Tasmanian Development Regulations 2022

The Regulations define several critical concepts. “Associated entity” (regulation 4) captures bodies corporate, partnerships or unincorporated associations, and majorities of trustees of a trust over which a director or a relative of the director has “control”. Control is assessed by reference to factors such as whether the director or relative is a shareholder, director, officer, trustee, or beneficiary, plus any other relevant matter or relationship. This definition is deliberately broad: it catches entities that may be at arm’s length on a formal organisational chart but where the director or relative exercises de facto control. The consequence is that a director’s interest in an associated entity will be treated as the director’s own interest for purposes of the material personal interest test.

“Material personal interest” (regulation 5) is defined by inclusion rather than exhaustive description. It includes direct or indirect interests, pecuniary or non-pecuniary interests, the interest of a relative, the interest of an associated entity, an interest in a corporation within the meaning of the Corporations Act, the director’s employment by a person with a direct or indirect interest in the Authority, the holding of another office where conflict may arise, membership of another statutory authority’s governing body, and any other interest that may give rise to a conflict of interest. This definition sweeps widely: a director who is also a member of another state board, or whose relative has a shareholding in a supplier to the Authority, could have a material personal interest. However, there are two carve-outs: holding an office as a State Service employee or officer does not of itself create a material personal interest (regulation 5(2)), and an interest in a contract for a good or service ordinarily supplied by the Authority on standard commercial terms to all customers does not count (regulation 5(3)). Those carve-outs are narrow; they do not extend to non-standard contracts or to interests arising through relatives’ shareholdings.

“Business judgment” (regulation 3) means any decision to take or not to take action in respect of a matter relevant to the business operations of the Authority. This is an expansive definition, covering both positive decisions and omissions. The business judgment rule in regulation 8(3)-(4) provides that a director, authorised officer or administrator who makes a business judgment is taken to meet the requirements of good faith and proper purpose (and equivalent equitable and common law duties) if the decision is made in good faith for a proper purpose, the person has no material personal interest in the subject matter, informs himself or herself about the subject matter to the extent reasonably believed appropriate, and rationally believes the judgment is in the Authority’s best interests. The belief is rational unless no reasonable person would hold it - a low threshold, but one that still requires evidence of the decision-making process.

The Regulations also distinguish between current and former officers. “Former director” and “former officer” mean persons who ceased to hold those roles within the 7 years immediately preceding the relevant time (regulation 3). That 7-year lookback period creates a potentially long tail of obligations and access rights. “Relative” includes a person in a personal relationship under the Relationships Act 2003, which extends beyond spouses and blood relatives to include de facto partners and same-sex relationships.

The Regulations directly affect a defined set of persons: directors, authorised officers, administrators, officers, former directors, former officers, and the Authority itself. Directors are members of the Authority’s board. Authorised officers and administrators are persons appointed under section 32 of the Act; the Regulations do not further specify their roles, but they likely exercise delegated powers. “Officer” is not separately defined in the Regulations but would take its meaning from the Act or the general law; in context it includes senior employees and managers who exercise significant authority. Former directors and former officers remain subject to certain provisions - notably the prohibition on improper use of information (regulation 8(5)(6) applies to “an officer or former officer”) and have a right to access records for legal proceedings (regulation 6). The 7-year lookback period means a person who was a director 6 years ago still holds that status for certain purposes.

The Authority itself is a party: it must allow access to records (regulation 6(2)), and it can recover profits and compensation under regulation 11. The Authority’s subsidiaries are also mentioned in the improper-use prohibition (regulation 8(5)(b): “damage to the Authority or any of its subsidiaries”). Persons dealing with the Authority - suppliers, contractors, joint venture partners, and their employees - may be affected indirectly through the material personal interest definitions. For example, a director’s relative employed by a supplier could create a material personal interest for the director, triggering disclosure and possibly recusal obligations. That in turn may affect the supplier’s relationship with the Authority.

