC or of a person authorised by it to receive them.
(9) If paragraph (1)(a) or (b) applies, the person, or a person into whose possession the person delivers any of the books under subsection (8), may require:
(a) if paragraph (1)(a) applies—a person who so produced any of the books; or
(b) in any case—a person who was a party to the compilation of any of the books;
to explain any matter about the compilation of any of the books or to which any of the books relate.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(10) In this section:
proceeding includes:
(a) in relation to a contravention of Division 2 of Part 2—a proceeding under a law of the Commonwealth, a State or a Territory; and
(b) otherwise—a proceeding under a law of the Commonwealth, or of a State or Territory in this jurisdiction.
38 Powers where books not produced
Where a person fails to produce particular books in compliance with a requirement made by another person under this Division, the other person may require the first‑mentioned person to state:
(a) where the books may be found; and
(b) who last had possession, custody or control of the books and where that person may be found.
Note: Failure to comply with a requirement made under this section is an offence (see section 63).
39 Power to require person to identify property of body corporate
A person who has power under this Division to require another person to produce books relating to affairs of a body corporate may, whether or not that power is exercised, require the other person:
(a) to identify property of the body; and
(b) to explain how the body has kept account of that property.
Note: Failure to comply with a requirement made under this section is an offence (see section 63).
39A ASIC may give copy of book relating to registered scheme to another person
(1) ASIC may, subject to such conditions (if any) as it imposes, give to a person a copy of any book in its possession that relates to a registered scheme.
(2) If a copy of a book is given to a person under subsection (1) subject to conditions, the person, and any other person who has possession, custody or control of the copy or a copy of it, must comply with the conditions.
Penalty: 10 penalty units or imprisonment for 3 months, or both.
39B ASIC to notify foreign regulator’s access to information or books
(1) This section applies if:
(a) an Australian auditor gives information or produces books because of a requirement made under subsection 30A(1) for purposes referred to in subparagraph 30A(2)(a)(ii) or 30A(2)(b)(ii); or
(b) books specified in such a requirement are obtained from an Australian auditor under a warrant issued under section 36; or
(c) a person gives information or produces books that relate to the question whether an auditor has complied with overseas audit requirements within the meaning of subsection 30A(2) because of a requirement made under subsection 33(2); or
(d) such books are obtained from a person under a warrant issued under section 36.
(2) If ASIC gives the information or books, or copies of the books, to a regulatory body with which it has entered into an agreement or arrangement under subsection 11(10), ASIC must, within 14 days of doing so, notify the Australian auditor or person in writing of the details of the information or books, or copies, given.
39C ASIC may give information and books in relation to Chapter 5 bodies corporate
Application of this section
(1) This section applies if ASIC obtains or generates information or books in the exercise of its powers or the performance of its functions in relation to:
(a) a person in that person’s capacity as a registered liquidator; or
(b) the external administration of a company; or
(c) the control of property of a corporation.
ASIC may give administration information to certain persons
(2) ASIC may give the information, all or part of the books or copies of all or part of the books (administration information) to one or more of the following:
(a) if the administration information relates to a corporation—the corporation;
(b) if the administration information relates to a company that is or has been under external administration—a person who is or has at any time been:
(i) the external administrator of the company; or
(ii) a related entity of the company; or
(iii) an officer of the company; or
(iv) a creditor of the company; or
(v) a member of a committee of inspection in the external administration of the company;
(c) if the administration information relates to property of a corporation that is or has been under control—a person who is or has at any time been:
(i) the controller of the property; or
(ii) a related entity of the corporation; or
(iii) an officer of the corporation; or
(iv) a creditor of the corporation;
(d) if the administration information relates to a company that is or has been under external administration—a person who is carrying out, or has at any time carried out, a review of the external administration of the company under Subdivision C of Division 90 of Schedule 2 to the Corporations Act.
ASIC may only give administration information in certain circumstances
(3) ASIC must not give administration information to a person under this section unless ASIC is satisfied that:
(a) the administration information is relevant to the person; or
(b) the administration information is relevant to the exercise of a power or performance of a function under the Corporations Act by the person in relation to:
(i) a registered liquidator; or
(ii) the external administration of a company; or
(iii) the control of property of a corporation; or
(c) it is otherwise reasonable to give the administration information to the person.
Process to be observed before administration information given
(4) Before giving administration information to a person under this section, ASIC must give the external administrator of the company or the controller of the property of the corporation (as the case requires) notice in writing:
(a) identifying:
(i) the administration information that ASIC proposes to give; and
(ii) the person to whom ASIC proposes to give the information; and
(b) inviting the external administrator or controller (as the case requires) to make a written submission to ASIC within 10 business days after the notice is given, stating:
(i) whether he or she has any objection to the administration information being given to the person; and
(ii) if he or she has such an objection, the reasons for that objection.
(5) If the external administrator or controller (as the case requires) objects to the administration information being given to a person, ASIC must take into account the reasons for that objection when deciding whether to give the information to the person.
(6) If the external administrator or controller (as the case requires) has made a submission objecting to the administration information being given to a person and ASIC decides to give the information to the person, ASIC must give the external administrator or controller (as the case requires) 5 business days’ notice of its decision before giving the information to the person.
Conditions
(7) ASIC may, by notice in writing to the person to whom ASIC gives the administration information, impose conditions on the use and disclosure of the administration information by the person.
Offence
(8) A person commits an offence if:
(a) ASIC gives administration information to the person subject to a condition in relation to the use or disclosure of that information by the person; and
(b) ASIC has given the person notice of the condition under subsection (7); and
(c) the person does not comply with the condition.
Penalty: 10 penalty units or imprisonment for 3 months, or both.
Notices are not legislative instruments
(9) Notices under subsections (4) and (7) are not legislative instruments.
Definitions
(10) In this section:
control of the property of a corporation means:
(a) the receivership of that property; and
(b) the possession, or control, of that property for the purpose of enforcing a security interest;
and includes any functions or powers in connection with managing the corporation that may be performed or exercised by a receiver or other controller of that property.
external administration of a company has the same meaning as in Schedule 2 to the Corporations Act.
external administrator of a company has the same meaning as in Schedule 2 to the Corporations Act.
registered liquidator means a person who is registered as a liquidator under Schedule 2 to the Corporations Act.
Division 4—Requirements to disclose information
40 When certain powers may be exercised
A power conferred by section 41 or 42 may only be exercised:
(a) for the purposes of the performance or exercise of any of ASIC’s functions and powers under the corporations legislation (other than the excluded provisions); or
(b) for the purposes of ensuring compliance with the corporations legislation (other than the excluded provisions); or
(c) in relation to:
(i) an alleged or suspected contravention of the corporations legislation (other than the excluded provisions); or
(ii) an alleged or suspected contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that concerns the management or affairs of a body corporate, or involves fraud or dishonesty and relates to a body corporate or financial products; or
(iii) an alleged or suspected contravention, by a trustee company, of a law of the Commonwealth, or of a State or Territory, being a contravention that involves fraud or dishonesty and that relates to trust property; or
(d) for the purposes of an investigation under Division 1.
