1997

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

AUSTRALIAN NATIONAL RAILWAYS COMMISSION SALE BILL 1997

EXPLANATORY MEMORANDUM

(Circulated by the authority of the 
Minister for Transport and Regional Development, 
the Hon John Sharp MP)

88191    Cat. No. 96 7584 1    ISBN 0644 501103

AUSTRALIAN NATIONAL RAILWAYS COMMISSION 
SALE BILL 1997

OUTLINE

The Australian National Railways Commission Sale Bill 1997 gives effect to the Government’s decision to sell the non-interstate mainline track rail assets of Australian National (the Commission).  It provides authority and mechanisms for the sale, including authority to repeal, replace or amend rail agreements with South Australia and Tasmania following their agreement to sale arrangements.  It also provides for reduction of the Commission to an entity charged with dealing with any residual functions, litigation, disputes, assets and liabilities not able to be finalised or disposed of prior to abolition.

The sale enables the injection of private sector expertise into rail operations to promote cost reductions, service responsiveness improvements and increased rail market share.  It is a component of the Government’s rail reform initiatives which propose the separation of the management of the interstate rail track network from above track operations with the Commonwealth’s role being to concentrate on controlling and managing economically-efficient and non-discriminatory access to the interstate rail network.

Schedule 1 of the Bill inserts a new Part in the Australian National Railways Commission Act 1983, to provide flexible arrangements for the transfer of assets, liabilities and contracts between the Commission, the Commonwealth and new rail operators.  It is proposed that the Commission will be wound down through a combination of the transfer of assets to companies formed under corporations law for sale as rail businesses, take over of liabilities by the Commonwealth and direct sale of assets.

This will enable the Commonwealth to sell the rail operations while retaining and meeting the liabilities of the Commission.  It also provides authority to the Minister to enter into agreements with relevant States to replace or amend specified rail agreements with the States to allow the sale to proceed.  Similarly it provides for the Minister for Finance to be authorised to sign agreements with purchasers of the Commission rail businesses.

The Schedule also proposes a range of provisions which are intended to both protect the Commonwealth from default by the Commission as a result of the loss of assets and revenue generating capacity and provisions to meet the liabilities of the Commission in order to protect parties which have contracted to the Commission in good faith.

Schedule 2 amends existing provisions of the Australian National Railways Commission Act 1983 to enable the Commission to assist the Commonwealth with the sale and to provide a power of direction which enables the Minister to direct the Commission to facilitate disposal of its assets and liabilities.

Through the sale process, the Commission will shed all its rail operations other than the ownership and management of interstate track.  The schedule proposes transitional arrangements to facilitate the sale and to allow flexibility to reduce the structure and size of the Commission as its responsibilities contract.

Schedule 3 enables abolition of the Commission and the transfer of residual assets, liabilities and contracts to the Commonwealth after the sale has been completed and the Commission liabilities have been met.  It also enables repeal of specified legislation covering agreements with South Australia and Tasmania after replacement agreements have been negotiated, tabled in Parliament and taken effect. 

Schedule 4 amends other acts in consequence to the abolition of the Commission.  Schedule 5 Part 1 enables fixtures to be severed from railways land and to be sold to a rail operator.  This will provide them with increased incentive to maintain and improve rail infrastructure.  Part 2 provides for access to railways for defence-related purposes and for emergency or disaster relief, and compensation for that access.

FINANCIAL IMPACT STATEMENT

The costs associated with the Commission sale have been provided for in separate appropriations.  In particular, it is expected that some $355.8m will be expended from 1996/97 budget appropriations for the payment of employee redundancy packages, unfunded provisions, outstanding contracts, Commonwealth debt, environmental remediation, regional assistance and sales costs.  Further payments of $50.7m are estimated in relation to these items in 1997/98 with some $40m required for superannuation liabilities.  

The Bill authorises the assumption of the Commission debt and other financial obligations by the Commonwealth.  It is expected that funding in the order of $1billion will be required for this purpose and budget provision has been made.  In addition, the Commonwealth will assume responsibility for the Commission interest obligations estimated at $35m in 1997/98, declining to $5m in 2000/01.

The Government expects to receive a financial return from the sale of the Commission businesses.  However, due to the particular nature of the businesses, it is not possible to provide estimates of likely sales revenue at this time.

NOTES ON CLAUSES

Clause 1 - Short Title

Clause 1 provides for the Act to be cited as the Australian National Railways Commission Sale Act 1997

Clause 2 - Commencement

The Australian National Railways Commission Sale Act 1997 commences on the day on which it receives the Royal Assent, unless specified otherwise.  Those items which will not commence at that time are: 

•	Schedule 3 Items 1-5 repeals the Act to abolish the Commission, though provides that the provisions of the Act continue in relation to specified matters, and will commence on a day to be fixed by proclamation when the Commission’s activities are insufficient to justify its continued operation.

•	Schedule 3 Item 6 repeals the Seat of Government Railway Act which provides for the Commission to provide rail services in the ACT.  Alternative arrangements will be made for these services during the wind up period, and this Act will be repealed by proclamation when the Commission is abolished.

•	Schedule 3 Items 7-11 repeal existing legislation covering rail agreements between the Commonwealth and South Australia and the Commonwealth and Tasmania.  These will commence on a day to be fixed by proclamation, which must not be earlier than when new agreements are made with the respective States under section 67AZR.

•	Schedule 4 Items 8 and 9 repeal rail components of legislation covering a broader agreement with South Australia and will commence on a day to be fixed by proclamation which must not be earlier than when a new agreement, or agreements, are made with South Australia under section 67AZR.

•	Other items of Schedule 4 (other than Item 2 amendment of Commonwealth Borrowing Levy Act 1987 which will commence from the date of Royal Assent) are consequential to the abolition of the Commission and will take effect on a day to be proclaimed when the Commission is abolished under Schedule 3. 

