Australian Securities and Investments Commission v Medical Defence Association of Western Australia Inc - [2005] FCAFC 173

FEDERAL COURT OF AUSTRALIA
Australian Securities and Investments Commission v Medical Defence Association of Western Australia Inc [2005] FCAFC 173
CORPORATIONS – incorporated associations– incorporated association incorporated under Incorporated Associations Act 1987 (WA) – registration of body corporate as company under Part 5B.1 of Corporations Act 2001 (Cth) – where no express provision in Incorporated Associations Act 1987 (WA) permitting transfer of body’s incorporation – whether such a provision is required to satisfy s 601BC(8)(d) of Corporations Act 2001 (Cth)
Constitution of the Commonwealth of Australia
Corporations Act 2001 (Cth) Part 5B.1
Corporations Act 1989 (Cth)
Company Law Review Act 1998 (Cth)
Corporations Legislation Amendment Act 1990 (Cth)
Associations Incorporation Act 1987 (WA) ss 3A, 13
Associations Incorporation Regulations 1988 (WA)
Associations Incorporation Act 1984 (NSW)
Companies Act 1961 (NSW)
Companies (Transfer of Domicile) Act 1968 (NSW)
Companies Code 1981
Saccharin Corporation Ltd v Chemische Fabrik Bon Heyden Aktiengesellschaft [1911] 2 KB 516 cited
Gasque v Inland Revenue Commissioners [1940] 2 KB 80 cited
Banco de Bilbao v Sancha [1938] 2 KB 177 cited
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 referred to
Tasker v Fullwood (1978) 1 NSWLR 20 referred to
Victrawl Pty Ltd v Telstra Corporation Limited (1995) 183 CLR 595 cited
Dicey and Morris on the Conflict of Laws (13^th ed, 2000) (Vol 2)
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v MEDICAL DEFENCE ASSOCIATION OF WESTERN AUSTRALIA INC
NSD 294 OF 2005
FINN, EMMETT & CONTI JJ
25 AUGUST 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 294 OF 2005

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
APPELLANT

AND:

MEDICAL DEFENCE ASSOCIATION OF WESTERN AUSTRALIA INC
RESPONDENT

JUDGES:

FINN, EMMETT & CONTI JJ

DATE OF ORDER:

25 AUGUST 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.        The appeal be allowed.
2.        The respondent pay the appellant’s costs of the appeal.
3.        The orders made by Stone J in proceedings NSD 1217 of 2004 be set aside.
4.        In lieu of those orders:
(a)       proceedings NSD 1217 of 2004 be dismissed.
(b)       The applicants pay the respondent’s costs of the proceedings.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 294 OF 2005

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION
APPELLANT

AND:

MEDICAL DEFENCE ASSOCIATION OF WESTERN AUSTRALIA INC
RESPONDENT

JUDGES:

FINN, EMMETT & CONTI JJ

DATE:

25 AUGUST 2005

PLACE:

SYDNEY

REASONS FOR JUDGMENT
FINN J

I have had the advantage of reading the reasons of both Emmett J and Conti J. I agree with the conclusions arrived at by their Honours and with the orders proposed by Emmett J.

I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.
Associate:
Dated: 25 August 2005

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 294 OF 2005

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
APPELLANT

AND:

MEDICAL DEFENCE ASSOCIATION OF WESTERN AUSTRALIA
RESPONDENT

JUDGES:

FINN, EMMETT & CONTI JJ

DATE:

25 AUGUST 2005

PLACE:

SYDNEY

REASONS FOR JUDGMENT
EMMETT J

The respondent, Medical Defence Association of Western Australia (‘the Association’), is a body corporate incorporated under the provisions of the Associations Incorporation Act 1987 (WA) (‘the Associations Act’). The Association wants to become a company limited by guarantee registered under the Corporations Act 2001 (Cth) (‘the Corporations Act’). It claims that it can become so registered pursuant to Part 5B.1 of the Corporations Act. The appellant, Australian Securities and Investments Commission (‘the Commission’) says that it is not possible for the Association to be registered under Part 5B.1.
The Association commenced a proceeding in the Court against the Commission, seeking declarations concerning the effect of Part 5B.1. In February 2005, a judge of the Court made a declaration concerning the effect of s 601BC of the Corporations Act. The Commission, by notice of appeal filed on 28 February 2005, appeals from the declaration made by the primary judge.
THE CORPORATIONS ACT
The Association is not a company, as that word is defined in s 9 of the Corporations Act. The word ‘company’ is defined in s 9 as a company registered under the Corporations Act. There are two ways in which a company might become registered under the Corporations Act. Part 2A.2 of the Corporations Act, which consists of ss 117 to 123, inclusive, deals with the creation or incorporation of a company as a body corporate where none previously exists. Part 5B.1, which consists of ss 601BA to 601BS, inclusive, deals with the registration as a company of a body corporate that already exits but is not a company as defined in S 9.
Under s 117(1), to register a company where no body corporate exists, a person must lodge an application with the Commission. Section 117(2) specifies the contents of such an application. Under s 118(1)(b), if an application is lodged under s 117, the Commission may register the company. Under s 119, a company comes into existence as a body corporate at the beginning of the day on which it is registered.
Section 601BA(1) provides that a body corporate that is not a company may be registered under the Corporations Act as a company of one of six types, including a company limited by guarantee. Section 601BC(1) provides that, to register the body corporate under Part 5B.1, a person must lodge an application with the Commission. Section 601BC(2) specifies the requirements for the contents of an application.
Section 601BC(6) provides that certain documents must be lodged with the application unless the Commission already has the document and agrees not to require its lodgement. Section 601BC(7) provides that the application must be accompanied by evidence that:
- the body corporate is not externally administered;
- no application to wind up the body corporate has been made to a court;
- no application to approve a compromise or arrangement between the body corporate and another person has been made to a court.
Of critical importance is s 601BC(8), which requires that the application must be accompanied by evidence that, under the law of the body corporate’s place of origin:
‘…
(d) the transfer of the body’s incorporation is authorised; and
(e)the body has complied with the requirements (if any) of that law for the transfer of its incorporation; and
(f)if those requirements do not include consent to the transfer by the members of the body – the members:
(i)have consented to the transfer by a resolution that has been passed at a meeting by at least 75% of the votes cast by members entitled to vote on the resolution and
(ii)were given at least 21 days notice of the meeting or the proposed resolution.’
Under s 601BC(9), the evidence lodged in accordance with ss 601BC(7) and 601BC(8) must be satisfactorily proof to the Commission of the matters referred to in those sections.
THE ASSOCIATIONS ACT
The Associations Act contains no express authorisation for the transfer of the registration or incorporation of an association. Further, there is no other law of Western Australia that expressly authorises the transfer of the registration or incorporation of an association. The Association, however, relies on the provisions of s 3A of the Associations Incorporation Act as constituting such an authorisation.
The term ‘corporations legislation’ is defined in s 9 of the Corporations Act as meaning:
(a) the Corporations Act
(b) the Australian Securities and Investments Commission Act 2001 (Cth) and
(c)Rules of Court made by federal or State or Territory courts dealing with corporations matters
Part 1.1A of the Corporations Act deals with the interaction between corporations legislation and, inter alia, State laws. Part 1.1A consists of ss 5D to 5I inclusive. The effect of s 5D is that Part 1.1A applies to the laws of Western Australia, and under s 5D(2), Part 1.1A applies, relevantly, to the Corporations Act. The effect of s 5E(1) is that the Corporations Act is not intended to exclude or limit the concurrent operation of any law of Western Australia.
Section 5F of the Corporations Act provides that the Corporations Act does not apply to a matter declared by Western Australia to be an excluded matter. Under s 5F(1)(c), s 5F(2) applies if a provision of, relevantly, a law of Western Australia declares a matter to be an excluded matter for the purposes of s 5F in relation to the Corporations Act, other than a specified provision. Under s 5F(2)(c), the provisions of the Corporations Act other than the specified provisions do not apply in Western Australia in relation to that matter.
Section 3A(1) of the Associations Act provides that, in relation to the whole of the Corporations Act, other than the provisions specified in s 3A(2), the following matters are excluded matters for the purposes of s 5F:
- an incorporated association;
- any act or omission of any person, body or other entity in relation to an incorporated association.
‘Incorporated association’ means an association incorporated under the Associations Act.
The provisions specified in s 3A(2) of the Associations Act are as follows:
‘(a)provisions that relate to any matter that the regulations provide is not to be excluded from the operation of the Corporations legislation;
(b)provisions that relate to the role of an incorporated association in the formation of a company;
(c)provisions that relate to substantial holdings, by or involving an incorporated association, in a company;
(d)provisions that confer or impose functions on an incorporated association as a member, or former member, of a corporation;
(e)provisions that relate to dealings by an incorporated association in securities of a body corporate, other than securities of the incorporated association itself;
(f)provisions that confer or impose functions on an incorporated association in its dealings with a corporation, not being dealings in securities of the incorporated association;
(g)provisions that relate to securities of an incorporated association, other than debentures of or deposits with an incorporated association;
(h)provisions relating to the futures industry;
(i)provisions relating to participants in the securities industry;
(j)provisions relating to the conduct of securities business;
(k)provisions relating to dealers’ accounts and audit;
(l)provisions relating to money and scrip of dealers’ clients; or
(m)provisions relating to registers of interests in securities.’
Thus, the effect of s 3A is that only the provisions of the Corporations Act specified in paragraphs (a) to (m) apply to an incorporated association. Under s 3A(3) of the Associations Act, those provisions only apply to an incorporated association to the extent to which that incorporated association may engage in the activities covered by those provisions. It is critical to the present issue that none of those provisions relates to the registration, under the Corporations Act, as a company of a body corporate that is not a company. It follows that there is nothing in s 3A that authorises the transfer of an incorporated association’s incorporation, as referred to in s 601BC(8)(d) of the Corporations Act.
THE CONCLUSIONS OF THE PRIMARY JUDGE
The primary judge accepted that the Associations Act does not specifically deal with an incorporated association transferring registration. On the other hand, her Honour referred to s 13 of the Associations Act, which gives an incorporated association the power to do all things necessary or convenient for carrying out its objects and purposes, subject to the rules of the incorporated association and the provisions of the Associations Act. Clause 3.1(x) of the Association’s Rules gives the Association the power ‘to do all such… things as are incidental or conducive to the attainment of the objects and the exercise of all or any of the powers of the [Association]…’. Her Honour concluded that the evidentiary requirements of s 601BC(9) of the Corporations Act could be satisfied by a body corporate providing evidence of the consent of its members in accordance with s 601BC(8)(f), or, if Western Australian law requires that the consent of the members be obtained, in accordance with that law.
The primary judge did not accept that, unless the law of Western Australia expressly provides for authorisation by Western Australia in some form, an applicant cannot comply with s 601BC(8). Nor did her Honour accept that the Association would not need to provide evidence of such authorisation because such a transfer of incorporation is implicitly authorised by Western Australia. Rather, her Honour concluded that s 601BC(8) would impose mandatory obligations on the Association to provide evidence as to authorisation. However, her Honour considered that the members of the Association could give authorisation, so long as that authorisation was given under, or in accordance with, the law of Western Australia. Her Honour concluded that the absence of a specific provision in the Associations Act was not an obstacle to the Commission accepting an application from the Association under s 601BC(1).
On 14 February 2005, the primary judge made a declaration that, on the proper construction of s 601BC of the Corporations Act, evidenced by the Association of consent of its members in accordance with s 601BC(8)(f) of the Corporations Act is evidence under the law of Western Australia, as the Association’s place of origin, that the transfer of the Associations Incorporation to the Corporations Act is authorised pursuant to s 601BC(8)(d) of the Corporations Act. Her Honour also made orders for costs.
REASONING ON THE APPEAL
The primary judge’s view of s 601BC(8)(d) is difficult to sustain in the light of the legislative background to that provision. The uniform companies legislation of the States and Territories, of which the Companies Act 1961 (NSW) (‘the 1961 Companies Act’) was the paradigm, made no provision for the transfer of the registration of corporations between States and Territories of Australia.
The Companies Codes of the States and Territories, which were enacted in 1981, made provision for the transfer of incorporation of a company incorporated in one State or Territory to another State or Territory. That legislation drew upon the scheme of the Companies (Transfer of Domicile) Act 1968 (NSW), which permitted a corporation incorporated outside New South Wales to be registered as a company under the 1961 Companies Act. The corporation was not to be registered unless, in accordance with the law for the time being in force in the place of incorporation, the transfer of its domicile from that place was authorised. Section 9 provided that, upon registration, the corporation was to be deemed to be a company duly incorporated under the 1961 Companies Act, but that such registration was not to create a new entity.
There was no provision under the scheme of the Companies Codes for getting authorisation to transfer incorporation outside the cooperative scheme. That scheme involved a company incorporated in one jurisdiction applying to the Corporate Affairs Commission in that jurisdiction for a certificate authorising it to make an application for registration as a company under a corresponding law of another State or Territory. The provisions specified the prerequisites for the grant of a certificate. A company with such a certificate could then apply to the Corporate Affairs Commission of another State or Territory. However, there was no provision under the Companies Codes for incorporated associations incorporated in a State or Territory to seek direct registration as a company in another State or Territory.
That scheme was the precursor of Part 5B.1. It indicates the way in which Part 5B.1 should be viewed. That is to say, it was never contemplated that an association formed under the law of a State or Territory would have the capacity to excuse itself unilaterally from compliance with the regulatory scheme of that law without the authorisation of an instrumentality or a law of that State or Territory.
There could be formidable complications arising from the purported transfer of registration of an incorporated association to registration as a company under the Corporations Act, without express legislative authorisation under the law of Western Australia. Without some provision of Western Australian law dealing with the consequences of registration of an incorporated association as a company under the Corporations Act, the position of an incorporated association under the Associations Act that become registered as a company under the Corporations Act could be intolerable. The provisions of the Associations Act would continue to apply to the incorporated association, notwithstanding that provisions of the Corporations Act dealing with the same subject matter, but in different terms, would thereafter apply to the Association as a company registered under the Corporations Act.
The same body corporate would be both a company registered under the Corporations Act and an incorporated association incorporated under the Associations Act. Such a body would be subject to the regulatory provisions of each. Examples of differences between provisions applying to incorporated associations under the Associations Act and to companies registered under the Corporations Act are set out in the schedule to these reasons. References to provisions are references to the Associations Act, the Associations Incorporation Regulations 1988 (WA) and the Corporations Act, as the context requires. While it may be possible to comply with both regulatory provisions in some respects, the resolution of a conflict where the two schemes are inconsistent could create enormous difficulties.
By way of example of the way in which a State or Territory might deal with those questions, it is instructive to consider the Associations Incorporation Act 1984 (NSW) (‘the NSW Associations Act’). Section 56(1) of the NSW Associations Act provides that an incorporated association may, with the approval of the Minister and subject to such conditions as may be specified in the approval, become registered as a company under the Corporations Act. Section 57(2)(a) then provides that, upon a transfer of incorporation by an incorporated association, the incorporated association is to be dissolved and none of the provisions of that Act apply to the association after the transfer of incorporation. The incorporation of the incorporated association under the NSW Associations Act is then cancelled.
However, under s 57(3), the transfer of incorporation does not affect the identity of the incorporated association, which is to be deemed to be the same body before and after the transfer of incorporation. No act, matter or thing is to be affected or abated by the transfer of incorporation. In particular, any claim by or against the incorporated association subsisting immediately before the transfer of incorporation may be continued by or against the company formed by the transfer of incorporation in the name of the incorporated association or commenced by or against the company so formed in the name of the company. Further, under s 57(4) the dissolution of the incorporated association does not affect any right, privilege, obligation or liability acquired or incurred under the NSW Associations Act, any penalty, forfeiture or punishment incurred in respect of any offence committed against the Associations Act or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment.

Those considerations lead to the conclusion that s 601BC(8)(d) of the Corporations Act must be construed as requiring that the law of the of the origin of a body corporate positively authorise the transfer of the incorporation of that body. There is no such provision under the law of Western Australia. Accordingly, there could never be evidence constituting satisfactory proof of all of the matters referred to in s 601BC(8) of the Corporations Act.
CONCLUSION
The orders of the primary judge should be set aside. In lieu of those orders there should be an order that the proceeding be dismissed and that the Association pay the Commission’s costs. The Association should pay the Commission’s costs of the appeal.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.
Associate:
Dated: 25 August 2005
THE SCHEDULE
Following are examples of differences between provisions applying to incorporated associations under the Associations Act and companies registered under the Corporations Act.