41 Acquisitions and disposals of financial products
(1) ASIC may require a person who carries on a financial services business to disclose to it, in relation to an acquisition or disposal of financial products:
(aa) whether the acquisition or disposal was effected on another person’s behalf and, if so:
(i) the name of the other person; and
(ii) the nature of the instructions given to the person who carries on a financial services business in relation to the dealing; or
(a) the name of the person from or through whom the financial products were acquired; or
(b) the name of the person to or through whom the financial products were disposed;
as the case may be, and the nature of the instructions given to the person who carries on a financial services business in relation to the acquisition or disposal.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(2) ASIC may require a person to disclose to it, in relation to an acquisition or disposal of financial products by the person, whether or not the person acquired or disposed of the financial products as trustee for, or for or on behalf of, another person, and, if so:
(a) the name of the other person; and
(b) the nature of any instructions given to the first‑mentioned person in relation to the acquisition or disposal.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(3) ASIC may require a person who operates a financial market to disclose to ASIC, in relation to an acquisition or disposal of financial products on that financial market, the names of the persons who acted in the acquisition or disposal.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(4) ASIC may require an operator of a clearing and settlement facility to disclose to ASIC, in relation to a dealing in financial products, the names of any participants in the clearing and settlement facility who were concerned in any act or omission in relation to the dealing.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(5) Information required to be disclosed under this section need only be disclosed to the extent to which it is known to the person required to make the disclosure.
Note: In criminal proceedings, a defendant bears an evidential burden in relation to the matters in subsection (5).
(6) An offence under subsection 63(2) relating to subsection (1), (2), (3) or (4) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
42 Acquisitions and disposals of trust property by trustee companies
(1) ASIC may require a trustee company to disclose to it, in relation to an acquisition or disposal of trust property by the trustee company, all or any of the following:
(a) the name of:
(i) the person from or through whom the trust property was acquired; or
(ii) the person to or through whom the trust property was disposed;
(b) whether the acquisition or disposal was effected on the instructions of another person, and the nature of any such instructions;
(c) the names of the beneficiaries of the trust.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(2) Information required to be disclosed under this section need only be disclosed to the extent to which it is known to the person required to make the disclosure.
Note: In criminal proceedings, a defendant bears an evidential burden in relation to the matters in subsection (2).
(3) An offence under subsection 63(2) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
43 Exercise of certain powers of ASIC in relation to financial products
(1) This section applies where ASIC considers that:
(a) it may be necessary to exercise, in relation to a financial product issued by a body corporate, a power under section 794D of the Corporations Act; or
(b) a contravention of section 991F, or Division 2 of Part 7.10, of the Corporations Act may have been committed in relation to financial products issued by a body corporate; or
(c) a contravention of Chapter 6C of the Corporations Act may have been committed in relation to shares in a body corporate; or
(d) a contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, may have been committed, being a contravention that involves fraud or dishonesty and relates to financial products issued by a body corporate; or
(e) unacceptable circumstances within the meaning of Part 6.9 of the Corporations Act have, or may have, occurred:
(i) in relation to an acquisition of shares in a body corporate; or
(ii) as a result of conduct engaged in by a person in relation to shares in, or the affairs of, a body corporate; or
(f) a person has, or may have, contravened section 657F of the Corporations Act.
(2) ASIC may require a director, secretary or senior manager of the body to disclose to ASIC information of which he or she is aware and that:
(a) may have affected a dealing that has taken place; or
(b) may affect a dealing that may take place;
in financial products issued by the body.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(3) If ASIC believes on reasonable grounds that a person can give, information about particular matters, being any or all of the following:
(a) a dealing in financial products issued by the body;
(b) advice, or an analysis or report, that a person who carries on or has carried on (either alone or together with any other person or persons) a financial services business, or a representative of such a person, has given, issued or published about such financial products;
(c) the financial position of a business carried on by a person who:
(i) is or has been (either alone or together with any other person or persons) a person who carries on or has carried on a financial services business, or a representative of such a person; and
(ii) has dealt in, has given advice about, or has issued or published an analysis or report about, such financial products;
(d) the financial position of a business carried on by a nominee controlled by a person of a kind referred to in paragraph (c) or jointly controlled by 2 or more persons at least one of whom is such a person;
(e) an audit of, or a report of an auditor about, accounts or records of a person who carries on or has carried on (either alone or together with any other person or persons) a financial services business, or a representative of such a person, being accounts or records relating to dealings in such financial products;
ASIC may require the person to disclose to it the information that the person has about those particular matters.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(3A) An offence under subsection 63(2) relating to subsection (2) or (3) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) ASIC must not exercise a power conferred by subsection (2) or (3) except:
(a) if paragraph (1)(a) applies—for the purpose of determining whether or not to exercise a power as mentioned in that paragraph; or
(b) if paragraph (1)(b), (c) or (d) applies—for the purpose of investigating the possible contravention; or
(c) if paragraph (1)(e) or (f) applies—for the purpose of determining whether or not to make an application under section 657C or 657G of the Corporations Act.
44 Exercise of certain powers of ASIC in relation to trust property acquired or disposed of by trustee company
(1) This section applies if ASIC considers that a contravention of a law of the Commonwealth, or of a State or Territory, may have been committed by a trustee company, being a contravention that involves fraud or dishonesty and that relates to trust property.
(2) ASIC may require a director, secretary or senior manager of the trustee company to disclose to ASIC information of which he or she is aware and that may have affected an acquisition or disposal of trust property by the trustee company.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(3) If ASIC believes on reasonable grounds that a person can give information about particular matters, being any or all of the following:
(a) an acquisition or disposal of trust property by the trustee company;
(b) the financial position of the trustee company;
(c) an audit of, or a report of an auditor about, accounts or records of the trustee company;
ASIC may require the person to disclose to it the information that the person has about those particular matters.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(4) An offence under subsection 63(2) relating to subsection (2) or (3) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) ASIC must not exercise a power conferred by subsection (2) or (3) except for the purpose of investigating the possible contravention referred to in subsection (1).
47 Disclosures to take place in private
(1) A disclosure to ASIC pursuant to a requirement made under this Division must take place in private and ASIC may give directions about who may be present during it, or during a part of it.
(2) A person must not be present during a disclosure unless he or she:
(a) is a member; or
(b) is a staff member approved by ASIC; or
(c) is entitled to be present by virtue of:
(i) a direction under subsection (1); or
(ii) subsection 48(1).
Penalty: 10 penalty units or imprisonment for 3 months, or both.
(3) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
48 Lawyer of person making disclosure may attend
(1) The lawyer of a person making a disclosure to ASIC pursuant to a requirement made under this Division may be present during the disclosure and may, at such times during it as the representative of ASIC presiding at the meeting during which the disclosure is made determines, address the representatives of ASIC about the disclosure.
(2) If, in the presiding representative’s opinion, a person is trying to obstruct the disclosure by exercising rights under subsection (1), the presiding representative may require the person to stop addressing the representatives of ASIC.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(3) An offence under subsection 63(4) relating to subsection (2) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Division 5—Proceedings after an investigation
49 ASIC may cause prosecution to be begun
(1) This section applies where:
(a) as a result of an investigation; or
(b) from a record of an examination;
conducted under this Part, it appears to ASIC that a person:
(c) may have committed an offence against the corporations legislation; and
(d) ought to be prosecuted for the offence.
(2) ASIC may cause a prosecution of the person for the offence to be begun and carried on.
(3) If:
(a) ASIC, on reasonable grounds, suspects or believes that a person can give information relevant to a prosecution for the offence; or
(b) the offence relates to matters being, or connected with, affairs of a body corporate, or to matters including such matters;
ASIC may, whether before or after a prosecution for the offence is begun, by writing given to the person, or to an eligible person in relation to the body, as the case may be, require the person or eligible person to give all reasonable assistance in connection with such a prosecution.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(3A) An offence under subsection 63(3) relating to subsection (3) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) Subsection (3) does not apply in relation to:
(a) the person referred to in subsection (1); or
(b) a person who is or has been that person’s lawyer.
