Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill and a correction to the explanatory memorandum circulated in the chamber on 13 May 2009. By leave, I move government amendments (1) to (20) together:

(1)    Schedule 1, item 19, page 21 (line 21), after “Note”, insert “1”.

(2)    Schedule 1, item 19, page 21 (after line 22), at the end of subsection 44ZZRO(1), add:

Note 2:  For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

(3)    Schedule 1, item 19, page 21 (before line 23), before subsection 44ZZRO(2), insert:

     (1A)    Section 44ZZRF does not apply in relation to an arrangement or understanding containing a cartel provision if:

             (a)    the arrangement or understanding is not a contract; and

             (b)    when the arrangement was made, or the understanding was arrived at, each party to the arrangement or understanding:

                   (i)    intended the arrangement or understanding to be a contract; and

                  (ii)    reasonably believed that the arrangement or understanding was a contract; and

             (c)    the cartel provision is for the purposes of a joint venture; and

             (d)    the joint venture is for the production and/or supply of goods or services; and

             (e)    in a case where subparagraph 4J(a)(i) applies to the joint venture—the joint venture is carried on jointly by the parties to the arrangement or understanding; and

              (f)    in a case where subparagraph 4J(a)(ii) applies to the joint venture—the joint venture is carried on by a body corporate formed by the parties to the arrangement or understanding for the purpose of enabling those parties to carry on the activity mentioned in paragraph (d) jointly by means of:

                   (i)    their joint control; or

                  (ii)    their ownership of shares in the capital;

                      of that body corporate.

Note 1:  A defendant bears an evidential burden in relation to the matter in subsection (1A) (see subsection 13.3(3) of the Criminal Code).

Note 2:  For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

      (1B)    Section 44ZZRG does not apply in relation to giving effect to a cartel provision contained in an arrangement or understanding if:

             (a)    the arrangement or understanding is not a contract; and

             (b)    when the arrangement was made, or the understanding was arrived at, each party to the arrangement or understanding:

                   (i)    intended the arrangement or understanding to be a contract; and

                  (ii)    reasonably believed that the arrangement or understanding was a contract; and

             (c)    when the cartel provision was given effect to, each party to the arrangement or understanding reasonably believed that the arrangement or understanding was a contract; and

             (d)    the cartel provision is for the purposes of a joint venture; and

             (e)    the joint venture is for the production and/or supply of goods or services; and

              (f)    in a case where subparagraph 4J(a)(i) applies to the joint venture—the joint venture is carried on jointly by the parties to the arrangement or understanding; and

             (g)    in a case where subparagraph 4J(a)(ii) applies to the joint venture—the joint venture is carried on by a body corporate formed by the parties to the arrangement or understanding for the purpose of enabling those parties to carry on the activity mentioned in paragraph (e) jointly by means of:

                   (i)    their joint control; or

                  (ii)    their ownership of shares in the capital;

                      of that body corporate.

Note 1:  A defendant bears an evidential burden in relation to the matter in subsection (1B) (see subsection 13.3(3) of the Criminal Code).

Note 2:  For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

(4)    Schedule 1, item 19, page 21 (line 24), after “subsection (1)”, insert “, (1A) or (1B)”.

(5)    Schedule 1, item 19, page 21 (line 30), after “subsection (1)”, insert “, (1A) or (1B), as the case may be”.

(6)    Schedule 1, item 19, page 21 (line 34), after “subsection (1)”, insert “, (1A) or (1B), as the case may be”.

(7)    Schedule 1, item 19, page 22 (line 2), after “subsection (1)”, insert “, (1A) or (1B), as the case may be”.

(8)    Schedule 1, item 19, page 22 (after line 28), at the end of subsection 44ZZRP(1), add:

Note:   For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

(9)    Schedule 1, item 19, page 22 (before line 29), before subsection 44ZZRP(2), insert:

     (1A)    Section 44ZZRJ does not apply in relation to an arrangement or understanding containing a cartel provision if:

             (a)    the arrangement or understanding is not a contract; and

             (b)    when the arrangement was made, or the understanding was arrived at, each party to the arrangement or understanding:

                   (i)    intended the arrangement or understanding to be a contract; and

                  (ii)    reasonably believed that the arrangement or understanding was a contract; and

             (c)    the cartel provision is for the purposes of a joint venture; and

             (d)    the joint venture is for the production and/or supply of goods or services; and

             (e)    in a case where subparagraph 4J(a)(i) applies to the joint venture—the joint venture is carried on jointly by the parties to the arrangement or understanding; and

              (f)    in a case where subparagraph 4J(a)(ii) applies to the joint venture—the joint venture is carried on by a body corporate formed by the parties to the arrangement or understanding for the purpose of enabling those parties to carry on the activity mentioned in paragraph (d) jointly by means of:

                   (i)    their joint control; or

                  (ii)    their ownership of shares in the capital;

                      of that body corporate.

