Australia Council (Consequential and Transitional Provisions) Act 2013

The Act introduces several defined terms that are essential to understanding its operation. The old Council means the Australia Council as established and in existence before the transition time under section 4 of the old Act. The continued Council means the Australia Council as continued in existence after the transition time, by operation of section 7 of the new Act. The Council transition is the shift from the old Council to the continued Council. The transition time is defined as the commencement of section 3 of the new Act (that is, 1 July 2013). The new Act is the Australia Council Act 2013, and the new Board is the Board established under section 14 of that Act. Asset and liability are defined broadly to include legal or equitable interests, rights, powers, privileges, immunities, duties and obligations, whether actual, contingent or prospective. Instrument includes Acts and any instrument made under an Act. These definitions ensure that the transition provisions capture everything from property and contracts to statutory references and pending litigation. The concept of continuity is central. Item 8 preserves employee continuity without any change in terms. Item 9 continues assets and liabilities automatically without any conveyance, transfer or assignment. Item 10 deems that any reference in an existing instrument to the old Council is a reference to the continued Council after the transition time. Item 11 provides that things done by or in relation to the old Council before the transition time have effect as if done by or in relation to the continued Council. Item 12 substitutes the continued Council as a party in any pending court or tribunal proceedings. The final annual reporting requirement under item 13 obliges the new Board to prepare a report for the old Council covering the period from the start of the previous financial year up to the transition time. That report must include the matters described in subsection 38(1) of the old Act as in force immediately before repeal. The Act also creates a civil penalty for contravention of that reporting requirement, applied through a modified version of Schedule 2 to the Commonwealth Authorities and Companies Act 1997. The exempt matter concept in item 17 covers the operation of Schedule 2 and anything connected with it, giving rise to an exemption from stamp duty and state taxes. The Minister may issue a certificate that is prima facie evidence of the exempt status. Finally, the Minister may make rules by legislative instrument under item 18, prescribing matters required or convenient, including saving or application provisions relating to the repeal or the enactment of either Act.

The Act directly affects several categories of persons and entities. The members of the old Council (other than the Chairperson, Deputy Chairperson and General Manager) cease to hold office at the transition time under item 4. This includes members of committees established under section 17A of the old Act and members of any Board established under section 20 of the old Act. Those individuals lose their positions immediately, though nothing prevents their reappointment under the new Act. The Chairperson and Deputy Chairperson of the old Council are treated differently: their appointments continue under items 2 and 3, with their instruments of appointment deemed to be instruments made under the new Act for the remainder of their terms. Their existing remuneration determinations under the Remuneration Tribunal Act 1973 also carry over. The General Manager of the old Council (or the person acting in that role) continues as the Chief Executive Officer of the continued Council on an interim basis until the new Board makes a formal appointment under sections 35 or 36 of the new Act. Remuneration arrangements under the old Act and the Remuneration Tribunal Act also carry over. The employees of the old Council are taken to be employees of the continued Council on identical terms and conditions. This affects ongoing employment relationships and avoids any break in service that could trigger redundancy or other entitlements. The members of the new Board acquire a duty to prepare and give the final annual report for the old Council to the Minister within the statutory timeframe. Failure to comply exposes each member who caused the contravention or failed to take reasonable steps to a civil penalty. That penalty is enforceable in a similar manner to civil penalty provisions under the Commonwealth Authorities and Companies Act 1997. The Minister gains powers to make legislative rules of a transitional nature, to grant extensions of time for the final report, and to issue certificates that a matter is an exempt matter for stamp duty purposes. The Act also affects State and Territory tax authorities by extinguishing liability for stamp duty and other taxes on transactions connected with the transition. Finally, the Act affects counterparties to contracts, leases, grants or other instruments that refer to the old Council, because those references are automatically read as references to the continued Council. This includes grant recipients, suppliers, landlords and tenants. The Act does not directly affect the general public or individual artists, except insofar as they may be parties to instruments with the old Council.

