Victorian Funds Management Corporation Act 1994

This Act organises a set of interlocking legal concepts: a statutory Corporation with commercial objectives, a governance structure of appointed directors, an operational role as an external or internal fund manager for public sector entities, and a set of statutory constraints and accountability mechanisms tying the Corporation to the Treasurer and to other statutory regimes.

Corporation and Board. The statutory body “Victorian Funds Management Corporation” is a legal person with property, contracting and litigation capacities (s 5). The Board is the governing body responsible for management and the exercise of the Corporation’s powers (s 12). Directors are Governor in Council appointees selected with regard to necessary expertise (s 13(1)). The Public Administration Act 2004 applies to directors except for Part 3 of that Act (s 13(3)), which grafts aspects of public service governance onto the Board.

Participating body. A “participating body” is a public authority accepted by the Corporation under s 34 and is central to the Corporation’s client base. The definition of “public authority” in s 3 is broad and includes state agencies, state-owned companies, municipal councils, bodies administering public sector superannuation and prescribed agencies (s 3). Participating-body status is discretionary: a public authority may apply to be accepted (s 34(1)) and the Corporation may accept or revoke acceptance by notice (s 34(2)-(3)).

Fund manager appointment and trustee/manager roles. Section 9A authorises participating bodies to appoint the Corporation to exercise, on specified terms, the functions and powers authorised to the Corporation by this or any other Act, and to authorise the Corporation to delegate functions in accordance with the appointment (s 9A(1)). The Treasurer may likewise appoint the Corporation in relation to State funds (s 9A(3)-(4)). Where appointed, the Corporation may invest funds or assets in any manner authorised to the appointing body (s 9A(2), s 9A(4)).

Investment and borrowing powers. The Act imports the Corporation’s investment and borrowing powers from the Borrowing and Investment Powers Act 1987 (s 35(1)), and further clarifies the Corporation may acquire, sell, mortgage or lease property and obtain financial accommodation and invest money subject to that Act (s 35(1A)-(1A)(c)). Where the Corporation is trustee of a trust, its powers to obtain financial accommodation and invest trust money are subject to the authorisations of that Act and Treasurer approvals in specified circumstances (s 35(2)-(3)).

Treasurer’s control and limits. The Corporation operates under the Treasurer’s general direction and control for performance of its functions (s 10(1)), but the Treasurer must not give directions inconsistent with the Corporation’s objectives (s 10(2)). The statute explicitly limits directions by preventing the Treasurer from directing the Corporation in relation to a specific investment decision, dealing with property or the exercise of a voting right (s 10(4)). The Treasurer’s written directions must be published in the Government Gazette and included in the Corporation’s annual report (s 10(5)-(6)).

Governance mechanics and internal controls. Delegation is authorised by Board resolution to directors, named officers, committees or other persons except the delegation power itself and prescribed powers (s 11). The Board must prepare an annual corporate plan in a Treasurer-approved form, submit the draft by 31 May, consider Treasurer comments within two months, and incorporate agreed changes before delivering the completed plan (s 25). The plan is confidential unless the Board and Treasurer agree to publication (s 25(6)). Directors must disclose direct or indirect pecuniary interests at Board meetings and absent themselves from deliberations and votes unless the Minister or Board otherwise determines (s 21). Directors owe statutory duties of honesty, care and diligence, and prohibition on improper use of position or information (s 22).

Accountability and financial mechanics. The Treasurer may pay initial capital up to $10 million from the Consolidated Fund (s 33). The Treasurer may execute guarantees in favour of persons guaranteeing the Corporation’s obligations on terms the Treasurer determines; payments under such guarantees are met from the Consolidated Fund and recoveries are to be paid into the Consolidated Fund (s 37(1)-(3)). The Corporation must pay dividends to the State as determined by the Treasurer after consultation with the Board (s 27). The Corporation is excluded from the Freedom of Information Act 1982 (s 39), affecting public access to its records.

Statutory prohibitions and penalties. The Act prohibits the Corporation from making loans to directors or giving guarantees in connection with such loans, subject to the exception where similar arrangements are available to the public on the same terms (s 23). The Corporation may not indemnify directors for liabilities except by insurance (s 24). Staff and officers must disclose conflicts (s 30) and face penalties for non-compliance and for improper use of information (ss 30-32).

Interconnections with other Acts. The Act is framed to operate alongside borrowing and investment law, financial reporting regimes, public administration rules and duties law. The definitions and powers explicitly reference the Borrowing and Investment Powers Act 1987 (invest), the Financial Management Act 1994 (reporting), the Public Administration Act 2004 (application to directors), the Duties Act 2000 (stamp duty consequences via s 36), and other statutes in the definition of public authority (s 3). The Act is also expressed to operate extra-territorially to the fullest extent possible (s 4).

The Act allocates rights, responsibilities and risks among a defined set of actors: the State through the Treasurer, the Corporation and its Board, participating bodies and public authorities, the chief executive officer and staff, creditors and counterparties, taxpayers (via initial capital and guarantees), and the public (information access).