Clause 3 - Schedule(s)

Clause 3 provides for the amendment and repeal of the Australian National Railways Commission Act 1983 and a number of other Acts as specified in the Schedules, and for other items in the Schedules to have effect on their own terms.

schedule 1 - insertion of new part va in the australian national railways commission act 1983

ITEM 1 - After Part V

The Schedule inserts a new Part VA after the existing Part V of the Australian National Railways Commission Act 1983 to provide for the winding down of the Commission.  It establishes flexible arrangements for the Minister for Finance or the Commission to transfer or sell assets, contracts and liabilities of the Commission to the Commonwealth or to other persons.  It also provides for the Commonwealth to take over and meet obligations of the Commission.

The new Part also enables the Commission and Commissioners to assist the Commonwealth in connection with the sale and to pay to the Commonwealth proceeds from the sale or transfer of any of the Commission’s assets or contracts.

The Part also makes certain sale and Commission wind up transactions exempt from stamp duty and similar taxes and provides for the Federal Court to grant injunctions relating to the enforcement of the new Part.  The new Part makes provision for compensation for acquisition of property.

Provisions of the new Part VA - Transfer of assets of Commission

Division 1 - Preliminary

New section 67AA - Purpose of Part

New section 67AA provides that the purpose of the Part is to provide for the winding down of the Commission prior to the Commission being abolished by repeal of this Act.

New section 67AB - Simplified Outline

New section 67AB provides a simplified outline of new Part VA.

New section 67AC - Interpretation

This section defines terms used in the new Part:

'Asset' means any legal or equitable estate or interest in real or personal property, whether actual, contingent or prospective and any right, power, privilege or immunity, whether actual, contingent or prospective.

‘Commonwealth guaranteed liability’ means a liability, and any other related obligations, whose satisfaction or performance is guaranteed by the Commonwealth.

‘Contract’ includes a deed and a deed poll.

‘Federal Court’ means the Federal Court of Australia.

‘Instrument’ includes a document.

‘Land registration official’ means the Registrar of Titles or equivalent officer of the State or Territory in which the land is situated.

‘Liability’ means any liability, duty or obligation, whether actual, contingent or prospective.

‘Obligation’ means any actual, contingent or prospective obligation.

DIVISION 2 - TRANSFER OF ASSETS, LIABILITIES, RIGHTS AND OBLIGATIONS OF COMMISSION

This Division provides flexible arrangements for the transfer or sale of assets, liabilities, rights and obligations of the Commission to the Commonwealth or another person.

New Section 67AD - Minister for Finance may direct Commission to sell or transfer assets

New subsection 67AD(1) provides that the Minister for Finance may, by written notice to the Commission, direct the Commission to sell or transfer a specified asset of the Commission.  Subsection 67AD(2) provides that the direction may specify to the Commission requirements for the sale or transfer, including to whom, when, how and the price that should apply to the transfer or sale.

New subsection 67AD(3) provides that the Commission must comply with a direction.  Subsection 67AD(4) provides that new section 67AD does not limit the Minister for Finance from directly transferring assets or contractual rights and obligations from the Commission to the Commonwealth or other persons under new sections 67AE or 67AF.

New Section 67AE - Transfer of assets by declaration

New subsection 67AE(1) provides that the Minister for Finance may, in writing, make any or all of the following declarations:

(a)	declare that specified assets of the Commission vest in a specified person at a specified time without any conveyance, transfer or assignment;

(b)	declare that a specified instrument relating to a specified asset transferred continues to have effect after the transfer as if a reference in the instrument to the Commission were a reference to the person; and 

(c)	declare that a specified person becomes the Commission’s successor in law in relation to an asset immediately after the asset vests in the person.

New subsection 67AE(2) provides that a declaration under subsection (1) has effect according to its terms and new subsection 67AE(3) requires a copy of declarations made under subsection (1) to be published in the Gazette within 14 days of making the declaration.  New subsection 67AE(4) provides that new subsection (1) does not prevent the Commission from disposing of assets in other ways than by Ministerial declaration unless disposal would be contrary to a declaration.

New section 67AF - Transfer of contractual rights and obligations by declaration.

New subsection 67AF(1) provides that the Minister for Finance may, by writing, declare that the Commission’s rights and obligations under a specified contract to which the Commission is a party, cease to be rights and obligations of the Commission at a specified time and transfer to a specified person at that time (a specified person can be the Commonwealth).

New subsection 67AF(2) enables the Minister for Finance to declare, in writing, that a specified contract continues to have effect after a specified time, as if a reference in the contract to the Commission were a reference to the Commonwealth or a specified person.

New subsection 67AF(3) provides that the Minister for Finance may, by writing, declare that a specified instrument relating to a specified contract continues to have effect after the Commission’s rights and obligations under the contract are transferred to a specified person, as if a reference in the instrument to the Commission were a reference to the person.

New subsection 67AF(4) provides that the Minister for Finance may, by writing, declare that a 	specified person becomes the Commission’s successor in law, in relation to the Commission’s rights and obligations under a specified contract, immediately after those rights and obligation’s transfer to the person.

New subsection 67AF(5) provides that a declaration under new section 67AF has effect according to its terms and subsection 67AF(6) requires that the declarations be published in the Gazette within 14 days of making the declaration.

New subsection 67AF(7) provides that section 67AF does not limit the Minister’s powers to make declarations in relation to assets under section 67AE.

New section 67AG - Transfer of liabilities by declaration

New subsection 67AG(1) provides that the Minister for Finance may in writing make any of 	the following declarations in relation to any liability of the Commission other than a liability which is guaranteed by the Commonwealth:

(a)	a declaration that a specified liability ceases to be a liability of the Commission and becomes a liability of the Commonwealth or a specified person at a specified time;

(b)	a declaration that a specified instrument relating to a specified liability continues to have effect after the liability is transferred as if a reference in the instrument to the Commission were a reference to the person to whom it is transferred;

(c)	a declaration that a specified person becomes the Commission’s successor in law in relation to a specified liability immediately after the liability is transferred to the person.

