Western Australia Statutory Corporations (Liability of Directors) Act 1996 Western Australia Statutory Corporations (Liability of Directors) Act 1996 CONTENTS Part 1 - Preliminary 1. Short title 2 2. Commencement 2 Part 2 - Statutory corporations generally Division 1 - Interpretation 4. Terms used 3 Division 2 - Duties of directors stated 5. Directors' fiduciary relationship with and duties to corporation 3 Division 3 - Ministerial directions 6. Unlawful directions 4 Part 3 - Duties of directors of certain corporations Division 1 - Interpretation 7. Terms used; attempted offences; application of Part 5 8. Amendment of Sch. 1 5 Division 2 - Duties stated 9. Duty to act honestly 6 10. Duty to exercise reasonable care and diligence 6 11. Duty not to make improper use of information 6 12. Duty not to make improper use of position 7 Division 3 - Compensation 13. Compensation may be ordered for breach of s. 9, 10, 11 or 12 7 14. Civil proceedings for breach of s. 9, 10, 11 or 12 8 15. Corporation's power to insure 8 Division 4 - Ministerial directions 16. Terms used 8 17. Governing body may question direction 9 18. Corporation may challenge direction 9 19. Protection of directors 10 Part 4 - Relief from liability 20. Relief from liability under s. 5, 13 and 14 11 21. Application for relief from liability under s. 5, 13 or 14 11 22. Case may be withdrawn from jury 11 Schedule 1 - Persons who are directors under Part 3 Notes Compilation table 16 Defined Terms Western Australia Statutory Corporations (Liability of Directors) Act 1996 An Act to declare the duty that persons who control the affairs of a statutory corporation owe to the corporation, to provide for particular duties in the case of certain statutory corporations and for the recovery of compensation for breaches, to make provision in respect of Ministerial directions, and for connected purposes. Part 1 - Preliminary 1. Short title This Act may be cited as the Statutory Corporations (Liability of Directors) Act 1996 1. 2. Commencement This Act comes into operation on such day as is fixed by proclamation 1. [3. Omitted under the Reprints Act 1984 s. 7(4)(e).] Part 2 - Statutory corporations generally Division 1 - Interpretation 4. Terms used In this Part, unless the contrary intention appears - corporation means any body corporate established for a public purpose by a written law, but does not include a local government; director means - (a) a member of the governing body of a corporation or, if the corporation is governed by one person, that person; or (b) if the affairs of a corporation are managed by its members, a member of the corporation; or (c) where a corporation consists of one person, that person. [Section 4 amended by No. 8 of 2009 s. 121.] Division 2 - Duties of directors stated 5. Directors' fiduciary relationship with and duties to corporation (1) It is declared that a director of a corporation has - (a) the same fiduciary relationship with the corporation; and (b) the same duties to the corporation to act with loyalty and in good faith, as a director of a company incorporated under the Corporations Act 2001 of the Commonwealth has with and to the company. (2) The duties referred to in subsection (1) are enforceable - (a) by the Minister who is responsible for the administration of the Act under which the director holds or held his or her position; or (b) if the Act under which the director held his position has been repealed and replaced by another Act, by the Minister who is responsible for the administration of that other Act; or (c) in any case by the Attorney General, and not otherwise. (3) Despite this section a written law may relieve a director of liability arising from a breach of the duties referred to in subsection (1). [Section 5 amended by No. 10 of 2001 s. 220.] Division 3 - Ministerial directions 6. Unlawful directions It is declared that a Minister cannot give a direction to a corporation under a written law if the direction - (a) would require the corporation - (i) to do something that it could not otherwise do; or (ii) not to do something that it is obliged to do; or (b) is unlawful for some other reason. Part 3 - Duties of directors of certain corporations Division 1 - Interpretation 7. Terms used; attempted offences; application of Part (1) In this Part, unless the contrary intention appears - corporation, in relation to a director, means the body specified in the first column in Schedule 1 opposite the reference in the second column that includes that director; director means a person who holds a position described in the second column of Schedule 1, and includes a person who, under a relevant Act mentioned in that Schedule or another written law, is acting in place of a director, whether the acting is - (a) expressed to be temporary; or (b) as a deputy, an alternate or a representative; or (c) in any other circumstances. (2) A person who attempts (within the meaning in section 4 of The Criminal Code) to commit an offence against a provision of this Part is guilty of that offence. (3) The duties provided for by this Part are in addition to those in section 5. (4) The provisions of this Part apply to a Board member of the Mid West Development Commission and the South West Development Commission established by the Regional Development Commissions Act 1993 only in respect of the functions of the relevant Commission under Part 5 of that Act. [Section 7 amended by No. 4 of 2004 s. 58.] 8. Amendment of Sch. 1 The Governor may by regulation amend Schedule 1. Division 2 - Duties stated 9. Duty to act honestly (1) A director must at all times act honestly in the performance of the functions of his or her office, whether within or outside the State. (2) A person who contravenes subsection (1) - (a) with intent to deceive or defraud - (i) the corporation; or (ii) creditors of the corporation or of any other person; or (b) for any other fraudulent purpose, is guilty of a crime and is liable to a fine of $20 000 or imprisonment for 5 years, or both. Summary conviction penalty: A fine of $12 000 or imprisonment for 3 years, or both. (3) If subsection (2) does not apply a person who contravenes subsection (1) is liable to a fine of $5 000. 10. Duty to exercise reasonable care and diligence A director must at all times exercise the degree of care and diligence in the performance of the functions of his or her office, whether within or outside the State, that a reasonable person in that position would reasonably be expected to exercise in the corporation's circumstances. Penalty: $5 000. 11. Duty not to make improper use of information (1) A director or a former director must not, whether within or outside the State, make improper use of information acquired by virtue of his or her position as such to gain, directly or indirectly, an advantage for himself or herself or for any other person or to cause detriment to the corporation. (2) A person who contravenes subsection (1) is guilty of a crime and is liable to a fine of $20 000 or imprisonment for 5 years, or both. Summary conviction penalty: A fine of $12 000 or imprisonment for 3 years, or both. 12. Duty not to make improper use of position (1) A director must not, whether within or outside the State, make improper use of his or her position as such to gain, directly or indirectly, an advantage for himself or herself or for any other person or to cause detriment to the corporation. (2) A person who contravenes subsection (1) is guilty of a crime and is liable to a fine of $20 000 or imprisonment for 5 years, or both. Summary conviction penalty: A fine of $12 000 or imprisonment for 3 years, or both. Division 3 - Compensation 13. Compensation may be ordered for breach of s. 9, 10, 11 or 12 (1) Where - (a) a person is convicted of an offence for a contravention of section 9, 10, 11 or 12; and (b) the court is satisfied that the corporation has suffered loss or damage as a result of the act or omission that constituted the offence, the court by which the person is convicted may, in addition to imposing a penalty, order the convicted person to pay compensation to the corporation of such amount as the court specifies. (2) Any such order may be enforced as if it were a judgment of the court. 