State Financial Institutions and Metway Merger Act 1996

The Act defines a “State financial institution” in section 5 to mean QIDC as a company registered under the Corporations Law, SIF as a company registered under that Law, Suncorp Finance Limited (A.C.N. 009 705 417), SBS, a wholly-owned subsidiary of any of those entities, and a company formed for holding some or all of the issued share capital, assets or liabilities of one or more of those entities. The “Metway scheme of arrangement” is defined in section 6 as a scheme or schemes of arrangement under Corporations Law Part 5.1 between one or more SFIs and their members, and if a regulation declares another entity (a “scheme entity”) then also between that entity and its members, under which either or both of the following occur: all or substantially all of the assets and liabilities of SFIs and scheme entities are transferred to Metway, or SFIs and scheme entities become wholly-owned subsidiaries of Metway. The “mandatory constitution provisions” are the requirements set out in Part 6, specifically the obligations in section 64 that Suncorp’s constitution must at all times require its registered office to be located in Queensland, at least one member of the board of directors to be ordinarily resident in Queensland, and its head office to be located in Queensland. Section 64(2) elaborates that the head office is located in Queensland only if the principal operational office of the chief executive officer is in Queensland and the CEO performs their role primarily in Queensland, the chairperson has an office in Queensland, each “group corporate services activity” is wholly or partly performed in Queensland, and the usual location for holding Suncorp board meetings is in Queensland. “Group corporate services activity” is defined in section 64(3) as a list of eight activities carried out in relation to Suncorp’s Australian business, including activities of the chief executive’s office, financial reporting and business development, risk management and compliance, legal and company secretariat, internal audit, technology and transformation strategy and management (covering data analytics, digital enablement, cloud services, and IT infrastructure and security), human resources, and corporate affairs and government relations. The Metway amalgamation day is not itself defined in the provided text, but it appears repeatedly in Part 7 as the cut-off date for pre-amalgamation liabilities. Part 6A introduces “general obligations of Suncorp”, and Part 6B extends those obligations to any entity that acquires substantially all of Suncorp’s Australian business. The dictionary in schedule 3 defines particular words used in the Act, but the text of that schedule is not reproduced in the source.

The Act directly affects Suncorp as the primary entity subject to Parts 6 and 6A. Suncorp’s board of directors must ensure at least one director is ordinarily resident in Queensland, the registered office is in Queensland, and the head office is in Queensland as defined by the detailed criteria in section 64(2). The chief executive officer of Suncorp bears a personal obligation under section 66A to provide an annual certificate to the Treasurer by 31 July, certifying compliance with section 64 and Part 6A for the preceding 12 months and a statement that Suncorp does not propose to act in contravention for the next 12 months. The CEO’s role is also central to the head office test: the CEO’s principal operational office must be in Queensland and the CEO must perform their role primarily in Queensland. The chairperson of Suncorp must have an office in Queensland, and board meetings must usually be held in Queensland. The Treasurer of Queensland is given significant powers: the Treasurer may apply to the Supreme Court for injunctions under section 66, may delegate powers under Part 6 to the chief executive of the department (section 67), may require guarantee fees under section 75, and receives the CEO’s annual compliance certificate. The State of Queensland itself is affected as a guarantor of certain pre-amalgamation liabilities of QIDC, SIF, and their wholly-owned subsidiaries under sections 70 to 72, but not for future liabilities (section 73). Entities that acquire substantially all of Suncorp’s Australian business are directly affected by section 69D, which makes Parts 6 and 6A apply as if that acquirer were Suncorp. The original SFIs , QIDC, SIF, Suncorp Finance Limited, SBS, and their subsidiaries , are affected by the guarantee provisions if they have transferred liabilities to another entity. Metway and its related bodies corporate are affected by section 75(2) in that guarantee fees are not payable if the liability was transferred to Metway or a related body corporate. ASIC is indirectly involved because Suncorp must maintain its registration as a company with ASIC under section 69B. Members of SFIs and scheme entities are affected by the Metway scheme of arrangement, though those provisions are now largely spent.

