Gas Corporation (Business Disposal) Act 1999

The Act defines several key concepts that structure the entire disposal process. “Corporation” means the Gas Corporation established by the Gas Corporation Act 1994 (s 3). The “corporate vehicle” is the body incorporated under the Corporations Law through which the disposal is to occur; it is created by the Under Treasurer on behalf of the State (s 5(2), (3)). “Cornerstone investor” means the person who, under the Minister’s order, becomes entitled to a specified percentage of shares in the corporate vehicle through a tender process; that percentage must be between 40% and 49% and is called the “specified percentage” (s 5(5), (6)). “Section 6 disposal” means a disposal for which an order has been made under section 6 (s 3). The Act also defines “subsidiary” as a body that would be a subsidiary of the corporation under the Corporations Law if the corporation were a body corporate to which that Law applied (s 3). For the purposes of the Corporations Law definitions of “acquire”, “dispose of” and “entitled” in relation to shares, the Act uses those terms as they had in Chapter 6 of the Corporations Law as in force immediately before 13 March 2000 (s 3). In Part 3 Division 1 on transfer orders, further defined terms are crucial: “asset” includes any property whether tangible, intangible, real or personal, and includes choses in action, goodwill, rights, interests and claims of any kind whether contingent or prospective (s 14). “Liability” includes any duty or obligation, actual, contingent or prospective, liquidated or unliquidated, and whether owed alone or jointly (s 14). “Right” means any right, power, privilege or immunity whether actual, contingent or prospective, but excludes Crown-agent privileges except as they relate to things done before the transfer time (s 14). “Transfer order” means an order under section 15 (including as amended or corrected) and “transfer time” is the time specified in the order (s 14). The “assignee” is the person specified in the transfer order as the person to whom anything is assigned or the person substituted as a reference party (s 14). The Act also distinguishes different phases: Part 6 Division 3 commences on a day fixed by proclamation, which must be the day the disposal is substantially complete in the Minister’s opinion (s 2(5), (6)). The corporate vehicle’s constitution must contain the residency requirements set out in section 10, and that section applies at all times, whether before, on or after that day (s 10(5)). The freeze on the cornerstone investor’s share entitlement under section 11 applies for two years after that person or another person becomes the cornerstone investor (s 11(1)). The general share-dealing restrictions under section 12(3) cease to apply two years after the day on which a person becomes the cornerstone investor (s 12(4)). The concept of “tariff consumer” is defined in section 25(3) as a person supplied with gas by the corporation or a subsidiary otherwise than under a written contract, liable to pay fees and charges prescribed under the Energy Operators (Powers) Act 1979. “Supply business” is that part of the corporation’s or subsidiary’s operations that consisted of supplying gas to tariff consumers (s 25(3)).

The Act primarily affects the Gas Corporation itself, which is obliged to comply with Ministerial directions and participate in the disposal process. The corporation’s subsidiaries may also be affected as they can be assigned assets or liabilities, given the corporation’s powers and duties under the transitional provisions, and have their obligations potentially taken over by the State (s 7(2)(a), 35, 32). The corporate vehicle , the new incorporated entity , is affected by mandatory constitutional requirements regarding registration in Western Australia, location of head office, residency of directors and CEO, and a prohibition on altering those provisions (s 10). The cornerstone investor is directly affected by the two-year freeze on acquiring or disposing of shares that would change its entitlement beyond the specified percentage, and by restrictions on share dealings in the public float (s 11, 12). Any person who applies for shares in the public float or who otherwise acquires shares in the corporate vehicle is affected by the prohibition on exceeding 5% shareholding within two years of the cornerstone investor’s entry (s 12(1), (3)). The Minister and the Treasurer are affected by duties to approve orders, give directions, and potentially provide State indemnities and guarantees (s 6(5), 7, 31). Employees of the corporation may be made available to the corporate vehicle on agreed terms until the day the disposal is substantially complete (s 24). Tariff consumers , those who were supplied with gas without a written contract , are affected because they are deemed to have entered into a contract with the assignee of the supply business in a form approved by the Coordinator of Energy (s 25). The State is affected by its capacity to give indemnities and guarantees, to take over obligations, and to appropriate money from the Consolidated Account for those purposes (s 31, 32). The Auditor General is required to examine and report on obligations, duties, liabilities, indemnities and guarantees assumed by the State under the Act (s 37). Relevant officials such as the Registrar of Titles and the Registrar of Deeds and Transfers are required to record and register documents to show the effect of transfer orders (s 20). Persons who obtain confidential information connected with the disposal, such as members of committees appointed under section 7(3) or others, are affected by the offence provision for unauthorised disclosure (s 29). The Crown is bound by the Act (s 4). Other bodies affected by amendments to other Acts include local governments, because section 67 provides that land is not regarded as occupied under the Local Government Act 1995 merely because of the presence of a gas pipeline subject to a distribution licence.