New subsection 67AG(2) provides that such a declaration has effect according to its terms and new subsection 67AG(3) requires that such a declaration is to be published in the Gazette within 14 days of making the declaration.

New section 67AH - Commonwealth guaranteed liabilities of the Commission

New section 67AH provides for the Minister for Finance, may, by writing, declare that a specified liability of the Commission, which is guaranteed by the Commonwealth, ceases to be a liability of the Commonwealth and becomes a liability of the Commonwealth.  The section has effect according to its own terms and provides that the Treasurer may authorise payments to discharge the liability from the Consolidated Revenue Fund.

New section 67AJ - Consideration

This section is intended to remove any doubt that transfers by declaration under this Division may be made with or without the giving of consideration.

DIVISION 3 - CONTRACTS

This Division provides for the Commission to enter into contracts for the purposes of the new Part VA.

New section 67AK - Commission may enter into contracts

New subsection 67AK provides that the Commission may enter into contracts for the purposes of assisting in the sale or wind down of the Commission, for example to lease its assets to other persons, or to assign its leases.

New section 67AL - Minister for Finance may direct Commission to enter into contracts

New subsection 67AL provides that the Minister for Finance may, by writing, direct the Commission to enter into contracts under new section 67AK.  A direction may specify to the Commission details of the contract to be entered into, such as when and with whom the contract should be made.  The section also requires the Commission to comply with this type of direction.

DIVISION 4 - TRANSFERS BY THE COMMONWEALTH

This Division provides flexible arrangements for the Minister for Finance to transfer or sell assets, liabilities, rights and obligations that were transferred from the Commission to the Commonwealth under Division 2 to another person.

New section 67AM - Transfer of assets

New subsection 67AM(1) provides that the Minister for Finance may, by writing, make any or all of the following declarations in relation to an asset that has been transferred to the Commonwealth by declaration under 67AE:

(a)	a declaration that a specified asset vests in a specified person at a specified time without conveyance, transfer or assignment;

(b)	a declaration that a specified instrument relating to a specified asset continues to have effect after the asset transfers to a specified person as if a reference in the instrument to the Commonwealth were a reference to the person;

(c)	a declaration that a specified person becomes the Commonwealth's successor in law in relation to an asset immediately after the asset transfers to the person.

New subsection 67AM(2) provides that such a declaration has effect according to its terms and subsection 67AM(3) requires declarations under the section to be published in the Gazette within 14 days of making the declaration.

New subsection 67AM(4) provides that subsection (1) does not prevent the Commonwealth from transferring an asset to a person in some other way. 

New section 67AN Transfer of contractual rights and obligations

New subsection 67AN(1) provides that the section applies to rights and obligations under contracts transferred to the Commonwealth under section 67AF.

New subsection 67AN(2) provides that the Minister for Finance may, by writing, declare that the Commonwealth's rights and obligations under a specified contract are transferred at a specified time to become rights and obligations of a specified person.

New subsection 67AN(3) provides that the Minister for Finance may, by writing, declare that a specified contract continues to have effect after a specified time as if a reference in the contract to the Commonwealth were a reference to a specified person.

New subsection 67AN(4) provides that the Minister for Finance may, by writing, declare that a specified instrument relating to a specified contract continues to have effect, after the Commonwealth transfers the rights and obligations under the contract to a specified person, as if a reference in the instrument to the Commonwealth were a reference to the person.

New subsection 67AN(5) provides that the Minister for Finance may, by writing, declare that a specified person becomes the Commonwealth's successor in law in relation to the Commonwealth's rights and obligations under a specified contract, immediately after those rights and obligations become rights and obligations of the person.

New subsection 67AN(6) provides that such a declaration has effect according to its terms and new subsection 67AN(7) requires declarations under the section to be published in the Gazette within 14 days of making the declaration.

New subsection 67AN(8) provides that the section does not prevent the Minister for Finance from transferring assets under section 67AM.

New section 67AP ‑ Transfer of liabilities

New subsection 67AP(1) provides that the section applies to a liability that was transferred to the Commonwealth by declaration under section 67AG.

New subsection 67AP(2) provides that the Minister for Finance may, by writing, make any or all of the following declarations:

(a)	a declaration that a specified liability ceases to be a liability of the Commonwealth and becomes a liability of a specified person at a specified time;

(b)	a declaration that a specified instrument relating to a specified liability continues to have effect after the liability transfers to a specified person as if a reference in the instrument to the Commonwealth were a reference to the person;

(c)	a declaration that a specified person becomes the Commonwealth’s successor in law in relation to a specified liability immediately after the liability transfers to the person.

New subsection 67AP(3) provides that such a declaration has effect according to its terms and new subsection 67AP(4) requires a copy of a declaration under the section to be published in the Gazette within 14 days of making the declaration.

New Section 67AQ ‑ Consideration

This new section is intended to remove any doubt that transfers by declaration under new Division 4 may be made with or without the giving of consideration.

Division 5 - Proceeds of asset transfers to be paid to the Commonwealth

This division provides that proceeds of assets sold as a result of the winding down of the Commission are transferred to the Commonwealth.

New section 67AR - Proceeds of asset transfers to be paid to the Commonwealth

This section ensures that the proceeds from transfers of assets by the Commission are paid to the Commonwealth.  New subsection 67AR(1) provides that the Minister for Finance, may direct the Commission to pay to the Commonwealth a sum of money up to the amount of any consideration it receives in respect of the sale or transfer of a specified asset or contract.  

New subsection 67AR(2) provides that the Commission must comply with such a direction.  New subsection 67AR(3) provides that new section 67AR does not, by implication, limit the payment of dividends to the Commonwealth by the Commission under section 57 of the Australian National Railways Commission Act 1983.