The Treasurer. The Treasurer has central decision-making and financial roles. The Treasurer provides general direction and control over the Corporation’s performance of its functions (s 10(1)), may issue written directions (s 10(5)), must not give directions inconsistent with the Corporation’s objectives (s 10(2)), and cannot direct particular investment decisions (s 10(4)). The Treasurer approves the form of the corporate plan and may direct the inclusion or omission of matters in the business plan or financial statements after consultation (s 25(3), s 25(9)-(11)). The Treasurer may provide initial capital up to $10 million from the Consolidated Fund (s 33) and may issue State guarantees on terms the Treasurer determines, with payments under guarantees made from the Consolidated Fund (s 37(1)-(2)). The Treasurer does not automatically control day-to-day investment choices where the Act bars specific direction, but maintains influence through appointment and corporate plan processes and through the publication of directions.

The Corporation and its Board. The Board manages the Corporation’s affairs and may exercise the Corporation’s powers, including delegation (s 12). Directors are appointed by Governor in Council with expertise in mind (s 13(1)) and are subject to Public Administration Act 2004 governance obligations (s 13(3)). Directors owe statutory duties of honesty, care and diligence and must avoid improper use of information or position (s 22). Failure to disclose interests can trigger removal by Governor in Council if the director is convicted of an offence relating to duties or fails to comply with the disclosure regime (s 17(3), s 21). The Board prepares and negotiates corporate plans with the Treasurer and is responsible for delivering reports when required (ss 25, 26).

Participating bodies and public authorities. A participating body is a public authority accepted by the Corporation under s 34. The class of “public authority” is wide and includes State agencies, State-owned companies, municipal councils, administrators of public sector superannuation schemes, and prescribed agencies (s 3). Participating bodies may appoint the Corporation to manage their funds and authorise delegation in the terms of appointment (s 9A(1)). Participating bodies that cease to wish to be participating bodies may give notice to the Corporation (s 34(3)(a)), and the Corporation may revoke acceptance (s 34(3)(b)), terminating the relationship.

State finances and taxpayers. The Consolidated Fund bears direct exposure. Initial capital up to $10 million may be paid into the Corporation from the Consolidated Fund (s 33). Guarantees executed by the Treasurer on behalf of the Government expose the Consolidated Fund to contingent liabilities; payments under guarantees are met from that Fund (s 37(2)), and recoveries are to be paid back into it (s 37(3)). The Corporation also must pay dividends to the State as determined by the Treasurer after consultation (s 27). These mechanics determine who ultimately pays for losses, liabilities or returns.

Counterparties, creditors and markets. The Corporation may enter into contracts, subscribe for units in trusts, form or participate in bodies corporate, and enter into joint ventures (s 9). It may obtain financial accommodation and invest money under the Borrowing and Investment Powers Act 1987 (s 35). Counterparties to the Corporation’s contracts and financiers have potential recourse to the Corporation’s assets and benefit indirectly from the State guarantee regime when the Treasurer elects to provide guarantees (s 37).

Directors, CEO and staff. Directors face duties and potential civil recovery actions by the Treasurer in the name of the Corporation for breaches of s 22 (s 22(6)). Directors cannot receive loans from the Corporation and the Corporation may not indemnify directors (ss 23-24). The chief executive officer is appointed by the Board with Treasurer approval and holds office on terms set by the Board for up to five years (s 28). Staff, including the CEO, must disclose interests when required to consider matters in which they have an interest (s 30) and face criminal penalties for failing to comply or for improper use of information (ss 30-32).

The public and transparency. The Corporation is exempt from being an agency or prescribed authority under the Freedom of Information Act 1982; it is not eligible to be declared one (s 39). That exclusion reduces statutory avenues for public access to the Corporation’s records compared with ordinary public authorities, potentially concentrating information control within the Corporation and Treasurer.

Other statutory actors. The Act interacts with other statutory regimes. Directors fall within the Public Administration Act 2004 (s 13(3)), investment powers are governed by the Borrowing and Investment Powers Act 1987 (s 35), annual reporting obligations are framed against the Financial Management Act 1994 (s 10(6)), and stamp duty consequences can be affected by Treasurer exemptions under the Duties Act 2000 (s 36). These cross-links assign legal responsibilities to actors in other legal regimes (for example, the Auditor-General and other financial regulators) though those bodies are not named in this Act.

The Act establishes a matrix of statutory duties, rights and discretions for the Corporation, its Board, directors, staff and external actors. Those duties and rights determine who must do what, who may decide what, and the information and control flows between the Corporation and the Treasurer.

Duties of directors and staff. Directors must at all times act honestly and exercise reasonable care and diligence in performing their functions (s 22(1)-(2)). They must not make improper use of information acquired by virtue of their position, nor improperly use their position to gain an advantage or cause detriment to the Corporation (ss 22(3)-(4)). These statutory duties sit alongside other criminal or civil liability regimes (s 22(5)). For breaches, the Treasurer may recover from the person, in the name of the Corporation, an amount equal to any profit made or loss suffered as a debt due to the Corporation (s 22(6)). Staff (including the CEO) must disclose conflicts in writing and take steps to avoid conflicts when required to consider matters in which they have a pecuniary or other interest (s 30). Failure to comply with s 30 is offences subject to penalty (penalty item at foot of s 30).