The Act imposes several specific duties and grants corresponding rights to facilitate the disposal. The corporation has a duty to comply with any direction given to it by the Minister under section 7(1). This duty is regarded as a function of the corporation under the Gas Corporation Act 1994 and prevails if it conflicts with any duty or provision of that Act (s 8(1), (2)). The corporation also has a duty to take all practicable steps if section 16 cannot fully effect an assignment due to extra-jurisdictional issues or other reasons, to achieve the intended effect as soon as possible (s 17). The Minister has a duty to obtain the Treasurer’s approval before making a disposal order (s 6(5)) and must cause orders and directions to be published in the Gazette or laid before Parliament (s 6(4), 7(4)). The corporate vehicle has a duty to ensure its constitution complies with section 10 at all times; if it does not, it is deemed amended to include the required provisions (s 10(2)). A person who becomes the cornerstone investor must not acquire or dispose of shares or interests in shares within two years if that would cause the cornerstone investor’s entitlement to become more than or less than the specified percentage (s 11(1)). Any person applying for shares in the public float must not do so if it would cause the cornerstone investor’s entitlement to exceed the specified percentage or any person to become entitled to more than 5% of shares (s 12(1)). Similarly, any person acquiring shares other than through the public float must not cause another person (other than the cornerstone investor) who holds less than 5% or no shares to exceed 5% within two years of the cornerstone investor’s entry (s 12(3), (4)). The Minister has the right to give directions to the corporation for bringing about the disposal (s 7(1)), to make and vary transfer orders (s 15), and to correct errors in transfer orders (s 21). The Minister and the corporation each have the right to do anything necessary or convenient for the purposes of the Act, including entering into agreements (s 9). The assignee under a transfer order receives rights to assets free from any prior vesting provisions in written laws (s 22(1)), and the benefit of easements in favour of the corporation is capable of being assigned (s 23). An assignee is substituted as a party to proceedings specified in the transfer order (s 16(1)(a)(iii)). The corporation and an assignee may make arrangements for custody and use of records (s 19). The State has the right to give indemnities and guarantees (s 31) and to take over obligations of the corporation or subsidiary (s 32). The Auditor General has the right to disclose information to facilitate the disposal at the request of the corporation or a committee, despite the Auditor General Act 2006 (s 28). Tariff consumers have a right to be supplied under a form of contract approved by the Coordinator of Energy, but they have no right to opt out of the deemed contract (s 25).