ASSOCIATIONS COMPANIES

Only able to be formed for limited purposes (eg religious, educational, political) and not able to be formed for the purposes of trading or securing a profit for members: s 4. No statutory limit on the objects that a company may pursue. Company has all the legal capacity and powers of an individual and some specific ones related to bodies corporate: s 124. Constitution may limit objects: s 125.

Upon incorporation, the corporate name of the association must conclude with the word “Incorporated” or the abbreviation “Inc”: s 10. The name of a company must conclude with words or an abbreviation that designate the type of company: s 148.

Doctrine of ultra vires continues to apply in cases of actual notice of a deficiency in the legal capacity of the association: s 15. Doctrine of ultra vires abolished. Acts not invalid merely because they are contrary to objects in constitution: s 125.

Legislation specifies matters for which the constitution must make provision including qualifications for membership, fees, meeting formalities, custody of records: s 16 & Sch 1. No equivalent requirement. "Replaceable rules" cover some aspects and statutory obligations cover others. For example, there are statutory provisions relating to calling and voting at meetings.

An alteration of the name of an association does not take effect until the proposed name has been approved by the Commissioner: s 18. The process for changing the name of a company is completely different: ss 157-161.

Amendment of objects of association subject to approval by Commissioner: s 19. No equivalent requirement.

No general requirements about the duties of persons (committee members) managing the affairs of the association. General duties on directors and other officers of a company to act in the best interest of the company and not to misuse their position.

Committee members who have a pecuniary interest in a contract must not participate in any deliberation about it: s 22. Directors of public companies may participate in decisions about matters in which they have a material personal interest with the approval of the disinterested directors or ASIC approval in some circumstances: s 195. No limitations on directors of proprietary companies.

Requirement to maintain a record of details of officers and make it available on request to members: s 29. Requirement to notify ASIC of details of directors: s 205B.

No distribution of surplus property to members on voluntary winding up: r 6(3). Surplus property may be distributed to members on voluntary winding up: s 501.

No distribution of surplus property to members on court ordered winding up; property only able to be disposed of to incorporated association or charity: s 33. Members may have rights to surplus property on court ordered winding up.

Committee members do not commit an offence where association trades while insolvent. Directors commit offence where company trades while insolvent: s 588G.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 294 OF 2005

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION
APPELLANT

AND:

MEDICAL DEFENCE ASSOCIATION OF WESTERN AUSTRALIA INC
RESPONDENT

JUDGE:

FINN, EMMETT & CONTI JJ

DATE:

25 AUGUST 2005

PLACE:

SYDNEY

REASONS FOR JUDGMENT
CONTI J
Principal issue arising on the appeal and its context