Disclosure and conflict management. Directors must disclose direct or indirect pecuniary interests about matters being considered or about to be considered by the Board as soon as practicable after the relevant facts come to their knowledge (s 21(1)). Disclosures must be recorded in the minutes and, unless permitted by the Minister or Board, the director must not be present during deliberations or decision-making on the matter (s 21(2)). Directors who do not comply with s 21 may face removal by Governor in Council if the failure occurs without reasonable excuse and in specific circumstances set out in s 17(3).

Corporate plan and reporting rights and obligations. The Board must prepare an annual corporate plan in a form approved by the Treasurer, submit a proposed plan by 31 May, consider Treasurer comments within two months, consult and agree modifications, and deliver the completed plan within two months after the commencement of the financial year (s 25(1)-(5)). The Treasurer may direct the Board to include or omit specified matters in statements or plans after consultation (s 25(9)-(11)), and the Board must comply. The plan is confidential unless the Board and Treasurer agree to publication (s 25(6)). The Board must also provide periodic reports to the Treasurer at times and for periods the Treasurer determines and containing such information as the Treasurer requires (s 26). The Corporation must include in its annual report a copy of each written direction given by the Treasurer during the year (s 10(6)).

Rights to act as fund manager and trustee. Participating bodies may, under s 9A, appoint the Corporation to perform any functions and powers the Corporation is authorised to carry out. The appointment may authorise delegation to others under the terms of the appointment (s 9A(1)-(2)). The Treasurer may similarly appoint the Corporation in respect of State funds (s 9A(3)-(4)). When so appointed, the Corporation may invest funds of the appointing body in any manner in which the appointing body is authorised to invest (s 9A(2), s 9A(4)). This grants the Corporation substantive rights to manage public sector funds subject to the terms of appointment.

Delegation and internal decision rights. The Board may, by resolution, delegate powers to two or more directors, named officers, committees or other persons, subject to the express prohibition on delegating the delegation power itself and any prescribed powers (s 11(e)-(f)). The Board retains the responsibility to regulate its own proceedings and ensure minutes are kept (s 18(6), s 18(7)). The Board may pass resolutions without meetings by signed documents (s 19), which affects how corporate decisions are formalised.

Financial rights and State interactions. The Corporation has power to enter contracts, acquire and dispose of property, form or participate in bodies corporate and joint ventures, and engage in funds-management contracts (s 9, s 9(2)). It may obtain financial accommodation and invest money in accordance with the Borrowing and Investment Powers Act 1987 (s 35). The Treasurer has rights to provide initial capital (s 33) and to guarantee the Corporation’s obligations on terms the Treasurer determines, including fees and payment terms (s 37(1)). The Corporation must pay dividends to the State as determined by the Treasurer after consultation with the Board (s 27), which is a financial obligation transferring returns to the State.

Limits and prohibitions. The Act expressly forbids certain conduct. The Corporation may not make loans to directors, spouses or relatives, nor provide guarantees in connection with such loans, though it may enter into arrangements with such persons on the same terms as members of the public (s 23). The Corporation may not exempt or indemnify directors against liabilities arising from negligence, default, breach of duty or breach of trust, except by taking out insurance (s 24). The Treasurer may not direct the Corporation about a specific investment decision, dealing with property or the exercise of a voting right (s 10(4)).

Transparency exemptions and administrative rights. The Corporation is excluded from being an agency or prescribed authority within the Freedom of Information Act 1982 (s 39). That exclusion limits statutory avenues for third-party access to its documents. Conversely, the Treasurer has administrative rights to require corporate plans and reports and to publish directions in the Government Gazette (ss 25, 26, 10(5)). The Commissioner or Auditor-General powers are not stated in the Act; compliance burdens are imposed directly through these reporting and plan duties.

Enforcement powers and remedies. Enforcement takes a mix of internal administrative measures and statutory remedies. Directors may be removed by Governor in Council in specified circumstances (s 17). The Treasurer can recover profits or losses from a person who contravenes director duties via court action in the name of the Corporation (s 22(6)). Staff offences under ss 30 and 32 carry specified penalties. Guarantees, once executed by the Treasurer, are enforceable against the State by payment from the Consolidated Fund (s 37).

The Act establishes a suite of enforcement mechanisms that combine civil recovery powers, criminal penalties for certain staff conduct, administrative removal powers for directors and reporting obligations that create compliance pressure through disclosure to the Treasurer. The Act also contemplates financial enforcement through State guarantees and rights to recover sums.

Director liability and recovery. Section 22 imposes statutory duties of honesty, care and diligence and prohibitions on improper use of information or position. For contraventions of s 22, the Treasurer may, in the name of the Corporation, recover from the person, by action in a court of competent jurisdiction, an amount equal to any profit made by that person as a result of the contravention and/or an amount equal to any loss or damage suffered by the Corporation as a result of the contravention (s 22(6)). The provision creates a civil recovery remedy framed as a debt recoverable by action; it does not prescribe criminal sanctions in s 22 itself.

Removal for misconduct and fit-and-proper tests. Directors’ offices become vacant for a range of reasons including non-attendance at meetings without permission, bankruptcy, conviction of indictable offences, and, importantly, removal by Governor in Council where a director is convicted of an offence relating to duties as a director or fails, without reasonable excuse, to comply with s 21 (the disclosure obligation) (s 17(1), s 17(3)). The removal process is administrative/political (Governor in Council) rather than judicial.