Compliance professionals advising the Authority will need to train directors and officers on the duty provisions, the business judgment rule, and the record-keeping requirements. Lawyers and accountants must understand the scope of “associated entity” and “material personal interest” to design disclosure forms and conflict-of-interest registers. Journalists and researchers may use the access provisions (regulations 6 and 7) to obtain Authority records, but only former directors, administrators, or authorised officers can invoke the specific right under regulation 6(1), and only for legal proceedings. Others must rely on other access rights, such as those under the Act or freedom of information legislation.

The Regulations also affect the court system: regulation 10 empowers a sentencing court to order compensation, and regulation 11 allows the Authority to sue for profits and damages in any court of competent jurisdiction. That expands the potential for civil litigation flowing from regulatory breaches, increasing the demand for judicial resources and for insurance coverage for directors and officers.

The Regulations impose several key duties and also confer rights. Regulation 8(1) requires a director, authorised officer or administrator to perform their functions and powers in good faith in the best interests of the Authority and for a proper purpose. The penalty is a fine of up to 100 penalty units and/or imprisonment up to 2 years. Regulation 8(2) imposes a duty of care and diligence: the officer must exercise powers and functions with the degree of care and diligence that a reasonable person would exercise if they were in that office with those responsibilities. The same penalty applies. These duties mirror the statutory duties in the Corporations Act for company directors but are tailored to the Authority’s context.

Regulation 8(5) prohibits an officer or former officer from making improper use of information acquired by reason of their office or employment, to gain an advantage for themselves or another, or to cause damage to the Authority or its subsidiaries. Regulation 8(6) prohibits improper use of position for the same purposes. Both carry the same penalty. “Improper use” is not defined; it will be interpreted by reference to equitable and common law principles of fiduciary duty and misuse of confidential information. The geographic scope extends to conduct “in Tasmania or elsewhere”, covering overseas use.

The business judgment rule in regulation 8(3)-(4) provides a defence to a claim of breach of the good faith/proper purpose duty and equivalent equitable/common law duties. To rely on it, the officer must (a) make the judgment in good faith for a proper purpose, (b) have no material personal interest in the subject matter, (c) inform themselves to the extent reasonably believed appropriate, and (d) rationally believe the judgment is in the Authority’s best interests. The belief is rational unless no reasonable person would hold it. This rule does not cover the duty of care and diligence - only the good faith/proper purpose duty. That is a crucial limitation: an officer could still be liable for negligence even if the business judgment rule applies.

Regulation 9 allows an officer to rely on information or professional advice from other officers, professional advisers, experts, or committees, provided the reliance is in good faith, after independent assessment having regard to the officer’s knowledge of the Authority and the complexity of its structure, and the reasonableness of the reliance is presumed unless contrary is proved. The burden shifts to the party challenging the reliance. This defence applies to proceedings concerning performance of functions under the Act or equivalent general law duties.

Rights include the right of a director, administrator or authorised officer to access Authority records at any reasonable time (regulation 7). Any director or officer who prevents such access commits an offence (penalty: 50 penalty units). A former director, administrator or authorised officer has a narrower right: access only for the purpose of legal proceedings to which they are a party, which they propose in good faith to bring, or which they have reason to believe will be brought against them (regulation 6(1)). The Authority must allow such access or face a penalty of up to 100 penalty units. These rights are in addition to any other access right (regulation 6(3)).

The Regulations create criminal offences with penalties ranging from 50 penalty units up to 100 penalty units and/or 2 years imprisonment. Regulation 7(2) (preventing access by director, administrator or authorised officer): fine not exceeding 50 penalty units. Regulation 6(2) (Authority failing to allow former director etc to access records): fine not exceeding 100 penalty units. Regulation 8(1), (2), (5), (6): fine not exceeding 100 penalty units or imprisonment for not exceeding 2 years, or both. There is no offence for breach of the business judgment rule itself; it is a defence. The improper use offences (regulation 8(5) and (6)) apply to both officers and former officers, with the same maximum penalty.

Enforcement is not limited to criminal prosecution. Regulation 10 allows a court convicting a person of an offence under the Regulations to also order the person to pay compensation to the Authority for loss or damage suffered as a result of the act or omission constituting the offence. This compensation order can be enforced as a judgment of the court. It is discretionary: the court “may” order compensation if satisfied the Authority suffered loss or damage.