The principal duty created by the Act is the obligation on the members of the new Board to prepare and give a final annual report for the old Council under item 13. That duty requires a report in accordance with Schedule 1 to the Commonwealth Authorities and Companies Act 1997 (now the Public Governance, Performance and Accountability Act 2013, but the Act refers to the old regime) covering the transitional reporting period. The report must include the matters described in subsection 38(1) of the old Act as in force immediately before the transition time. The new Board must give the report to the Minister by the 15th day of the fourth month after the end of the transitional reporting period, unless the Minister grants an extension in special circumstances. That is a strict deadline. The Minister must table the report in each House of Parliament as soon as practicable. The new Board also has a duty to ensure compliance with the reporting requirement; any member who causes a contravention or fails to take all reasonable steps to comply or secure compliance contravenes item 14(1) and is liable to civil penalty proceedings. The Act provides a limited defence if the contravention consists of an omission from financial statements and the defendant proves the omitted information was immaterial and did not affect the giving of a true and fair view. The new Board also has the duty to ensure the first annual report for the continued Council does not overlap with the period covered by the final report (item 15). The new Board benefits from a right to have the final report prepared using the same accounting and reporting framework as the old Act. The continued Council has the right to hold all assets and be subject to all liabilities of the old Council without any conveyance, transfer or assignment. The continued Council also has the right to be substituted as a party in pending proceedings. Employees have the right to continue employment on unchanged terms and conditions. The Chairperson and Deputy Chairperson have the right to continue in their offices for the remainder of their terms. The General Manager has the right to continue as acting Chief Executive Officer. The Minister has the right to make legislative rules prescribing transitional matters, to certify exempt matters for stamp duty purposes, and to extend the reporting deadline in special circumstances. The Act also grants the Minister the right to make a certificate that is prima facie evidence of the exempt status of a matter, which is a significant evidentiary advantage but does not apply in criminal proceedings.

The Act imposes a civil penalty regime for contravention of the final annual reporting requirement. Item 14(1) provides that if a final annual reporting requirement is contravened, each member of the new Board who caused the contravention or failed to take all reasonable steps to comply or secure compliance contravenes that subitem. The final annual reporting requirements are defined in item 14(4) as subitems 13(1), (3) and (5). These are: the duty to prepare a report in accordance with Schedule 1 of the Commonwealth Authorities and Companies Act 1997 (now repealed but referenced as in force), the duty to include the matters described in subsection 38(1) of the old Act, and the duty to give the report to the Minister by the 15th day of the fourth month after the end of the transitional reporting period. Item 14(2) then applies Schedule 2 to the Commonwealth Authorities and Companies Act 1997 to the contravention as if subitem 14(1) were a civil penalty provision specified in clause 1 of that Schedule. However, the Act carves out several subparagraphs and clauses, including subparagraphs 3(1)(b)(i) and (ii), clauses 4 and 5, subclause 6(2) and paragraph 11(c). The effect is to modify the usual penalty enforcement mechanism. Notably, it also omits the reference to a compensation order in subclause 6(1). So the penalty is limited to a civil penalty order (a monetary penalty) rather than a compensation order. The maximum penalty is not stated in this Act, but under the Commonwealth Authorities and Companies Act 1997 the maximum for an individual was 200 penalty units at the time (though the Act may have been different). The Act does not create any criminal offences. It also provides a defence for omissions from financial statements if the defendant proves the omitted information was immaterial and did not affect the true and fair view. That is a reverse onus defence, which is unusual but limited to omissions. The penalty regime only applies to the final annual reporting requirement, not to other transitional obligations. There are no penalties for failure to update instruments, for failure to transfer property (which happens automatically), or for failure to comply with any other item. The Minister’s certificate under item 17 is not a legislative instrument and is prima facie evidence in all courts except criminal proceedings. That means in civil proceedings, the certificate shifts the burden of proof onto the party challenging the exemption status. The Act does not provide for review of the Minister’s certificate or the Minister’s rules. The rules are legislative instruments subject to disallowance under the Legislation Act 2003. Enforcement of the civil penalty would likely be by the Australian Securities and Investments Commission or the responsible Commonwealth body under the CAC Act, but the Act does not specify the regulator.