Criminal penalties for staff disclosure failures and improper use of information. Staff (including the chief executive officer) must disclose interests required by s 30(2) and take steps to avoid conflicts (s 30(3)). The statutory text shows a penalty item at the foot of s 30: “10 penalty units or imprisonment for 3 months, or both.” That penalty also appears at the foot of s 32 pertaining to improper use of information by employees (s 32). The presence of specified penal sanctions for breaches by staff imposes criminal compliance risk for officers who fail to disclose or who misuse information gathered during employment.

Financial enforcement via guarantees and the Consolidated Fund. The Treasurer may execute guarantees on behalf of the Government of Victoria to guarantee the Corporation’s obligations or obligations of bodies formed by the Corporation or joint ventures entered into by the Corporation, including payment of enforcement costs (s 37(1)). Payments made by the Treasurer under such guarantees are to be paid out of the Consolidated Fund (s 37(2)); recoveries received by the Treasurer in respect of sums paid under a guarantee are to be paid into the Consolidated Fund (s 37(3)). Thus guarantee enforcement places fiscal responsibility on the State subject to recoverability.

Compliance reporting and publication. The Treasurer must cause a copy of any written direction given to the Board to be published in the Government Gazette as soon as possible after giving it (s 10(5)), and the Corporation must include in its annual report under the Financial Management Act 1994 a copy of each direction given to it in writing during the year (s 10(6)). The Board must also provide periodic reports to the Treasurer containing such information as the Treasurer requires (s 26). These mechanisms are administrative enforcement tools that create information flows constraining the Corporation through public disclosure to the Treasurer, and in the case of Gazette publication, to the public.

Restrictions and prohibitions as preventive enforcement. The Act prevents the Corporation from making loans to directors, spouses or relatives and from providing guarantees in connection with such loans (s 23(1)). It forbids the Corporation from indemnifying directors against liability for negligence, default, breach of duty or breach of trust other than by insurance (s 24). These prohibitions reduce certain conflict-of-interest risks and remove potential self-serving financial protections for directors, with non-compliance exposing the Corporation and directors to administrative and reputational consequences and potential criminal or civil action under other laws.

Procedural safeguards and decision validity. Sections 18-20 create procedural frameworks that affect enforcement. The Board must keep minutes (s 18(6)), meetings may be held by technology with consent (s 18(2A)-(2C)), resolutions without meetings are valid if signed by directors (s 19), and decisions are not invalid solely due to defects in appointment or vacancies (s 20). These provisions protect the Corporation’s acts from collateral attack on procedural grounds but also require accurate minute-keeping and formalities as evidence should enforcement or litigation occur.

Other remedies and administrative constraints. While the Act does not create a comprehensive enforcement regime (for example, it does not specify an inspector or dedicated regulator), it embeds enforcement levers within the executive: Treasurer powers to issue directions and require reporting (s 10, s 25, s 26); Governor in Council appointment and removal powers for directors (ss 13, 17); statutory civil recovery by the Treasurer in the Corporation’s name (s 22(6)); and criminal penalties for staff offences (ss 30, 32). Together these create a set of overlapping enforcement channels combining public accountability, civil litigation and criminal sanctions.

The Act is explicitly framed to operate with, and to import rules from, a number of other statutes. These cross-references allocate legal content and compliance obligations to actors governed by other statutory regimes and define the Corporation’s investment, reporting, governance and tax-related boundaries.

Borrowing and Investment Powers Act 1987. The Act repeatedly imports and refers to the Borrowing and Investment Powers Act 1987. The definition of “invest” is given the same meaning as in that Act (s 3, annotation). Section 35(1) states the Corporation has the powers conferred on it by the Borrowing and Investment Powers Act 1987. Section 35(1A) elaborates that the Corporation may acquire, sell, mortgage or lease property and, subject to the powers in that Act, obtain financial accommodation and invest money. Where the Corporation is trustee of a trust, its ability to obtain financial accommodation and invest trust money is subject to sections of the Borrowing and Investment Powers Act and Treasurer approvals (s 35(2)-(3)). Practically, investment limits, authorised classes of assets, leverage rules and borrowing constraints will be governed by that Act and by any Treasury approvals under it.

Financial Management Act 1994. The Corporation must include in its annual report a copy of each written direction given to it by the Treasurer during the year (s 10(6)) and the Act expressly ties the Corporation’s reporting obligations to the Financial Management Act 1994, indicating that the Corporation’s annual reporting is to be prepared and furnished in the manner that Act prescribes. The corporate plan and financial statements obligations in s 25 feed into the broader state financial management framework under that Act.

Public Administration Act 2004. Section 13(3) applies the Public Administration Act 2004 to a director in respect of the office of director, except Part 3 of that Act. This imports standards applicable to public officeholders, including possible obligations around merit, ethical standards, and public service employment rules, to the extent the Public Administration Act supplies them.

Freedom of Information Act 1982. The Corporation is expressly excluded from being, and from being eligible to be declared, an agency or prescribed authority under the Freedom of Information Act 1982 (s 39). That legal exclusion means FOI requests cannot be made to the Corporation under that Act, distinguishing the Corporation’s information regime from other public authorities.