The principal issue arising on the appeal is whether the primary judge erred in concluding that an incorporated association, being here of course the respondent Medical Defence Association of Western Australia Inc (‘the Association’), may satisfy the requirements of par (d) of subs (8) of s 601BC of the Corporations Act 2001 (Cth) (‘Corporations Act’) for the transfer of its incorporation as an association pursuant to current State legislation, that is, pursuant to the Associations Incorporation Act 1987 (WA) (‘WA Associations Act’), to the status of a registered company, pursuant to current Commonwealth legislation, by providing evidence of the consent of its members to that transfer of the Association’s incorporation in accordance with par (f) of subs (8) of s 601BC of the Corporations Act. The issue requires a close consideration of complex definitive and exceptional provisions of both legislative regimes, so far as the same might conceivably bear upon that principal issue.
The Association is a medical defence organisation that operates by the informal designation ‘MDA National’. It was originally incorporated in 1925, and its present standing is regulated by the WA Associations Act. Its members are medical practitioners. It has an authorised insurer subsidiary MDA National Insurance Pty Limited. As implicitly foreshadowed, what gave rise to the proceedings below was the proposal of the Association, not yet implemented, to become registered as a company under the Corporations Act. Unlike the corresponding legislation in other States of Australia, the WA Associations Act does not contain any provisions which purport to authorise the transfer of the incorporated status of an association to that of registration as a company under the Corporations Act, and accordingly the Association is at least strictly speaking unable to comply with the requirement of par (d) of subs 601BC(8) that an application to transfer its incorporation can be accompanied by evidence that the transfer is authorised under the law of the Association’s place of origin as a body.
The primary judge resolved the issue arising in the affirmative, and thereby rejected the contention of the Australian Securities and Investments Commission (‘ASIC’) that the requirement of the above par (d) as to authorisation of transfer of a body’s registration must be met by evidence of a law of the association’s place of origin, being that of the State of Western Australia where the Association was incorporated, that authorises that body, whether or not subject to conditions, to transfer its incorporation from that place to another place. Her Honour made a consequential declaration in the following terms:
‘On the proper construction of section 601BC of the Corporations Act 2001 (Cth), evidence by the [Association], a body incorporated under the Associations Incorporation Act 1987 (WA), of consent of its members in accordance with sub-section 601BC(8)(f) of the Corporations Act, is evidence under the law of the [Association’s] place of origin that the transfer of the [Association’s] incorporation to the Corporations Act 2001 is authorised pursuant to sub-section 601BC(8)(d) of the Corporations Act 2001.’
Contentions of the parties in outline
It was the contention of ASIC that the requirements of par (d) of subs (8) of s 601BC of the Corporations Act must be satisfied by reference to the general law for the time being in operation in an incorporated association’s place of origin that authorises, whether or not subject to conditions, the incorporated association to transfer its incorporation from the place of origin to another place. It was common ground between ASIC and the Association that unlike the equivalent legislation in New South Wales comprising s 56 of the Associations Incorporation Act 1984 (NSW) (‘NSW Associations Act’), the corresponding Western Australian legislation is silent on the subject as to authorisation of bodies like the Association to transfer their place of incorporation, such as is here presently proposed. Section 56 together with s 57 of the NSW Associations Act read as follows:
‘56Registration of incorporated association as company or co-operative
(1)An incorporated association may, with the approval of the Minister and subject to such conditions as may be specified in the approval, become:
(a)registered as a company under the Corporations Act 2001 of the Commonwealth, or
(b)registered as a co-operative within the meaning of the Co-operatives Act 1992,
in the manner prescribed.
(2)Where the Minister is satisfied that the continued incorporation of an association under this Act would be inappropriate or inconvenient:
(a)by reason of the Minister’s assessment of:
(i)     the scale or nature of the activities of the incorporated association,
(ii)    the value or nature of the property of the incorporated association, or
(iii)   the extent or nature of the dealings which the incorporated association has with the public, or
(b)     for any other reason which to the Minister appears sufficient, the Minister may, by notice to the incorporated association, direct the association to become:
(c)registered as a company under the Corporations Act 2001 of the Commonwealth, or
(d)registered as a co-operative within the meaning of the Co-operatives Act 1992,
within the period (being not less than 3 months), and subject to any conditions, specified in the notice.
57       Effect of transfer of incorporation
(1)In this section, a reference to a transfer of incorporation by an incorporated association is a reference to:
(a)the registration of the association as a company under the Corporations Act 2001 of the Commonwealth, or
(b)the registration of the association as a co-operative within the meaning of the Co-operatives Act 1992.
(2)Subject to this section, upon a transfer of incorporation by an incorporated association:
(a)the incorporated association shall be dissolved and none of the provisions of this Act shall, after the transfer of incorporation apply to the association, and
(b)the Director-General shall cancel the incorporation of the association under this Act.
(3)The transfer of incorporation by an incorporated association does not affect the identity of the association which shall be deemed to be the same body before and after the transfer of incorporation and no act, matter or thing shall be affected or abated by the transfer of incorporation and, in particular, any claim by or against the association subsisting immediately before the transfer of incorporation may be continued by or against the company or society formed by the transfer of incorporation in the name of the incorporated association or commenced by or against the company or society so formed in the name of the company or society.
(4) Without limiting the generality of subsection (3), nothing in subsection (2):
(a)affects any right, privilege, obligation or liability acquired or incurred under this Act,
(b)affects any penalty, forfeiture or punishment incurred in respect of any offence committed against this Act, or
(c)affects any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment,
and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if subsection (2) had not been enacted.
(5)This section has effect in relation to a matter concerning an incorporated association that is registered as a company under the Corporations Act 2001 of the Commonwealth only to extent that the matter is not dealt with by that Act.’
Accordingly the essence of ASIC’s submissions was that by reason of the absence of any provision in the WA Associations Act authorising the transfer of the place of origin (that being the s 601BC(8) expression) of an association incorporated under that Act, ASIC is not empowered to register any such transfer, and therefore to accept an application for transfer of the body’s incorporation. Thus ASIC’s contention that the Association’s failure or incapacity to supply any such evidence is fatal to and invalidates any such application.
The case of the Association was presented on a somewhat more multi-faceted basis, as follows:
(i)the Association is an incorporated association under and pursuant to the WA Associations Act, and seeks to register as a company under Part 5B.1 of the Corporations Act and so effectively transfer its place of incorporation from the State of Western Australia to the Commonwealth;
(ii)unlike what was described as the equivalent legislation in operation in the State of New South Wales, namely the NSW Associations Act, the WA Associations Act is silent as to the authorisation of bodies such as the Association to transfer their incorporation as so proposed;
(iii)hence the Association is unable to comply with the s 601BC(8)(d) requirement that an application to register as a company be accompanied by evidence that the transfer of the Association’s incorporation is authorised under the law of a body’s place of origin (that description appearing in s 601BC(8) of the Corporations Act);
(iv)contrary to the above position taken by ASIC, the inability of the Association ‘to supply the evidence’ of such authorisation is not fatal to and does not invalidate any such application on the Association’s part, for the reasons reproduced below.
Those reasons were submitted by the Association to be as follows:
(i)the purpose of Part 5B.1 of the Corporations Act (which is entitled ‘Registering a Body Corporate as a Company’) relevantly is to ensure comity between the State of Western Australia and the Commonwealth;
(ii)the requirement of par (d) of subs 601BC(8) in particular is ‘not a condition of validity’ but rather ‘forms part of a check list of matters which ASIC must consider and be satisfied of in the exercise of its discretion under subs 610BC(9) and 610BD’, and therefore ‘is in the nature of evidence which is itself subject to a discretion of ASIC’;
(iii)the Association submitted that this was because the requirement to supply evidence that the transfer of the body’s incorporation is authorised is not mandatory. Support for that characterisation of the requirement was said to arise, first from the fact that the requirement for evidence is not expressly stated as a pre-condition of a valid application, secondly the legislature’s use of the word ‘evidence’ in drafting the requirement further tending to support a non-mandatory characterisation, and thirdly the existence of ‘several levels of discretion invested in ASIC’ under Part 5B.1. The Association compared the present drafting of that requirement with s 135 of the Corporations Act 1989 (Cth), which explicitly stated that a non-company was not entitled to be registered unless under the law of its place of origin, the transfer of its incorporation was authorised and contended that the effect of the legislative changes was not to be explained simply as the plain English rewriting of the legislation, but rather that the changes sought to invest ASIC with a statutory obligation to receive an application and then to exercise various levels of discretion;
(iv)both the element of comity, and the inherent purpose relevantly of the legislation, has been satisfied by the so-called ‘company law reforms introduced in 2001 in both Western Australia and the Commonwealth whereby the State of Western Australia invested the Commonwealth with power to govern the role of an incorporated association in the formation of a company’; and
(v)‘accordingly, in circumstances where the purpose of the legislation has otherwise been satisfied it is not the intention of the legislators to deny validity to an otherwise valid and meritorious application.’
The Association submitted moreover that contrary to the view expressed by the primary judge, the Western Australian legislature thereby ‘deliberately and expressly provided’ in terms that the provisions of the Corporations Act that relate to the ‘role of an incorporated association in the formation of a company’, referring thereby to Division 1 of Part 5B.1 of the Corporations Act, apply to incorporated associations such as the present Association. In that regard, subs 3A(1) of the WA Associations Act excludes the Corporations Act from application to incorporated associations other than the provisions specified in subsection (2), and par (b) of the following subs 3A(2) in effect removes, from the operation of that preceding subs 3A(1) exclusion of incorporated associations in Western Australia from the Corporations Act, the so-called provisions that relate to the role of an incorporated association in the formation of a company. Upon that footing, the Association contended that ‘the clear statutory purpose of s 3A(2)(b)’ is for relevant provisions of the Corporations Act, being, it was contended, Division 1 of Part 5B thereof, to apply to incorporated associations, and further that by construing the State legislation as not authorising the transfer of incorporation would lead to the ‘absurd result’ that the Western Australian legislature had ‘expressly and deliberately provided that the relevant provisions apply to incorporated associations, while at the same time had failed to do the very thing required by the Corporations Act to allow its incorporated associations to take advantage of those provisions’. The Association thus submitted that the WA Associations Act should be construed so as to fulfil the ‘clear statutory purpose of s 3A(2)(b)’, and avoid that so-called ‘absurd result’, and thereby give par (d) of subs 3A(2) ‘some effect’. This argument further depends for its acceptance, I would observe, on the presumption that the s 3A(2)(b) expression provisions that relate to the role of an incorporated association in the formation of a company, was intended by the WA legislature to refer to the provisions of the Corporations Act contained in Part 5B.1. So much is not readily apparent however on the plain and ordinary meaning of the words in that expression.
All that was said by the Association to be ‘understood and achievable’ by:
(i)reading par (b) of subs 3A of the WA Associations Act as impliedly authorising the transfer of incorporation for the purpose of par (d) of subs 601BC(8) of the Corporations Act, bearing in mind that all that is required is ‘evidence’ of authorisation which constitutes satisfactory proof to ASIC of authorisation; or
(ii)adopting ‘a strained construction of s 3A(2)(b)’, even if that would involve reading the same as including additional words; or
(iii)construing the WA Associations Act as providing for the Corporations Act to be the law of the Association’s place of origin for the purpose of par (d) of subs 601BC(8).
The Association submitted furthermore that adopting such a construction of the WA Associations Act so as to facilitate the registration, by ASIC, of the Association as a company limited by guarantee under the Corporations Act, would not give rise to what ASIC called the problem of dual registration. This was said to be because registration of a company under Part 5B.1 of the Corporations Act is properly to be characterised as a transfer of incorporation rather than the formation of a new entity. That being the case, the submission continued, the domicile and ‘jurisdiction’ of the Association would pass entirely from the State of Western Australia to the Commonwealth. Following registration of the Association as a company, there was said moreover to be nothing further to be done in Western Australia, since there is no register of incorporated associations maintained by the relevant West Australian Commissioner, in contrast to that subsisting in respect of associations incorporated under the NSW Associations Act.
The principal provisions of the corporations legislation of the Commonwealth of Australia here material