The Act directly repeals the whole of the Australia Council Act 1975. That repeal is the primary interaction: the old statutory framework ceases to exist from the transition time. The Act then works in tandem with the new Australia Council Act 2013. The new Act establishes the Australia Council as a body corporate, sets out its functions and powers, and creates a Board. This transitional Act ensures that the entity continues without interruption. The Act also interacts heavily with the Commonwealth Authorities and Companies Act 1997 (the CAC Act). The final reporting obligation is governed by Schedule 1 to the CAC Act, and the penalty regime is governed by a modified version of Schedule 2 to that Act. The CAC Act has since been repealed and replaced by the Public Governance, Performance and Accountability Act 2013 (PGPA Act), but the transitional Act references the CAC Act as it stood at the time. In practice, the reporting for the continued Council would now fall under the PGPA Act, but the final report for the old Council remains governed by the CAC Act provisions as they were. The Act interacts with the Remuneration Tribunal Act 1973, because determinations under that Act for the Chairperson, Deputy Chairperson and General Manager of the old Council continue to have effect for the new Board offices. The Acts Interpretation Act 1901 is relevant because item 6 allows appointments of the first members of the new Board to be made before the transition time in accordance with section 4 of that Act (which deals with the exercise of powers before commencement). The Act also interacts with State and Territory taxation laws by creating an exemption from stamp duty and other taxes for matters connected with the Schedule. That exemption overrides any inconsistent state or territory law, but only for this specific transition. The Act does not interact with the Australian Charities and Not for profits Commission Act 2012 or any general tax law, because the Australia Council is a Commonwealth authority. The Act also interacts with any other Commonwealth, state or territory Act that references the old Council, because item 10 deems those references to be references to the continued Council. This automatic read across avoids the need for hundreds of individual amendments. The Minister’s power to make rules under item 18 is a legislative instrument power under the Legislation Act 2003, and those rules can prescribe matters of a transitional nature, including saving and application provisions. The Act does not purport to amend any other Act beyond the repeal in Schedule 1. Its interaction is limited to ensuring a seamless transition across the entire legal landscape.

The Act is titled the Australia Council (Consequential and Transitional Provisions) Act 2013 and received Royal Assent on 27 June 2013. The commencement table in section 2 provides that sections 1 to 3 and any uncommenced provisions commenced on that day. Schedule 1 (the repeal of the 1975 Act) commenced at the same time as section 3 of the new Act, which was 1 July 2013. Schedule 2 commenced on the later of 27 June 2013 and the day the new Act received Royal Assent. Since the new Act received Royal Assent on 27 June 2013, Schedule 2 also commenced on that date. The Act has not been amended by any subsequent legislation. The Act itself is not an amending Act except for the repeal it effects. It is a stand alone consequential Act that has no amendment history because it was enacted as a final piece of the legislative package replacing the 1975 Act. The note to the commencement table states that the table will not be amended to deal with later amendments, but as a matter of practice, no amendments have been made to this Act. The Act appears in the Federal Register of Legislation as at 1 July 2013. Because the Act is transitional, its significance diminishes over time: the reporting period ends, appointments are made, and the transitional provisions become spent. However, the Act remains in force for any residual purposes, such as the validity of the Minister’s certificates or the continuing effect of the stamp duty exemption. The Act has no Parts beyond the two Schedules. There is no evidence of any proposed amendments or repeal of this Act. It is a typical example of a close out statute that provides certainty for the transition period.

The Act itself does not refer to any litigation and does not create any private right of action that would be likely to generate litigation. No court cases are mentioned anywhere in the text. Given that the Act is purely procedural and transitional, it is unlikely to have been the subject of significant judicial interpretation. The provisions are drafted to eliminate legal uncertainty, not to create new causes of action. The civil penalty provision in item 14 could theoretically be enforced by the Commonwealth, but no public records of such enforcement exist that are grounded in this Act. The stamp duty exemption could give rise to disputes between the continued Council and state revenue authorities as to whether a particular transaction falls within the exempt matter. The Minister’s certificate is prima facie evidence, not conclusive, so a state or territory could challenge the certificate in court. However, that would be a rare occurrence. The Act has not been the subject of any High Court or Federal Court decisions that are widely cited. It is possible that the Act has been cited in passing in litigation involving the Australia Council, but the source text does not provide that information. The Act’s provisions are straightforward and closely follow standard transitional formulae used in Commonwealth legislation. The continuity of employment provision could give rise to disputes if an employee claimed that their terms changed after the transition, but the Act expressly says continuity is preserved. The Act’s definition of asset and liability includes contingent and prospective interests, which could be relevant in disputes over whether a particular right or obligation was transferred. In general, the Act is designed to avoid litigation by making transfers automatic and clear. No litigation history is available from the text, so it is reasonable to conclude that the Act has not been the subject of any reported cases. This is consistent with its purpose as a clean up measure.

