2014

LEGISLATIVE ASSEMBLY OF THE
NORTHERN TERRITORY

TREASURER

TERRITORY INSURANCE OFFICE (SALE) BILL 2014
SERIAL NO. 109

EXPLANATORY STATEMENT

GENERAL OUTLINE

The purpose of the legislation is to facilitate the sale of the Insurance and Banking businesses of the Territory Insurance Office, to provide for the outsourcing of the management of the Motor Accidents (Compensation) Scheme and, subject to these transactions occurring, to repeal the Territory Insurance Office Act.

NOTES ON CLAUSES

Part 1. 	Preliminary Matters

Clause 1.	Short Title
This is a formal clause which provides for the citation of the Bill.  The Bill when passed may be cited as the Territory Insurance Office (Sale) Act 2014.

Clause 2.	Commencement

The Act, other than Part 6, Divisions 1 to 3 will commence on the day on which the Administrator’s assent is declared. If the banking sale date is before the insurance sale date, then Part 6, Divisions 1 commence on the banking sale date. Part 6, Division 2 commences on the date fixed by the Administrator by Gazette notice. Part 6, Division 3 commences on the insurance sale date.  If the banking sale date is not on or before the insurance sale date then Part 6, Division 4 commences. If the banking sale date is after the insurance sale date, then Part 6, Division 2 commences on the banking sale date.

Clause 3.	Definition

This clause defines the terms used in the Act.  
 
Clause 4.	Meaning of “instrument applies to a person”

This clause sets out the circumstances under the Act when an instrument applies to a person.

Clause 5.	Meaning of “done under this Act”

This clause provides that a reference in this Act to something done under this Act includes a reference to anything: that is done in the exercise of a power or performance of a function under this Act; or that occurs by operation of a transfer order; or that is effected by, or done under, the insurance sale agreement or banking sale agreement. 

Clause 6.	Act binds Crown

This clause provides that this Act will bind the Crown in each of its capacities.

Clause 7.	Extra-territorial operation
This clause confirms that it is the intention of the Legislative Assembly that this Act, should, so far as possible, include operation in relation to: things situated outside the Territory; acts, transactions and matters done, entered into or occurring outside the Territory; things, acts, transactions and matters (wherever situated, done, entered into or occurring) that would, apart from this Act, be governed or otherwise be affected by the law of another jurisdiction.

Part 2. 	Sale of TIO Businesses

Clause 8. 	Sale of Insurance business
This clause provides that the Minister may, on behalf of the Territory and TIO, sell all or part of the insurance business.  The sale is to be a sale by agreement of such of the vendor's assets and liabilities relating to the insurance business as are agreed by the Minister and purchaser. 
The clause further provides that the insurance sale agreement may require the Minister to make one or more transfer orders for the purpose of facilitating the sale.  Before completion of the sale, the Minister must declare, by Gazette notice, the time and date when completion of the sale will take place.

Clause 9. 	Management of MAC Business
This clause provides that, in conjunction with entering into the insurance sale agreement, the Minister may, on behalf of the MAC Commission (which will be a continuation of TIO), enter into one or more contracts with the purchaser of the insurance business delegating to it any of the powers or functions that the MAC Commission will have under the MACC Act in relation to the MAC business. The clause further provides that a contract made under this section cannot take effect before the insurance sale date.

Clause 10. 	Sale of banking business 
This clause provides that the Minister may, on behalf of the Territory and TIO, sell all or part of the banking business.  The sale is to be a sale by agreement of such of the vendor's assets and liabilities relating to the banking business as are agreed by the Minister and purchaser. 
The clause further provides that the insurance sale agreement may require the Minister to make one or more transfer orders for the purpose of facilitating the sale.  Before completion of the sale, the Minister must declare, by Gazette notice, the time and date when completion of the sale will take place.

Clause 11. 	Proceeds 
This clause provides that the sale proceeds, including the proceeds received for the right to enter into the MAC management agreement, belong to and are payable to the Territory.  It further provides that the sale proceeds will be paid into the Central Holding Authority subject to certain liabilities, expenses and charges first being paid.