Suncorp’s core duty under Part 6 is to ensure its constitution contains the three mandatory requirements set out in section 64(1): a Queensland registered office, at least one board member ordinarily resident in Queensland, and a Queensland head office. Section 64(2) spells out four conditions that must be satisfied for the head office to be considered located in Queensland: the CEO’s principal operational office is in Queensland and the CEO performs their role primarily in Queensland; the chairperson has an office in Queensland; each “group corporate services activity” (as defined in section 64(3)) is wholly or partly performed in Queensland; and the usual location for Suncorp board meetings is in Queensland. Section 66A imposes a duty on the CEO to give the Treasurer an annual certificate by 31 July covering a 12-month period ending the previous 30 June, certifying that Suncorp complied with section 64 and Part 6A, and that it does not propose to act in contravention for the following 12 months. Part 6A imposes three general duties: section 69A requires Suncorp to act consistently with the mandatory constitution provisions at all times, even if it has not modified its constitution to include them; section 69B requires Suncorp to maintain its ASIC registration and refrain from any act or omission that would cause it to cease being registered; and section 69C requires Suncorp to immediately give the Treasurer written notice if it becomes aware of any act, omission, or proposed act or omission that is or would be inconsistent with an obligation under Part 6A. Section 65 provides that a special resolution of Suncorp is void if it would alter the constitution so that it would not comply with section 64, or if it would ratify an act or omission contravening the mandatory constitution provisions. Section 69 provides that Part 6 has effect despite the Corporations Act and prevails over Suncorp’s constitution in case of conflict. The Treasurer has the right to apply to the Supreme Court for injunctions under section 66, with broad powers covering restraining orders, mandatory orders, interim injunctions, and any other order considered appropriate. Notably, the court must not require the Treasurer to give an undertaking as to damages as a condition for an interim injunction (section 66(9)). Under Part 7, the State retains an obligation to pay amounts for which QIDC, SIF, or a wholly-owned subsidiary of SIF becomes liable due to pre-Metway amalgamation day matters under the QIDC Act or Suncorp Act (sections 70 and 71). Section 72 extends that obligation to liabilities transferred from those entities. The Treasurer may require the relevant entity to pay guarantee fees at prescribed rates (0.05% or 0.20% per annum depending on when the amount becomes due), except where the liability was transferred to Metway or a related body corporate (section 75). Fees are a debt due to the State and may be paid from the consolidated fund without further appropriation (section 74).

The Act does not prescribe criminal penalties, fines, or imprisonment for non-compliance. Enforcement is primarily through the injunctive powers of the Supreme Court under section 66, which are available at the suit of the Treasurer. Section 66(1) lists the classes of conduct that may trigger injunctive relief: a contravention of the mandatory constitution provisions; attempting to contravene them; aiding, abetting, counselling or procuring a contravention; inducing or attempting to induce a contravention; being knowingly concerned in or party to a contravention; or conspiring to contravene them. If such conduct has occurred, is occurring, or is proposed, the court may grant an injunction restraining the conduct and may also require Suncorp or the other person to do something (section 66(2)). If there is a failure to do something required by the mandatory constitution provisions, the court may grant a mandatory injunction (section 66(3)). The court’s powers are broad: it may grant injunctions by consent even if not satisfied of the grounds (section 66(4)), grant interim injunctions pending a final decision (section 66(5)), and discharge or vary injunctions (section 66(6)). Critically, the court may exercise its power to restrain conduct whether or not Suncorp or the other person intends to engage again, has previously engaged in such conduct, or there is an imminent danger of substantial damage (section 66(7)). The same applies to mandatory injunctions (section 66(8)). The court may also make any other order it considers appropriate in addition to or in substitution for an injunction (section 66(10)). Section 65 provides a separate enforcement mechanism: any special resolution of Suncorp that would alter the constitution to be inconsistent with section 64, or that would ratify a contravention, is automatically void and has no effect. The annual certification requirement in section 66A is a duty of the CEO; failure to provide the certificate may itself be a breach that could be the subject of injunction proceedings, though no specific penalty is stated. The Treasurer’s ability to require guarantee fees under section 75, and the status of those fees as a debt due to the State, provides a financial enforcement mechanism in relation to Part 7 liabilities. Section 68 gives the Supreme Court of Queensland exclusive jurisdiction for matters under Part 6, except for the High Court’s jurisdiction under Commonwealth Constitution section 75.