Note: A defendant bears an evidential burden in relation to the matter in subsection (4), see subsection 13.3(3) of the Criminal Code.
(5) Nothing in this section affects the operation of the Director of Public Prosecutions Act 1983.
50 ASIC may cause civil proceeding to be begun
Where, as a result of an investigation or from a record of an examination (being an investigation or examination conducted under this Part), it appears to ASIC to be in the public interest for a person to begin and carry on a proceeding for:
(a) the recovery of damages for fraud, negligence, default, breach of duty, or other misconduct, committed in connection with a matter to which the investigation or examination related; or
(b) recovery of property of the person;
ASIC:
(c) if the person is a company—may cause; or
(d) otherwise—may, with the person’s written consent, cause;
such a proceeding to be begun and carried on in the person’s name.
Division 5A—Audit deficiency notifications and reports
50A Application
(1) This Division applies to an audit deficiency (the identified audit deficiency) that:
(a) is identified by ASIC in circumstances described in subsection (2) in relation to an audit conducted by an Australian auditor; and
(b) consists of any of the following:
(i) a failure by the auditor to comply with the auditing standards;
(ii) a failure by the auditor to comply with the auditor independence requirements in the Corporations Act;
(iii) a failure by the auditor to comply with any applicable code of professional conduct;
(iv) a failure by the auditor to comply with the provisions of the Corporations Act dealing with the conduct of audits; and
(c) ASIC reasonably believes:
(i) indicates a significant weakness in the Australian auditor’s quality control system; or
(ii) indicates a significant weakness in the conduct of the audit and may be detrimental to the overall quality of the audit.
(2) For the purposes of paragraph (1)(a), the circumstances are that the identified audit deficiency is identified by ASIC while exercising its powers or functions:
(a) in relation to audit‑related matters (Corporations Act audit requirements) under Chapter 2M, Chapter 5C, Part 7.8, Part 9.2 or Part 9.2A of the Corporations Act or under other provisions of that Act that relate to that Chapter or that Part; or
(b) for the purposes of ascertaining compliance with Corporations Act audit requirements; or
(c) in relation to:
(i) an alleged or suspected contravention of Corporations Act audit requirements; or
(ii) an alleged or suspected contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that relates to an audit matter and that either concerns the management or affairs of a body corporate or involves fraud or dishonesty and relates to a body corporate; or
(d) for the purposes of an investigation under Division 1 of this Part relating to a contravention referred to in paragraph (c).
50B Notice of audit deficiency
(1) ASIC may, in writing, notify the Australian auditor of the identified audit deficiency.
(2) The notice must:
(a) set out:
(i) the identified audit deficiency; and
(ii) any remedial action that ASIC thinks necessary to remedy the deficiency; and
(iii) such other matters in relation to the deficiency as ASIC thinks fit; and
(b) invite the auditor to make written submissions to ASIC, within 6 months, about the deficiency and any remedial action taken, or proposed to be taken, to remedy the deficiency.
50C Audit deficiency report
(1) At any time after the end of the 6 month period, ASIC may prepare an audit deficiency report if ASIC is satisfied that the Australian auditor has not taken appropriate remedial action to remedy the identified audit deficiency.
(2) The report must set out:
(a) the identified audit deficiency; and
(b) the remedial action that ASIC thinks necessary to remedy the deficiency; and
(c) if the auditor has taken remedial action to remedy the deficiency—details of the remedial action; and
(d) if the auditor has not taken any remedial action—that fact; and
(e) such other matters in relation to the deficiency as ASIC thinks fit.
(3) Before preparing the report, ASIC must take into account:
(a) any submissions received from the auditor in response to an invitation under paragraph 50B(2)(b); and
(b) whether or not the auditor has taken any remedial action to remedy the deficiency.
(4) The report is not a legislative instrument.
50D Publication of report
(1) Subject to subsection (2) and section 50E, ASIC may, if it considers it appropriate to do so, publish the report on its website.
(2) If ASIC publishes the report on its website, the report:
(a) if the audit to which the report relates was conducted by an audit firm or audit company:
(i) may disclose identifying particulars of the audit firm or audit company; but
(ii) must not disclose identifying particulars of any professional member of the audit team involved in the audit; and
(b) if the audit to which the report relates was conducted by an individual auditor who did not act on behalf of an audit firm or audit company:
(i) may disclose identifying particulars of the auditor; but
(ii) must not disclose identifying particulars of any other professional member of the audit team involved in the audit; and
(c) must not disclose identifying particulars of the audited body.
(3) In this section:
identifying particulars:
(a) in relation to an audit firm, an audit company, an individual auditor referred to in paragraph (2)(b) or an audited body, means:
(i) the name, or a business name, of the firm, company, auditor or body; or
(ii) any other particulars that would enable the firm, company, auditor or body to be identified; or
(b) in relation to a professional member of an audit team (other than an individual auditor referred to in paragraph (2)(b)), means:
(i) the name of the member; or
(ii) any other particulars that would enable the member to be identified.
50E Consultation before publication
(1) Before publishing the report on its website, ASIC must:
(a) give a copy of the report to the Australian auditor to which the report relates; and
(b) invite the Australian auditor to give ASIC comments on the report within 21 days.
(2) The report as published must include any comments received in response to the invitation in a separate part of the report.
Division 6—Hearings
51 Power to hold hearings
ASIC may hold hearings for the purposes of the performance or exercise of any of its functions and powers under the corporations legislation (other than the excluded provisions), other than a function or power conferred on it by Division 1 of this Part or by section 657C or 657G of the Corporations Act.
52 General discretion to hold hearing in public or private
(1) Subject to sections 53 and 54, ASIC may direct that a hearing take place in public or take place in private.
(2) In exercising its discretion under subsection (1), ASIC must have regard to:
(a) whether evidence that may be given, or a matter that may arise, during the hearing is of a confidential nature or relates to the commission, or to the alleged or suspected commission, of an offence; and
(b) any unfair prejudice to a person’s reputation that would be likely to be caused if the hearing took place in public; and
(c) whether it is in the public interest that the hearing take place in public; and
(d) any other relevant matter.
53 Request by person appearing at hearing that it take place in public
(1) Subject to section 54, where:
(a) the corporations legislation (other than the excluded provisions) requires ASIC to give a person an opportunity to appear at a hearing; and
(b) the person requests that the hearing or part of the hearing take place in public;
the hearing or part must take place in public.
(2) Despite subsection (1), where ASIC is satisfied, having regard to the matters referred to in subsection 52(2), that it is desirable that a hearing or part of a hearing take place in private, it may direct that the hearing or part take place in private.
54 Certain hearings to take place in private
Where the corporations legislation (other than the excluded provisions and this section) requires a hearing to take place in private, the hearing must take place in private.
55 ASIC may restrict publication of certain material
(1) Where, at a hearing that is taking place in public or in private, ASIC is satisfied that it is desirable to do so, ASIC may give directions preventing or restricting the publication of evidence given before, or of matters contained in documents lodged with, ASIC.
