In this edition of Gilbert + Tobin's Corporate Advisory Update, we focus on key legal developments over the last month which are particularly relevant to in-house counsel.
Consultation on permanent reforms for the use of technology to execute documents, hold meetings and send meetings-related materials
On 30 August 2021, the Government finally issued much anticipated exposure draft legislation containing permanent reforms to facilitate the use of technology in meetings, to execute documents and send meeting-related materials.
Consultation closed on 16 September 2021. If passed in the form set out in the exposure draft, these reforms will essentially make permanent the temporary relief currently in place until 31 March 2022 under the recently passed Treasury Laws Amendment (2021 Measures No. 1) Act 2021 with some changes.
If passed, the exposure draft legislation will
- Establish a general regime in Part 1 of the Corporations Act to allow:
- Documents (including deeds) to be signed in a flexible and technology neutral manner;
- Meetings-related documents to be signed and given using electronic means, regardless of whether the meeting is a virtual, physical or hybrid meeting;
- Agents to make, vary, ratify or discharge contracts and execute documents (including deeds) on behalf of a company;
- Proprietary companies with a sole director and no company secretary can use the statutory document execution mechanisms;
- Members of companies and registered schemes can elect to receive meeting-related documents electronically or in hard copy.
- Allow companies and registered schemes to hold physical, hybrid or, if permitted by the constitution, virtual meetings; and
- Require that listed companies and listed registered schemes conduct resolutions contained in a notice of meeting on a poll, and allow a member or group of members with at least 5% voting power to require a listed company or registered scheme to appoint an independent person to observe or report on a poll.
ASIC formally extends the time for holding AGMs
ASIC has formally extended the time that public companies have to hold their AGMs to allow flexibility in preparing for the upcoming AGM season (see ASIC’s media release).
The relief in new ASIC Corporations (Extension of Time to Hold AGM) Instrument 2021/770 formalises ASIC’s previous no action position which it had taken to give public companies with balance dates up to 7 July 2021 an additional 2 months to hold their AGMs (see 23 April 2021 media release), with some further specific relief for public companies limited by guarantee.
Under the new Instrument:
- all public companies with balance dates between 21 February 2021 and 7 July 2021 have an additional two months to hold their AGM; and
- public companies limited by guarantee with balance dates between 24 January 2021 and 7 April 2021 have an additional four months to hold their AGM.
The relief is in addition to measures recently passed by parliament in the Treasury Laws Amendment (2021 Measures No. 1) Act 2021 to permit the convening and holding of meetings using technology until 31 March 2022.
ASIC’s new credo: “why not….promote economic recovery?”
Australia’s corporate regulator has signalled a subtle but important shift in its approach to regulating the country’s largest companies and financial services providers, and a shift away from the controversial “Why Not Litigate?” mantra that it embraced following the Financial Services Royal Commission. ASIC is now clearly flagging a more pragmatic approach to regulation and enforcement that more appropriately recognises that litigation is just one of the many tools it has available to prevent and deter misconduct and not always the best one. ASIC’s shift in focus seeks to align with promoting economic recovery and will involve more targeted enforcement action and even reviving, in appropriate cases, the much maligned Enforceable Undertaking regime.
While clearly indicating an ongoing intolerance for corporate misconduct and a willingness to act where appropriate, ASIC is flagging a more nuanced approach that will mean that companies which are able to engage constructively with the regulator where things have gone wrong can expect a better dialogue with a less binary approach to enforcement.
A recent G+T Insight provides an outline of these changes and ASIC's priorities for the year ahead.
Consultation on insolvency safe harbour laws
As announced around the time of the 2021 Federal Budget, Treasury has announced a review of the insolvent trading safe harbour which was established under the Treasury Laws Amendment (2017 Enterprise Incentives No 2) Act 2017 (Act). The Act created a safe harbour for company directors from personal liability for insolvent trading if the company is undertaking a restructure outside of formal insolvency and is intended to encourage directors to seek advice early on how to restructure and save financially stressed but viable companies, rather than closing down prematurely to avoid personal liability.
The overarching intent of the review is to determine the effectiveness of the reforms and whether they are fit for purpose in enabling company turnaround and promoting a culture of entrepreneurship and innovation. The consultation paper seeks views on a range of factors including the effectiveness of the reforms, their impact on the conduct of directors and also on the interests of creditors and employees, as well as experiences with the COVID-19 insolvent trading moratorium.
Submissions are open until 1 October 2021.
Senate Committee reports on inquiry into foreign investment proposals
Following its investigation into foreign investment proposals the Senate Economic References Committee has released its report entitled “Greenfields, Cash Cows and the Regulation of Foreign Investment in Australia”. While broadly supportive of foreign investment, the report raises concerns about the administration and transparency of Australia’s foreign investment regime and suggests the Treasury must improve its oversight and enforcement of foreign investment approval conditions. Foreign investment laws have already seen the most significant changes in decades this year, and it seems unlikely that the government will agree to act on the Committee’s findings, with the dissenting voices on the committee suggesting time was needed to “bed down” the most recent reforms. See the Senate Committee’s inquiry home page.
Many thanks to Justin Mannolini, Partner and Janelle Sputore, Lawyer for this insight.
ACCC heralds its proposal to reform the Australian merger control regime
Australian Competition and Consumer Commission Chair Rod Sims says that significant changes to the Australian merger control regime are necessary, but is the need for them really borne out when merger review statistics are considered? The debate is only just beginning, but it is clear that a balance will need to be struck between the ACCC’s proposals and the burden on businesses participating in M&A activity in Australia.
A recent G+T Insight explores the ACCC's concerns about the current merger regime, the proposed reforms and also initial reactions and where to next?
Unfair contracts regime- Government releases draft legislation
After much anticipation, the Federal Government has released the exposure draft of its Treasury Laws Amendment (Measures for a later sitting) Bill 2021: Unfair contract term reforms. The Exposure Draft seeks to amend the Australian Consumer Law and the Australian Securities and Investments Commission Act 2001 (Cth) to strengthen the existing unfair contract term regime.
A recent Insight by G+T’s Competition and Regulation team considers the proposed changes, how to address them and what’s next.
Collecting vaccination information – a privacy conundrum for employers?
As employers grapple with the issue of providing COVID-safe workplaces, it appears that many businesses are considering whether to require their staff and visitors to be vaccinated. However, the obligation to provide a safe workplace needs to be balanced with obligations under privacy laws. The collection of information on the vaccination status of employees presents risks in relation to consent, data minimisation and storage.
A recent G+T Insight considers employers’ privacy obligations in light of the new set of National COVID-19 Privacy Principles.
No comment: High Court endorses strict approach to defamation law in online age
Sweeping changes in modern communication do not warrant relaxing the strictness of the common law regarding the publication of defamatory material. So the High Court has found, in a decision that should make all organisations hosting or facilitating online or social media content alert to the risks of being found liable for comments made by others.
The High Court’s decision in Fairfax Media Publications Pty Ltd v Voller; Nationwide News Pty Limited v Voller; Australian News Channel Pty Ltd v Voller  HCA 27 confirms that an organisation or person opening a site or post to comments by others may be liable for any defamation in the comments others then make. Larger organisations may be able to track, vet and remove problematic posts quickly, but for individuals and organisations without continuous site monitoring, their risk from third party posts might be more difficult to control or mitigate.
A recent G+T Insight unpacks the implications of this judgement which extend well beyond Facebook and the media to all organisations with websites or social media pages.