Clause 12. 	Powers of Minister, TIO etc
This clause provides that The Minister may do anything necessary or convenient to be done for the purpose of exercising a power under the Act. This would include doing anything necessary or convenient to be done to facilitate the sale of the insurance business or the sale of the banking business; or to ensure the orderly sale of the business; or in consequence of, or incidental to, that sale. 
The clause also provides that the Minister may, in writing, direct TIO to do anything necessary or convenient to be done to facilitate the sale of the insurance business or the sale of the banking business; or to ensure the orderly sale of the business; or in consequence of, or incidental to, that sale. 
The clause further provides that the TIO must comply with any direction given and may also do anything necessary or convenient to be done for the purpose of enabling the Minister to exercise a power under this Act.
Finally, the clause provides that any preparatory action taken by the Minister or TIO before the commencement of this section (including before the enactment of this Act) is taken to be, and always to have been, as valid as it would have been had this Act been in force at the time the action was taken

Part 3. 	Statutory transfer to facilitate sale

Clause 13. 	Application of Part
This clause states that the Part applies: in relation to the insurance business – if the insurance sale agreement requires the Minister to make one or more transfer orders; and in relation to the banking business – if the banking sale agreement requires the Minister to make one or more transfer orders. 

Clause 14. 	Minister may make transfer order
This clause provides that the Minister may make one or more transfer orders for the purpose of facilitating the sale of the insurance business or the banking business (as the case requires).  However, it further states that the Minister must not make a transfer order unless the purchaser of the relevant business has agreed to the order being made.

Clause 15. 	Content of transfer order
This clause provides the possible contents of a transfer order made under the Act.

Clause 16. 	Provisions required in transfer order if purchaser to be successor
This clause applies if a transfer order provides that the purchaser is to be the successor in law of TIO to the extent of all or part of the insurance business or banking business.  In such a case, the clause sets out specific things that the transfer order must provide in consequence of a purchaser becoming the successor in law of TIO.

Clause 17. 	Effect of transfer order
This clause provides that a transfer order takes effect on the date it is made or a later date specified in it and that has effect according to its terms.  The clause further provides that anything that occurs by operation of a transfer order has effect without the need for any separate transfer, conveyance, assignment or novation and despite anything in any law in force at the time the order is made. 

Finally, the clause provides that if a transfer order provides that a purchaser becomes the successor in law of TIO to the extent of all or part of the insurance business or banking business, that succession has effect as if the purchaser were a continuation of, and the same legal entity as, TIO to that extent and TIO had, to that extent, ceased to exist.

The body corporate currently called the Territory Insurance Office will continue in existence after the sale of the insurance business and banking business.  However, as a result of amendments and repeals to be made by Part 6 and the enactment of the Motor Accidents (Compensation) Commission Act, on the insurance sale date TIO will become the Motor Accidents (Compensation) Commission and will cease to have power to conduct the insurance business.  On the banking sale date, TIO will cease to have power to conduct the banking business. 

Clause 18. 	Provisions required in transfer order if purchaser to be successor
This clause provides that if a precondition would have to be satisfied before something that is done by a transfer order could occur, the precondition is taken to have been satisfied unconditionally before the order has effect.  However, the clause does not apply in relation to  any preconditions imposed by the insurance sale agreement or the banking sale agreement.
.

Clause 19. 	Completion of necessary transactions
This clause provides that if there is any impediment to a provision of a transfer order having effect (for example, because a matter is governed by a law of another jurisdiction), the relevant purchaser, TIO and the Minister must take all practicable steps to ensure that the effect sought to be achieved by the provision is achieved.
 
Clause 20. 	Registration of transfer
This clause provides that if an asset, liability, instrument or right is affected by a transfer order, any relevant statutory register is taken to have been updated to record the effect of the transfer order when the transfer order had its effect.   The clause further provides that the relevant registrar must in fact register the effect of the transfer order if requested in writing to do so by the purchaser or vendor, and may do so even if no such request has been made.  If requested by the registrar, the purchaser or vendor must give the registrar all documents and information the registrar reasonably needs in order to register the effect of the transfer order. 

Clause 21. 	Notice of transfer
This clause applies if as a result of something occurring by operation of a transfer order, the purchaser or vendor incurs an obligation to notify another person of the occurrence of that thing.  The clause provides that he obligation is taken to have been met if notice of the sale is published in a newspaper circulating throughout the Territory within 14 days after the thing occurred or any longer period specified in the transfer order.  The clause further sets out the requirements for the content of the notice.