(2) In determining whether or not to give a direction under subsection (1), ASIC must have regard to:
(a) whether evidence that has been or may be given, or a matter that has arisen or may arise, during the hearing is of a confidential nature or relates to the commission, or to the alleged or suspected commission, of an offence against an Australian law; and
(b) any unfair prejudice to a person’s reputation that would be likely to be caused unless ASIC exercises its powers under this section; and
(c) whether it is in the public interest that ASIC exercises its powers under this section; and
(d) any other relevant matter.
56 Who may be present when hearing takes place in private
(1) ASIC may give directions about who may be present during a hearing that is to take place in private.
(2) A direction under subsection (1) does not prevent:
(a) a person whom the corporations legislation (other than the excluded provisions) requires to be given the opportunity to appear at a hearing; or
(b) a person representing under section 59:
(i) a person of a kind referred to in paragraph (a) of this subsection; or
(ii) a person who, by virtue of such a direction, is entitled to be present at a hearing;
from being present during the hearing.
(3) Where ASIC directs that a hearing take place in private, a person must not be present at the hearing unless he or she:
(a) is a member; or
(b) is a staff member approved by ASIC; or
(c) is entitled to be present by virtue of:
(i) a direction under subsection (1); or
(ii) subsection (2).
Penalty: 10 penalty units or imprisonment for 3 months.
(4) Subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
57 Involvement of person entitled to appear at hearing
(1) This section applies where the corporations legislation (other than the excluded provisions) requires ASIC to give a person an opportunity to appear at a hearing and to make submissions and give evidence to it.
(2) ASIC must appoint a place and time for the hearing and cause written notice of that place and time to be given to the person.
(3) If the person does not wish to appear at the hearing, the person may, before the day of the hearing, lodge with ASIC any written submissions that the person wishes ASIC to take into account in relation to the matter concerned.
58 Power to summon witnesses and take evidence
(1) A member may, by written summons in the prescribed form given to a person:
(a) require the person to appear before ASIC at a hearing to give evidence, to produce specified documents, or to do both; and
(b) require the person to attend from day to day unless excused, or released from further attendance, by a member.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(2) At a hearing, ASIC may take evidence on oath or affirmation, and for that purpose a member may:
(a) require a witness at the hearing to either take an oath or make an affirmation; and
(b) administer an oath or affirmation to a witness at the hearing.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(3) The oath or affirmation to be taken or made by a person for the purposes of this section is an oath or affirmation that the evidence the person will give will be true.
(4) The member presiding at a hearing:
(a) may require a witness at the hearing to answer a question put to the witness; and
(b) may require a person appearing at the hearing pursuant to a summons issued under this section to produce a document specified in the summons.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(4A) An offence under subsection 63(3) relating to subsection (1), (2) or (4) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) ASIC may permit a witness at a hearing to give evidence by tendering, and if ASIC so requires, verifying by oath, a written statement.
59 Proceedings at hearings
(1) A hearing must be conducted with as little formality and technicality, and with as much expedition, as the requirements of the corporations legislation (other than the excluded provisions) and a proper consideration of the matters before ASIC permit.
(2) At a hearing, ASIC:
(a) is not bound by the rules of evidence; and
(b) may, on such conditions as it thinks fit, permit a person to intervene; and
(c) must observe the rules of natural justice.
(3) Subject to subsection (4), Division 4 of Part 4 (other than section 104) applies, so far as practicable, in relation to a hearing as if the hearing were a meeting of ASIC.
(4) At a hearing before a Division of ASIC, 2 members of the Division form a quorum.
(5) At a hearing, a natural person may appear in person or be represented by an employee of the person approved by ASIC.
(6) A body corporate may be represented at a hearing by an officer or employee of the body corporate approved by ASIC.
(7) An unincorporated association, or a person in the person’s capacity as a member of an unincorporated association, may be represented at a hearing by a member, officer or employee of the association approved by ASIC.
(8) Any person may be represented at a hearing by a barrister or solicitor of the Supreme Court of a State or Territory or of the High Court.
60 ASIC to take account of evidence and submissions
ASIC must take into account:
(a) evidence given, or a submission made, to it at a hearing; or
(b) a submission lodged with it under section 57;
in making a decision on a matter to which the evidence or submission relates.
61 Reference to Court of question of law arising at hearing
(1) ASIC may, of its own motion or at a person’s request, refer to the Court for decision a question of law arising at a hearing.
(3) Where a question has been referred under subsection (1), ASIC must not, in relation to a matter to which the hearing relates:
(a) give while the reference is pending a decision to which the question is relevant; or
(b) proceed in a manner, or make a decision, that is inconsistent with the Court’s opinion on the question.
(4) Where a question is referred under subsection (1):
(a) ASIC must send to the Court all documents that were before ASIC in connection with the hearing; and
(b) at the end of the proceeding in the Court in relation to the reference, the Court must cause the documents to be returned to ASIC.
62 Protection of members etc.
(1) A member has, in the performance or exercise of any of his or her functions and powers as a member in relation to a hearing, the same protection and immunity as a Justice of the High Court.
(1A) A delegate of a member has, in the performance or exercise of any delegated function or power in relation to a hearing, the same protection and immunity as a Justice of the High Court.
(2) A barrister, solicitor or other person appearing on a person’s behalf at a hearing has the same protection and immunity as a barrister has in appearing for a party in a proceeding in the High Court.
(3) Subject to this Act, a person who is required by a summons under section 58 to appear at a hearing, or a witness at a hearing, has the same protection as a witness in a proceeding in the High Court.
Division 7—Offences
63 Non‑compliance with requirements made under this Part
(1) A person must not intentionally or recklessly fail to comply with a requirement made under:
(a) section 19; or
(b) subsection 21(3); or
(c) section 30, 30A, 30B, 31, 32A, 33 or 34; or
(d) subsection 37(9); or
(e) section 38; or
(f) section 39.
Penalty: 100 penalty units or imprisonment for 2 years, or both.
(2) A person must not fail to comply with a requirement made under section 41, 42, 43 or 44.
Penalty: 50 penalty units or imprisonment for 12 months, or both.
(3) A person must not fail to comply with a requirement made under subsection 21(1) or 29(2), paragraph 24(2)(a) or subsection 49(3) or 58(1), (2) or (4).
Penalty: 10 penalty units or imprisonment for 3 months, or both.
(4) A person must comply with a requirement made under subsection 23(2) or 48(2).
Penalty: 5 penalty units.
(5) Subsections (1), (1A), (2) and (3) do not apply to the extent that the person has a reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in this subsection, see subsection 13.3(3) of the Criminal Code.
(6) Paragraph (1)(d) does not apply to the extent that the person has explained the matter to the best of his or her knowledge or belief.
Note: A defendant bears an evidential burden in relation to the matter in this subsection, see subsection 13.3(3) of the Criminal Code.
(7) Paragraph (1)(e) does not apply to the extent that the person has stated the matter to the best of his or her knowledge or belief.
Note: A defendant bears an evidential burden in relation to the matter in this subsection, see subsection 13.3(3) of the Criminal Code.
(8) Paragraph (1)(f) does not apply to the extent that the person has, to the extent that the person is capable of doing so, performed the acts referred to in paragraphs 39(a) and (b).
Note: A defendant bears an evidential burden in relation to the matter in this subsection, see subsection 13.3(3) of the Criminal Code.
64 False information
(1) A person must not:
(a) in purported compliance with a requirement made under this Part; or
(b) in the course of an examination of the person;
give information, or make a statement, that is false or misleading in a material particular.
Penalty: 100 penalty units or imprisonment for 2 years, or both.