Duties Act 2000. Section 36 gives the Treasurer discretion to exempt instruments from duty under the Duties Act 2000 where duty would otherwise be chargeable for transactions or instruments between the Corporation and a participating body. The practical effect is that transactions between the Corporation and participating bodies may be relieved of transfer duty but only at the Treasurer’s discretion and upon application (s 36).

State Owned Enterprises Act 1992, Government Superannuation Act 1999, and Corporations Act. The Act’s definition of public authority references other Acts. “Public authority” includes a State owned company within the meaning of the State Owned Enterprises Act 1992 (s 3(b)), bodies administering public sector superannuation schemes within the Government Superannuation Act 1999 (s 3(d)), and the Corporations Act is invoked to define “relative” for the prohibition on loans to directors (s 23, annotation referencing Corporations Act). These cross-references determine which entities may be participating bodies and how corporate-law terms apply.

Financial and insolvency law interplay. Director removal and vacating events include bankruptcy and insolvency events (s 17(1)(b)), linking corporate governance outcomes to general insolvency law. The Act also allows the Corporation to be a member of bodies corporate, participate in joint ventures, and form bodies, bringing into play company law, trust law and partnership law as relevant to the Corporation’s activities (s 9(2)).

Consolidated Fund and appropriation law. Initial capital payments under s 33 and guarantee payments under s 37 are paid from the Consolidated Fund and the Act appropriates funds to the necessary extent (s 33(2), s 37(2)). That ties the Corporation’s fiscal interactions into the State’s budgetary and appropriation frameworks and the Financial Management Act environment.

Extra-territorial operation and federal considerations. Section 4 states the Parliament intends the Act to operate extra-territorially as far as possible, including in relation to land, things, acts and transactions outside Victoria and matters that would otherwise be governed by Commonwealth or foreign law. This wording signals an intention to extend provincial statutory reach but actual enforceability and conflicts with Commonwealth law will still be determined by constitutional rules and private international law when those issues arise.

Regulatory overlay and compliance. Regulations may be made for prescribing bodies and trustees to which the Act applies and for other matters necessary to give effect to the Act (s 40). Schedule and endnote entries show the Act has been amended a number of times by subsequent Victoria Acts, altering definitions and functional elements; users must track those amendments to understand current interactions with other statutes (endnotes, Table of Amendments).

The Act’s endnotes and in-text annotations record multiple amendments since assent in 1994. The endnotes provide a chronological list of amending Acts and the specific parts or sections altered, including commencement dates. Key amendments visible in the text and table include the following.

1995 and 1996 omnibus amendments. The Miscellaneous Acts (Omnibus Amendments) Act 1995 (No. 100/1995) and the Miscellaneous Acts (Further Omnibus Amendments) Act 1996 (No. 73/1996) are recorded in the Table of Amendments. Notably, s 9A was inserted by No. 73/1996 s 100 (annotation in the text marks s 9A as inserted by No. 73/1996 s 100), creating the specific fund-management appointment mechanism that allows participating bodies and the Treasurer to appoint the Corporation and authorise delegation in the terms of appointment (s 9A).

Late 1990s and 1999 statute adjustments. The Public Sector Reform (Miscellaneous Amendments) Act 1998 (No. 46/1998) and the Government Superannuation Act 1999 (No. 8/1999) amended aspects of definitions and governance. For example, s 3’s definition of public authority was amended by No. 8/1999 s 54, as noted in the in-text annotation.

Duties Act and Corporations Act consequential changes. The Duties Act 2000 (No. 79/2000) amended s 36 with respect to stamp duty (annotation references s 36 amended by No. 79/2000 s 285(Sch. 1 item 10)). The Corporations (Consequential Amendments) Act 2001 (No. 44/2001) amended s 23(1)(a) (annotation: S. 23(1)(a) amended by No. 44/2001 s. 3(Sch. item 124)), affecting the prohibition on loans to directors and relatives with reference to the Corporations Act definitions.

Public Administration Act 2004 and other public sector changes. The Public Administration Act 2004 (No. 108/2004) applied its provisions to directors (s 13(3)) by amendment (annotation: S. 13(3) amended by No. 46/1998 s. 7(Sch.1) and substituted by Nos 108/2004 s. 117(1) (Sch. 3 item 222), 80/2006 s. 26(Sch. item 110)). The Public Sector Acts (Further Workplace Protection and Other Matters) Act 2006 (No. 80/2006) also made related changes.

Subordinate Legislation and Statute Law Revision. Subordinate Legislation Amendment Act 2010 (No. 78/2010) altered regulatory disallowance mechanics relevant to s 40 (annotation). The Statute Law Revision Act 2013 repealed Part 6 (Heading and ss 41, 42) of this Act (annotation S. 38 repealed and Pt 6 repealed by No. 70/2013 s.3(Sch.1 item 58)).

Victorian Funds Management Corporation Amendment Act 2016. The 2016 amendment Act (No. 56/2016) made multiple textual changes across the statute. In-text annotations show many inserts and substitutions by No. 56/2016 s 3-13. For example, the definition of “invest” was inserted by No. 56/2016 s 3; sections 8 and 9 contain annotations of amendments by No. 56/2016 s 4 and s 5 respectively; ss 11, 13, 15, 18, 19 and 35 contain annotations of amendments by that Act and other items were restructured. The Table of Amendments entry for No. 56/2016 notes that sections 3-13 commenced on 1 January 2017. The 2016 Act appears to have modernised governance and clarified investment and appointment powers among other textual changes.

