Guidance on obtaining Ministerial consent to rely on extraterritorial conduct in private proceedings

The purpose of this guidance

This guidance is provided to assist litigants and legal practitioners with advice on the process for obtaining Ministerial consent to rely on extraterritorial conduct in private legal proceedings under the Competition and Consumer Act 2010¹  ('the CCA') and the Australian Securities and Investments Commission Act 2001 ('the ASIC Act').

 

 

Section 5 of the Competition and Consumer Act 2010

Extended application of this Act to conduct outside Australia

(1) Each of the following provisions:

(a) Part IV;

(b) Part XI;

(c) the Australian Consumer Law (other than Part 5 3);

(f) the remaining provisions of this Act (to the extent to which they relate to any of the provisions covered by paragraph (a), (b) or (c)); extends to the engaging in conduct outside Australia by:

(g) bodies corporate incorporated or carrying on business within Australia; or

(h) Australian citizens; or

(i) persons ordinarily resident within Australia.

(1A) In addition to the extended operation that section 46A has by virtue of subsection (1), that section extends to the engaging in conduct outside Australia by:

(a) New Zealand and New Zealand Crown corporations; or

(b) bodies corporate carrying on business within New Zealand; or

(c) persons ordinarily resident within New Zealand.

(2) In addition to the extended operation that sections 47 and 48 have by virtue of subsection (1), those sections extend to the engaging in conduct outside Australia by any persons in relation to the supply by those persons of goods or services to persons within Australia.

(3) Where a claim under section 82, or under section 236 of the Australian Consumer Law, is made in a proceeding, a person is not entitled to rely at a hearing in respect of that proceeding on conduct to which a provision of this Act extends by virtue of subsection (1) or (2) of this section except with the consent in writing of the Minister.

(4) A person other than the Minister, the Commission or the Director of Public Prosecutions is not entitled to make an application to the Court for an order under subsection 87(1) or (1A), or under subsection 237(1) or 238(1) of the Australian Consumer Law, in a proceeding in respect of conduct to which a provision of this Act extends by virtue of subsection (1) or (2) of this section except with the consent in writing of the Minister.

(5) The Minister shall give a consent under subsection (3) or (4) in respect of a proceeding unless, in the opinion of the Minister:

(a) the law of the country in which the conduct concerned was engaged in required or specifically authorised the engaging in of the conduct; and

(b) it is not in the national interest that the consent be given.

Section 12AC of the Australian Securities and Investments Commission Act 2001

Division extends to some conduct outside Australia

(1) This Division extends to the engaging in conduct outside Australia by:

(a) bodies corporate incorporated or carrying on business within Australia; or

(b) Australian citizens; or

(c) persons ordinarily resident within Australia.

(2) If a claim under section 12GF is made in a proceeding, a person may rely at a hearing in respect of that proceeding on conduct to which a provision of this Division extends because of subsection (1) of this section only if the Minister consents in writing to the reliance.

(3) A person other than the Minister or ASIC may apply to the Court for an order under subsection 12GM(1) or (2) in a proceeding in respect of conduct to which a provision of this Division extends because of subsection (1) of this section only if the Minister consents in writing to the application.

(4) The Minister must give a consent under subsection (2) or (3) in respect of a proceeding unless, in the Minister's opinion:

(a) the law of the country in which the conduct concerned was engaged in required or specifically authorised the engaging in of the conduct; and

(b) it is not in the national interest to give the consent.

Why is consent required?

Subsection 5(3) of the CCA and subsection 12AC(2) of the ASIC Act establishes a requirement for Ministerial consent where a person seeking damages for a contravention of the CCA or the ASIC Act seeks to rely on evidence of foreign conduct. Subsection 5(4) of the CCA and subsection 12AC(3) of the ASIC Act applies where some other form of compensatory order is being sought, such as rescission of an agreement or an order requiring property be transferred. In such cases, consent is required before making application to the court.

Section 5 of the CCA was amended in 1986 by the insertion of subsections (3) — (5) and section 12AC of the ASIC Act was included in the original ASIC Act, to ensure that international relations are not adversely affected by litigation in Australian courts. The extraterritorial application of these Acts may impinge upon the laws or policies of the foreign country where the conduct in question took place. The principal area of concern is the possibility that the law of the foreign country might require or specifically authorise certain conduct in that country, whilst the conduct nonetheless contravenes the CCA or the ASIC Act.

To meet this concern, the provisions of the CCA and the ASIC Act that apply those Acts extraterritorially provide the Government with an opportunity to take account of the foreign country's interests and, if necessary, to engage in consultations with the foreign government concerned. These provisions allow the Government the opportunity to settle the matter at the diplomatic level and, if necessary (taking into account national interest considerations) prevent the CCA or ASIC Act action proceeding at all.