Division 6 - Tax exemption

This Division provides that transfers of assets, liabilities and contracts as a result of the wind down of the Commission are exempt from stamp duty and other similar State and Territory taxes unless declared otherwise by the Minister for Finance.

New section 67AS - Exemption from stamp duty and other taxes

New subsection 67AS(1) provides an exemption from stamp duty or other tax that would otherwise be payable under a law of the Commonwealth, a State or Territory in respect of any transfers of assets, contracts, liabilities, rights, obligations or shares arising out of, because of, or for a purpose connected with, the sale of the Commission.

New subsection 67AS(2) provides that the Minister for Finance may, by written notice, declare that subsection (1) does not apply in respect of a specified exempt matter.  New subsection 67AS(3) provides that such a declaration has effect according to its terms.

Subsection 67AS(4) defines an ‘exempt matter’ to mean all those types of transfers, transactions and agreements etc that may take place pursuant to new Part VA.

Division 7 - Commonwealth Takeover of CONTRACTUAL RIGHTS AND obligations AND other liabilities

This Division provides for the Commonwealth to take over, and meet, any contractual rights or liabilities of the Commission. 

New section 67AT - Commonwealth takeover of certain contractual rights and obligations and other liabilities of the Commission

This section provides for the Minister for Finance to take over direct responsibility for contractual rights obligations and liabilities of the Commission, other than borrowing transactions which are provided for by new section 67AU.  It complements new section 67AF to enable the Commonwealth to take over by agreement, those rights and obligations and liabilities unable to be effected by declaration.  This may cover, for example, lease contracts between the Commission and a foreign Corporation.  

New section 67AU - Commonwealth takeover of certain liabilities of the Commission

This section provides for the Treasurer to take over direct responsibility for Commission borrowing by agreement.  It complements new section 67AG to enable the Commonwealth to take over debts by agreement, including those unable to be effected by declaration, for example financing obligations to overseas parties governed by foreign law.  The section also defines ‘Borrowing Transaction’ to be a loan or any other transaction that gives rise to a borrowing and to include raising money by dealing in securities or by obtaining credit.

New section 67AV - Authorisation of payments

New section 67AV enables the Treasurer, should he or she enter an agreement to takeover an obligation of the Commission under section 67AU, to authorise the payment of money to meet the Commonwealth’s obligations under the agreement.

New section 67AW - Appropriation

New section 67AW provides that a payment under new section 67AV is to be made out of the consolidated revenue fund which is appropriated accordingly.

New section 67AX - Application of the Loan Securities Act 1919

New section 67AX is intended to allow any overseas borrowings that are taken over by the Commonwealth under new section 67AU to be managed in the same manner as other overseas Commonwealth borrowings covered by the Loan Securities Act 1919.

DIVISION 8 - COMMISSION AND OTHERS TO ASSIST THE IMPLEMENTATION OF THIS PART

This division provides for the Commission and Commissioners to assist in the wind down process and for the use of information provided in giving assistance.

New section 67AY ‑ Implementation of this Part

This new section defines for the purposes of this Division a reference to the “implementation of this Part” as including the formulation of policies and approaches to be adopted by the Minister for Finance in connection with the wind down of the Commission.

New section 67AZ - Assistance given by Commission and Commissioners in connection with the implementation of this Part.

New section 67AZ ensures cooperation by the Commission and Commissioners in the implementation of new Part VA.  Under new subsections 67AZ(1) and 67AZ(2) the Commission or Commissioners may assist the Commonwealth in connection with the implementation of the new Part VA.

New subsections 67AZ(3) and 67AZ(4) provide that the Commission or Commissioners must, when requested in writing by the Minister for Finance, assist the Commonwealth in connection with the implementation of the new Part VA.  The assistance requested must be provided within the period, and in the form and manner, specified by the request.

New subsection 67AZ(5) ensures that the giving of such assistance or the making of such a request under new section 67AZ does not result in a contravention, liability or remedy under a rule of common law or equity, other than a rule of administrative law.

New section 67AZA - Giving of assistance - ancillary provisions

New subsection 67AZA(1) specifies that the giving of assistance under 67AZ by the Commission or Commissioners may take the form of the giving of information, financial assistance, a financial benefit to a related party, such as a Corporation established as a sales vehicle, or the entering into of an agreement with the Commonwealth or the Commission.  It may also include the provision of information and other assistance by a Commissioner or by employees of the Commission, in connection with conduct of a due diligence procedure, market briefing or similar process.

New subsection 67AZA(2) provides that subsection (1) does not limit the forms in which assistance can be given.

New subsection 67AZA(3) confirms that new section 67AZ does not limit the powers of the Commonwealth, Commission or Commissioners to enter into agreements and subsection 67AZA(4) provides that section 67AZ extends to assistance given outside Australia.

67AZB - Use of information by the Commonwealth or the Commission

New section 67AZB is intended to ensure that the Commonwealth, the Commission or an ‘associated person’ are able, without risk of any breach of a rule of common law or equity to use or disclose information obtained under new section 67AZ.  This protection does not extend to a rule of administrative law.  ‘Associated person’ is defined in new subsection 67AZB(5) to include a Minister, Commonwealth officer or other person performing services on behalf of the Commonwealth in connection with the implementation of new Part VA.  That definition also includes a Commissioner, officer or employee of the Commission or a person performing services on behalf of the Commission in connection with the implementation of new Part VA.

New section 67AZC - Agreements relating to the protection of information

New subsection 67AZC(1) enables the Minister for Finance, on behalf of the Commonwealth, to enter into an agreement with a person relating to the protection of commercially sensitive information provided under section 67AZ.  Subsection 67AZC(2) ensures that such an agreement is legally enforcement as if it were a contract.  New subsection 67AZC(3) confirms that the section does not limit the Commonwealth’s power to enter into agreements.  

New subsection 67AZC(4), (5) and (6) make the same provisions in respect of the Commission.

DIVISION 9 - INJUNCTIONS

This Division provides enforcement provisions for this part.