Clause 22. 	Change of parties to proceedings
This clause applies if, by operation of a transfer order, the purchaser becomes a party to proceedings instead of the vendor.  The clause provides that the relevant court officer must register the effect of the transfer order if requested in writing to do so by a party to the proceedings or the vendor, and may register the effect of the transfer order even if no such request has been made.  The clause further provides that if evidence would, apart from the transfer order, have been adducible or admissible in the proceedings by, or in relation to, the vendor, then on and after the change of parties, the evidence is adducible or admissible by, or in relation to, the purchaser.  Finally, the clause provides that the court may make any order that is necessary or convenient to facilitate the change of parties to the proceedings. 

Clause 23. 	General transitional provision following transfer order
This clause applies if a transfer order has taken effect in relation to the sale of the insurance business or the sale of the banking business. The clause provides that if, before the relevant date, something had been done, or not done, by or in relation to the vendor in connection with an affected thing; and immediately before the relevant date, the thing was of ongoing effect, then, on and after the relevant date, the thing is taken to have been done, or not done, by or in relation to the purchaser. 
The clause further provides that if a document that includes a reference to the vendor in connection with an affected thing was in existence before the relevant date, then on and after the relevant date, the reference is taken to be or include a reference to the purchaser, unless the context otherwise requires.
Finally the clause makes clear that it does not apply to the extent that the transfer order provides to the contrary.

Clause 24. 	Remedial transfer order – wrong pocket corrections
This clause provides a framework to make remedial transfer orders to rectify errors in the effect of the initial transfer order.

Clause 25. 	Remedial transfer order – failure to complete sale
This clause provides a framework for the Minister to make another transfer order to reverse the effect of an initial transfer order when one or both of the insurance sale and/or the banking sale do not complete.

Part 4. 	Effect of things done under Act

Clause 26. 	Contravention of laws, civil wrongs, etc 
This clause provides that Nothing done under this Act constitutes a contravention of any law or a breach of confidence, breach of a professional code, or other civil wrong.

Clause 27. 	Instruments
This clause provides that nothing done under the Act constitutes a breach of an instrument.  It further provides that nothing done under the Act fulfils a condition in an instrument that would do any of the following: (i) allow a person to terminate or modify the operation or effect of the instrument; (ii) allow a person to enforce an obligation or exercise a right under the instrument; (iii) release a person from an obligation under the instrument; (iv) require a person to perform an obligation under the instrument; (v) require money to which the instrument relates to be paid before the money's stated maturity.
The clause also provides that nothing done under the Act constitutes an intervening event for the purposes of an insurance policy or reinsurance policy; or causes an instrument to become void or otherwise unenforceable; or releases any surety from any of the surety's obligations in relation to an instrument. 
The clause also makes clear that it applies despite anything in an instrument.

Clause 28.	Joint ownership and joint liability
This clause applies if an asset or liability that is affected by something done under this Act is an interest in property in which another person also has an interest; or is a liability that is owed jointly with another person. 
The clause provides that nothing done under the Act severs any joint tenancy or joint liability or in any other way affects the interest or liability of the other person. 

Clause 29.	Compensation not payable
This clause provides that no compensation is payable by TIO or the Territory in consequence of anything done under this Act.  However, the clause does not apply in relation to compensation payable under a transaction document, to a party to the transaction document in consequence of non-compliance with that or any other transaction document.
Clause 30.	Territory fees
This clause provides that no Territory fees are payable in relation to anything done under this Act.  Territory fees means fees or charges payable under a law of the Territory, but does not include stamp duty or any other tax.

Part 5. 	Miscellaneous matters

Clause 31.	Lists to be available to interested persons
This clause applies if a transfer order provides for things to be identified by reference to a list and a person requests a copy of all or part of the list from the Minister.  The clause provides that If the Minister is satisfied that the person has a proper interest in having access to the list, the Minister must give the person a copy of so much of the list as relates to the person's interest.  The clause further provides that if the transfer order affects an instrument as mentioned in clauses 15(1)(c) or 16(2)(b), any person to whom the instrument applies has a proper interest in having access to so much of the list as relates to the instrument. 

Clause 32.	Certificate that thing done under Act 
This clause provides that a certificate signed by the Treasurer certifying that a specified thing is something that was done under this Act is, for all purposes and in all proceedings, evidence of the matters certified in it. 

Clause 33.	Statutory guarantee 
This clause provides for the removal of the Government guarantees relating to the insurance contracts on the insurance sale date and the banking deposits on the banking sale date.  For banking deposits that are not transferred to the purchaser, the clause provides that the statutory guarantee will remain in place until 31 March 2015.
 
Clause 34.	Procurement Act not to apply 
This clause provides that the Procurement Act does not apply to anything done under this Act. 