More significantly, regulation 11 gives the Authority a stand-alone civil remedy: where a person contravenes or fails to comply with a provision of the Regulations in relation to the Authority, the Authority may recover from that person “as a debt due to the Authority” by action in any court of competent jurisdiction (a) the amount of any profit made by that person or any other person as a result of the contravention, and (b) the amount of any loss or damage suffered by the Authority as a result. This can be done whether or not the person has been convicted. This is a powerful enforcement tool: the Authority need not prove a criminal case beyond reasonable doubt; it sues in debt. The words “in relation to the Authority” may limit the scope to contraventions that affect the Authority rather than third parties. The provision permits recovery of profits made by third parties who are not themselves the contravenor - for example, if a director uses inside information to benefit a family trust, the Authority could recover the trust’s profit from the director.

The penalty unit amount is not specified in the Regulations but is set under the Act or the general law - as of 2025, one penalty unit in Tasmania is $193, so 100 penalty units is $19,300. Imprisonment is available only for the most serious duty breaches, not for record-access offences.

These enforcement mechanisms are additive to any common law or statutory remedies. Regulation 12 explicitly preserves existing rules of law and civil proceedings. The Authority could therefore pursue both criminal prosecution and civil recovery for the same conduct, although double punishment principles may apply to penalties.

Regulation 12 is the key interaction provision: the Regulations have effect in addition to, and not in derogation of, any rule of law relating to duty or liability by reason of office or employment by the Authority, and they do not prevent the institution of any civil proceedings for breach of such a duty or liability. This means that the common law duties of fiduciaries - including the duty to avoid conflicts of interest, the duty not to profit from office, and the duty of loyalty - remain fully applicable. The same applies to equitable duties and any statutory duties under the Act itself. A director who breaches the Regulations may also be in breach of fiduciary duties, and the Authority could sue for equitable compensation or an account of profits in addition to or instead of relying on the Regulations.

The definition of “material personal interest” in regulation 5 has a cross-reference to “corporation, within the meaning of the Corporations Act”. That imports the expansive definition from the Commonwealth Corporations Act 2001, which includes foreign corporations. There is no carve-out for small proprietary companies. This creates a potential interaction where a director’s interest in a corporation that qualifies under the Corporations Act but would not otherwise be caught by state law becomes a material personal interest.

The definition of “relative” includes persons in a personal relationship under the Relationships Act 2003 (Tas). That expands the scope beyond traditional family relationships to include registered relationships and de facto partners. This means that a director’s partner’s business interests are swept in, even if the partner is not married to the director.

The business judgment rule in regulation 8(3) explicitly refers to “equivalent duties at common law and in equity”. So compliance with the rule also provides a defence to actions for breach of fiduciary duty or negligence at common law, provided the conduct also falls within the rule’s scope. However, the rule only covers decisions to take or not take action in respect of business operations - it does not extend to non-business decisions such as compliance with statutory obligations or internal governance matters.

The access rights in regulations 6 and 7 are stated to be “in addition to” any other right of access (regulation 6(3)). This means that a former director may also have rights under the Act itself, under the general law of inspection, or under the Corporations Act if the Authority is a company. The interaction with privacy and confidentiality laws is not addressed; the Authority may need to balance these access rights against obligations under the Personal Information Protection Act 2004 (Tas) or the Privacy Act 1988 (Cth) if it holds personal information.

The Regulations do not contain any provision overriding the Corporations Act or the Australian Securities and Investments Commission Act 2001 (Cth). They are state regulations under a state Act, so they operate within the constitutional limits of the Tasmanian Parliament. They would not apply to conduct that is exclusively within Commonwealth power, but they apply to the Tasmanian Development Authority, a state entity. Practitioners should check whether the Authority is a “trading corporation” for constitutional purposes, as that could affect the application of Commonwealth law.

These regulations are the Tasmanian Development Regulations 2022 (SR 2022, No. 091). They were made on 16 November 2022, notified in the Gazette on that date, and took effect on 25 December 2022. This is a consolidated version as at 12 April 2026, but there is no indication of any amendments having been made since commencement. The regulations appear to be a new instrument replacing any earlier regulations under the Tasmanian Development Act 1983. The commencing provision (regulation 2) simply says they take effect on 25 December 2022. They would have been made by the Governor in Council under the Act. No statement of amendments or transitional provisions is included. Given the date of the consolidated version (12 April 2026), it is possible that no amending regulations have been made, but practitioners should verify this on the Tasmanian legislation website. The regulations are administered by the Department of State Growth, which is the portfolio department.