New section 67AZD - Injunctions

New subsection 67AZD(1) empowers the Federal Court (the Court), on application of the Minister for Finance to grant injunctions preventing conduct or proposed conduct in contravention of Part VA, or to require modified conduct.  Subsection 67AZD(2) empowers the Court, upon application from the Minister for Finance, to grant an injunction requiring a person to take action to comply with the new Part VA.

New section 67AZE - Interim injunctions

New subsection 67AZE(1) empowers the Federal Court to grant an interim injunction restraining a person from engaging in specified conduct, pending consideration of an application for an injunction under section 67AZD.  New subsection 67AZE(2) precludes the Court from making it a condition of granting an interim injunction that the Minister for Finance gives an undertaking as to damages.  Such an undertaking would have required the Minister for Finance, in the event the injunction was not granted at the end of the interim injunction period, to pay the respondent to the application damages caused by the operation of the interim injunction.

New section 67AZF - Discharge etc of injunctions

New section 67AZF empowers the Court to discharge or vary an injunction granted under new Division 9.

New section 67AZG - Certain limits on granting injunctions not to apply

A court may be reluctant to grant an injunction where it is unlikely that the person against whom the injunction is sought (‘the respondent’) will continue to act in a way the injunction is seeking to remedy and a court may be reluctant to grant an injunction where there is no imminent danger of substantial damage to the applicant or a third party if the injunction is not issued.

New paragraphs 67AZG(1)(a) and 28(2)(a) empower the Court to grant an injunction if satisfied that the respondent has engaged in conduct of a particular kind, or has refused to comply with specific provisions of new Part VA, regardless of whether it appears to the Court that the person intends to continue to engage in conduct of that kind or to continue to refuse to comply.

New paragraphs 67AZG(1)(b) and 28(2)(b) empower the Court to grant an injunction if satisfied that if an injunction is not granted it is likely that the respondent will engage in conduct of a particular kind, regardless of whether the person has previously engaged in conduct of that kind or previously failed to comply, or whether there is imminent danger of substantial damage to any person.

New section 67AZH - Other powers of the court unaffected

New section 67AZH confirms that the powers of the Court to issue injunctions under new Part VA are in addition to any of the Court’s other powers

Division 10 - miscellaneous

New section 67AZJ -  Transfers of Commission land may be registered

The purpose of new section 67AZJ is to enable transfers of rights, titles and interests in land that are transferred by written declaration of the Minister for Finance, or a person authorised by the Minister for Finance, pursuant to new section 67AE or 67AM to be registered and otherwise dealt with by the States and Territories in the way that transfers of those matters would ordinarily be dealt with.

New section 67AZK - This part does not modify registers kept by land registration officials.

New section 67AZK provides that new Part VA, insofar as it provides for the interpretation of references in other instruments, does not modify any register kept by land registration official under a law of a State or Territory.

New section 67AZL - Lands Acquisition Act 1989 does not apply to this part

New section 67AZL provides that the Lands Acquisition Act 1989 does not apply to anything done under new Part VA.  Any acquisition of land by the Commonwealth will be from the Commission which is an authority of the Commonwealth and thus the processes and compensation provided for under that Act are not appropriate.

New section 67AZM - Certificates in relation to assets other than land

The purpose of new section 67AZM is to enable transfers of rights, titles and interests in assets other than land that are transferred by written declaration of the Minister for Finance, or a person authorised by the Minister for Finance, pursuant to new section 67AE, or 67AM, to be registered and otherwise dealt with in the way that transfers of those matters would ordinarily be dealt with.  New subsection 67AZM(4) defines ‘assets official’ for the purposes of section 67AZM. 

New section 67AZN - Minister may sell shares in sale company

To avoid doubt, new section 67AZN provides that if the Commonwealth owns shares in a company established for purposes relating to new Part VA, the Minister for Finance may, on behalf of the Commonwealth, enter into contracts to sell the shares.

New section 67AZP - Legislative Instruments Act does not apply to this Part

To avoid doubt, new section 67AZP provides that the Legislative Instruments Act 1997 will not apply in relation to an instrument made under new Part VA.  The provision promotes commercial certainty for purchasers of Commonwealth rail assets.

New section 67AZQ - Operation of Australian Land Transport Development Act 1988

New section 67AZQ provides that, for the purpose of paragraph 32(1)(n) of the Australian Land Transport Development Act 1988, where the Commission disposes of an asset under new Part VA, the Commission is taken to have paid to the Commonwealth an amount equal to the greater of the proceeds of the sale or disposal and the market value of the asset, thus meeting its obligations under that Act.

New section 67AZR - Minister may enter into certain agreement with States

New section 67AZR enables the Minister to, by written notice, enter into agreements on behalf of the Commonwealth with South Australia or Tasmania that terminate or vary agreements contained in the Port Augusta to Whyalla Railway Agreement Act 1970, Tarcoola to Alice Springs Railway Act 1974, Railways Agreement (South Australia) Act 1975, Railway Agreement (Adelaide to Crystal Brook Railway) Act 1980 and Railways (Tasmania) Act 1975, and authorises the performance and observance by the Commonwealth and the Commission of the new agreements.  New subsections 67AZR1(b) to (d) and 2(b) to (d) restrict the matters able to be included in the agreements to:

.	the transfer to South Australia or Tasmania of the whole or any part of land owned by the Commission or the Commonwealth that is located in South Australia or Tasmania that is used for purposes related to railways;

.	matters that are incidental to those land transfers; or

.	matters incidental to the sale of Commission assets in the relevant State.

New subsection 67AZR(3) provides that a notice by the Minister under new section 67AZR is a disallowable instrument for purposes of section 46A of the Acts Interpretation Act 1901, enabling Parliament to consider proposed agreements prior to their taking effect.

New section 67AZS - Compensation - constitutional safety net

The new section 67AZS provides that if the operation of new Part VA were to result in the acquisition of property otherwise than on just terms, the Commonwealth would be liable to pay reasonable compensation.  This ensures that acquisitions are constitutional.