Other changes. The endnotes list a consistent series of amending Acts with specific commencement dates (for example, Miscellaneous Acts 1995, 1996; Government Superannuation Act 1999; Duties Act 2000; Corporations consequential amendment 2001; Public Administration Act 2004; Public Sector Acts 2006; Subordinate Legislation Amendment Act 2010; Statute Law Revision Act 2013; and the 2016 Amendment Act). The endnotes also provide commencement details: the original Act sections 1-4 came into operation on 15 June 1994 and the remainder on 19 July 1994 (endnote under Interpretation and second-reading details).

Implications for practice. The amendment record indicates the Act has been regularly updated to reflect changes in public sector governance, financial management, and corporate law. Practitioners must consult the consolidated text (as provided) and the Table of Amendments to track which provisions were altered, the years of change, and commencement dates. Specific amendments (for example, the insertion of s 9A in 1996 and the suite of changes in 2016) materially affect the Corporation’s appointment and investment powers and governance arrangements and therefore require attention when advising participating bodies, directors or the Treasurer.

The text and endnotes supplied with the Act do not record any judicial decisions, reported litigation or statutory interpretations arising from the Victorian Funds Management Corporation Act 1994. The endnotes include the Minister’s second-reading speech references and a table of amendments, but there is no list of cases attached to the statute text provided here.

Practical consequences of the absence of recorded litigation in these materials. The absence of cases in the Act’s endnotes is not definitive proof that no litigation has occurred under or about the Act; it simply means the consolidated statute text and its accompanying endnotes do not include reported case citations. Users seeking litigation history should conduct searches of legal databases and law reports for proceedings concerning the Act, its provisions (for example, s 10 on Treasurer directions, s 22 on director duties, s 9A on fund-management appointments, and s 35 on borrowing and investment powers), and disputes involving the Corporation or participating bodies. Key points that would typically attract litigation or contentious administrative review in this legislative context include:

• disputes over the scope of the Treasurer’s directions and whether a particular instruction impermissibly seeks to determine an investment decision, dealing with property or exercise of voting rights contrary to s 10(4);

• conflicts between the Corporation and a participating body about the terms of appointment under s 9A, delegation permitted under the appointment terms, or the extent to which the Corporation may invest funds in ways authorised to the appointing body;

• recoveries under s 22(6) where the Treasurer pursues a director for profits or amounts equal to loss or damage alleged to arise from contraventions of director duties;

• claims arising from the exercise or enforcement of state guarantees given under s 37, including recoveries by third parties and subsequent rights of the Treasurer to recover sums from the Corporation (s 37(3));

• challenges to the legitimacy of revocation of participating-body status under s 34(3) by the Corporation or disputes about whether a public authority properly became a participating body; and

• actions or quasi-judicial reviews relating to the statutory exclusions from FOI under s 39, where information access or non-disclosure raises human rights or administrative-law claims.

Areas to check in litigation research. When compiling litigation history, search decisions in administrative law, commercial law, corporate insolvency, trust law and public finance contexts. Also review any public reports of audit or parliamentary oversight which may not be captured as judicial decisions but which bear on practical legal risk and compliance.

If litigation surfaces, the provisions of the Act most likely to be litigated are those that place discretionary powers in the Treasurer or the Corporation and those that create financial exposure to the State or directors. Examples include s 10 (directions), s 9A (appointments and delegation), s 35 (investment and borrowing powers), s 22 (director duties and statutory recovery), s 37 (guarantees), and s 36 (stamp-duty exemptions).

Because the Act interacts with other statutes (Public Administration Act 2004, Borrowing and Investment Powers Act 1987, the Financial Management Act 1994 and the Duties Act 2000), litigation may also focus on statutory interpretation where provisions intersect. For authoritative positions on these points, practitioners will need to search reported cases and tribunal decisions beyond the Act’s text.

The Act contains several provisions and structural features that create practical traps for directors, staff, participating bodies and counterparties. These are concrete legal mechanics rather than policy judgments; practitioners should map them to internal controls and contractual terms.

FOI exemption and confidentiality of the corporate plan. Section 39 excludes the Corporation from being an “agency” or “prescribed authority” under the Freedom of Information Act 1982. That means routine FOI access is unavailable. At the same time, the corporate plan is protected from publication except with prior approval of both the Board and the Treasurer (s 25(6)). These provisions mean information access is constrained and that routine transparency expectations for public bodies do not apply, which has consequences for journalists, members of the public and counterparties relying on public disclosure.

Treasurer’s direction power is broad but with a narrow explicit limit. The Treasurer has a general direction and control power over the Corporation’s functions (s 10(1)) and may issue directions concerning corporate performance measures (s 10(3)). However, s 10(4) expressly prohibits directions relating to specific investment decisions, dealings with property or the exercise of voting rights. The “gotcha” is that the Treasurer’s general direction power combined with control over the corporate plan and reporting (s 25, s 26) can still influence strategy and risk appetite, even if explicit, transaction-specific directions are barred. Parties should be clear about where the line lies between permitted general direction and prohibited transaction-specific direction. Any attempt by the Treasurer to frame an otherwise specific instruction as a general policy direction may prompt dispute.