The Act creates several criminal offences, all with specified penalties that are enforceable by prosecution. Contravening the two-year freeze on the cornerstone investor’s share entitlement under section 11(1) is an offence punishable by a fine of $200,000 or imprisonment for 12 months (s 11(4)). The same penalty of $200,000 or 12 months’ imprisonment applies to a person who applies for shares in the public float where the acquisition would cause the cornerstone investor’s entitlement to exceed the specified percentage or any person to be entitled to more than 5% of shares (s 12(1), penalty). It also applies to a person who acquires shares in any other way (outside the public float) within two years of the cornerstone investor’s entry that would cause another person (other than the cornerstone investor) who holds less than 5% of shares to exceed 5% (s 12(3), penalty). The Act expressly provides that a contract, dealing or other transaction is not unenforceable, voidable or void merely because it contravened these sections (s 11(5), s 12(5)). This means that while the transaction itself is not invalid, the participants may still face criminal liability. A further offence is created for unlawful disclosure of information connected with the disposal. A person who obtains information under section 28 or otherwise and who has agreed or is under a duty not to disclose it commits an offence if they breach that agreement or duty without lawful excuse, with a penalty of $100,000 (s 29(1)). A person who obtains such information from the bound recipient and discloses it in a way that would have been a breach if the bound recipient had disclosed it also commits an offence punishable by $100,000 (s 29(2)). The Act does not prescribe any specific penalty or enforcement mechanism for a failure by the corporation to comply with a Ministerial direction under section 7(1). However, section 8 makes compliance a duty and that duty prevails over the Gas Corporation Act, meaning non-compliance could potentially be enforced through administrative law remedies (e.g., mandamus) or through the Minister’s oversight rather than by criminal prosecution. Similarly, the requirement that the corporate vehicle’s constitution contain the mandatory provisions is backed by a deeming provision (s 10(2)) and a prohibition on contrary alterations (s 10(3)), but no criminal penalty is attached. The Minister’s duty to obtain the Treasurer’s approval before making a disposal order (s 6(5)) is likewise not backed by an express penalty; failure to obtain approval would likely make the order invalid. The Auditor General’s reporting obligation under section 37 is mandatory but not penalised; it is a public accountability mechanism. The Act empowers regulations to prescribe matters necessary for giving effect to its purposes (s 33, 38), and regulations could in theory create offences for breach of their provisions. Enforcement of share-related offences would be by prosecution in the ordinary criminal courts, with the penalties applicable to individuals; corporations may also be liable.

The Act contains several provisions that override, modify, or declare the relationship with other legislation. Section 12A declares the following matters to be excluded matters for the purposes of section 5F of the Corporations Act 2001 (Cth) in relation to the whole of the Corporations legislation: the constitution of the corporate vehicle to the extent governed by s 10, alterations to that constitution governed by s 10, resolutions of the vehicle governed by s 10, and the acquisition or disposal of shares governed by s 11 or 12. This has the effect that the takeover provisions and other parts of the Corporations legislation do not apply to those matters. Section 27 provides that a disclosure of information made for facilitating a section 6 disposal is not to be regarded as a breach of contract or confidence, a civil wrong, or a contravention of section 24 of the Energy Coordination Act 1994, Schedule 2 to the Gas Corporation Act 1994, section 5 of the Statutory Corporations (Liability of Directors) Act 1996, or sections 232 or Part 7.11 Division 2A of the Corporations Law (s 27(1)). This exemption applies to disclosures by the Government, the corporation, a subsidiary, or a person acting with their authority, and to disclosures by the corporate vehicle before the day fixed under s 2(5) (s 27(2), (3)). Section 28 allows the Auditor General to disclose information despite section 46(2) of the Auditor General Act 2006. Section 30 provides that the operation of a provision of the Act is not to be regarded as a breach of contract or confidence, a civil wrong, a breach of any contractual provision restricting assignment or disclosure, a ground for termination of an instrument due to change in ownership, a cause of voidness or unenforceability, or a release of any surety. This operates to override contractual and other rights that might otherwise be triggered by the disposal. Section 8(3) provides that section 7 applies despite section 6(a) of the Statutory Corporations (Liability of Directors) Act 1996, which otherwise might affect directors’ liability. The transfer order provisions under section 16 operate by force of law to assign assets and liabilities independently of any other requirements for transfer or assignment, overriding any restrictions in other laws. Section 22 states that the assignment of an asset by the corporation is not prevented by any written law that states the asset vests in the corporation. Section 23 makes the benefit of easements in favour of the corporation assignable even if the easement was not created as assignable, and provides for registration by the Registrar of Titles or Registrar of Deeds and Transfers. Part 6 (Effect on other Acts) includes section 67 which provides that land is not regarded as occupied under the Local Government Act 1995 merely because of a gas pipeline or distribution licence, an important interaction for local government rates and regulatory provisions. The transitional provisions in Part 4 allow regulations to modify other written laws insofar as they relate to a subsidiary, including substituting references to the corporation with references to the subsidiary (s 36). Section 26 provides that proceeds of disposal are to be applied firstly to expenses, then to payments to the corporate vehicle, then to liabilities, and the balance paid into the Consolidated Account, which interacts with the Financial Management Act 2006 and related legislation. Sections 31 and 32 appropriate money from the Consolidated Account for indemnities, guarantees, and obligations taken over by the State. The Act also deems Part 6 Division 2 to have come into operation immediately before a distribution licence is granted under Part 2A of the Energy Coordination Act 1994 (s 2(2)), ensuring the amendments to that Act are timed correctly.