14. Civil proceedings for breach of s. 9, 10, 11 or 12 Where a person contravenes section 9, 10, 11 or 12, the corporation may, whether or not the person has been convicted of an offence in respect of that contravention, recover from the person as a debt due to the corporation by action in any court of competent jurisdiction - (a) if that person or any other person made a profit as a result of the contravention, an amount equal to that profit; and (b) if the corporation has suffered loss or damage as a result of the contravention, an amount equal to that loss or damage. 15. Corporation's power to insure (1) A corporation may, with the approval of the responsible Minister, pay a premium in respect of a contract insuring a director or a former director against a liability incurred by him or her under section 13 or 14 where the liability arises from conduct involving a breach of section 9 or 10, other than a wilful breach. (2) In subsection (1) - responsible Minister means the Minister responsible for the administration of the Act under which the corporation is established. Division 4 - Ministerial directions 16. Terms used (1) In this Division, unless the contrary intention appears - governing body, in relation to a corporation whose affairs are managed by its members, means the members of the corporation; responsible Minister, in relation to a direction referred to in section 17, means the Minister by whom the direction is given. (2) For the purposes of this Division a direction is unlawful if it - (a) would require the corporation - (i) to do something that it could not otherwise do; or (ii) not to do something that it is obliged to do; or (b) is unlawful for some other reason. 17. Governing body may question direction (1) Where a direction is given under a written law to a corporation by a Minister and the governing body determines that - (a) it would not be in the interests of the corporation for it to comply with the direction; or (b) the direction is unlawful, the governing body is to notify the responsible Minister in writing within 7 days of receipt of the direction of its determination and the reasons for it. (2) Where a governing body gives such a notice to the responsible Minister, that Minister is to either - (a) cancel the direction; or (b) confirm it and state his or her reasons for doing so. (3) The confirmation of a direction has no effect if the direction is unlawful. (4) If the direction is confirmed the corporation is required, subject to subsection (3), to give effect to it. 18. Corporation may challenge direction A corporation has standing to apply to a court for relief against a direction that the corporation considers to be unlawful. 19. Protection of directors (1) A director does not contravene section 5, 9 or 10 by doing or omitting to do any thing - (a) if that thing is done or omitted in compliance with a lawful direction given by a Minister in exercise of a power conferred by a written law; and (b) where the director was of the opinion that section 17(1)(a) applied to the direction, if he or she made reasonable efforts to cause the governing body to give notice to the Minister under that section. (2) Subsection (1) does not extend to the manner in which any thing is done or omitted if it is done or omitted in a manner that is contrary to section 9 or 10 and the direction did not require that it be done in that manner. Part 4 - Relief from liability 20. Relief from liability under s. 5, 13 and 14 For the purposes of section 5, 13 or 14, if it appears to the court that a person - (a) is, or may be, liable under that section; and (b) has acted honestly; and (c) ought fairly to be excused