Discretion in participating-body acceptance and revocation. A public authority may apply to be a participating body (s 34(1)), and the Corporation may accept or revoke acceptance (s 34(2)-(3)). The Act does not set out substantive criteria or a statutory appeals mechanism for acceptance or revocation. Participating bodies should ensure appointment agreements and acceptance letters set out clear exit and dispute-resolution terms, because statutory revocation could disrupt fund-management arrangements.

Director disclosure and removal traps. Directors must disclose interests in matters being considered by the Board (s 21). Failure to comply without reasonable excuse, or conviction of an offence relating to duties, triggers removal by Governor in Council (s 17(3)). Practically, this requires robust declarations registers, prompt disclosure practices and formal avoidance measures at meetings. The consequences include not only removal but potential litigation under s 22(6) where the Treasurer seeks recovery for profits or losses.

Prohibition on loans and indemnities to directors. Section 23 bars loans, guarantees or security in connection with loans to directors, their spouses or relatives, save where similar arrangements are entered into with members of the public on the same terms (s 23(2)). Section 24 bars indemnification of directors against liability other than by insurance. Organisations must avoid designing remuneration or financing structures that could be seen as structured loans or disguised indemnities.

State guarantees and fiscal exposure. The Treasurer can provide guarantees on terms the Treasurer determines and such payments are made from the Consolidated Fund (s 37). The practical “gotcha” for the Corporation is fiscal substitution risk: counterparties may rely on State guarantees, but the Treasurer retains discretion over terms and fees and the political decision to back liabilities sits with the Treasurer. Conversely, the State, and indirectly taxpayers, carry contingent exposure where guarantees are used.

Stamp duty exemption is discretionary and application-driven. Section 36 allows the Treasurer to exempt instruments from duty on application. The exemption is not automatic and requires an application by the Corporation or the participating body, with the Treasurer empowered to grant relief by notice (s 36). Parties should not assume stamp-duty relief will be supplied as a matter of course.

Delegation limits and governance. The Board may delegate powers under s 11 to directors, named officers, committees or other persons, but may not delegate its power of delegation or any prescribed power. Practically, this means the Board must identify which powers are “prescribed” and ensure delegates are formally empowered, with clear terms. Absent care, exercises of delegated power could be challenged if they fall into non-delegable categories.

Civil recovery scope under s 22(6). The Treasurer may seek recovery of profits gained or losses suffered as a result of contraventions of director duties. The “gotcha” is that recovery is framed as a debt due to the Corporation and pursued by action in court; directors should be aware that personal civil exposure may extend beyond corporate governance sanctions and could involve significant personal liability.

Employee offences and penalty risk. Staff offences about disclosure (s 30) and improper use of information (s 32) carry criminal penalties (10 penalty units and/or 3 months imprisonment, as noted at the foot of those provisions). Employers should ensure staff policies, training and registers are robust to mitigate the risk of criminal exposure.

Interplay with other statutes. Multiple cross-references mean compliance risk extends beyond this Act. Investment activities are governed by the Borrowing and Investment Powers Act 1987 (s 35), directors are subject to the Public Administration Act 2004 (s 13(3)), and stamp duty consequences depend on the Duties Act 2000 (s 36). Failure to check these cross-referenced regimes is a common practical pitfall.

Extra-territorial reach and conflicts of law. Section 4 declares an intention that the Act operate extra-territorially “so far as possible.” In practice, this can generate conflicts with Commonwealth law, foreign law or choice-of-law rules when the Corporation deals with assets or transactions outside Victoria. Parties dealing on a multi-jurisdictional basis should consider choice-of-law clauses and enforceability across borders.

Exemption from FOI but public reporting requirements. Although excluded from FOI (s 39), the Corporation must still provide copies of Treasurer directions in its annual report (s 10(6)) and meet other reporting obligations to the Treasurer. This produces a selective transparency regime; practitioners should not equate FOI exemption with no reporting obligations.

Compliance requires a mix of governance frameworks, documented procedures, timely disclosures and careful contractual drafting. Below are practical, statute-grounded steps tied to specific provisions.

1. Governance and Board conduct (ss 12-19, 21-22)

• Maintain a formal Board charter that records the Board’s responsibility to manage the Corporation’s affairs and to exercise its powers (s 12). Record Board composition within statutory limits (4-9 directors) and ensure Governor in Council appointment formalities are completed (s 12, s 13).
• Maintain a standing conflicts register. Require directors to disclose direct or indirect pecuniary interests at the earliest practicable time at a Board meeting and ensure disclosures are recorded in minutes as required by s 21(1)-(2).
• Implement written procedures for recusal where a director has an interest, including formal minutes showing absence from deliberations and votes unless the Minister or Board determines otherwise (s 21(2)).
• Train directors on statutory duties (s 22). Provide induction materials and regular briefings on the duty to act honestly, to use reasonable care and diligence, and to avoid improper use of information or position (ss 22(1)-(4)).
• Prepare formal minute-taking templates and ensure minutes are kept for each meeting (s 18(6)). Adopt procedures for electronic meetings and standing consents as permitted by ss 18(2A)-(2C).