The absence of amendment history suggests the instrument has been stable, but that could change if the Act is amended or if policy needs shift. Clients should monitor for any amendments, especially if the Authority’s functions or structure change. The 7-year lookback for former directors and officers means that amendments could alter obligations for persons who left years before the amendment.

The Regulations themselves have not been the subject of reported litigation in the source provided. However, the text does not include any cases, and we must not invent them. The Regulations are relatively new (commenced 2022), and litigation may be limited. Future litigation could arise around the meaning of “material personal interest”, particularly the scope of “indirect interest” and “any other interest that may give rise to a conflict of interest” - these are open-textured phrases that invite argument. The business judgment rule’s requirement of “no material personal interest” could be litigated to determine whether a remote indirect interest disqualifies the defence entirely. The improper use offences (regulation 8(5)(6)) will require courts to define “improper use” in the context of a state authority; they may look to decisions under section 182 of the Corporations Act for guidance.

The Authority’s civil recovery power under regulation 11 has not been tested in reported decisions, but it could generate litigation on whether the breach was “in relation to the Authority”, the calculation of profits, and whether the Authority can recover from a third party who profited but was not the contravenor. The regulation uses “if that person or any other person made a profit” - this suggests the Authority can recover from the contravenor the profit made by someone else. The contravener may argue that they should not be liable for profits they did not receive.

Prosecutions for record-access obstruction (regulations 6(2) and 7(2)) may arise if the Authority or its officers resist inspection requests. The defence of reasonable reliance on advice (regulation 9) may be invoked in criminal proceedings, but the presumption of reasonableness is rebuttable, so litigation may focus on whether the officer’s independent assessment was adequate.

Given the penalty of imprisonment for up to 2 years for duty breaches, defendants will have strong incentives to contest charges, and courts will need to interpret the duties carefully. The imprisonment threshold adds a criminal stigma and may lead to more cautious conduct, but also increases the risk of overcriminalisation of what might be honest mistakes. No case law exists yet from the source, but practitioners should watch for developments as the Regulations are enforced.

Several provisions contain traps for the unwary.

First, the definition of “material personal interest” extends to non-pecuniary interests (regulation 5(1)(b)). This means a director could have a material personal interest purely because of a friendship or ideological alignment, without any financial benefit. The regulator or court could construe “conflict of interest” broadly, potentially catching directors who serve on multiple community boards. The carve-outs are narrow: only State Service employment and standard-supply contracts are excluded (regulations 5(2) and (3)). A director who is a volunteer on a non-government board that has a funding relationship with the Authority could have a material personal interest under regulation 5(1)(h) or (i).

Second, the business judgment rule in regulation 8(3) requires that the director “does not have a material personal interest in the subject matter of the judgment”. This is an absolute bar: even a small, peripheral interest disqualifies the defence. A director who has a relative with a minor shareholding in a company that is an associated entity of a supplier to the Authority cannot rely on the rule for any decision regarding that supplier. The director must either disclose and recuse, or risk liability.

Third, the reliance on advice defence in regulation 9 requires that the officer “after making an independent assessment of the information or advice, having regard to the officer’s knowledge of the Authority and the complexity of the structure and operations of the Authority”. This is not a rubber stamp. An officer who blindly relies on a legal opinion without understanding it will not be protected. The officer must be able to show they considered the advice’s substance and formed a view. The onus shifts only after the officer proves the prerequisites in paragraphs (a), (b), and (c) of regulation 9.

Fourth, the access right for former directors (regulation 6) is limited to legal proceedings. A former director cannot use this right to investigate potential wrongdoing unless they have a specific legal proceeding in mind. The opening phrase “for the purpose of a legal proceeding” is narrow - it must be the purpose of the inspection, not a vague interest. The right does not extend to internal investigations or public interest research. Attempting to access records for a broader purpose could be a misuse of the right and possibly an offence.

