44 Adams v Batley; Cole v Francis and the cases referred to above establish that the assessment of whether proceedings are for a penalty depends very much upon the terms of the statute pursuant to which the proceedings are brought. In my view the reference in the joint judgment in Rich v ASIC to Adams v Batley; Cole v Francis is not a reference upon which reliance can be placed to suggest that proceedings or orders for compensation brought or made under Part 9.4B of the Act do not involve exposure to a penalty. The High Court was not considering that question.
Status of the Notes
45 Part IV of the Acts Interpretation Act 1901 (Cth), "General Provisions", includes the following:
13 Headings, schedules, marginal notes, footnotes and endnotes
(1) The headings of the Parts Divisions and Subdivisions into which any Act is divided shall be deemed to be part of the Act.
(2) Every schedule to an Act shall be deemed to form part thereof.
(3) No marginal note, footnote or endnote to an Act, and no heading to a section of an Act, shall be taken to be part of the Act.
46 The Corporations Law, amended by the Corporations Legislation Amendment Act 1990, previously included a section, s 109D(3), which provided, inter alia, that "each footnote or end note to this Law, is taken not to be part of this Law". That was included at a time before there was national applicability of the corporations legislation. When that was achieved there was no longer a requirement for that section because the Acts Interpretation Act 1901 (Cth) applied to the legislation. Thus the absence of section 109D(3) or a section in similar terms, from later provisions is not relevant.
47 The words in s 3 of the 2004 Act are: "Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms". The Act is "specified" in the Schedule and the language in the Schedule varies. The term "omit" is used when words of a section are to be removed. The term "insert" is used when words are to be included in a section, or "substitute" when different words are to be included in parts of the section where words have been omitted. When the Schedule refers to Notes, the word "Add" is used. The Schedule Items relevant to s 1317H(1), s 1317HA(1) and s 1317J(2) provide that the "Note" is added "at the end of the subsection" (Items 14, 15 and 16). The Note to s 1317E was inserted in the 1999 provisions and the amending Act included a section similar to section 3 of the 2004 Act. The Note to s 1317E was amended by the Financial Services Reform Act 2001 to add the words "(or in the case of a corporations scheme/civil penalty provision)".
48 "Notes" in the form under discussion seem to have been first used extensively in the 1992 Act although their first use appears to have been in the Corporations (Unlisted Property Trusts) Amendment Act 1991. The Explanatory Memoranda to those Acts make no mention of the Notes. There was some use of Notes in the Corporate Law Reform Act 1994 (1 note), the Corporations Legislation Amendment Act 1994 (4 notes), the Corporations Law (Securities and Futures) Amendment Act 1995 (2 notes), and there was extensive use of notes in the First Corporate Law Simplification Act 1995 (the Simplification Act). Many of these notes were what could reasonably be described as navigational, for example, the note at the end of s 206B of the Simplification Act: "For the redemption of redeemable preference shares see section 192". Others were more advisory in nature, for example the note at the end of s 206G: "A company that has to lodge documents under section 206D, 206E or 206F needs to lodge a notice under paragraph (2)(b) only if it wants for some reason to have less than 14 days between lodging the section 206D, 206E or 206F documents and entering into the buy-back agreement or the passing of the resolution".
49 The Act makes no provision in relation to the status of the Notes. Specifically Part 1.2 does not define "Note". The relevant Explanatory Memoranda (EM) do provide some guidance. An EM may be considered in the interpretation of a provision where "the meaning of the provision to be construed is ambiguous": s 15AB(2)(e) Acts Interpretation Act; Re Australian Federation of Construction Contractors; Ex Parte Billing (1986) 68 ALR 416, at 420 per Gibbs C. J., Mason, Wilson, Brennan, Deane and Dawson JJ. The ambiguities that arise are: (a) whether or not the provisions of Part 9.4B require the Court to make a declaration of contravention under s 1317E when a contravention of a civil penalty provision is proved for the purpose of s 1317H(1)(a) of the Act; and (b) whether ASIC is entitled to make an application for compensation whether or not a declaration of contravention has been made under s 1317E of the Act.