Note:   For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

      (1B)    Section 44ZZRK does not apply in relation to giving effect to a cartel provision contained in an arrangement or understanding if:

             (a)    the arrangement or understanding is not a contract; and

             (b)    when the arrangement was made, or the understanding was arrived at, each party to the arrangement or understanding:

                   (i)    intended the arrangement or understanding to be a contract; and

                  (ii)    reasonably believed that the arrangement or understanding was a contract; and

             (c)    when the cartel provision was given effect to, each party to the arrangement or understanding reasonably believed that the arrangement or understanding was a contract; and

             (d)    the cartel provision is for the purposes of a joint venture; and

             (e)    the joint venture is for the production and/or supply of goods or services; and

              (f)    in a case where subparagraph 4J(a)(i) applies to the joint venture—the joint venture is carried on jointly by the parties to the arrangement or understanding; and

             (g)    in a case where subparagraph 4J(a)(ii) applies to the joint venture—the joint venture is carried on by a body corporate formed by the parties to the arrangement or understanding for the purpose of enabling those parties to carry on the activity mentioned in paragraph (e) jointly by means of:

                   (i)    their joint control; or

                  (ii)    their ownership of shares in the capital;

                      of that body corporate.

Note:   For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

(10)  Schedule 1, item 19, page 22 (line 29), after “subsection (1)”, insert “, (1A) or (1B)”.

(11)  Schedule 1, item 126, page 67 (after line 29), at the end of subsection 44ZZRO(1), add:

Note:   For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

(12)  Schedule 1, item 126, page 67 (before line 30), before subsection 44ZZRO(2), insert:

     (1A)    Section 44ZZRF does not apply in relation to an arrangement or understanding containing a cartel provision if:

             (a)    the arrangement or understanding is not a contract; and

             (b)    when the arrangement was made, or the understanding was arrived at, each party to the arrangement or understanding:

                   (i)    intended the arrangement or understanding to be a contract; and

                  (ii)    reasonably believed that the arrangement or understanding was a contract; and

             (c)    the cartel provision is for the purposes of a joint venture; and

             (d)    the joint venture is for the production and/or supply of goods or services; and

             (e)    in a case where subparagraph 4J(a)(i) applies to the joint venture—the joint venture is carried on jointly by the parties to the arrangement or understanding; and

              (f)    in a case where subparagraph 4J(a)(ii) applies to the joint venture—the joint venture is carried on by a body corporate formed by the parties to the arrangement or understanding for the purpose of enabling those parties to carry on the activity mentioned in paragraph (d) jointly by means of:

                   (i)    their joint control; or

                  (ii)    their ownership of shares in the capital;

                      of that body corporate.

Note:   For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

      (1B)    Section 44ZZRG does not apply in relation to giving effect to a cartel provision contained in an arrangement or understanding if:

             (a)    the arrangement or understanding is not a contract; and

             (b)    when the arrangement was made, or the understanding was arrived at, each party to the arrangement or understanding:

                   (i)    intended the arrangement or understanding to be a contract; and

                  (ii)    reasonably believed that the arrangement or understanding was a contract; and

             (c)    when the cartel provision was given effect to, each party to the arrangement or understanding reasonably believed that the arrangement or understanding was a contract; and

             (d)    the cartel provision is for the purposes of a joint venture; and

             (e)    the joint venture is for the production and/or supply of goods or services; and

              (f)    in a case where subparagraph 4J(a)(i) applies to the joint venture—the joint venture is carried on jointly by the parties to the arrangement or understanding; and

             (g)    in a case where subparagraph 4J(a)(ii) applies to the joint venture—the joint venture is carried on by a body corporate formed by the parties to the arrangement or understanding for the purpose of enabling those parties to carry on the activity mentioned in paragraph (e) jointly by means of:

                   (i)    their joint control; or

                  (ii)    their ownership of shares in the capital;

                      of that body corporate.

Note:   For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

(13)  Schedule 1, item 126, page 67 (line 30), after “subsection (1)”, insert “, (1A) or (1B)”.

(14)  Schedule 1, item 126, page 68 (line 2), after “subsection (1)”, insert “, (1A) or (1B)”.

(15)  Schedule 1, item 126, page 68 (line 8), after “subsection (1)”, insert “, (1A) or (1B), as the case may be”.