Section 69(1) expressly provides that Part 6 of this Act has effect despite the Corporations Act. This overriding effect is significant because the Corporations Act normally governs company constitutions, board composition, registered office, and head office location. The Queensland legislature has used this Act to impose location-specific requirements that would otherwise be inconsistent with the general law of corporations. Section 69(2) further provides that if there is any conflict or inconsistency between Part 6 and Suncorp’s constitution, Part 6 prevails. This means that even if Suncorp’s shareholders attempt to amend the constitution to remove the Queensland requirements, such amendments would be void under section 65. Section 68 provides that the Supreme Court of Queensland has exclusive jurisdiction for matters arising under Part 6, ousting the jurisdiction of other courts except for the High Court under section 75 of the Commonwealth Constitution. The Act references the “Corporations Law” in sections 5 and 6, which was the predecessor to the Corporations Act 2001 (Cth). The Editor’s note to section 5 notes that Corporations Law Part 2.2 Division 3 (Registering non-companies as companies) was repealed effective 1 July 1998. The 2001 amendment (No. 45) updated references to the Corporations Act. Part 6A and Part 6B do not contain their own overriding provisions, but section 69A’s requirement to act consistently with the mandatory constitution provisions would have effect regardless of the Corporations Act by virtue of Part 6’s overriding effect. Part 7 interacts with the QIDC Act and the Suncorp Act: sections 70 and 71 refer to liabilities under those Acts as they existed before the Metway amalgamation day. The State’s guarantee obligation under Part 7 is not a guarantee of future liabilities; section 73 makes clear that from the Metway amalgamation day the State does not guarantee any liability not mentioned in sections 70, 71, or 72. Part 8 provides transitional interaction: section 76 gives Suncorp six months from the commencement of the 2024 amendments to comply with the new section 64, and provides that references to compliance or contravention in other provisions are subject to that delay, but does not limit section 69A (the obligation to act consistently). Section 69D extends Parts 6 and 6A to any entity that acquires substantially all of Suncorp’s Australian business, effectively imposing the same Queensland location requirements and general obligations on that acquirer.

Based solely on the annotations in the source text, the Act has been amended on multiple occasions. The 1996 Act was originally enacted with extensive machinery provisions in Parts 2 through 5. Sections 38 to 50 expired on 1 December 1998 as noted in the source. The 2001 amendment (No. 45, section 29, schedule 3) updated references from the Corporations Law to the Corporations Act. The 2007 amendment (No. 17, section 57) amended section 64. The 2009 amendment (No. 9, section 136, schedule 1) amended section 87, which was later omitted. The 2010 amendment (No. 11, sections 104 and 105) amended sections 64 and 71. The most substantial amendment was the 2013 amendment (No. 39), which omitted a large number of sections: section 2, sections 7 through 36 (the entire Part 3 and most of Part 2 Division 4 and Part 5), sections 51 through 62, sections 77 through 96, and sections 87 and 88 after separate amendments. The 2013 amendments also amended sections 1, 4, 70, 72, and 75 (the last of which was also later amended in 2024). The most recent amendment is the 2024 amendment (No. 36), which made significant changes. Section 4 was substituted to restate the objects. Section 63 was omitted. Section 64 was substituted with a more detailed head office requirement and the new definition of “group corporate services activity”. Section 65 was amended to extend the voiding effect to resolutions that would ratify contraventions. Section 66 was amended to update references. New Part 6A (sections 69A to 69C) and new Part 6B (section 69D) were inserted. Section 75 was amended in relation to guarantee fees. A new Part 8 was inserted containing section 76, providing a six-month transitional period for compliance with section 64. The schedule references in section 66 were also amended. The Act now consists primarily of Part 1 (Preliminary), Part 2 Division 1 (Object) and Division 2 (Basic concepts), Part 6 (Mandatory requirements regarding Suncorp’s constitution), Part 6A (General obligations of Suncorp), Part 6B (Application of particular provisions to entity acquiring Suncorp’s Australian business), Part 7 (Guarantee of existing obligations), and Part 8 (Transitional provision for State Financial Institutions and Metway Merger Amendment Act 2024).

The source text of the Act does not refer to any litigation history, court decisions, or judicial interpretations. No cases are mentioned in any section, note, or schedule provided. Accordingly, based solely on the source material, there is no litigation history to report from the Act itself. It is possible that the Supreme Court of Queensland has exercised its jurisdiction under section 68 in matters arising under Part 6, but the source does not disclose such cases. Similarly, there may have been proceedings involving the guarantee provisions under Part 7 or the injunction provisions of section 66, but those are not referenced in the legislative text. The Act’s provisions on the voiding of special resolutions under section 65 and the CEO’s certification duty under section 66A have not been the subject of any reported litigation that is noted in the source. As a result, this section can only state that the Act’s text does not contain any reference to litigation or judicial consideration.