The Gas Corporation (Business Disposal) Act 1999 is Act No. 58 of 1999 and received Royal Assent on 24 December 1999. Most provisions commenced on that day under section 2(1). Part 6 Division 4 commenced on 1 January 2000 (s 2(7)). Part 6 Division 2 commenced on 1 July 2000, deemed to have come into operation immediately before a distribution licence was granted, as published in the Gazette on 4 July 2000 (s 2(2) and Gazette). Part 6 Division 3 commenced on 16 December 2000, the day fixed by proclamation when the disposal was substantially complete (s 2(5) and Gazette 15 December 2000). The first amending Act was the Corporations (Consequential Amendments) Act 2001 (No. 10 of 2001), which on 15 July 2001 amended sections 3 and 10, inserted section 12A, and made other consequential changes to align the Act with the new Commonwealth Corporations regime. The Statutes (Repeals and Minor Amendments) Act 2003 (No. 74 of 2003) on 15 December 2003 amended section 2(1) and deleted Part 6 Division 5, which had not come into operation. The Planning and Development (Consequential and Transitional Provisions) Act 2005 (No. 38 of 2005) amended section 23 on 9 April 2006 to update a reference to the Planning and Development Act 2005. The Financial Legislation Amendment and Repeal Act 2006 (No. 77 of 2006) on 1 February 2007 amended sections 26, 28, 31, 32 and 37, mainly to update references to the Consolidated Account and to the Auditor General Act 2006. The Statutes (Repeals and Minor Amendments) Act 2011 (No. 47 of 2011) on 26 October 2011 amended sections 20 and 23 to update references to the Registrar of Titles and the Land Administration Act 1997. The most recent amendment is the Directors’ Liability Reform Act 2023 (No. 9 of 2023), which on 5 April 2023 deleted section 13 (which had previously been omitted or dealt with directors’ liability). The compilation table shows reprints: Reprint 1 as at 18 November 2005 and Reprint 2 as at 29 August 2014. The note also indicates that the Gas Corporation Act 1994 (which established the corporation) was repealed by section 93 of this Act, though that section is omitted under the Reprints Act.

The text of the Gas Corporation (Business Disposal) Act 1999 as provided does not contain any references to court cases, judgments, or litigation history. No cases are cited in the Act itself, and the compilation notes do not list any judicial consideration. The Act is largely a facilitative and transactional statute designed to authorise and implement a specific disposal of a government business. Such statutes often generate little litigation because they override contractual and other rights (s 30) and provide for automatic assignment mechanisms (s 16) that minimise grounds for dispute. The saving provision in section 30 is expressly designed to prevent claims for breach of contract, confidence, or other civil wrongs, which would otherwise be a common source of litigation in a business transfer. Similarly, sections 11(5) and 12(5) expressly preserve the validity of contracts and dealings even if they contravene the share restrictions, which would tend to reduce litigation over the enforceability of such transactions. The offence provisions under sections 11, 12 and 29 are criminal in nature and could theoretically be prosecuted, but no prosecutions are recorded in the source. Possible areas for litigation could include challenges to the validity of transfer orders (though section 21 provides for correction of errors) or disputes about whether an asset or liability was properly specified. However, the broad powers of the Minister to make orders and the automatic effect of transfer orders under section 16 likely minimise such disputes. Any litigation that did occur would be in the Western Australian Supreme Court or the Federal Court (if involving corporations law). Because the Act declares itself an excluded matter for certain Corporations Act provisions (s 12A), questions about the scope of that exclusion could arise. Without any case law mentioned in the source, it is not possible to identify specific litigation outcomes. The Act was enacted in 1999 and the disposal has long been completed (Part 6 Division 3 commenced in December 2000 on the day the disposal was substantially complete), so most operational matters are now historical. The ongoing provisions , such as the constitutional requirements for the corporate vehicle (s 10) , could still be relevant if the corporate vehicle continues to exist, but no litigation is noted.