(16)  Schedule 1, item 126, page 68 (line 12), after “subsection (1)”, insert “, (1A) or (1B), as the case may be”.

(17)  Schedule 1, item 126, page 68 (line 16), after “subsection (1)”, insert “, (1A) or (1B), as the case may be”.

(18)  Schedule 1, item 126, page 69 (after line 6), at the end of subsection 44ZZRP(1), add:

Note:   For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

(19)  Schedule 1, item 126, page 69 (before line 7), before subsection 44ZZRP(2), insert:

     (1A)    Section 44ZZRJ does not apply in relation to an arrangement or understanding containing a cartel provision if:

             (a)    the arrangement or understanding is not a contract; and

             (b)    when the arrangement was made, or the understanding was arrived at, each party to the arrangement or understanding:

                   (i)    intended the arrangement or understanding to be a contract; and

                  (ii)    reasonably believed that the arrangement or understanding was a contract; and

             (c)    the cartel provision is for the purposes of a joint venture; and

             (d)    the joint venture is for the production and/or supply of goods or services; and

             (e)    in a case where subparagraph 4J(a)(i) applies to the joint venture—the joint venture is carried on jointly by the parties to the arrangement or understanding; and

              (f)    in a case where subparagraph 4J(a)(ii) applies to the joint venture—the joint venture is carried on by a body corporate formed by the parties to the arrangement or understanding for the purpose of enabling those parties to carry on the activity mentioned in paragraph (d) jointly by means of:

                   (i)    their joint control; or

                  (ii)    their ownership of shares in the capital;

                      of that body corporate.

Note:   For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

      (1B)    Section 44ZZRK does not apply in relation to giving effect to a cartel provision contained in an arrangement or understanding if:

             (a)    the arrangement or understanding is not a contract; and

             (b)    when the arrangement was made, or the understanding was arrived at, each party to the arrangement or understanding:

                   (i)    intended the arrangement or understanding to be a contract; and

                  (ii)    reasonably believed that the arrangement or understanding was a contract; and

             (c)    when the cartel provision was given effect to, each party to the arrangement or understanding reasonably believed that the arrangement or understanding was a contract; and

             (d)    the cartel provision is for the purposes of a joint venture; and

             (e)    the joint venture is for the production and/or supply of goods or services; and

              (f)    in a case where subparagraph 4J(a)(i) applies to the joint venture—the joint venture is carried on jointly by the parties to the arrangement or understanding; and

             (g)    in a case where subparagraph 4J(a)(ii) applies to the joint venture—the joint venture is carried on by a body corporate formed by the parties to the arrangement or understanding for the purpose of enabling those parties to carry on the activity mentioned in paragraph (e) jointly by means of:

                   (i)    their joint control; or

                  (ii)    their ownership of shares in the capital;

                      of that body corporate.

Note:   For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

(20)  Schedule 1, item 126, page 69 (line 7), after “subsection (1)”, insert “, (1A) or (1B)”.

By way of explanation, the bill was introduced in the House of Representatives on 3 December 2008 and referred to the Senate Standing Committee on Economics, as I mentioned. The amendments will ensure that the exceptions will be available where joint venturers can prove that they intended to be and reasonably believed that they were party to a valid joint venture contract. The supplementary explanatory material also provides examples of the operation of joint venture exceptions.

The government’s amendments extend the joint venture exceptions under sections 44ZZRO and 44ZZRP of the bill to cover an arrangement or understanding that is not a contract but was intended and reasonably believed by the parties to be a contract. For example, the amendments would cover situations where the joint venturers intended to enter into and reasonably believed they had entered into a contract but failed to do so because they lacked capacity or a condition precedent was not satisfied. This change will provide additional comfort to legitimate joint venturers who have sought to formalise their dealings in a contract.

The amendments also insert an explanatory note in the joint venture exceptions of the bill to provide an example in relation to research and development. The results of an R&D joint venture, even if just provided to joint venture participants, would amount to a supply of a service that could bring it within the exception. Examples are included in the supplementary explanatory memorandum to demonstrate that certain types of activity could fall within the joint venture exceptions where that activity is for the purpose of the joint venture. The examples also make readers aware that there are other general exception provisions in the bill that may also be relevant to joint ventures, such as the collective acquisition of goods and services exception.

Finally, the explanatory memorandum is amended to incorporate a recommendation made by the Senate Standing Committee for the Scrutiny of Bills. Paragraph 8.15 of the explanatory memorandum is to be amended to refer to an amendment made by item 30 of schedule 2 of the bill. I thank the two Senate committees for their good work.

Question agreed to.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.