Fifth, the Authority can recover profits made by another person under regulation 11. If a director breaches the Regulations and a family trust profits, the director personally owes the Authority the amount of the trust’s profit, even if the director never received the money. The director would then have to seek recovery from the trust separately. This expands personal liability beyond the immediate economic benefit.

Sixth, the 7-year lookback for former directors and former officers means obligations can persist long after leaving the Authority. A former director who accesses information during their tenure could still be prosecuted for improper use up to 7 years after ceasing, or longer if the limitation period extends. The access right for former directors likewise only exists for 7 years - after that, they lose the statutory right.

Seventh, regulation 12 reminds us that the Regulations do not override any other duty. So even if an officer complies with the Regulations, they may still be liable for breach of fiduciary duty at common law. The business judgment rule expressly covers only “equivalent duties at common law and in equity” in respect of the judgment - but that does not protect against other breaches, such as the duty to disclose conflicts. An officer who is disqualified from the business judgment rule due to a material personal interest may still be liable for failure to disclose.

Compliance with the Regulations requires a systematic approach for the Authority and its personnel.

First, the Authority should adopt a conflicts-of-interest policy that requires each director, authorised officer, and administrator to disclose any material personal interest at the time of appointment and whenever a new interest arises. The policy should specifically address indirect interests, interests of relatives, and interests of associated entities as defined in regulation 4. It should provide a register of interests that is reviewed at each board meeting. Training should be given on the breadth of “material personal interest” under regulation 5, including non-pecuniary interests and the need to identify interests of relatives and associated entities.

Second, decision-making processes should be documented to support reliance on the business judgment rule when a director or officer makes a business judgment. The documentation should show: (a) the judgment was made in good faith for a proper purpose; (b) the director had no material personal interest in the subject matter; (c) the director informed themselves about the subject matter to the extent reasonably believed appropriate (e.g., reviewed reports, sought expert advice); and (d) the director rationally believed the judgment was in the Authority’s best interests. Even if the rule is not invoked, documenting this process serves as evidence of compliance with the duty of care and diligence under regulation 8(2).

Third, reliance on advice under regulation 9 should be carefully managed. An officer who intends to rely on advice from another officer, professional adviser, expert, or committee must independently assess the advice. The officer should prepare a written note of that assessment, stating what they knew about the Authority’s structure and operations, why they considered the adviser competent, and why they believed the advice was sound. The assessment should be done before acting on the advice.

Fourth, record access must be facilitated. The Authority should ensure that directors, administrators, and authorised officers can physically or electronically access records at any reasonable time. Any officer who obstructs such access faces a penalty of 50 penalty units. For former directors, administrators, and authorised officers, the Authority should implement a process for responding to access requests under regulation 6. The process should verify that the requester is within the 7-year lookback period, that the request is for a legal proceeding, and that the purpose is genuine. The Authority should not refuse access arbitrarily, but may seek legal advice if it suspects the request is not for a proper purpose.

Fifth, the prohibitions on improper use of information and position (regulation 8(5)(6)) require a strong information governance framework. All officers and former officers must understand that they cannot use confidential Authority information for personal gain or to damage the Authority. The Authority should implement confidentiality agreements, IT security policies, and exit procedures that remind departing officers of their ongoing obligations for 7 years. Training should cover what constitutes “improper use” - for example, using information about a tender process to benefit a relative’s company.

Sixth, the Authority should consider purchasing directors’ and officers’ liability insurance that covers both criminal defence costs and civil claims under the Regulations. The insurance should also cover the risk that the Authority itself sues the officer for recovery of profits under regulation 11.

Seventh, all persons covered should keep records of their compliance efforts for at least 7 years after ceasing office, given the lookback period. This includes minutes of meetings where conflicts were declared, copies of disclosure forms, and notes of business judgment assessments.

Finally, the Authority should review its constitution and any delegation instruments to ensure they align with the Regulations’ definitions of “authorized officer” and “administrator”. If the Act does not clearly define these roles for all purposes, the Authority should clarify who falls within the scope of the duties and access provisions. Regular compliance audits by internal or external legal counsel will help identify gaps.