(2) A person must not, at a hearing, give evidence that is false or misleading in a material particular.
Penalty: 10 penalty units or imprisonment for 3 months, or both.
(3) It is a defence to a prosecution for a contravention of subsection (1) or (2) if it is proved that the defendant, when giving the information or evidence or making the statement, believed on reasonable grounds that it was true and not misleading.
Note: A defendant bears a legal burden in relation to the matter in subsection (3), see section 13.4 of the Criminal Code.
65 Obstructing person acting under this Part
(1) A person must not:
(a) engage in conduct that results in the obstruction or hindering of a person in the exercise of a power under this Part; or
(b) engage in conduct that results in the obstruction or hindering of a person who is executing a warrant issued under section 36.
Penalty: 100 penalty units or imprisonment for 2 years, or both.
(1A) Subsection (1) does not apply to the extent that the person has a reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the Criminal Code.
(2) The occupier, or person in charge, of premises that a person enters under a warrant issued under section 36 must not intentionally or recklessly fail to provide to that person all reasonable facilities and assistance for the effective exercise of his or her powers under the warrant.
Penalty: 25 penalty units or imprisonment for 6 months, or both.
66 Contempt of ASIC
(1) A person must not:
(a) engage in conduct that results in the obstruction or hindering of ASIC or a member in the performance or exercise of any of ASIC’s functions and powers; or
(b) engage in conduct that results in the disruption of a hearing.
Penalty: 50 penalty units or imprisonment for 1 year, or both.
(2) A person must not contravene a direction given under subsection 55(1).
Penalty: 50 penalty units or imprisonment for 1 year, or both.
(2A) Subsection (2) does not apply to the extent that the person has a reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in this subsection, see subsection 13.3(3) of the Criminal Code.
(2B) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(3) An offence constituted by a contravention of subsection (1) or (2) is punishable on summary conviction.
67 Concealing books relevant to investigation
(1) Where ASIC is investigating, or is about to investigate, a matter, a person must not:
(a) in any case—engage in conduct that results in the concealment, destruction, mutilation or alteration of a book relating to that matter; or
(b) if a book relating to that matter is in a particular State or Territory—engage in conduct that results in the taking or sending of the book out of that State or Territory or out of Australia.
Penalty: 200 penalty units or imprisonment for 5 years, or both.
(2) It is a defence to a prosecution for a contravention of subsection (1) if it is proved that the defendant intended neither to defeat the purposes of the corporations legislation, nor to delay or obstruct an investigation, or a proposed investigation, by ASIC.
Note: A defendant bears a legal burden in relation to a matter mentioned in subsection (2), see section 13.4 of the Criminal Code.
68 Self‑incrimination
(1) For the purposes of this Part, of Division 3 of Part 10, and of Division 2 of Part 11, it is not a reasonable excuse for a person to refuse or fail:
(a) to give information; or
(b) to sign a record; or
(c) to produce a book;
in accordance with a requirement made of the person, that the information, signing the record or production of the book, as the case may be, might tend to incriminate the person or make the person liable to a penalty.
(2) Subsection (3) applies where:
(a) before:
(i) making an oral statement giving information; or
(ii) signing a record;
pursuant to a requirement made under this Part, Division 3 of Part 10 or Division 2 of Part 11, a person (other than a body corporate) claims that the statement, or signing the record, as the case may be, might tend to incriminate the person or make the person liable to a penalty; and
(b) the statement, or signing the record, as the case may be, might in fact tend to incriminate the person or make the person so liable.
(3) The statement, or the fact that the person has signed the record, as the case may be, is not admissible in evidence against the person in:
(a) a criminal proceeding; or
(b) a proceeding for the imposition of a penalty;
other than a proceeding in respect of:
(c) in the case of the making of a statement—the falsity of the statement; or
(d) in the case of the signing of a record—the falsity of any statement contained in the record.
69 Legal professional privilege
(1) This section applies where:
(a) under this Part, Division 3 of Part 10, or Division 2 of Part 11, a person requires a lawyer:
(i) to give information; or
(ii) to produce a book; and
(b) giving the information would involve disclosing, or the book contains, as the case may be, a privileged communication made by, on behalf of or to the lawyer in his or her capacity as a lawyer.
(2) The lawyer is entitled to refuse to comply with the requirement unless:
(a) if the person to whom, or by or on behalf of whom, the communication was made is a body corporate that is being wound up—the liquidator of the body; or
(b) otherwise—the person to whom, or by or on behalf of whom, the communication was made;
consents to the lawyer complying with the requirement.
(3) If the lawyer so refuses, he or she must, as soon as practicable, give to the person who made the requirement a written notice setting out:
(a) if the lawyer knows the name and address of the person to whom, or by or on behalf of whom, the communication was made—that name and address; and
(b) if subparagraph (1)(a)(i) applies and the communication was made in writing—sufficient particulars to identify the document containing the communication; and
(c) if subparagraph (1)(a)(ii) applies—sufficient particulars to identify the book, or the part of the book, containing the communication.
Penalty: 10 penalty units or imprisonment for 3 months, or both.
70 Powers of Court where non‑compliance with Part
(1) This section applies where ASIC is satisfied that a person has, without reasonable excuse, failed to comply with a requirement made under this Part (other than Division 8).
(2) ASIC may by writing certify the failure to the Court.
(3) If ASIC does so, the Court may inquire into the case and may order the person to comply with the requirement as specified in the order.
Division 8—ASIC’s powers where non‑compliance with Part
71 Orders by ASIC
This Division applies where, in ASIC’s opinion, information about:
(a) affairs of a body corporate; or
(b) financial products; or
(c) trust property acquired or disposed of by a trustee company;
needs to be found out for the purposes of the exercise of any of ASIC’s powers under this Part but cannot be found out because a person has failed to comply with a requirement made under this Part.
72 Orders in relation to securities of a body corporate
(1) If paragraph 71(a) applies, ASIC may make one or more of the following:
(a) an order restraining a specified person from disposing of any interest in specified securities of the body corporate referred to in that paragraph;
(b) an order restraining a specified person from acquiring any interest in specified securities of the body;
(c) an order restraining the exercise of voting or other rights attached to specified securities of the body;
(d) an order directing the holder of securities in respect of which an order under this section is in force to give written notice of that order to any person whom the holder knows to be entitled to exercise a right to vote attached to the securities;
(e) an order directing the body not to pay, except in the course of winding up, a sum due from the body in respect of specified securities of the body;
(f) an order directing the body not to register the transfer or transmission of specified securities of the body;
(g) an order directing the body not to issue to a person who holds shares in the body shares that the body proposed to issue to the person:
(i) because the person holds shares in the body; or
(ii) pursuant to an offer or invitation made or issued to the person because the person holds shares in the body.
(2) An offence under subsection 75(5) relating to subsection (1) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
73 Orders in relation to financial products and trust property generally
(1) If paragraph 71(b) applies, ASIC may make one or more of the following:
(a) an order restraining a specified person from disposing of any interest in specified financial products;
(b) an order restraining a specified person from acquiring any interest in specified financial products;
(c) an order restraining the exercise of voting or other rights attached to specified financial products;
(d) an order directing the holder of financial products in respect of which an order under this section is in force to give written notice of that order to any person whom the holder knows to be entitled to exercise a right to vote attached to the financial products;
(e) an order directing a body corporate not to pay, except in the course of winding up, a sum due from the body in respect of specified financial products;
(f) an order directing a body corporate not to register the transfer or transmission of specified financial products;
(g) an order directing a body corporate not to issue to a person who holds shares in the body shares that the body proposed to issue to the person:
(i) because the person holds such shares; or
(ii) pursuant to an offer or invitation made or issued to the person because the person holds such shares;
(h) an order requiring a specified person to dispose of specified derivatives, or to dispose of specified derivatives in a specified manner.