Clause 35.	Acquisition on just terms
This clause provides that If the operation of this Act would, apart from this clause, result in an acquisition of property from a person otherwise than on just terms, then: (a) the person is entitled to receive from the Territory the compensation necessary to ensure the acquisition is on just terms; and (b) a court of competent jurisdiction may decide the amount of compensation or make the orders it considers necessary to ensure the acquisition is on just terms. 

Clause 36.	Regulations 
This clause provides for the Administrator to make regulations under the Act. 

Part 6. 	Amendment of other laws 

Division 1. 	Banking sale before insurance sale

Clause 37. 	Act amended
This clause provides that this Division amends the Territory Insurance Office Act.

Clause 38. 	Long title amended 
This clause amends the Long title to omit the words “financial business and”.   

Clause 39. 	Section 3 amended 
This clause amends Section 3 to omit the definition of “financial service” and insert a definition of “residual banking business”. 

Clause 40. 	Section 5 amended
This modification deletes the current section 5(da) and inserts a new section 5(da) that provides the functions of carrying on the residual banking business until all of the deposits have been repaid and to wind up the residual banking business. 

Clause 41. 	Section 6 amended 
This modification deletes the words “, or providing financial services” from section 6(2)(f) and deletes the words “accepts deposits, makes loans and investments” from the power in section 6(2)(ma). 

Clause 42.	Section 23 amended 
This amendment deletes the current section 23(3) and inserts a new section 23(3) that provides that the account mentioned in the previous version of section 23(3) will become an account for the residual banking business and must not be applied except for the purposes of the residual banking business. 

Clause 43.	Section 30 amended 
This amendment adds a new subsection 30(3) that provides, for the avoidance of doubt, that on the banking sale date each deposit that is included in the sale of the banking business ceases to be a deposit with the Office for the purposes of the statutory guarantee in section 30(1)(b).
 
Clause 44.	Section 31 amended 
This amendment deletes section 31.

Division 2.	Banking sale – amendments to other Acts 

Clause 45.	Other laws amended 
Schedule 1 amends a range of other laws that refer to the TIO in its capacity of operating a banking business.  These provisions relate to the capacity of certain parties to deposit monies with the TIO.

Division 3.	Insurance sale 

Subdivision 1.	Repeals 

Clause 46.	Repeals 
This clause repeals the Acts in Schedule 2 to the Act.  These are the Territory Insurance Office Act and all of the subsequent amending Acts.

Subdivision 2.	Amendment of Motor Accidents (Compensation) Act

Clause 47.	Act amended 
This clause provides that this subdivision amends the Motor Accidents (Compensation) Act. 

Clause 48.	Section 4 amended 
The purpose of these amendments is to replace references to the Office with references to the Motor Accidents (Compensation) Commission and 

Clause 49.	Section 27 amended 
This amendment provides for the appointment of the designated person. 

Clause 50.	Section 30C inserted 
This amendment inserts a new section 30C that provides that all benefits payable under the Motor Accidents (Compensation) Act are to be paid by the Commission out of the Motor Accidents (Compensation) Fund continued by section 16 of the Motor Accidents (Compensation) Commission Act. 

Clause 51.	Section 36 repealed 
This amendment repeals section 36.

Clause 52 	Act further amended

Schedule 3 contains a number of amendments to the Act to replace references to the Office with references to the Commission, and references to the Territory Insurance Office Act with references to the Motor Accidents (Compensation) Commission Act.

Subdivision 3.	Amendment of other laws

Clause 53.	Other laws amended on sale of insurance business
This clause provides for consequential amendments to the Acts in Schedule 4 to the Act.  

Division 4.	Banking provisions if insurance sale before banking sale

Clause 54.	Expiry of Part
This clause provides that this Part of the Act will expire on the later of the insurance sale date and the banking sale date. 

Schedule 1.	Laws amended on sale of banking business
This schedule sets out the Laws to be amended on the sale of the banking business in the terms set out in clause 45. 

Schedule 2.	Repealed Acts
This schedule sets out the Laws to be repealed in the terms set out in clause 46. 

Schedule 3.	Motor Accidents (Compensation) Act amended 
	on sale of insurance business 
This schedule sets out the provisions of the Motor Accidents (Compensation) Act to be amended on the sale of the insurance business in the terms set out in clause 52. 

Schedule 4.	Laws amended on sale of insurance business
This schedule sets out the Laws to be amended on the sale of the banking business in the terms set out in clause 53.