New subsection 67AZS(2) provides that where an amount of compensation cannot be agreed upon, proceedings may be brought against the Commonwealth for such reasonable amount of compensation as the Federal Court of Australia determines.  New subsection 67AZS(3) provides that any remedy given in a proceeding begun otherwise than under this section must be taken into account in assessing compensation payable in a proceeding begun under a section and arising out of the same event or transaction.

New subsection 67AZS(4) defines ‘acquisition of property’ and ‘just terms’ as having the same meanings as in paragraph 51(xxxi) of the Constitution.

New section 67AZT - Transfer of pending proceedings

New section 67AZT ensures the preservation of legal proceedings in relation to an asset, liability or contract by substituting the successor in law for the original person as a party to the proceedings.  The Minister for Finance is also given the power to determine, in writing, that this substitution should not occur and that the original person remains the party to the proceedings.

New section 67AZU - Operation of this Part does not place a person in breach of contract etc.

New section 67AZU makes it clear that the operation of new Part VA cannot:

.	place a person in breach of contract or confidence;

.	make a person guilty of a civil wrong;

.	place a person in breach of a contractual provision prohibiting, restricting or regulating the disclosure of any information or the assignment or transfer of any asset, liability, right or obligation, or release any surety from any of the surety’s obligations in relation to a liability or obligation that is transferred under a declaration that is made under new Part VA;

.	place any person in breach of or default under any law or agreement, arrangement or understanding; or

.	fulfil any condition which allows a person to terminate or modify any agreement or obligation or triggering any early repayment clauses.

New section 67AZV - Delegation 

New subsection 67AZV(1) enables the Minister for Finance to delegate to the Secretary of the Department of Finance, the Chief Executive of the Office of Asset Sales or the person holding or performing the duties of a Senior Executive Service office (whether or not an officer of the Department of Finance), all or any of the Minister for Finance’s functions and powers conferred by new Part VA.  Subsection 67AZV(2) defines ‘Senior Executive Service office’ for the purposes of the section.

New Section 67AZW - Commonwealth records

New subsection 67AZW(1) provides that the Act does not authorise Commonwealth record (within the meaning of the Archives Act 1983) to be transferred or otherwise dealt with except in the accordance of the Archives Act 1983.  Subsection 67AZW(2) provides that a Commonwealth record must not be transferred to a person under new Part VA unless the Australian Archives has given permission under paragraph 24(2)(b) of the Archives Act 1983 or the record is covered by a determination under section 29 of that Act.

New section 67AZX - This Part does not authorise the imposition of taxation

New section 67AZX provides that new Part VA does not authorise the imposition of taxation within the meaning of section 55 of the Constitution.  This section is included to ensure that determinations under the Act are not interpreted as the imposition of tax.

SCHEDULE 2 - OTHER AMENDMENTS OF THE AUSTRALIAN NATIONAL RAILWAYS COMMISSION ACT 1983

This Schedule makes a series of amendments to the existing provisions of the Australian National Railways Commission Act 1983 to enable the sale of the Commission operations to occur, to facilitate the Commission assisting with the sale and to provide flexibility to change the operation of the Commission as its responsibilities reduce.

Item 1 - At the end of Part 1

3A - Crown to be bound

A new section 3A is inserted to provide that the Crown in right of the Commonwealth, the States and the Territories will be bound by the Act.  New subsection 3A(2) provides that the Crown is not liable to be prosecuted for an offence.  However, by new subsection 3A(3), this protection does not apply to an authority of the Crown.

3B- Extra-territorial operation

A new section 3B is inserted to ensure that the Act extends to cover activity outside of Australia.

Item 2 - At the end of section 5

A new subsection 5(g) is inserted to expand the functions of the Commission to include those functions required to give effect to the new Part VA of the Act.  New Part VA deals with transfer and sale of assets of the Commission for the purpose of winding down the Commission.

Item 3 - At the end of section 6

New subsection 6(3) is inserted so as to provide that the powers of the Commission are subject to section 6AA (which deals with directions to the Commission).

Item 4 - After section 6

6AA Ministerial directions

New subsection 6AA is inserted into the Act giving the Minister wider power to give directions to the Commission with respect to the performance of the Commission’s functions or the exercise of its powers.  New subsection 6AA(2) provides that a direction may be given for the purposes of winding down the various activities of the Commission.  A direction under new section 6AA is to be published in the Gazette.  The section replaces current sections 19 and 20 of the Australian National Railways Commission Act 1983 (see items 8 and 9 below).

Item 5 - Subsection 18(1)

Subsection 18(1) provides that  the Commission’s responsibilities are subject to directions of the Minister.  This item updates this provision in consequence of the change in the directions powers of the Minister and includes actions in relation to the action of new Part VA.

Item 6 and 7 - Sections 19 and 20

This item repeals these sections relating to directions to the Commission and the reimbursement of the cost determined by the Minister of complying with directions, which are replaced by new section 6AA.

Item 8 and 9 - Subsection 21(1)

These items amend the subsection to reflect the change to the Directions sections.

Item 10 - Subsections 24(1) and 24(2)

Subsections 24(1) and (2) are repealed and replaced with provisions which provide that the Commission consists of the Chairman of the Commission, the Deputy Chairman of the Commission, the Managing Director of the Commission and such other Commissioners as the Minister determines.  New subsections 24(2) and (2A) provide for the appointment of the Commissioners by the Minister; for them to hold office during the Minister’s pleasure.  These changes enable the structure of the Commission to be altered as its responsibilities wind down.

Item 11 - Section 25

This item repeals the section relating to the period of appointment of the Commissioners.

Item 12 - Section 32

Section 32 relating to termination of appointment by the Governor-General is repealed.