having regard to all the circumstances of the case, including those connected with the person's appointment, the court may relieve the person either wholly or partly from liability on such terms as the court thinks fit. 21. Application for relief from liability under s. 5, 13 or 14 (1) Where a person has reason to believe that any claim will or might be made against him or her under section 5, 13 or 14 the person may apply to the Supreme Court for relief. (2) On an application under subsection (1) the Supreme Court has the same power to relieve the person as it would have had under section 20 if it had been a court exercising jurisdiction under section 5, 13 or 14. 22. Case may be withdrawn from jury Where a case to which section 20 applies is being tried by a judge with a jury, the judge after hearing the evidence may, if he or she is satisfied that the person ought under that section to be relieved either wholly or partly from liability sought to be enforced against the person - (a) withdraw the case in whole or in part from the jury; and (b) direct judgment to be entered for the person on such terms as to costs or otherwise as the judge thinks proper. Schedule 1 - Persons who are directors under Part 3 [s. 7(1)] [Heading amended by No. 19 of 2010 s. 4.] |Corporation |Persons who are |Act under which | | |directors for the |holds position | | |purposes of this | | | |Act | | |Albany Port |a director of the |Port Authorities| |Authority |Authority |Act 1999 | |Broome Port |a director of the |Port Authorities| |Authority |Authority |Act 1999 | |Bunbury Port |a director of the |Port Authorities| |Authority |Authority |Act 1999 | |Bunbury Water Board|a member of the |Water Boards | | |Board |Act 1904 | |Busselton Water |a member of the |Water Boards | |Board |Board |Act 1904 | |Chemistry Centre |a member of the |Chemistry Centre| |(WA) |Board |(WA) Act 2007 | |Country Housing |a member of the |Country Housing | |Authority |Authority |Act 1998 | |Dampier Port |a director of the |Port Authorities| |Authority |Authority |Act 1999 | |Esperance Port |a director of the |Port Authorities| |Authority |Authority |Act 1999 | |Forest Products |a commissioner |Forest Products | |Commission | |Act 2000 | |Fremantle Cemetery |a member of the |Cemeteries | |Board |Board |Act 1986 | |Fremantle Port |a director of the |Port Authorities| |Authority |Authority |Act 1999 | |Geraldton Port |a director of the |Port Authorities| |Authority |Authority |Act 1999 | |Government |a director |State | |Employees | |Superannuation | |Superannuation | |Act 2000 | |Board | | | |Independent Market |a director |Electricity | |Operator | |Industry | | | |Act 2004 | |Insurance |a commissioner |Insurance | |Commission of | |Commission of | |Western Australia | |Western | | | |Australia | | | |Act 1986 | |Lotteries |a member of the |Lotteries | |Commission |Commission |Commission | | | |Act 1990 | |Metropolitan |a member of the |Cemeteries | |Cemeteries Board |Board |Act 1986 | |Metropolitan |a member of the |Metropolitan | |Redevelopment |board of |Redevelopment | |Authority |management of the |Authority | | |Authority |Act 2011 | |Mid West |a Board member |Regional | |Development | |Development | |Commission | |Commissions | | | |Act 1993 | |Perth Market |a member of the |Perth Market | |Authority |Authority |Act 1926 | |Perth Theatre Trust|a trustee |Perth Theatre | | | |Trust Act 1979 | |Port Hedland Port |a director of the |Port Authorities| |Authority |Authority |Act 1999 | |Potato Marketing |a member of the |Marketing of | |Corporation of |Corporation |Potatoes | |Western Australia | |Act 1946 | |Racing and Wagering|a director of the |Racing and | |Western Australia |board |Wagering Western| | | |Australia | | | |Act 2003 | |Rottnest Island |a member of the |Rottnest Island | |Authority |Authority |Authority | | | |Act 1987 | |State Government |a director of the |Insurance | |Insurance |Corporation 2 |Commission of | |Corporation 2 | |Western | | | |Australia | | | |Act 1986 3 | |South West |a Board member |Regional | |Development | |Development | |Commission | |Commissions | | | |Act 1993 | |Western Australian |a Commissioner |Western | |Coastal Shipping | |Australian | |Commission | |Coastal Shipping| | | |Commission | | | |Act 1965 | |Western Australian |a director |Western | |Land Authority | |Australian Land | | | |Authority | | | |Act 1992 | |Western Australian |a member of the |Land Information| |Land Information |Authority's board |Authority | |Authority |of management |Act 2006 | |Western Australian |a member of the |Abattoirs | |Meat Commission |Commission |Act 1909 4 | |Western Australian |a member of the |Western | |Meat Industry |Authority |Australian Meat | |Authority | |Industry | | | |Authority | | | |Act 1976 | |Western Australian |a director |Western | |Treasury | |Australian | |Corporation | |Treasury | | | |Corporation | | | |Act 1986 | [Schedule 1 amended by No. 4 of 1998 s. 48; No. 30 of 1998 s. 8; No. 25 of 1998 s. 27; No. 46 of 1998 s. 12; No. 5 of 1999 s. 21; No. 8 of 1999 s. 19; No. 38 of 1999 s. 76; No. 34 of 2000 s. 72; No. 43 of 2000 s. 65; No. 25 of 2001 s. 69; No. 30 of 2002 s. 47; No. 31 of 2003 s. 208(2); No. 35 of 2003 s. 24(2) and 52; No. 20 of 2004 s. 9; No. 28 of 2006 s. 45; No. 60 of 2006 s. 188; No. 10 of 2007 s. 43; No. 28 of 2008 s. 14; No. 45 of 2011 s. 143; amended in Gazette 26 Nov 2004 p. 5314-15.] [Schedule 2 omitted under the Reprints Act 1984 s. 7(4)(e).] [pic] Notes 1 This is a compilation of the Statutory Corporations (Liability of Directors) Act 1996 and includes the amendments made by the other written laws referred to in the following table 5. The table also contains information about any reprint. Compilation table |Short title |Number |Assent |Commencement | | |and year| | | |Statutory |41 of |10 Oct 1|s. 1 and 2: 10 Oct | |Corporations |1996 |996 |1996; | |(Liability of | | |Act other than s. 1| |Directors) | | |and 2: 1 Dec 1996 | |Act 1996 | | |(see s. 2 and | | | | |Gazette 12 Nov 1996| | | | |p. 6301) | |Country Housing |4 of |14 Apr 1|1 Jul 1998 | |Act 1998 s. 48 |1998 |998 |(see s. 2 and | | | | |Gazette 30 Jun 1998| | | | |p. 3557) | |Western |25 of |30 Jun 1|10 Nov 1998 (see | |Australian |1998 |998 |s. 2 and Gazette | |Treasury | | |10 Nov 1998 | |Corporation | | |p. 6149) | |Amendment | | | | |Act 1998 s. 27 | | | | |WADC and WA Exim |30 of |30 Jun 1|30 Jun 1998 | |Corporation |1998 |998 |(see s. 2) | |Repeal Act 1998 | | | | |s. 8 | | | | |Western |46 of |19 Nov 1|19 Nov 1998 (see | |Australian Meat |1998 |998 |s. 2) | |Industry | | | | |Authority | | | | |Amendment | | | | |Act 1998 s. 12 | | | | |Port Authorities |5 of |13 Apr 1|Sch. 1, 3-8: | |(Consequential |1999 |999 |14 Aug 1999 | |Provisions) | | |(see s. 2 and | |Act 1999 s. 21 | | |Gazette 13 Aug 1999| |(Sch. 1-8) | | |p. 3823); | | | | |Sch. 2: 1 Jan 2000 | | | | |(see s. 2(9) and | | | | |Gazette 24 Dec 1999| | | | |p. 6871) | |Marketing of Meat|8 of |13 Apr 1|13 Aug 1999 (see | |Amendment |1999 |999 |s. 2(2) and Gazette| |Act 1999 s. 19 | | |13 Aug 1999 | | | | |p. 3823) | |Midland |38 of |11 Nov 1|1 Jan 2000 | |Redevelopment |1999 |999 |(see s. 2 and | |Act 1999 s. 76 | | |Gazette 31 Dec 1999| | | | |p. 7059) | |Reprint of the Statutory Corporations (Liability of | |Directors) Act 1996 as at 8 Sep 2000 | |(includes amendments listed above) | |Forest Products |34 of |10 Oct 2|16 Nov 2000 | |Act 2000 s. 72 |2000 |000 |(see s. 2 and | | | | |Gazette 15 Nov 2000| | | | |p. 6275) | |State |43 of |2 Nov 20|17 Feb 2001 (see | |Superannuation |2000 |00 |s. 2(1) and Gazette| |(Transitional and| | |16 Feb 2001 p. 903)| |Consequential | | | | |Provisions) | | | | |Act 2000 s. 65 | | | | |Corporations |10 of |28 Jun 2|15 Jul 2001 (see | |(Consequential |2001 |001 |s. 2 and Gazette | |Amendments) | | |29 Jun 2001 p. 3257| |Act 2001 s. 220 | | |and Cwlth Gazette | | | | |13 Jul 2001 | | | | |No. S285) | |Reprint of the Statutory