As indicated at the commencement of these reasons, par (d) of subs (8) of s 601BC is located within Part 5B.1 of the Corporations Act. Part 5B.1 forms part of Chapter 5B which is headed ‘Bodies Corporate Registered as Companies, and Registrable Bodies’.
Those provisions of s 601BC bearing upon or at least contextual to the issue arising are reproduced below:
‘601BC Applying for registration under this Part
(1)To register the body as a company under this Part, a person must lodge an application with ASIC.
…
(8)The application must be accompanied by evidence that under the law of the body’s place of origin:
(a)the body’s type is the same or substantially the same as the proposed type specified in the application; and
(b)if the members of the body have limited liability – the body’s constitution defines how and to what extent that liability is limited; and
(d)the transfer of the body’s incorporation is authorised; and
(e)the body has complied with the requirements (if any) of that law for the transfer of its incorporation; and
(f)if those requirements do not include consent to the transfer by the members of the body – the members:
(i)have consented to the transfer by a resolution that has been passed at a meeting by at least 75% of the votes cast by members entitled to vote on the resolution; and
(ii)were given at least 21 days notice of the meeting and the proposed resolution.
(9)The evidence lodged in accordance with subsections (7) and (8) must be satisfactory proof to ASIC of the matters referred to in those subsections.’
The use of the word must in both subsections may be observed. Par (c) of subsection (8) appears never to have been previously enacted, or in any event has not appeared in the text of the previous statutory version of s 601BC which has been identified in the course of submissions. Par (d) of subs 601BC(8) above is of paramount relevance to the issue arising on the appeal. A body is defined by s 9 of the Corporations Act to mean a body corporate or an unincorporated body and includes, for example, a society or association.
Consequential to the affirmative operation of s 601BC of the Corporations Act is the following s 601BD, subsection (1) whereof is next reproduced below:
‘601BDASIC Gives Body ACN, Registers as Company and Issues Certificate
(1)Registration
If an application is lodged under section 601BC, ASIC may:
(a) give the body an ACN, and
(b)register the body as a company of the proposed type specified in the application; and
(c)issue a certificate that states:
(i)the company’s name; and
(ii)the company’s ACN; and
(iii)the company’s type; and
(iv)that the company is registered as a company under this Act; and
(v)the State or Territory in which the company is taken to be registered; and
(vi)the date of registration.’
Subsection 601BM(1) of the Corporations Act provides the following clarification as to the operation of ss 601BC and 601BD:
‘Registration under this Part does not:
(a) create a new legal entity; or
(b)affect the body’s existing property, rights or obligations (except as against the members of the body in their capacity as members); or
(c)render defective any legal proceedings by or against the body or its members.’
The legislative development of laws in Australia governing the transfer of incorporation
Those legislative developments were traced in detail by ASIC in order to provide some insight into the legislative context against which Part 5B.1 was introduced into the Corporations Act, and further purportedly to demonstrate legislative restrictions or inhibitions reflected by the framework of Part 5B.1, and in particular by the critical subs 602BC(8). I will briefly outline that legislative history. The principal focus of that history was upon the evolutionary trend of legislative change affecting the State of New South Wales, being a change which was seemingly reflected in the other States of the Commonwealth.
The starting point taken by ASIC was the uniform scheme of regulation of companies taking the form, for instance in the State of New South Wales, of the Companies Act 1961 (NSW). No provision was made thereby, or by any other State laws, for any corporations, foreign or domestic, to transfer their place of incorporation to corporate residence in any other State, and as a consequence, there was no mechanism for the transfer of incorporation between State jurisdictions.
Section 5 of the Companies (Transfer of Domicile) Act 1968 (NSW) permitted a company incorporated outside of New South Wales to apply for registration as a company in that State, upon the footing that it did so in accordance with the law for the time being in force in the place of incorporation from which the transfer of corporate domicile was authorised. Upon registration, the company was deemed to be incorporated under the Companies Act 1961 (NSW), but the occurrence of registration did not create a new entity, and that statutory precept remained in force notwithstanding that the legislation, to which it related, had been repealed by the time of enactment of the subsequent 1968 companies legislation. The Second Reading Speech for the 1968 legislation explained that what was then proposed was designed to enable a company incorporated outside New South Wales to transfer to that State, and to be registered there as a company, and it recorded that recent developments had demonstrated the need for such a legislative provision, exemplifying in that regard overseas incorporated companies, particularly emanating from the United Kingdom, having the intention of carrying on a substantial portion of their business in Australia. It was submitted that it would be a possible, though normally an unattractive option, for a company to achieve the same result by being wound up and thereafter reconstructed in New South Wales.
The Companies Codes of 1981 were said to have followed suit next in point of time, and provided for the transfer of incorporation, of what was thereby and thereafter termed a corporation, from one State or Territory to that of another. That 1981 legislation drew in that particular regard upon the structure of the 1968 Act. In order to implement the transfer process, a company incorporated in one jurisdiction was thenceforth required to obtain from the then Commission for that jurisdiction a certificate of authority to make the application for registration, being a certificate which covered conditions precedent to the application such as advertising, enabling special resolutions, history of corporate compliance, and absence of insolvent management. By s 85 of that 1981 legislation, application could also be made for registration of a corporation incorporated outside Australia. By virtue of subsection (3) thereof, the Commission could not grant any such application:
‘… unless
(a)under the law for the time being in force in the place where the corporation was incorporated or formed:
(i)the transfer of incorporation of the corporation is authorized;
…
(b)the corporation has complied with the regulations (if any) of the law of the place where it is incorporated or formed that relate to the transfer of its incorporation; [and]
(c)where the law of the place where the corporation was incorporated or formed does not require the members of the corporation, or a specified proportion of those members, to consent to the transfer of the incorporation of the corporation – not less than three-quarters of such members of the corporation as being entitled to do so, vote in person or, where proxies are allowed, by proxy, consent to the transfer of the incorporation of the corporation at a meeting of which not less than 21 days’ notice specifying the intention of the corporation to apply for such transfer is given…’
Under s 85(4), an application by a corporation under s 85(1) was required to be accompanied by evidence acceptable to the Commission as to satisfaction of those requirements; moreover under s 86, a Commission that received an application under ss 84 and 85 was obliged to register the corporation, so long as it fulfilled all statutory requirements. By s 87, one of the effects of registration was that the corporation would be deemed to be a company incorporated under the relevant Code, and by s 89, where a company registered by the Commission had applied for and been registered by another Commission, that company would cease to be incorporated under the law of its original place of incorporation.
ASIC submitted therefore that in relation to the provisions of historical schemes for allowing the transfer of incorporation from one jurisdiction to another, it may be seen that the elements of such earlier legislation have remained the same under the current legislation. Unlike the current legislation in force, no provision was made for the registration as companies of corporations formed in participating States. In relation to the provisions of that scheme for permitting transfer to another State (and also Territory), the same specified that ministerial consent was required, and moreover, no provision for transferring the incorporation of a company to a foreign jurisdiction, that is, one outside the so-called ‘co-operative’ scheme involving those participants.
The Corporations Act 1989 (Cth) (‘Corporations Law’) as originally enacted provided for the transfer of incorporation of certain foreign companies: see in particular ss 133 to 135. That expression was defined in s 9 in such a way as to include certain unincorporated bodies formed in an excluded Territory or outside of Australia. Those transfer provisions contained requirements not materially different to what is contained in s 85(3) of the preceding Companies Code. The Corporations Law contained no such provision that would allow for an incorporated association (such as the Association the subject of the present appeal, as distinct of course from an incorporated company) to apply for registration as a company.
By the Corporations Legislation Amendment Act 1990 (Cth), amendments were made to the then existing legislation in relation to the transfer of foreign companies, and the expression non-company was substituted for foreign company, though it continued to bear the same import, as well as other meanings. The explanatory memorandum to the 1990 Bill, which became the 1990 Act, indicated that the amendments had the effect of both broadening and narrowing the range of bodies that could register under s 133 thereof. Unincorporated bodies were excluded from that categorisation, though certain incorporated Australian bodies, not being a company, could seek registration under s 133, if not so permitted by ss 134 and 135. Those provisions continued to impose the same requirements for registration as had been stipulated by s 85(3) of the Companies Code. It was emphasised by ASIC that nothing contained in that explanatory memorandum suggested that the amendment was intended to permit all State and Territory corporations, having a general power to do all things necessary to pursue their objects, thenceforth to effect a transfer of their incorporation unless expressly constrained by existing State law.
The critical legislative corporate reform here involved was said by ASIC to have been implemented by way of the Company Law Review Act 1998 (Cth), which repealed inter alia ss 133 to 135 of the Corporations Law, and introduced Part 5B.1 in essentially the same terms as presently appear in the Corporations Act 2001 (Cth).
In the light of that summarised evolution of relevant or analogous company legislation, ASIC contended the effect thereof to be that the requirements governing a body seeking a transfer of incorporation have remained essentially the same since 1981, although the bodies capable of applying for any such transfer have varied. ASIC further contended that those requirements have not changed in any material way by reason of the enactment of the Corporations Act 2001 (Cth), when corporate law became premised upon Commonwealth legislative power. ASIC accordingly submitted that ‘it would be surprising then if s 109 of the Constitution played any role in issues of construction of Part 5B.1 of the Corporations Act 2001 (Cth), the provisions of Part 5B.1 having been drafted at a time when they were part of State legislation’. On the other hand, it was acknowledged by ASIC that s 109 of the Constitution may have significance in relation to the operation of those provisions.
The reasoning of the primary judge in support of the finding that ASIC is empowered to register the transfer of the Association’s incorporation
The primary judge recorded at [16] of her reasons for judgment that it was not in contention that the Association’s status as an incorporated association is governed by the WA Associations Act, and further that it was common ground that the WA Associations Act does not contain any provision prohibiting, authorising or regulating the transfer of incorporation. The primary judge further there recorded that both parties implicitly accepted that the authorisation stipulated by subs 601BC(8)(d), in the circumstances here prevailing, would constitute authorisation by Western Australian legislation, but that where the parties differed was as to the implications of the silence of the WA Associations Act bearing upon circumstances such as here prevailing. Her Honour outlined the case of the Association to have involved a comparison of s 601BC with the precursor s 135 of the Corporations Law, the operation of the latter being described as stipulating an unqualified requirement for authorisation without the reference to evidence supporting a claim for authorisation, with the consequence that the requirement of par (d) of subs 601BC(8) for an applicant to provide evidence of that kind constituted ‘… an attempt to introduce greater flexibility and to increase the efficiency of registration procedures under the [current] Corporations Act’. ASIC was recorded by her Honour as having nevertheless submitted that s 601BC produced ‘no substantive change to the provisions but merely changes designed to simplify the language by “plain English”’.
The primary judge therefore summarised the present terms of s 601BC, introduced as it was by the Company Law Review Act 1998 (Cth), as ‘designed to begin the process of simplifying the Corporations Law’, and her Honour cited the Second Reading Speech, which spoke of a legislative design to begin the process of simplifying the ‘Corporations Law with a view to facilitating business and investment’, but which made no reference to changes relating to registering an unincorporated association as a company. Her Honour drew attention further to the explanatory memorandum accompanying that 1968 legislation as supporting ‘ASIC’s view that the changes were not substantive’, and were ‘designed to simplify the expression and organisation of the Corporations Law’. In the result, the primary judge said that she was not persuaded by the Association’s submission that ‘an application for transfer of registration is not required to be accompanied by the evidence referred to in s 601BC(8)(d)’, and that ‘[t]here is nothing in the [Company Law Review Act 1998 (Cth)] or the extrinsic material relating to it that indicates any intention to alter the substance of the earlier provisions’. Nevertheless the primary judge was of the view that ‘[u]ltimately… I do not think that this analysis greatly assists’.
In the opinion of the primary judge, ‘…the resolution of the present controversy is comparatively simple’, and that what she perceived to be the implicit submissions of both parties to the effect that the authorisation the subject of par (d) of subs 601BC(8) referred to authorisation by the State, involved an incorrect interpretation, her Honour pointing out in that regard that s 601BC ‘… certainly requires that the proposed transfer be authorised but it does not say by whom, but does say that the proposed transfer be authorised under the law of the body’s place of origin’ (in the present case the State of Western Australia), and ‘not by the law of that place’. Her Honour considered that the critical par (d) expression authorised must imply authority of the members of the relevant association, albeit that such authorisation is required to be given under or else in accordance with the law of Western Australia.
In support of that statutory interpretation, the primary judge emphasised that incorporated associations operate under State law, and pointed out that although the relevant Western Australian legislation does not specifically deal with the issue of that State’s incorporated associations transferring their registration to the Corporations Act, nevertheless s 13 of the WA Associations Act does ‘give the Association power to do all things necessary or convenient for carrying out its objects or purposes, subject to the rules of the Association and the provisions of the [WA] Associations Act’. In the circumstances therefore, and reading pars (d), (e) and (f) of subs 601BC(8) together with the opening words thereof, namely [t]he application must be accompanied by evidence that under the law of the body’s place of origin, the primary judge held that ‘I have no difficulty in concluding that the evidentiary requirements of the section in relation to authorisation can be satisfied by an applicant providing evidence of the consent of its members in accordance with subsection (f) or, if the State law requires that the consent of the members be obtained, then in accordance with that State law’. Hence the primary judge did not accept ASIC’s submission, pursued on the present appeal, that unless State law expressly provides for State authorisation in some form or another, an applicant cannot comply with subs 601BC(8), and ASIC cannot accept an application for transfer of the body’s incorporation. Nor would the primary judge accept however the Association’s further claim that it did not need to provide evidence because the proposed transfer is implicitly authorised by the State.
On that analysis, the primary judge further concluded that much of what was in issue between the parties ‘[fell] away’, in that whilst in her view subs 601BC(8) imposes mandatory obligations on an applicant to provide evidence as to authorisation, once the difference between authorisation ‘by State law’ and authorisation ‘under State law’ is accepted, the absence of a specific provision relevantly in the WA Association Act does not create an obstacle to ASIC accepting an application made by a body corporate association pursuant to s 601BC(1) of the Corporations Act. The primary judge drew attention in that regard to what her Honour considered to be the recognition, inherent in par (e) of subs 601BC(8), that State law may not itself impose any requirements… for the transfer of its authorisation.
The primary judge acknowledged that her reasons for those conclusions were similar but not identical to the Association’s submissions as to implicit authorisation, except that the authorisation referred to in par (d) of subs 601BC(8) had been submitted by the Association to be that of the State, a proposition which her Honour did not accept. Nevertheless the primary judge identified no inconsistency thereby arising, and on the contrary, the existence of support for the conclusion she had reached. Both positions were described by the primary judge as involving acceptance of the proposition that in the case of Western Australia, that State did not seek to impose any specific requirement that the transfer of an incorporated association be authorised by the law of Western Australia. Ultimately therefore, whether the situation was to be characterised as one of implied State authorisation, or as not requiring State authorisation at all, so much was considered by the primary judge to be immaterial, her Honour proceeded to discuss the subject of dual registration, and concluded that she was ‘… by no means convinced that the transfer of the [Association’s] incorporation would result in dual registration’. The primary judge added the observation that although ASIC had submitted that a situation of ‘dual registration’ would be ‘intolerable’, only a few, if any, examples had been provided to the Court.