(1A) If paragraph 71(c) applies, ASIC may make one or more of the following:
(a) an order restraining a specified person from disposing of any interest in specified trust property;
(b) an order restraining a specified person from acquiring any interest in specified trust property;
(c) an order directing a body corporate not to pay, except in the course of winding up, a sum due from the body corporate in respect of specified trust property;
(d) an order directing a body corporate not to register the transfer or transmission of specified trust property.
(2) An order under subsection (1) or (1A) does not prejudice or affect a right of an operator of a financial market or clearing and settlement facility:
(a) to cause or enter into a transaction that causes a derivative to be closed out; or
(b) to cause to be registered in a person’s name, or to register in a person’s name, a derivative that was previously registered in another person’s name.
(3) An offence under subsection 75(5) relating to subsection (1) or (1A) of this section is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
75 Orders under this Division
(1) ASIC may make an order varying or revoking an order in force under this Division.
(2) An order under this Division must be made by notice published in the Gazette.
(3) Where an order is made under this Division (other than subsection (1)), ASIC must cause to be given to the person to whom the order is directed:
(a) a copy of the order; and
(b) a copy of each order varying or revoking it.
(4) Where an order under this Division relates to financial products, ASIC must cause:
(a) a copy of the order; and
(b) a copy of each order varying or revoking it;
to be given to:
(c) in any case—the person who issued or made available, or who will issue or make available, the financial products; or
(d) if the financial products are rights or options—the person against whom the right or option is, or would be enforceable.
(5) A person must comply with an order in force under this Division.
Penalty: 25 penalty units or imprisonment for 6 months, or both.
Division 9—Evidentiary use of certain material
76 Statements made at an examination: proceedings against examinee
(1) A statement that a person makes at an examination of the person is admissible in evidence against the person in a proceeding unless:
(a) because of subsection 68(3), the statement is not admissible in evidence against the person in the proceeding; or
(b) the statement is not relevant to the proceeding and the person objects to the admission of evidence of the statement; or
(c) the statement is qualified or explained by some other statement made at the examination, evidence of the other statement is not tendered in the proceeding and the person objects to the admission of evidence of the first‑mentioned statement; or
(d) the statement discloses matter in respect of which the person could claim legal professional privilege in the proceeding if this subsection did not apply in relation to the statement, and the person objects to the admission of evidence of the statement.
(2) Subsection (1) applies in relation to a proceeding against a person even if it is heard together with a proceeding against another person.
(3) Where a written record of an examination of a person is signed by the person under subsection 24(2) or authenticated in any other prescribed manner, the record is, in a proceeding, prima facie evidence of the statements it records, but nothing in this Part limits or affects the admissibility in the proceeding of other evidence of statements made at the examination.
77 Statements made at an examination: other proceedings
Where direct evidence by a person (the absent witness) of a matter would be admissible in a proceeding, a statement that the absent witness made at an examination of the absent witness and that tends to establish that matter is admissible in the proceeding as evidence of that matter:
(a) if it appears to the court or tribunal that:
(i) the absent witness is dead or is unfit, because of physical or mental incapacity, to attend as a witness; or
(ii) the absent witness is outside the State or Territory in which the proceeding is being heard and it is not reasonably practicable to secure his or her attendance; or
(iii) all reasonable steps have been taken to find the absent witness but he or she cannot be found; or
(b) if it does not so appear to the court or tribunal—unless another party to the proceeding requires the party tendering evidence of the statement to call the absent witness as a witness in the proceeding and the tendering party does not so call the absent witness.
78 Weight of evidence admitted under section 77
(1) This section applies where evidence of a statement made by a person at an examination of the person is admitted under section 77 in a proceeding.
(2) In deciding how much weight (if any) to give to the statement as evidence of a matter, regard is to be had to:
(a) how long after the matters to which it related the statement was made; and
(b) any reason the person may have had for concealing or misrepresenting a material matter; and
(c) any other circumstances from which it is reasonable to draw an inference about how accurate the statement is.
(3) If the person is not called as a witness in the proceeding:
(a) evidence that would, if the person had been so called, have been admissible in the proceeding for the purpose of destroying or supporting his or her credibility is so admissible; and
(b) evidence is admissible to show that the statement is inconsistent with another statement that the person has made at any time.
(4) However, evidence of a matter is not admissible under this section if, had the person been called as a witness in the proceeding and denied the matter in cross‑examination, evidence of the matter would not have been admissible if adduced by the cross‑examining party.
79 Objection to admission of statements made at examination
(1) A party (the adducing party) to a proceeding may, not less than 14 days before the first day of the hearing of the proceeding, give to another party to the proceeding written notice that the adducing party:
(a) will apply to have admitted in evidence in the proceeding specified statements made at an examination; and
(b) for that purpose, will apply to have evidence of those statements admitted in the proceeding.
(2) A notice under subsection (1) must set out, or be accompanied by writing that sets out, the specified statements.
(3) Within 14 days after a notice is given under subsection (1), the other party may give to the adducing party a written notice:
(a) stating that the other party objects to specified statements being admitted in evidence in the proceeding; and
(b) specifies, in relation to each of those statements, the grounds of objection.
(4) The period prescribed by subsection (3) may be extended by the court or tribunal or by agreement between the parties concerned.
(5) On receiving a notice given under subsection (3), the adducing party must give to the court or tribunal a copy of:
(a) the notice under subsection (1) and any writing that subsection (2) required to accompany that notice; and
(b) the notice under subsection (3).
(6) Where subsection (5) is complied with, the court or tribunal may either:
(a) determine the objections as a preliminary point before the hearing of the proceeding begins; or
(b) defer determination of the objections until the hearing.
(7) Where a notice has been given in accordance with subsections (1) and (2), the other party is not entitled to object at the hearing of the proceeding to a statement specified in the notice being admitted in evidence in the proceeding, unless:
(a) the other party has, in accordance with subsection (3), objected to the statement being so admitted; or
(b) the court or tribunal gives the other party leave to object to the statement being so admitted.
80 Copies of, or extracts from, certain books
(1) A copy of, or an extract from, a book relating to:
(a) affairs of a body corporate; or
(aa) an audit‑related matter referred to in subparagraph 30A(2)(a)(i); or
(ab) a matter referred to in paragraph 30B(2)(a); or
(b) a matter referred to in any of paragraphs 31(1)(g) to (m), inclusive; or
(c) a matter referred to in paragraph 32A(c) or (d);
is admissible in evidence in a proceeding as if the copy were the original book, or the extract were the relevant part of the original book, as the case may be, whether or not the copy or extract was made under section 37.
(2) A copy of, or an extract from, a book is not admissible in evidence under subsection (1) unless it is proved that the copy or extract is a true copy of the book, or of the relevant part of the book, as the case may be.
(3) For the purposes of subsection (2), a person who has compared:
(a) a copy of a book with the book; or
(b) an extract from a book with the relevant part of the book;
may give evidence, either orally or by an affidavit or statutory declaration, that the copy or extract is a true copy of the book or relevant part, as the case may be.