Item 13 - Subsection 34(6)

This item omits “4 Commissioners constitute a quorum”, and substitutes “a quorum is constituted by half of the Commissioners” to reflect the amended provisions allowing for less than 7 Commissioners.

Item 14 - Section 36C

This item repeals this section and substitutes another which provides that the Managing Director may hold office on either a full-time or part-time basis.

Item 15 - Section 54

This item repeals section 54 relating to the capital of the Commission.

Item 16 - Subsection 55(3)

This subsection requires the Commission to pursue financial targets in all activity except in relation to following directions in recognition of the changes to the directions provisions and the insertion of the new Part VA.

Item 17 - Sections 57, 57A and 58

This item repeals these sections relating to payment of dividends, interim dividends and profits of the Commission to the Commonwealth.  A new section 57 is substituted to provide that the Minister for Finance may give the Commission a written direction to pay a specified amount to the Commonwealth before a specified time.  Subsection 57(2) provides that the Commission must comply with a direction under subsection (1).

Item 18 - Subsection 62(1)

This item omits “The Commission” and substitutes it with “Subject to subsection (3), the Commission”.  This makes the Commission’s borrowings subject to written directions by the Minister for Finance under new subsection 62(3) and (4).

Item 19 - At the end of section 62

This item adds subsection 62(3) and 62(4).  New subsection 62(3) provides that the Minister for Finance may give the Commission a written direction requiring the Commission not to enter into a loan.  New subsection 62(4) provides that the Commission must comply with the direction under new subsection (3).

Items 20 - Subsection 63(1)

This item expands the powers Treasurer to guarantee borrowings by the Commission to include other liabilities.  This will assist the Commonwealth to avoid defaults on liabilities as a result of the loss of assets and earning capacity of the Commission.

Item 21 - Subsection 63(2)

This item expands the subsection consistent with the amendment to subsection 63(1).

Item 22 - Section 74

This item inserts after “contrary,” “other than a law that specifically relates to the safety in the operation of railways,” to give laws relating to safety precedence over exemptions from State and Territory fencing laws.

Item 23 - After section 74

A new section 74A is inserted to provide that the Commission, in operating railways, is subject to any law of a State or Territory that specifically relates to safety in the operation of railways.  New subsection 74A(2) provides that, subject to new subsection (3), a person who operates a railway that was previously operated by the Commission is subject to all laws of a State or Territory that relate to the operation of railways in operating the railway.  

New subsections 74A(3) and (4) provide that the Minister may by written notice published in the Gazette provide temporary relief from specified State or Territory laws relating to the operation of railways to a specified person who operates a railway that was previously operated by the Commission.  This relief can be provided for up to 6 months from the time the person takes over the railway.

New subsection 74A(5) provides that such a declaration has effect according to its terms.

SCHEDULE 3 - REPEAL OF THE AUSTRALIAN NATIONAL RAILWAYS COMMISSION ACT 1983 AND OTHER ACTS

This schedule provides for the repeal of the Australian National Railways Commission Act 1983 and saving of essential provisions to enable abolition of the Commission after sale or transfer of its assets and settlement of its liabilities.  It also provides for the abolition of a number of agreement Acts following the renegotiation of the agreements with South Australia and Tasmania.

Australian National Railways Commission Act 1983

Item 1 - The whole of the Act

This item repeals the Australian National Railways Commission Act 1983.

Item 2 - Definitions

This item defines terms used in the Schedule.

‘Repeal day’ is the day on which Schedule 3 commences.

‘Residual assets’ are any legal or equitable estates or interests in real or personal property including contingent or prospective ones and any rights privileges and immunities including contingent or prospective ones, of the Commission immediately before repeal day.

‘Residual instruments’ are instruments that are in force immediately before the repeal day to which the Commission is a party or that were given to, by or in favour of the Commission or in which reference is made to the Commission or under which any money is or may become payable, or any other property is to be, or may become liable to be, transferred, conveyed or assigned, to or by the Commission.

‘Residual liability’ are liabilities and duties of the Commission including contingent and prospective ones immediately before the repeal day.

Item 3 - Residual assets and liabilities to become Commonwealth assets and liabilities

This item provides that all residual assets and liabilities of the Commission cease to be assets and liabilities of the Commission and become assets and liabilities of the Commonwealth on the repeal day.  A residual instrument will continue to have effect on and after the repeal day as if a reference in the instrument to the Commission were a reference to the Commonwealth.

Item 4 - Provisions continue to apply

This item provides that in spite of its repeal, the Australian National Railways Commission Act 1983 continues to apply in relation to residual assets and residual liabilities as if those assets and liabilities transferred to the Commonwealth under section 67AE or 67AG of the Act.  This will enable the Commonwealth to dispose of the assets, contracts and liabilities in the ways provided for in the new Part VA even after the Act is repealed.

Item 5 - Pending proceedings

This item provides that if immediately before the repeal day proceedings to which the Commission was a party are pending in a court then, on or after the repeal day, the Commonwealth is substituted for the Commission in the proceedings and has the same rights and obligations as the Commission would have had.

Item 6 - Seat of Government Railway Act 1928

This item repeals the Seat of Government Railway Act 1928 in recognition of the abolition of the Commission.

Items 7 to 11

These items repeal the Port Augusta to Whyalla Railway Agreement Act 1970, Tarcoola to Alice Springs Railway Act 1974, Railways Agreement (South Australia) Act 1975, Railway Agreement (Adelaide to Crystal Brook Railway) Act 1980 and Railways (Tasmania) Act 1975.  The Commonwealth will enter into replacement agreements with South Australia and Tasmania under new Part VA section 67AZR.

SCHEDULE 4 - AMENDMENT OF OTHER ACTS

This Schedule amends a number of Acts consequent upon the abolition of the Commission.

Item 1 - Administrative Decision (Judicial Review) Act 1977

Item 1 amends Schedule 2 of the Administrative Decision (Judicial Review) Act 1977 to remove references to the Commission from the Act.