In the result, the primary judge concluded that her views as to the correct interpretation of the operation of subs 601BC(8) led to an outcome similar to that advocated by the Association, though for different reasons. It may be observed, in fairness to the primary judge, that ASIC’s submissions to the Full Court appear to have been more comprehensive than what I would infer to have been placed before the primary judge.
Expansion on the appeal of the contentions upon the scope of applicable principles raised at first instance
ASIC contended that contrary to the reasoning of the primary judge, the requirement of par (d) of subs 601BC(8) is not met by evidence of a consent to the transfer by the members of the body, being a transfer of the body’s incorporation, within pars (d) and (f) of that subsection, apart from the other formalities of the subsection not in issue. ASIC contended that the requirement is satisfied only by evidence of a law of a body’s place of origin that authorises the body, whether with or subject to conditions, to transfer its incorporation from that place to another place. ASIC submitted furthermore that under par (e) of subs 601BC(8), the body must have complied with any requirements under the law of its place of origin for the transfer of its incorporation, the latter par (e) expression being such as was said by ASIC to assume that under the law of the place of origin, there will be a law capable of being characterised as a law for any such transfer. Par (f) was said by ASIC to impose ‘as a minimum and residual requirement that the members of the body corporate comply with a requirement concerning consent’, being of course a requirement as to a minimum voting majority of members.
Upon that footing, ASIC submitted that the critical par (d) of subs 601BC(8) addresses the threshold question of whether under the law of [the body’s] place of origin, the transfer of the body’s incorporation is permitted at all, and that resolution of the construction issue arising ‘does not reach’ pars (e) and (f) of subs 601BC(8) unless ‘one goes through s 601BC(8)(d) and the requirements of s 601BC(8)(d) [are] first met’. Given that the notion of authorised appearing in par (d) bears its usual dictionary meaning of conferring authority or legal power, the issue therefore arises, so ASIC’s contentions continued, ‘… whether (if at all) under the law of the place of origin, authority or legal power to transfer incorporation may be given’. That inquiry was said by ASIC to be further directed to establishing that the relevant (general) law permits the transfer of a body’s incorporation, and if there exists any such permissive law, then ‘… there is a subsequent question as to how that authorisation may be achieved’. To the extent the authorisation may be achieved by the body meeting any statutory requirements, I am required to address again pars (e) and (f), though as ASIC further submitted, if authorisation is achievable only by approval of a third person, evidence that such approval has been given further falls under par (d).
By way of further elaboration upon the foregoing submissions, ASIC pointed out also that the threshold requirement imposed by par (d) of subs 601BC(8) is directed to a law authorising the transfer of the body’s incorporation, and that the nature of incorporation inherently requires that any such transfer of the body’s incorporation involves the removal of its incorporation under the law of one place and its incorporation under the law of another. Thus earlier in Part 5A.2 of the Corporations Act headed ‘Transfer of Registration’, provision is made for the transfer by a company of its registration to registration under a law of a State or Territory: see s 601AI of Part 5A.2. It was asserted by ASIC to be in that sense whereby the notion of transfer is used in Part 5A.2, dealing as it was said to do with the transfer of incorporation of a company registered under the Corporations Act from registration under that Act to registration under State and Territory law. It is in that sense, so ASIC submitted, in which the word transfer is used in Part 5B.1, addressing as subs 601BC(8) does, inter alia, the transfer of incorporation of a body incorporated under State or Territory law or foreign law from such incorporation to registration under the Corporations Act. Thus ASIC’s submission proceeded to the effect that the result of that ‘transfer’ of incorporation of a body from its place of origin to registration under the Corporations Act pursuant to Part 5B.1 was to constitute registration of that body as a company under the Corporations Act. In that latter regard, the Court was referred to the provisions of s 601BD as to ASIC giving a body (ie a body corporate as one of the defined meanings in the Dictionary to the Corporations Act set out in s 9 thereof) an Australian Business Number.
Subject only therefore to the modifications effected by and set out in the ensuing Part 5B.2 of the Corporations Act, primarily headed ‘Registrable Bodies’ and bearing the sub-heading ‘Registrable Australian Bodies’, the effect of registration of a company so brought about was contended by ASIC to subject the company, and its members and officers, to all of the incidents of registration as a company under the Corporations Act, the purpose of par (d) of subs 601BC(8) being described by ASIC to ensure that such registration does not occur thereby unless within the law of the body’s place of origin, provision is made for that to occur, and upon occurrence, for removal of the incorporation of the body under the law of that place to incorporation in the other intended place. In other words, so ASIC’s submissions continued, the relevant governing law must authorise, and make provision to effect, any movement of the incorporation of the relevant body from that place to another place.
ASIC emphasised in that regard that unlike equivalent legislation in other States and Territories (such was said to be the case for instance in relation to ss 56 and 57 of the NSW Associations Act, which have been earlier extracted in these reasons, the WA Associations Act does not authorise the transfer of incorporation in the way contended by the Association, and further that even if it did not prevent associations from making application under Part 5B.1 of the Corporations Act, the latter legislation does not make any provision to effect a movement of the incorporation of a relevant body from that place to another place. ASIC submitted emphatically that a law such as s 13 of that Western Australian legislation, being the statutory basis upon which the primary judge placed reliance, did no more than empower an incorporated body to do all things necessary or convenient for carrying out its objects and purposes, and even then only [s]ubject to [that] Act and to its rules, and was not properly to be characterised as a law authorising the transfer of incorporation of that body. It was also submitted by ASIC in that regard that while such a provision may go a long way towards conferring on the body as a creature of statute the attributes of a natural person, it would be ‘drawing a long bow’ to say that it empowers the creature ‘to run away from its creator and find a new one’.
For ease of reference, the abovementioned s 13 of the WA Associations Act reads as follows:
‘13 Powers of an incorporated association
(1)Subject to this Act and to its rules, an incorporated association may do all things necessary or convenient for carrying out its objects and purposes, and in particular, may -
(a)acquire, hold, deal with, and dispose of any real or personal property;
(b)open and operate bank accounts;
(c)invest its money –
(i) as trust funds may be invested under Part III of the Trustees Act 1962; or
(ii) in any other manner authorized by the rules of the association;
(d)borrow money upon such terms and conditions as the association thinks fit;
(e)give such security for the discharge of liabilities incurred by the association as the association thinks fit;
(f)appoint agents to transact any business of the association on its behalf; and
(g)enter into any other contract it considers necessary or desirable.
(2)An incorporated association may, unless its rules otherwise provide, act as trustee and accept and hold real and personal property upon trust, but an incorporated association does not have power to do any act or thing as a trustee that, if done otherwise than as a trustee, would contravene this Act or the rules of the association.’
ASIC’s submissions based on statutory construction (and of course on s 601BC(8) of the Corporations Act and par (d) thereof in particular) were said moreover to invoke a measure of support from common law principles and legislative history concerning the general law of companies, by way of ‘backdrop’ to Part 5B.1. The Full Court was referred to the basic principle of common law that the place of incorporation determines whether a corporation exists and the extent of its powers and functions. That principle is founded on the notion that a company, as in the case of a natural person, has a so-called domicile, but may have only one domicile, that being the place of its incorporation: see Saccharin Corporation Ltd v Chemische Fabrik Bon Heyden Aktiengesellschaft [1911] 2 KB 516 at 527, where Farwell LJ said that ‘… in truth it is not possible for one person to have more than one domicile’. The principle was re-affirmed in Gasque v Inland Revenue Commissioners [1940] 2 KB 80 at 85 (by Macnaghten J as he then was), and duly recorded in the current edition of Dicey and Morris on The Conflict of Laws (13^th ed, 2000) (Vol 2) (page 1101). The Full Court was referred additionally to established authority that where there has occurred a purported change of the place of incorporation, the common law conflict of law principle will nevertheless only recognise the transfer of incorporation if it was permitted both by the original place of incorporation and the new place of incorporation (Banco de Bilbao v Sancha [1938] 2 KB 177 at 194-195) (Greer, MacKinnon and Clauson LJJ).