50 Notes are discussed in paragraphs 5.69, 5.88, 5.239, 5.402, 5.468 and 5.603 of the EM to the 2004 Bill. For instance paragraph 5.468 includes the following:
Items 6 and 7 will amend subsections 674 (2) and 675 (2) by inserting in each a note stating that an infringement notice may be issued for an alleged contravention of these subsections. (Emphasis added)
51 The EM also refers to the "amendments" to s 1317J, s 1317H and s 1317HA. It does not expressly refer to the Notes. However, the only amendments to those sections were the addition of the Notes at the end of the respective relevant subsections. The relevant parts of the EM provide:
Part 4: Civil penalty provisions
Overview
5.398 The amendments to the Corporations Act contained in this Part of the Bill will:
...
· clarify that an application for a compensation order can be made in relation to contraventions of the civil penalty provisions regardless of whether a declaration of contravention has been made;
…
Declarations of contravention and compensation orders
5.400 Amendments to sections 1317H, 1317HA and 1317J will ensure that persons and bodies corporate can apply for a compensation order in relation to contraventions of the civil penalty provisions, and such compensation orders to be made, regardless of whether a declaration of contravention in relation to those civil penalty provisions has been made (items 14, 15, 16 and 17). Applicants for a compensation order under sections 1317H and 1317HA will still have to prove a contravention and that damage resulted from it.
52 The terms of the 2004 Act and these paragraphs of the EM lead me to the conclusion that Parliament intended the insertion of the Notes to operate as an amendment to the body of the Act, rather than to operate in the manner of a marginal note, an endnote or a footnote. Marginal notes, endnotes and footnotes that are not included in the manner in which the Notes under consideration have been included, do not form part of an Act. This has been held to be so because they are "not the product of anything done in Parliament": Reg v Schildkamp [1971] AC 1 at 10 per Lord Reid; Chandler v Director of Public Prosecutions [1964] AC 763, per Lord Reid at 789. However in The Ombudsman v Moroney (1983) 1 NSWLR 317 at 324G, Street CJ referred to the "invariable practice" of Bills being presented to Parliament with proposed sections being accompanied by marginal notes. The Chief Justice expressed the view that, if the marginal note "passes through Parliament unamended" and is "printed on the formal Bill to which Royal assent is given in due course", there was "every reason" to regard marginal notes as "a legitimate source upon which to draw as an aid to construction of the section" the marginal note accompanied. His Honour continued at 325C:
To the objection that Members of Parliament take no responsibility for the reliability of marginal notes as distinct from the text of sections, it could be answered that it is high time that they did. Marginal notes are plain to be seen in the printed Bill as well as the Act, and it could well come as a surprise to many Members of Parliament, and to the public at large, to be told that there is an arbitrary and inflexible rule precluding any reference to marginal notes as an aid to construction. I not only see no justification for such an arbitrary and inflexible rule, but I see every reason in commonsense and in law to permit such reference when the marginal note is properly authenticated.
Whilst asserting, as I do, the permissibility of turning to an authenticated marginal note to assist in resolving the interpretation of a doubtful or ambiguous section, I fully recognise that, not being part of the Act, it cannot control the meaning of the section. It may well be only rarely that such doubt or ambiguity will arise as will result in useful reference to an authenticated marginal note for its resolution. As Lord Upjohn said in Director of Public Prosecutions v Schildkamp [1971] AC 1, at 28:
" … I can conceive of cases were very rarely it might throw some light on the intentions of Parliament just as a punctuation mark."
After all, to be realistic about the matter, Members of Parliament just as likely as lawyers to read a marginal note as an indication of what the section is about. And, from the public's point of view, it would seem to be bordering on the mischievous to insist that, although the marginal note was there on the clause, although it was there on the section when assented to, and although it appears in the publicly available print of the statute, nevertheless it must be wholly disregarded. To take such a view is, to my mind, carrying technicalities to an extreme and reading more into the authorities than they properly bear.
53 These rather powerful observations recognise that marginal notes are not part of the Act. It was the seemingly absurd prohibition on recourse to the notes as an aid to construction to which the Chief Justice's observations were directed. Although The Ombudsman v Moroney was not concerned with endnotes or footnotes, it is probable that if it had been, the same observations would have been made about them. However the notes under consideration here are different. They, unlike the marginal note to which Street CJ was referring in The Ombudsman v Moroney, are the subject of express provision in an amending statute which states that the Act in question is "amended or repealed" as set out in the amending Act's schedule. Although there is reference is s 3 of the 2004 Act to "any other item in the Schedule" having "effect according to its terms", I am not satisfied that this part of s 3 applies to the Notes. In my view that Notes are clearly "applicable item(s)" in the Act specified in the Schedule and are part of the amendments to the Act, being their addition to it in the locations specified.