Conduct that occurred or proceedings that commenced before 1 January 2011

From 1 January 2011, the Trade Practices Act 1974 (TPA) was renamed the Competition and Consumer Act 2010. However, provisions of the TPA continue to apply in relation to conduct that occurred or proceedings that commenced before 1 January 2011.

An application for Ministerial consent in relation to an act or omission that occurred before 1 January 2011 should include reference to subsection 5(3) and/or subsection 5(4) of the TPA.²  An application for Ministerial consent in relation to a proceeding under the TPA that was commenced but not concluded before 1 January 2011 should include reference to subsection 5(3) and/or subsection 5(4) of the TPA.³

If proceedings commenced on or after 1 January 2011 in relation to conduct that occurred on or after 1 January 2011, then the application should include reference to subsection 5(3) and/or subsection 5(4) of the CCA.

Minister responsible for giving consent

The meaning of 'Minister' in section 5 of the CCA and section 12AC of the ASIC Act is derived by reference to section 19A of the Acts Interpretation Act 1901. The Ministers 'administering' the CCA and the ASIC Act can be ascertained by reference to the Administrative Arrangements Order, made by the Governor-General and notified in the Gazette. Ministerial appointments to administer particular portfolios are also made by the Governor-General and are notified in the Gazette, but a court would not ordinarily require such details to be proven.

Information to be provided with a request for consent

The request for consent should be accompanied by a copy of the pleadings identifying, by reference to the relevant paragraphs in the pleadings, the conduct which was engaged in outside Australia and upon which the applicant for consent wishes to rely or in respect of which the person wishes to apply to the Court for an order under:

• for consent under section 5 of the CCA: section 82 of the CCA or section 236 of the Australian Consumer Law; or subsection 87(1) or (1A) of the CCA, or subsection 237(1) or 238(1) of the Australian Consumer Law; or both; or
• for consent under section 12AC of the ASIC Act: section 12GF or subsection 12GM(1) or (2); or both.

The request should state whether consent is being sought under subsection 5(3) or 5(4) of the CCA or under subsection 12AC(2) or 12AC(3) of the ASIC Act, or both. To facilitate processing of the request, a copy of the request for consent should also be forwarded to other parties in the proceedings and to the Treasury (contact details at the foot of this information sheet), and the request should confirm that this has occurred.

Procedure for the provision of advice to the Minister on foreign law issues

Subsection 5(5) of the CCA and subsection 12AC(4) of the ASIC Act requires the Minister to grant consent unless the Minister forms the opinion that the alleged conduct which occurred outside Australia was required or specifically authorised by the law of the foreign country and it is not in the national interest that consent be given. In order to reach that opinion the Minister is supplied with legal advice on the matter.

If the Minister is not satisfied that the extraterritorial conduct is required or specifically authorised by the law of the foreign country, the Minister is obliged to grant the consent. In such cases, it will be unnecessary to determine whether it is in the national interest that the consent be given, as it is only if both conditions are met that consent may be withheld.

Advice from foreign lawyers

The Attorney-General's Department, which was for a period responsible for advising the relevant Minister in relation to his or her compliance with the requirements of section 5 of the CCA and section 12AC of the ASIC Act, considers that it is reasonable to form an opinion on the foreign law with the assistance of advice provided by lawyers expert in the laws of the foreign country.

Under the procedures which have been adopted for advising Ministers on the legal aspects of applications pursuant to the section, the lawyers for the applicant for the consent are asked to provide independent legal advice obtained from an expert (or experts) in the law of the relevant foreign country, which addresses the question of foreign laws. Alternatively, applicants may confirm they have given due consideration to whether the law of the country in which the conduct took place, required or specifically authorised the engaging in of the conduct. In advising whether their enquiries have disclosed the existence of any such laws in that jurisdiction, applicants should indicate fully the nature and scope of their enquiries and research on the issue.

Regardless of the method adopted by the applicant's lawyers to provide the Minister with legal advice on the foreign law issue, the lawyers for the respondent will be invited to place before the Treasury, within 28 days of the Treasury's notification to them, any submission on the foreign laws issue which the respondent wishes the Minister to take into account in deciding whether to grant the consent. It should be noted, however, that the Minister is bound to disregard irrelevant considerations in forming his opinion as to whether the foreign law 'requires or specifically authorises' the conduct to which the application relates.

Further information

Enquiries, copies of applications or requests for further information or assistance should be directed to:

For consent under section 5 of the CCA (or section 5 of the TPA)

The Manager
Consumer Policy Unit

The Treasury
Langton Crescent
PARKES ACT 2600
Telephone: 02 6263 2111

For consent under section 12AC of the ASIC Act

The Manager
Corporations and Managed Funds Unit

The Treasury
Langton Crescent
PARKES ACT 2600
Telephone: 02 6263 2111

---

¹ For conduct that occurred prior to 1 January 2011, applications should be made with respect to section 5 of the Trade Practices Act 1974.
² Item 6(1) of Schedule 7 to the Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010
³ Item 7(1) of Schedule 7 to the Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010