Attention was also drawn to the circumstance that the provisions of Part 5B.1 relevant to the issues here arising are derived substantially in unchanged form from the Companies (Transfer of Domicile) Act 1968 (NSW), which made provision for the transfer of corporate domicile from one place to another in the State of New South Wales. So much was described by ASIC as ‘unambiguously premised upon the common law principles that a company can have only one place of incorporation’, and as designed to facilitate the transfer or relocation of that place of incorporation.
ASIC emphasised moreover that the construction of the critical provisions of the Corporations Act, for which it contended, accords with the notion that subs 601BC(8) should be construed as providing appropriate comity between the Commonwealth, on the one hand, and the States, Territories and foreign nations on the other part; a fortiori was that said to be so, once account was taken of the circumstance that such current legislation relevantly concerning corporations is derived from State and Territory legislation in similar terms. Moreover as to the construction of the critical par (d) of subs 601BC(8), ASIC submitted that the express statutory requirement for authorisation of transfer of incorporation thereby made operates to assure that no perception may arise as to Commonwealth acquisition of the bodies of other polities in the absence of consent. A construction of par (d) which would accept that some general provision as s 13 of the WA Associations Act, relating as it does to the powers generally of an incorporated association, would be sufficient to authorise a transfer of registration, would have the consequence that bodies from polities that had never intended to authorise the transfer of incorporation of its bodies had done so, at least for the purposes of the Corporations Act. That subs 601BC(8) of that legislation was intended to observe comity as between polities was said by ASIC to be reinforced by subs 601BC(8)(e), which requires applicants to comply with any requirements of the law of their place of origin. Comity of that kind should be presumed, as between the Commonwealth the State and foreign nations, in the absence of clear wording to the contrary, so ASIC concluded its submissions on the issue of comity.
Yet a further reason for the Court not to uphold the primary judge’s construction of subs 601BC(8) was contended by ASIC to reside in the circumstance that the same would permit the registration of bodies in circumstances where the same need not de-register their status under their existing legislation. I would nevertheless point out in that regard that pars (d) and (e) of the subs 601BC(8) use the critical term transfer. Even more problematically, so it was further submitted by ASIC, the construction preferred by the primary judge was said to allow for the registration of bodies as companies, even though they are either not capable of being de-registered under their respective existing legislative regimes, or are not capable of being de-registered without effecting some form of winding up involving risks to the assets of such bodies. As foreshadowed above by ASIC, the law of the place of incorporation governs a range of matters under the private international law rules operating in Australia and other common law countries, and if dual registration of bodies corporate was permitted by Part 5B.1, that circumstance would necessarily open up the possibility of a company or its officers being subjected to two conflicting laws in respect of any such matters, conceivably for instance as to the doctrine of ultra vires, or conflicting laws on directors’ duties and on winding-up. ASIC hence submitted that a construction of the Corporations Act that could result in any such outcome should not be adopted. By way of further illustration of the point just made, ASIC pointed out that if a foreign company is to be registered under the Corporations Act, even though the laws of its place of origin do not make express provision for the transfer of its incorporation, and if a dispute is then to arise in a third common law country, it would be likely that the law courts of any such country would conclude that the laws of the original place of incorporation, and not the Corporations Act, would constitute the relevant law for resolving disputes in the kind of areas I have above exemplified. It was observed by ASIC that conflicts of law of that kind would be avoided if the construction adopted by the primary judge in the present case was rejected as incorrect.
The Association sought to avoid those potential problems involved in the forensic area of conflict of laws by the relatively short contention that s 109 of the Constitution would resolve any such difficulties. Even if that was to be the case in relation to State bodies however, which was asserted by ASIC to be far from clear, ASIC rejoined to the affect that no answer was thereby provided to problems arising with foreign companies in relation to which s 109 of the Constitution has no operation. Given the history of the present provisions for transfer of incorporation, being a history which extended to the general law of States and Territories, it was further pointed out by ASIC that it would be difficult to validly acknowledge that any such provisions should be construed in the way contended by the Association in reliance upon the operation of s 109, given the circumstance that s 109 would have had no application ‘at all’ when the provisions were first drafted in their current form as State and Territory legislation.
In summary therefore, ASIC contended on the appeal that the natural meaning of subs 601BC(8) does not accord with the reasons for decision of the primary judge, being a proposition said to be reinforced in the light of relevant common law principles and legislative history, and the need first to preserve comity between the various polities unless clear legislative language to the contrary is used, and secondly to avoid the difficulties that would flow from dual incorporation. The Association was thus presented on the appeal with what appears to have been a wider and more comprehensive historical analysis of legislative development bearing directly and indirectly upon the complexity of the issues asserted to arise.
The Association sought to respond to those ASIC contentions by recourse first to general principles of statutory construction, citing first the well known passage in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [93] of the joint judgment of McHugh, Gummow, Kirby and Hayne JJ, as follows:
‘… a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid.’
Attention was further drawn by the Association to the earlier passage in Tasker v Fullwood (1978) 1 NSWLR 20 at 23-24, where the following appears in the joint judgment of Hope, Glass and Samuels JJ:
‘The task of construction is to determine whether the legislature intended that a failure to comply with the stipulated requirement would invalidate the act done, or whether the validity of the act would be preserved notwithstanding non-compliance… it can mislead if one substitutes for the question thus posed an investigation as to whether the statute is mandatory or directory in its terms. It is an invitation, not only because those terms have been used with varying signification… It can mislead if one substitutes for the question thus posed an investigation as to whether the statue is mandatory or directory in its terms. It is an invitation to error, not only because these descriptions have been used with varying significations.’
On the footing of those longstanding statements of principle, the Association submitted that the evident function of Part 5B.1 of the Corporations Act 2001 (Cth) is to provide the necessary machinery and procedures to enable a body corporate to register as a company, and so convert in form to a company, and that subs 601BC(8) provides a ‘checklist of factual matters which ASIC must consider and be satisfied of’. In line largely with ASIC’s submissions, the Association further asserted that the legislative purpose of subs 601BC(8) is to ensure comity between the Commonwealth and the States, but that contrary to ASIC’s submissions, that purpose may be achieved notwithstanding the absence of evidence under the law of the body’s place of origin that ‘the transfer of the body’s incorporation is authorised’ within par (d) of subs 601BC(8). In circumstances where authorisation to transfer incorporation is neither able to be obtained nor is however required, and therefore where no evidence can accompany an application to register as a company, it does not mean, so the Association’s submission continued, ‘that the legislative purpose is somehow defeated’, provided that ASIC is satisfied that the legislative purpose of comity is otherwise preserved.
Accordingly the Association submitted in summary, in relation to the subs 601BC(8) requirement to provide evidence that the transfer of the body’s incorporation is authorised, that the same ‘… is not a pre-condition to a successful application to register as a company, but rather one of a number of factors to be weighed by ASIC in the exercise of its discretion’, for the reasons that:
(i) the requirement is not explicitly stated as a pre-condition of a valid application;
(ii) the characterisation by the subsection of the requirement is as to evidence only;
(iii)the existence of several levels of discretion invested in ASIC, first, to receive an application of a body corporate to register as a company, pursuant to subs 601BA(1), secondly to be satisfied or otherwise as to the evidence supporting the application, and thirdly to register the body corporate as a company pursuant to subs 601BD(1), which uses the words ‘ASIC may’.
However it is also to be observed that the critical preceding subs 601BC(8), and also subs 601BC(9), use the demanding word must. The Association’s submission however was that the use of the word must did not add anything of significance, the purpose of the particular provisions being said to be paramount in determining the elasticity, or otherwise, of the requirements enumerated in s 601BC(8).