Corporations (Liability of | |Directors) Act 1996 as at 10 Aug 2001 | |(includes amendments listed above) | |Armadale |25 of |26 Nov 2|23 Mar 2002 (see | |Redevelopment |2001 |001 |s. 2 and Gazette | |Act 2001 s. 69 | | |22 Mar 2002 | | | | |p. 1651) | |Grain Marketing |30 of |25 Oct 2|31 Oct 2002 (see | |Act 2002 s. 47 |2002 |002 |s. 2 and Gazette | | | | |30 Oct 2002 | | | | |p. 5351) | |Public Transport |31 of 20|26 May 2|1 Jul 2003 (see | |Authority |03 |003 |s. 2(1) and Gazette| |Act 2003 s. 208 | | |27 Jun 2003 | | | | |p. 2384) | |Racing and |35 of |26 Jun 2|s. 24: 1 Aug 2003 | |Gambling |2003 |003 |(see s. 2 and | |Legislation | | |Gazette 29 Jul 2003| |Amendment and | | |p. 3259); | |Repeal Act 2003 | | |s. 52: 30 Jan 2004 | |s. 24 and 52 | | |(see s. 2 and | | | | |Gazette 30 Jan 2004| | | | |p. 397) | |Reprint 3: The Statutory Corporations (Liability of | |Directors) Act 1996 as at 7 Nov 2003 (includes | |amendments listed above except those in the Racing and| |Gambling Legislation Amendment and Repeal Act 2003 | |s. 52) | |Criminal Code |4 of |23 Apr 2|21 May 2004 (see | |Amendment |2004 |004 |s. 2) | |Act 2004 s. 58 | | | | |Marketing of Eggs|20 of |26 Aug 2|2 Jul 2005 (see | |Amendment |2004 |004 |s. 2(2) and Gazette| |Act 2004 s. 9 | | |28 Jun 2005 | | | | |p. 2895) | |Statutory Corporations (Liability |1 Dec 2004 (see | |of Directors) (Act Amendment) |r. 2 and Gazette | |Regulations 2004 published in |30 Nov 2004 | |Gazette 26 Nov 2004 p. 5314-15 |p. 5515) | |Machinery of |28 of |26 Jun 2|1 Jul 2006 (see | |Government |2006 |006 |s. 2 and Gazette | |(Miscellaneous | | |27 Jun 2006 | |Amendments) | | |p. 2347) | |Act 2006 Pt. 3 | | | | |Div. 6 | | | | |Land Information |60 of |16 Nov 2|1 Jan 2007 (see | |Authority |2006 |006 |s. 2(1) and Gazette| |Act 2006 s. 188 | | |8 Dec 2006 p. 5369)| |Reprint 4: The Statutory Corporations (Liability of | |Directors) Act 1996 as at 9 Feb 2007 (includes | |amendments listed above) | |Chemistry Centre |10 of |29 Jun 2|1 Aug 2007 (see | |(WA) Act 2007 |2007 |007 |s. 2 and Gazette | |s. 43 | | |27 Jul 2007 | | | | |p. 3735) | |Eastern |28 of |1 Jul 20|29 Jul 2008 | |Goldfields |2008 |08 | | |Transport Board | | | | |Repeal Act 2008 | | | | |s. 14 | | | | |Statutes (Repeals|8 of |21 May 2|22 May 2009 (see | |and Miscellaneous|2009 |009 |s. 2(b)) | |Amendments) | | | | |Act 2009 s. 121 | | | | |Standardisation |19 of |28 Jun 2|11 Sep 2010 (see | |of Formatting |2010 |010 |s. 2(b) and Gazette| |Act 2010 s. 4 | | |10 Sep 2010 | | | | |p. 4341) | |Reprint 5: The Statutory Corporations (Liability of | |Directors) Act 1996 as at 4 Nov 2011 (includes | |amendments listed above) | |Metropolitan |45 of |12 Oct 2|31 Dec 2011 (see s.| |Redevelopment |2011 |011 |2(b) and Gazette | |Authority | | |30 Dec 2011 | |Act 2011 s. 143 | | |p. 5573) | 2 The Insurance Commission of Western Australia Act 1986 Part III provides for the establishment of the State Government Insurance Corporation and for a board of directors of the Corporation. The Acts Amendment (ICWA) Act 1996 s. 20, which had not come into operation at the date on which this reprint was prepared, would repeal that Part. 3 Formerly referred to the State Government Insurance Commission Act 1986 the short title of which was changed to the Insurance Commission of Western Australia Act 1986 by the Acts Amendment (ICWA) Act 1996 s. 5. The reference was substituted under the Reprints Act 1984 s. 7(3)(gb). 4 Repealed by the Meat Industry Legislation (Amendment and Repeal) Act 1993. 5 The amendment in the State Superannuation Amendment Act 2007 s. 87 is not included because it was repealed by the State Superannuation Amendment Act 2011 s. 4 before the amendment purported to come into operation. Defined Terms [This is a list of terms defined and the provisions where they are defined. The list is not part of the law.] Defined Term Provision(s) corporation 4, 7(1) director 4, 7(1) governing body 16(1) responsible Minister 15(2), 16(1)