Several provisions in the Act contain traps for the unwary. The cornerstone investor must take particular care with the two-year freeze: any acquisition or disposal of shares, or any interest in shares, that would cause the cornerstone investor’s entitlement to become more than or less than the specified percentage is an offence punishable by $200,000 or 12 months’ imprisonment (s 11(1), (4)). Critically, the prohibition applies even if the cornerstone investor itself does not act , it applies where “that person or another person becomes the cornerstone investor” (s 11(1)). This means that if a person becomes the cornerstone investor and later another entity acquires shares that alter the cornerstone investor’s percentage, the offence could be triggered. The Minister can permit acquisitions by notice in the Gazette (s 11(2)), but the default is prohibition. A related trap is that although the transaction is not void or unenforceable (s 11(5)), the criminal liability remains. For persons other than the cornerstone investor, the general share-dealing restriction in section 12(3) catches acquisitions outside the public float that result in any person (other than the cornerstone investor) who holds less than 5% or no shares exceeding 5%. However, this restriction only lasts for two years after the day a person becomes the cornerstone investor (s 12(4)), but the public float restriction under section 12(1) has no express time limit , it applies whenever a person applies for shares in the public float if the acquisition would cause the cornerstone investor to exceed the specified percentage or any person to exceed 5%. A person could inadvertently acquire shares in an underwriting arrangement that is exempted from the public float restriction (s 12(2)), but the terms of that exemption are narrow (issue or purchase of shares under an underwriting agreement to facilitate a public float). Another potential trap: the corporate vehicle’s constitution must comply with section 10 at all times; if it does not, it is deemed to have been amended to include the required provisions (s 10(2)). A company that attempts to alter those provisions will find that the alteration has no effect (s 10(3)), and any resolution that would contravene those provisions or ratify a contravention has no effect (s 10(4)). This could cause problems if directors or shareholders assume they can freely amend the constitution after the float. Transfer orders can be tricky: they may specify things by reference to schedules that need not be published in the Gazette, but must be available for public inspection (s 15(4)). A person affected by a transfer order needs to know the existence of such schedules to understand their rights. The Minister can amend a transfer order with the assignee’s consent before the transfer time (s 15(7)), but no amendment is possible after the transfer time. Error correction under section 21 can have retrospective effect to the transfer time, but with protection for persons other than the State, corporation, assignee or Ministers , those third parties cannot be prejudiced or have liabilities imposed for things done before correction (s 21(3)). Nonetheless, the retrospective effect could affect contractual arrangements. The consumer contract provision in section 25 creates a deemed contract for tariff consumers with no right to negotiate or opt out. The form of contract is set by notice in the Gazette, and different forms can apply to different classes of tariff consumers (s 25(2)). Consumers who were previously not under a written contract may find themselves bound by terms they did not agree to. The offence of disclosing information (s 29) applies broadly: a person who obtains information under section 28 or otherwise and has agreed or is under a duty not to disclose it commits an offence if they breach that agreement or duty without lawful excuse. The phrase “or otherwise” means the information need not come through the Auditory General; any person who obtains information connected with a section 6 disposal and who is bound by an agreement or duty may be liable. Even a person who obtains information from the bound recipient commits an offence if they disclose it in a way that would have been a breach if the bound recipient had disclosed it (s 29(2)). The interaction with the Corporations Act through section 12A is an excluded matter declaration, meaning that ordinary takeover rules and other Corporations legislation do not apply to the matters specified. But this exclusion is limited to the constitution, alterations, resolutions and share acquisitions/disposals under sections 10, 11 and 12; other aspects of the corporate vehicle’s operations remain subject to corporations law. Lastly, the Act provides that the Crown is bound (s 4), which means the State cannot claim Crown immunity in relation to any of the Act’s provisions, including potential offences or duties.