Item 2 - Commonwealth Borrowing Levy Act 1987

Item 2 omits Australian National Railways Commission from the Schedule to the Commonwealth Borrowing Levy Act 1987.

Item 3 - Freedom of Information Act 1982

Item 3 removes the Australian National Railways Commission from the list of agencies in Part 1 Schedule 2 of the Freedom of Information Act 1982.

Item 4 - Legislative Instruments Act 1997

Item 4 removes the Australian National Railways Commission Act 1983 from Schedule 2 of the Legislative Instruments Act 1997.

Item 5

Item 5 removes the Australian National Railways Commission from Schedule 3 of the Legislative Instruments Act 1997.

Item 6 - Long Service Leave (Commonwealth Employees) Act 1976

Item 6 repeals subsection 10(5) of the Long Service Leave (Commonwealth Employees) Act 1976 which relates to the Commission staff.

Item 7 - National Crime Authority Act 1984

Item 7 omits Australian National Railways Commission from Schedule 2 of the National Crime Authority Act 1984.

Item 8 - Northern Territory Acceptance Act 1910

This item repeals paragraphs 14 (g) and 14(h) of the Northern Territory Acceptance Act 1910, which relate to railways.  The Commonwealth will enter into replacement agreements with South Australia under new Part VA section 67AZR.

Item 9 - Transitional - agreement

This item is in consequence of the repeal of paragraphs 14 (g) and 14(h) of the Northern Territory Acceptance Act 1910, which relate to railways.  It deems paragraphs (1) (g) and (h) of the agreement attached as a schedule to the Acceptance Act not to exist.  The Commonwealth will enter into replacement agreements with South Australia under new Part VA section 67AZR.

Item 10 to 15 - National Rail Corporation Act 1992

These items remove references to the Commission from the National Rail Corporation Act 1992.

Item 16 - Occupation Health and Safety (Commonwealth Employment) Act 1991

Item 14 provides that the Australian National Railways Commission is omitted from the Schedule to the Occupation Health and Safety (Commonwealth Employment) Act 1991.

Item 17 -  Safety, Rehabilitation and Compensation Act 1988

This item repeals paragraph (j) of the definition of prescribed “Commonwealth authority” in subsection 128A(4) of the Safety, Rehabilitation and Compensation Act 1988 to remove reference to the Commission.

Item 18 to 20- Telecommunications Act 1997

These items remove references to the Commission from the Act.

SCHEDULE 5 - MISCELLANEOUS PROVISIONS

Schedule 5 Part 1 enables fixtures to be severed from railways land and to be sold to a rail operator.  This will provide them with increased incentive to maintain and improve rail infrastructure.  Part 2 provides for access to railways for defence-related purposes and for emergency or disaster relief, and compensation for that access.

Part 1 - Assets not to be fixtures

Item 1 - Certain assets to not be fixtures

This item enables the Minister for Finance, by written notice, to declare that specified assets that are affixed to land are taken to be separate assets and not fixtures.  This will enable these assets to be disposed of by the Commission or the Commonwealth under new Part VA of the Australian National Railways Commission Act 1983 and will provide an incentive for new rail operators to maintain and improve the infrastructure.  New item 5(1)(2) provides that such a declaration has effect according to its terms.

Part 2 

Item 2 - Access to railways for defence-related purposes and for emergency and disaster relief

This item sets out arrangements under which a person who manages of controls a railway previously managed or controlled by the Commission may be required to give access or priority of access for purposes related to: the defence of Australia; the operation of the Australian Defence Force (including in connection with international humanitarian aid or United Nations peace-keeping operations, or armed forces of another country in connection with the defence of Australia; or the management of emergencies or disasters where that management involves the Australian Defence Force.

Subitems (1), (2) and (3) empower the Minister by written notice to require an operator of a railway previously managed or controlled by the Commission to give access, or priority of access, to specified kinds of “railway services” for specified kinds of “defence-related purposes” (both terms are defined by subitem (8)), in such manner and on such terms and conditions as the Minister determines.

Subitem (4) requires a rail operator to comply with a notice given under subitem (1).

Subitem (5) provides that contravention of subitem (5) is not an offence but is grounds for obtaining an injunction.

Subitem (6) clarifies that a notice under Subitem (1) may be given by facsimile.  This may on occasions be necessary because of the urgency of the need for access or priority of access.

Subitem (7) draws specifically on the Commonwealth’s power to make laws with respect to corporations as a basis for this item.

Subitem (8) defines “railway service” and “defence-related purposes” for the purposes of this item.

Item 3 - Compensation for access to railways for defence-related purposes and for emergency or disaster relief

Under subitem 3(4), the Commonwealth must compensate specified rail operators if they have suffered loss or damage as a result of access, or priority of access, having been given in accordance with a notice under subitem 2(1).  Subitems 3(1) to (3) provide for a Commonwealth agency to be listed in a notice under subitem 2(1) and subitem 3(7) provides that that agency is responsible for any compensation payable to the rail operator.  Subitems (4) and (5) provide for the amount of the damages to be agreed between the operator and the head of the Commonwealth agency or, if there is no agreement on the amount, the matter may be determined by a court, having regard to any action taken in mitigation of the loss or damage.

Subitems 2(8) and (9) provides that the Commonwealth is liable to pay any additional compensation that would ensure that the operation of item 2(1) did not result in the unconstitutional acquisition of property otherwise than on just terms.  If there is no agreement on the amount, the matter may be taken to the Federal Court.

These provisions have effect notwithstanding section 70 of the Defence Act 1903.  Item 2(11) provides definitions of terms used in the item:

“acquisition of property” (same meaning as paragraph 51(xxxi) of the Constitution);

“Commonwealth agency” (a department or an agency or instrumentality of the Commonwealth);

“designated agency” (the Commonwealth agency specified in the notice as a designated agency in relation to the notice);

“just terms” (same meaning as paragraph 51(xxxi) of the Constitution).