2. Corporate plan and reporting (s 25, s 26, s 10(6))

• Prepare the proposed corporate plan in the Treasurer-approved form and deliver it to the Treasurer by 31 May (s 25(2)-(3)). Maintain evidence of the form used and any communications with the Treasurer.
• Track and respond to Treasurer comments within two months after submission and document consultations and agreed changes as required by ss 25(4)-(5). Retain copies of any Treasury directions or approvals relating to the plan.
• Keep corporate plans confidential unless the Board and Treasurer agree to publication (s 25(6)). Obtain written approval prior to release.
• Establish templates and processes for periodic reports to the Treasurer (s 26) and ensure the annual report includes copies of written directions received from the Treasurer during the year (s 10(6)).

3. Delegation and executive authority (s 11, s 28)

• Document all delegations by Board resolution, specifying delegate, scope, conditions and reporting obligations, and clearly exclude delegations of the delegation power itself or any prescribed powers (s 11).
• Ensure the CEO is appointed by Board resolution with written Treasurer approval and that the appointment instrument sets the term (not exceeding five years) and conditions as allowed by s 28(1)-(4).

4. Conflicts and staff disclosure (s 30)

• Implement mandatory written conflict-of-interest disclosures for staff required to consider matters where they have a direct or indirect interest (s 30(2)). Keep the disclosures on file and act promptly to remove staff from decision-making in such matters (s 30(3)).
• Provide staff training and policies that explain the criminal penalties for non-compliance and for improper use of information (ss 30-32 and penalty items).

5. Investment and borrowing compliance (s 35)

• Ensure all investment and borrowing activities comply with the Borrowing and Investment Powers Act 1987 and any Treasurer approvals referenced in s 35. Maintain legal opinions where necessary to confirm authorised investment classes and borrowing limits.
• Maintain records and internal approvals for acquisitions, sales, mortgages and leases of real or personal property as contemplated by s 35(1A)(a)-(b), and for obtaining financial accommodation in accordance with the Borrowing and Investment Powers Act (s 35(1A)(c)).

6. Fund-manager appointments and delegation under s 9A

• When accepting appointments from participating bodies or the Treasurer under s 9A, ensure the appointment instrument expressly sets out the functions and powers being delegated, any permitted sub-delegation and the standards of investment or fiduciary duty expected. Where the appointment authorises delegation, document delegation limits in the appointment terms (s 9A(1)-(2), s 9A(3)-(4)).
• If appointed to manage funds of a participating body, confirm in writing that the investments to be made are within the appointing body’s authorised investment powers (s 9A(2), s 9A(4)).

7. Loans, guarantees and indemnities (ss 23-24, s 37)

• Do not make loans to directors, spouses or relatives, nor guarantee loans for them, unless the arrangement is demonstrably identical in terms to those available to the public (s 23(1)-(2)). Record evidence of public availability where this exception is relied on.
• Do not enter into indemnities for directors in respect of negligence, default, breach of duty or breach of trust other than by contract of insurance (s 24). Ensure insurance arrangements are documented and lawful.
• If seeking a Treasurer guarantee, prepare an application outlining the terms sought and be prepared to accept and comply with any conditions the Treasurer imposes, including fee payments and reporting obligations (s 37(1)). Maintain processes for prompt reimbursement and cooperation in recoveries (s 37(3)).

8. Stamp duty exemption (s 36)

• If a transaction between the Corporation and a participating body would attract duty under the Duties Act 2000, submit a Treasurer application for exemption under s 36. Maintain records of the application and the Treasurer’s written notice of exemption. Do not rely on an implied exemption.

9. Information governance and FOI exclusion (s 39)

• Develop an information access policy recognising the Corporation’s exclusion from FOI (s 39) but also its reporting obligations to the Treasurer (s 10(6), s 26). Put in place internal procedures for deciding what information to disclose to counterparties or the public and obtain Board/Treasurer approvals where statutory confidentiality applies (s 25(6)).

10. Litigation preparedness and document retention (s 20)

• Preserve records of director appointments, minutes, delegations, corporate plans and Treasurer directions to protect the validity of decisions and to respond to potential civil recovery under s 22(6). Note that decisions are not invalidated merely because of defects in appointment or vacancies (s 20), but documentary evidence remains essential for defending disputes.

11. Regulatory awareness and cross-checking

• Regularly review related statutes cited in this Act (Borrowing and Investment Powers Act 1987, Financial Management Act 1994, Public Administration Act 2004, Duties Act 2000, Corporations Act) and applicable regulations under s 40. Establish a legal review cycle to ensure compliance with both the primary Act and its interacting regimes.

12. Policies, training and insurance

• Institute mandatory training for directors and relevant staff on duties (s 22), disclosure rules (s 21, s 30), and the criminal penalties for misuse of information (s 32). Ensure adequate directors’ and officers’ insurance is in place consistent with s 24.

These steps track the statute’s requirements and create evidence of compliance. They also reduce the risk that the Treasurer will use administrative levers under ss 10, 25 and 26, or that the Corporation will face recovery actions under s 22(6) or criminal exposure under ss 30-32. For any complex transaction or cross-border investment, obtain tailored legal advice referencing the Borrowing and Investment Powers Act 1987 and other relevant statutes.