To comply with the Gas Corporation (Business Disposal) Act 1999, the primary responsible parties are the corporation, the corporate vehicle, the cornerstone investor, and persons dealing in shares of the corporate vehicle. The corporation must fully comply with any direction given by the Minister under section 7(1) and treat that duty as paramount over any obligation under the Gas Corporation Act 1994 (s 8). The corporation should ensure it has systems to receive and implement directions promptly, including directions to form subsidiaries, assign assets, or reorganise its affairs. All directions must be given in writing; the corporation should maintain a record. The corporation must also facilitate the making of transfer orders by providing accurate information about its assets, liabilities and proceedings, and consult with relevant officials as required (s 15(6)). The corporate vehicle must ensure its constitution at all times contains the provisions required by section 10: that it is taken to be registered in Western Australia, its head office is located in Western Australia, a majority of directors and the CEO are ordinarily resident in Western Australia, and that those provisions cannot be altered (s 10(1)). If the constitution does not comply, the company must treat it as having been amended to comply, and any attempt to alter those provisions must not be acted upon (s 10(2), (3)). The corporate vehicle’s directors should verify constitutional compliance as a standing agenda item. For the cornerstone investor, compliance means refraining from any acquisition or disposal of shares or interests in shares within two years of becoming the cornerstone investor that would change the specified percentage (s 11(1)). If the cornerstone investor wishes to transact within that period, it must seek permission from the Minister by notice published in the Gazette (s 11(2)). The cornerstone investor should also avoid any arrangement that might result in another person causing the percentage to change. For any person applying for shares in the public float, compliance requires ensuring that the acquisition would not cause the cornerstone investor to exceed the specified percentage or cause any person to hold more than 5% of shares (s 12(1)). Underwriters should confirm they are acting under an underwriting agreement within the exemption (s 12(2)). For acquisitions outside the public float within two years of the cornerstone investor’s entry, a person must ensure that no other person (other than the cornerstone investor) who holds less than 5% or no shares would exceed 5% immediately after the acquisition (s 12(3)). Any person dealing in shares should obtain legal advice on their holding percentage and the time limits. The Minister must obtain the Treasurer’s written approval before making a disposal order (s 6(5)) and publish it in the Gazette (s 6(4)). Directions to the corporation must be laid before Parliament within 14 days (s 7(4)). The Minister should also ensure that any transfer order specifies the transfer time clearly, and that schedules are made available for public inspection (s 15(4)). For the State, any indemnity or guarantee must be given by the Treasurer in the name of the State (s 31(1)). The Treasurer should document the basis for any indemnity or guarantee and ensure that payments are charged to the Consolidated Account only as authorised. The Auditor General must examine and report to Parliament within 60 days of the day fixed under section 2(5) on obligations, liabilities, indemnities and guarantees assumed by the State (s 37(1)). For any person in possession of confidential information connected with the disposal, compliance requires strict adherence to any agreement or duty not to disclose, and a person who obtains information from another must not disclose it in a way that would have breached the original duty (s 29). All disclosures should be made only through authorised channels (s 27, 28). Finally, tariff consumers must be informed of the deemed contract as approved by the Coordinator of Energy, and the assignee must have the approved form of contract published in the Gazette (s 25). Regulations may provide further specifics, and all parties must comply with any regulations made under sections 33 or 38.