Several provisions warrant careful attention because they could create unintended outcomes. Item 4: automatic cessation of other members. Any person who held office as a member of the old Council (other than the Chair, Deputy Chair and General Manager) ceases to hold office at the transition time with no further action. This includes members of committees and Boards formed under the old Act. If the new Act had relied on those individuals continuing in an acting capacity, they would be out. There is no grace period. Item 2(2): deemed appointment of the Chair. The instrument appointing the old Chair continues as an instrument under the new Act, but only for the remainder of the period of the person’s appointment to that office. If the appointment was for a fixed term that had commenced, the term continues. But if the appointment was for a period that did not align with the new Act’s terms, the Chair could be in office for less than the full period contemplated by the new Act. No reappointment mechanism is provided. Item 3(2): General Manager becomes acting CEO. The person continues as acting Chief Executive Officer only until the new Board makes an appointment under section 35 or 36 of the new Act. There is no guarantee that the General Manager will be appointed as the permanent CEO. The person could be replaced at any time. Item 8: continuity of employment. While terms and conditions are preserved, the Act does not specify what happens if the new Board decides to restructure or terminate employees after the transition. The preservation only applies at the moment of transition; subsequent changes are governed by the new Act and common law. Item 13: final report preparation by the new Board. This duty falls on the new Board, not on the old Council members. The old Council members who were responsible for the period are no longer in office. The new Board must prepare a report for a period before their appointment, relying on records and staff. This is a compliance burden that could involve cost and risk. Item 14: strict liability for omissions? The defence for immaterial omissions places the burden of proof on the defendant Board member. A member who cannot prove materiality may be penalised even if the omission was inadvertent. The penalty provisions are civil, not criminal, but the standard of proof is likely the balance of probabilities. Item 17: stamp duty exemption limited to exempt matters. The exemption applies only to the operation of Schedule 2 and things connected with it. Not every transaction of the continued Council is exempt. The Minister’s certificate is prima facie evidence, but it is not conclusive and does not apply in criminal proceedings. A party relying on the certificate should still seek legal advice. Item 18: broad rule making power. The Minister can prescribe matters of a transitional nature. This includes saving or application provisions. The rules are legislative instruments but subject to disallowance. The power could be used to modify the effect of the Schedule or impose additional obligations. Item 10: references in instruments. This provision applies to any instrument in force immediately before the transition time, including Acts. If another Commonwealth Act references the old Council, that reference automatically becomes a reference to the continued Council. This could have unexpected effects if the old Act had specific provisions (e.g., reporting obligations) that are now read as applying to the continued Council under the new Act. Transitional reporting period definition. That period begins at the start of the financial year before the financial year in which the transition time occurs. For a 1 July transition, the period would be the previous financial year (1 July to 30 June). But if the transition occurs mid year, the period could be up to 12 months plus the part year. The new Board must report on a period that may have ended months earlier.

For the new Board members, the key compliance step is the preparation and delivery of the final annual report under item 13. They must identify the transitional reporting period (the period from the start of the previous financial year to the transition time) and ensure that a report is prepared that meets the requirements of Schedule 1 to the Commonwealth Authorities and Companies Act 1997 (as in force at the relevant time) and includes the matters listed in subsection 38(1) of the old Act. The new Board should obtain historical financial statements and performance information from the old Council’s records. The report must be given to the Minister by the 15th day of the fourth month after the end of the transitional reporting period. For a transition on 1 July 2013, the transitional period would have been from 1 July 2012 to 30 June 2013. The final reporting deadline would have been 15 October 2013. The Minister may grant an extension in special circumstances. The new Board should apply for an extension early if necessary. Each member must take all reasonable steps to ensure compliance, and should document their efforts to avoid personal liability under item 14. The defence for immaterial omissions is available but carries a reverse onus, so the Board should aim for completeness. For employees, no action is required, but the new Board should issue confirmatory letters to staff that their employment continues. For the Chair and Deputy Chair, their existing instruments continue; no new appointment is needed, but the Board should verify that the terms align with the new Act. For the General Manager, the person should be advised that they are now acting CEO until a formal appointment is made. The Board should address that appointment promptly. For asset and liability transfers, no conveyance is necessary, but the continued Council should update its registers, titles and ledgers to reflect the continuity. The continued Council should review all existing contracts and instruments to ensure that third parties are aware that references to the old Council now refer to the continued Council. For pending legal proceedings, the continued Council should notify the court and the other parties of the substitution under item 12. The continued Council may also seek a Minister’s certificate under item 17 for any stamp duty exemption needed. The certificate should be requested if there is any doubt about whether a transaction falls within the exempt matter. The Minister’s rules power under item 18 may be used to resolve any transitional issues not covered by the Schedule. The continued Council should monitor any rules made under that item. Finally, the new Board must ensure that the first annual report for the continued Council under the new Act does not overlap with the period already covered by the final report. The corporate plan under the new Act does not need to review performance before the first plan came into effect. Compliance with the transitional Act is largely a matter of administrative diligence and deadlines, not ongoing obligations. After the final report is delivered and appointments are formalised, the Act’s direct compliance burden ends.