Several provisions in the Act contain traps for the unwary. The definition of head office location in section 64(2) is prescriptive and conjunctive: all four conditions must be satisfied. The CEO must not only have a principal operational office in Queensland but must perform their role “primarily in Queensland”. This goes beyond a mere registered address. The “group corporate services activity” list in section 64(3) includes technology and transformation strategy and management, covering data analytics, digital enablement, cloud services, and IT infrastructure and security. Each of these activities must be “wholly or partly performed in Queensland”, so Suncorp cannot outsource all of these functions out of state. Section 65 renders void any special resolution that would result in the constitution not complying with section 64, and also catches resolutions that would ratify an act or omission contravening the mandatory provisions. This is broader than a direct constitutional alteration. Section 66(9) is a significant tactical advantage for the Treasurer: the court must not require the Treasurer to give an undertaking as to damages as a condition for an interim injunction. This reduces the cost risk for the State in seeking injunctive relief. Section 66(7) and (8) allow the court to grant injunctions even without proof of intention to repeat the conduct, prior conduct, or imminent danger of substantial damage. The CEO’s annual certification under section 66A covers both the past 12 months and the next 12 months. The certification as to future compliance (“does not propose to act in a way that would contravene”) may expose the CEO to liability if Suncorp later acts inconsistently. Section 69A’s obligation to act consistently with the mandatory constitution provisions applies “whether or not Suncorp has modified its constitution to include the mandatory constitution provisions”. This means the obligation exists even during the six-month transitional period under section 76. Section 69B requires Suncorp to maintain its ASIC registration; any step towards deregistration (such as a members’ voluntary winding up or a scheme of arrangement that would result in cancellation of registration) would be a breach. Section 69C requires immediate written notice to the Treasurer of any non-compliance or proposed non-compliance. “Immediately” is a demanding timeframe. Section 69D is a trap for any entity considering acquiring Suncorp’s Australian business: it steps into Suncorp’s shoes for the purposes of Parts 6 and 6A, meaning it must comply with the Queensland location requirements and general obligations. Section 73 removes any doubt that the State guarantee under Part 7 does not cover liabilities arising after the Metway amalgamation day. The guarantee fee rates in section 75 are low (0.05% or 0.20% per annum) but are mandatory if the Treasurer requires them, and they apply even if the original SFI has transferred the liability. However, if the liability was transferred to Metway or a related body corporate, no fee is payable (section 75(2)). The transitional provision in section 76 gives Suncorp six months to comply with section 64, but section 76(3) provides that this does not limit section 69A, so the general obligation to act consistently with the mandatory constitution provisions applies from commencement.

To comply with the Act, Suncorp must take several concrete steps. First, Suncorp’s constitution must be amended to include the three requirements mandated by section 64(1): a Queensland registered office, at least one director ordinarily resident in Queensland, and a Queensland head office. The constitution should also reflect that the head office location satisfies the four conditions in section 64(2). Suncorp must ensure that its registered office is physically located in Queensland and that at least one director has their ordinary residence in Queensland. The CEO must establish and maintain their principal operational office in Queensland and must primarily perform their role from Queensland. The chairperson must have an office in Queensland. Each of the eight “group corporate services activities” listed in section 64(3) must be performed wholly or partly in Queensland. This may require relocating or splitting functions such as legal, company secretariat, internal audit, risk management, technology strategy, human resources, and corporate affairs. The usual location for Suncorp board meetings must be in Queensland. Suncorp should document these arrangements and maintain records to demonstrate compliance. The CEO must prepare and deliver a certificate to the Treasurer no later than 31 July each year, covering the 12 months ending the previous 30 June and stating that Suncorp complied with section 64 and Part 6A during that period, and that Suncorp does not propose to act in contravention during the next 12 months (section 66A). This certification should be based on a thorough review and likely require board-level confirmation. Suncorp must act consistently with the mandatory constitution provisions at all times, even if the constitution has not yet been amended (section 69A). It must maintain its ASIC registration and refrain from any act that would cause it to cease being registered (section 69B). Suncorp must establish a compliance monitoring system to detect any actual or proposed act or omission inconsistent with Part 6A obligations, and must immediately give written notice to the Treasurer if any such act or omission is detected (section 69C). This notification requirement is ongoing and does not depend on materiality. If Suncorp is considering any corporate transaction that might affect the head office or the group corporate services activities, it should obtain legal advice on compliance with section 64 and Part 6A. Any special resolution that would alter the constitution to be less compliant with section 64 must be avoided, as it would be void under section 65. If another entity acquires substantially all of Suncorp’s Australian business, that entity must take on these same obligations by virtue of section 69D. For entities with transferred liabilities under Part 7, QIDC, SIF, or the entity to which liabilities were transferred should be aware that the Treasurer may require guarantee fees at the prescribed rates, and those fees are a debt due to the State. The entity should budget for potential fee demands and comply with the Treasurer’s requirements as to how and when fees are to be paid. Finally, Suncorp should review its constitution and corporate governance practices within the six-month transitional period provided by section 76 to ensure full compliance with section 64 after that period expires.