81 Report under Division 1
Subject to section 82, where a copy of a report under Division 1 purports to be certified by ASIC as a true copy of such a report, the copy is admissible in a proceeding (other than a criminal proceeding) as prima facie evidence of:
(a) ASIC’s report of its opinion for the purposes of paragraph 461(1)(h) or subparagraph 583(c)(iii) of the Corporations Act; and
(b) any facts or matters that the report states ASIC to have found to exist.
82 Exceptions to admissibility of report
(1) This section applies where a party to a proceeding tenders a copy of a report as evidence against another party.
(2) The copy is not admissible under section 81 in the proceeding as evidence against the other party unless the court or tribunal is satisfied that:
(a) a copy of the report has been given to the other party; and
(b) the other party, and the other party’s lawyer, have had a reasonable opportunity to examine that copy and to take its contents into account in preparing the other party’s case.
(3) Before or after the copy referred to in subsection (1) is admitted in evidence, the other party may apply to cross‑examine, in relation to the report, a specified person who, or 2 or more specified persons each of whom:
(a) was concerned in preparing the report or making a finding about a fact or matter that the report states ASIC to have found to exist; or
(b) whether or not pursuant to a requirement made under this Part, gave information, or produced a book, on the basis of which, or on the basis of matters including which, such a finding was made.
(4) The court or tribunal must grant an application made under subsection (3) unless it considers that, in all the circumstances, it is not appropriate to do so.
(5) If:
(a) the court or tribunal grants an application or applications made under subsection (3); and
(b) a person to whom the application or any of the applications relate, or 2 or more such persons, is or are unavailable, or does not or do not attend, to be cross‑examined in relation to the report; and
(c) the court or tribunal is of the opinion that to admit the copy under section 81 in the proceeding as evidence against the other party without the other party having the opportunity so to cross‑examine the person or persons would unfairly prejudice the other party;
the court or tribunal must refuse so to admit the copy, or must treat the copy as not having been so admitted, as the case requires.
83 Material otherwise admissible
Nothing in this Division renders evidence inadmissible in a proceeding in circumstances where it would have been admissible in that proceeding if this Division had not been enacted.
Division 10—Miscellaneous
84 Requirement made of a body corporate
Where a provision of this Part empowers a person to make a requirement of a body corporate, the provision also empowers the person to make that requirement of a person who is or has been an officer or employee of the body.
85 Evidence of authority
A person (the inspector), other than ASIC, who is about to make, or has made, a requirement of another person under this Part (other than Division 6) must, if the other person requests evidence of the inspector’s authority to make the requirement, produce to the other person:
(a) a current identity card that was issued to the inspector by ASIC and incorporates a photograph of the inspector; and
(b) if the requirement will be, or was, made under an authorisation by ASIC—a document that was issued by ASIC and sets out the effect of so much of the authorisation as is relevant to making the requirement; and
(c) otherwise—such evidence (if any) of the inspector’s authority to make the requirement as ASIC determines.
86 Giving documents to natural persons
Section 109X of the Corporations Act has effect for the purposes of this Part as if a reference in subsection (2) of that section to leaving a document at an address were a reference to leaving it at that address with a person whom the person leaving the document believes on reasonable grounds:
(a) to live or work at that address; and
(b) to have attained the age of 16 years.
87 Place and time for production of books
A provision of this Part that empowers a person to require the production of books at a place and time specified by the person is taken:
(a) to require the person to specify a place and time that are reasonable in all the circumstances; and
(b) if it is reasonable in all the circumstances for the person to require the books to be produced forthwith—to empower the person to require the books to be produced forthwith.
88 Application of Crimes Act and Evidence Act
(1) For the purposes of Part III of the Crimes Act 1914, an examination or a hearing is a judicial proceeding.
(2) Part 2.2, sections 69, 70, 71 and 147 and Division 2 of Part 4.6 of the Evidence Act 1995 apply to an examination in the same way that they apply to a proceeding to which that Act applies under section 4 of that Act.
89 Allowances and expenses
(1) A person who, pursuant to a requirement made under section 19, appears for examination is entitled to the prescribed allowances and expenses (if any).
(2) A person who, pursuant to a summons issued under section 58, appears at a hearing is entitled to be paid:
(a) if the summons was issued at another person’s request—by that other person; or
(b) otherwise—by ASIC;
the prescribed allowances and expenses (if any).
(3) ASIC may pay such amount as it thinks reasonable on account of the costs and expenses (if any) that a person incurs in complying with a requirement made under this Part.
90 Expenses of investigation under Division 1
Subject to section 91, ASIC must pay the expenses of an investigation.
91 Recovery of expenses of investigation
(1) Where:
(a) a person is convicted of an offence against a law of the Commonwealth, or of a State or Territory in this jurisdiction, in a prosecution; or
(b) a judgment is awarded, or a declaration or other order is made, against a person in a proceeding in a court of this jurisdiction; or
(ba) a person is convicted of an offence against Division 2 of Part 2 in a prosecution; or
(bb) a judgment is awarded, or a declaration or other order is made, against a person under Division 2 of Part 2 in a proceeding in a court;
begun as a result of an investigation under Division 1, ASIC may make one of the following orders:
(c) an order that the person pay the whole, or a specified part, of the expenses of the investigation;
(d) an order that the person reimburse ASIC to the extent of a specified amount of such of the expenses of the investigation as ASIC has paid;
(e) an order that the person pay, or reimburse ASIC in respect of, the whole, or a specified part, of the cost to ASIC of making the investigation, including the remuneration of a member or staff member concerned in the investigation.
(2) An order under this section must be in writing and must specify when and how the payment or reimbursement is to be made.
(3) A person must comply with an order under this section that is applicable to the person.
Penalty: 50 penalty units or imprisonment for 1 year, or both.
(3A) Subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) ASIC may recover in a court of competent jurisdiction as a debt due to ASIC so much of the amount payable under an order made under this section as is not paid in accordance with the order.
(5) A report under Division 1 may include recommendations about the making of orders under this section.
92 Compliance with Part
A person is neither liable to a proceeding, nor subject to a liability, merely because the person has complied, or proposes to comply, with a requirement made, or purporting to have been made, under this Part.
93 Effect of Part
(1) Except as expressly provided, nothing in this Part limits the generality of anything else in this Part.
(2) The functions and powers that this Part confers are in addition to, and do not derogate from, any other function or power conferred by a law of the Commonwealth, a State or a Territory.
93AA Enforcement of undertakings
(1) ASIC may accept a written undertaking given by a person in connection with a matter in relation to which ASIC has a function or power under this Act.
(2) The person may withdraw or vary the undertaking at any time, but only with ASIC’s consent.
(3) If ASIC considers that the person who gave the undertaking has breached any of its terms, ASIC may apply to the Court for an order under subsection (4).
(4) If the Court is satisfied that the person has breached a term of the undertaking, the Court may make all or any of the following orders:
(a) an order directing the person to comply with that term of the undertaking;
(b) an order directing the person to pay to the Commonwealth an amount up to the amount of any financial benefit that the person has obtained directly or indirectly and that is reasonably attributable to the breach;
(c) any order that the Court considers appropriate directing the person to compensate any other person who has suffered loss or damage as a result of the breach;
(d) any other order that the Court considers appropriate.
Part 3A—Enforceable undertakings in relation to registered schemes
93A Undertakings by responsible entity
(1) ASIC may accept a written undertaking given by the responsible entity of a registered scheme in connection with a matter:
(a) concerning the registered scheme; and
(b) in relation to which ASIC has a power or function under the corporations legislation (other than the excluded provisions).
