On Friday 27 February, we lodged a submission with the Australian Law Reform Commission in response to its Freedoms Inquiry and respective issues paper Traditional Rights and Freedoms — Encroachments by Commonwealth Laws.
We confined our comments in this submission to issues which have been of particular concern to directors for some time, the reversal of the onus of proof and strict liability provisions.
In summary, the key comments of the AICD are as follows:
- As a matter of principle there is no justification, ever, for the onus of proof to be reversed and for directors not to have available to them one of the most fundamental protections afforded by the common law, the presumption of innocence. The reversal of the onus of proof and the use of strict liability offences is an issue which not only impacts on Commonwealth laws but equally on the laws of the States and Territories. Section 8Y of the Taxation Administration Act 1953 (C’th) is an example of a Commonwealth law that denies directors the presumption of innocence. We are of the view that this provision should be amended
- Strict liability offences (or elements of offences) should not apply in circumstances where directors must make complex judgments or where the penalties applied as a result of a breach are significant
- In response to calls that the Australian Securities & Investments Commission (ASIC) requires additional powers, we are of the view that any impediments to ASIC’s effectiveness are more likely to be caused by a lack of adequate funding and resources rather than a lack of powers
- Provisions in tax legislation which make new directors of a company personally liable for the misconduct of the company at a time when they were not a director should be removed or amended
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