(2) The responsible entity may withdraw or vary the undertaking at any time, but only with ASIC’s consent.
(3) If ASIC considers that the responsible entity has breached any of the terms of the undertaking, ASIC may apply to the Court for an order under subsection (4).
(4) If the Court is satisfied that the responsible entity has breached a term of the undertaking, the Court may make all or any of the following orders:
(a) an order directing the responsible entity to comply with that term of the undertaking;
(b) an order directing the responsible entity to transfer to scheme property an amount up to the amount of any financial benefit that the responsible entity has obtained directly or indirectly and that is reasonably attributable to the breach;
(c) any order that the Court considers appropriate directing the responsible entity to compensate any person who has suffered loss or damage as a result of the breach;
(d) any other order that the Court considers appropriate.
(5) ASIC must keep a record of the full text of the undertaking.
(6) ASIC must make available to a person who asks for it a copy of the text of the undertaking, but ASIC must delete from the copy information:
(a) that the responsible entity has asked it not to release; and
(b) that ASIC is satisfied:
(i) is commercial in confidence; or
(ii) should not be disclosed because it would be against the public interest to do so; or
(iii) consists of personal details of an individual.
(7) If ASIC makes available a copy that has information deleted from it, the copy must include a note stating that information has been deleted.
Part 4—ASIC’s business
Division 1—General
94 Arrangement of ASIC’s business
Subject to sections 10A and 12, ASIC may give directions about the arrangement of ASIC’s business.
95 ASIC to establish offices
(1) For the purpose of performing its functions and exercising its powers under the corporations legislation, ASIC:
(a) must establish a regional office in each State and Territory (other than an external Territory) in this jurisdiction; and
(b) may establish a regional office in a State that is not in this jurisdiction; and
(c) may establish such other offices as it thinks fit.
(2) In deciding on the number and location of its offices, ASIC must seek to ensure that:
(a) for the purposes of the corporations legislation (other than the excluded provisions)—it serves adequately the needs of business communities in the States and Territories in this jurisdiction; and
(b) for the purposes of Division 2 of Part 2—it serves adequately the needs of business communities throughout Australia.
96 Regional Commissioners
For each regional office established under subsection 95(1) there is to be a different Regional Commissioner, employed by ASIC under subsection 120(3), who must manage the office.
Division 2—Divisions of ASIC
97 ASIC may establish Division
(1) ASIC may direct in writing that a Division of ASIC consisting of at least 2 specified members is to, either generally or as otherwise provided by the direction, perform or exercise specified functions or powers of ASIC.
(2) A direction under this section that is in force and does not specify the Chairperson as a member of the Division must specify such a member as the Division’s chairperson.
98 Effect of direction establishing Division
(1) Where a direction under section 97 is in force, this section has effect for the purposes of the performance or exercise by the Division, in accordance with the direction, of functions or powers of ASIC.
(2) ASIC is taken to consist of the Division.
(3) If the Chairperson is not a member of the Division, the member whom the direction specifies as the Division’s chairperson is taken to be the Chairperson.
(4) A meeting of the Division is taken to be a meeting of ASIC, but 2 members of the Division form a quorum at a meeting of the Division.
99 ASIC may reconstitute Division
Where a direction under section 97 is in force, ASIC may at any time revoke the direction or amend it in relation to the Division’s membership or in any other respect.
100 Effect of reconstituting Division
(1) This section has effect where, as at the time when a direction is amended under section 99 so as to change a Division’s membership, the Division as constituted before the change has, in relation to a particular matter, begun but not yet completed the performance of functions, or the exercise of powers, in accordance with the direction as in force before the amendment.
(2) The Division as constituted after the change may, in relation to that matter, perform functions, and exercise powers, in accordance with the direction as in force after the amendment.
101 Multiple Divisions
A Division of ASIC may perform functions, or exercise powers, of ASIC even though another such Division is performing such functions, or exercising such powers, at the same time.
Division 3—Delegation by ASIC
102 Delegation
(1) ASIC may, by writing under its common seal, delegate to a person all or any of its functions and powers.
(2) ASIC must not, without the Minister’s approval, delegate a function or power to a person other than:
(a) a member; or
(b) a staff member; or
(c) a person who, by virtue of the regulations, is a prescribed person in relation to the delegation; or
(d) a person appointed by the Chair of APRA under section 45 of the Australian Prudential Regulation Authority Act 1998; or
(e) a member of the staff of the Australian Competition and Consumer Commission referred to in subsection 27(1) of the Competition and Consumer Act 2010.
(2A) ASIC must not delegate a function or power to an APRA staff member within the meaning of the Australian Prudential Regulation Authority Act 1998, unless the Chief Executive Officer of APRA has agreed to the delegation in writing.
(2B) ASIC must not delegate a function or power to:
(a) a person referred to in paragraph (2)(e); or
(b) a person engaged under section 27A of the Competition and Consumer Act 2010;
unless the Chairperson of the Australian Competition and Consumer Commission has agreed to the delegation in writing.
(2C) ASIC must not delegate a function or power under section 12GLC, or under Subdivision GB or GC of Division 2 of Part 2, to a person other than:
(a) a member of ASIC; or
(b) a member of staff who is an SES employee or an acting SES employee.
(3) In subsections (1) and (2):
person includes a body.
(4) In exercising its power under subsection (1), ASIC must seek to ensure that:
(a) the persons who make decisions affecting a particular business community are located as close to that community as practicable; and
(b) for the purposes of the corporations legislation (other than the excluded provisions)—members of business communities in the States and Territories in this jurisdiction have prompt and convenient access to decision‑making and to ASIC’s facilities; and
(c) for the purposes of Division 2 of Part 2—members of business communities throughout Australia have prompt and convenient access to decision‑making and to ASIC’s facilities.
(5) In the performance of a function, or the exercise of a power, delegated under this section, the delegate is subject to ASIC’s directions.
(6) Where a function or power conferred on ASIC by or under a law (including this Act) and delegated under this section is performed or exercised by the delegate, it is, for the purposes of that law and this Act, taken to have been performed or exercised by ASIC.
Division 4—Meetings of ASIC
103 Convening of meetings
(1) The Chairperson may convene a meeting to be held at a place and time he or she determines.
(2) The Chairperson must convene such meetings as he or she thinks necessary for the efficient performance of ASIC’s functions.
(3) If so requested in writing by 2 of the members, the Chairperson must convene a meeting.
104 Approved methods of communication
(1) If all the members who are not absent from office so agree, a meeting may be held by means of a method of communication, or by means of a combination of methods of communication, approved by ASIC for the purposes of that meeting.
(2) For the purposes of this Part, a member who participates in a meeting held as permitted by subsection (1) is present at the meeting even if he or she is not physically present at the same place as another member participating in the meeting.
(3) In this section:
meeting includes a part of a meeting.
105 Quorum
At a meeting:
(a) if ASIC consists of 3 or 4 members—2 members; or
(b) in any other case—3 members;
form a quorum.
106 Who is to preside at meetings
(1) The Chairperson must preside at all meetings at which he or she is present.
(2) If the Chairperson is not present at a meeting but the Deputy Chairperson is present, the Deputy Chairperson must preside.
(3) If neither the Chairperson nor the Deputy Chairperson is present at a meeting, the members present must elect one of their number to preside.
107 Procedure at meetings