The Association rejected the contention of ASIC, but also the corresponding view of the primary judge, that the so-called points of distinction the subject of the Association’s submissions are explained simply by the plain English rewriting of the legislation. Rather the Association asserted that ‘the re-writing and improvement of the company law’ appearing in the text of the Second Reading Speech for the Company Law Review Bill 1997 (Cth) was to invest ASIC with a statutory obligation to receive an application and to thereupon exercise its so-called various levels of discretion. I have of course addressed immediately above the statutory language relevantly employed in that regard. The Association further asserted on the appeal that in circumstances where the provision of evidence of one requirement was, as here, impossible to supply, then ASIC ‘in the exercise of its discretion and the application of common sense’ may nevertheless be satisfied about that requirement as the purpose of the legislation is nonetheless met.
Hence the Association maintained on the appeal that ASIC’s case failed to recognise the importance of the co-operation involved inherently in this controversial legislation between the State and Federal legislatures in the so-called ‘federalising’ of company law and ‘the impact of the reforms introduced in 2001’. The Association further maintained that the combined effect of Part 1.1A of the Corporations Act and s 3A of the WA Associations Act reflected that recognition.
Conclusion
The operation of subs (8) of s 601BC of the Corporations Act directs attention to the governing law of the place of origin of a body corporate, not being a company but a body as defined, and thus an incorporated (as in the case of the Association) as well as an unincorporated body. The Association is of course an incorporated body and not a corporation. What the Association seeks to do is to transfer that present status which the Association enjoys under current State legislation to that of a registered company under current Commonwealth legislation being of course the Corporations Act. That proposal has been approved by the Association’s members, to the extent of the majority stipulated by par (f) of subs (8). However the course so proposed is not authorised by the municipal law of the State of Western Australia. As has been seen, par (d) of subs (8) requires that the transfer of the body’s incorporation is authorised, but is silent as to by whom.
The authorisation referred to in par (d) of subs (8) of s 601BC must necessarily mean in the present context authorised by the municipal law of Western Australia, that being the Association’s place of origin, to adopt the further language of subs (8). That operation of the subsection is in consonance with the historical development of the general law relating to companies as the same has evolved in Australia, and as I have sought to trace with the assistance of the submitted outline of ASIC’s researches on that subject. No such legislative authorisation operates in the State of Western Australia at this present time, such as would assist the Association in relation to the dilemma in which it now finds itself presently placed. Incidentally the statutory notion under the law of the body’s place of origin carries the prima facie meaning ‘having its source in’ or ‘arising under’: Victrawl Pty Ltd v Telstra Corporation Limited (1995) 183 CLR 595 at 613 (per Deane, Dawson, Toohey and Gaudron JJ).
In those circumstances, I am unable to accept the contention of the Association that par (d) of subs 601BC can be satisfied, at least so long as the municipal law of the State of Western Australia retains its presently limited scope of operation. It follows that ASIC is correct in its contention that par (d) of subs 601BC(8) addresses an essential requirement which cannot be satisfied under the general law of Western Australia, and will not be so satisfied unless and until legislative reform is implemented in that State to the extent which has been distilled in the course of ASIC’s presentation of its case on the present appeal, and the Association may thereby become authorised to transfer its incorporation pursuant to the law of Western Australia as its place of origin.
I would further acknowledge my agreement with ASIC’s submission by way of rejection of the availability of assistance to the Association from s 13 of the WAAssociations Act, and the reasons which ASIC has advanced in that regard. The generality or width of the power thereby conferred on an incorporated body cannot take the Association the distance it needs to achieve for the radical outcome of a transfer of its incorporation.
Moreover the position which ASIC has adopted in relation to the Association derives a measure of principled support from the common law principles which ASIC has invoked and which I have above recorded, and also from the 1968 transfer of domicile legislation of the State of New South Wales which I have also identified. Nor do I consider that the substance of subs 601BC(8) implies merely a directory or machinery scope of operations. The use of the word must in the opening line of the subsection is too intractable to allow sufficient room for any such proposition. Significantly I would add for completeness, subs 601BC(9) further stipulates that the evidence lodged in accordance with subsections (7) and (8) must be satisfactory proof to ASIC of the matters referred to in those subsections. Moreover I have found myself otherwise unable to be attracted to the Association’s assertion as to implications as to the ‘federalising’ of company law. It is to my mind far from clear that words of s 3A(2)(b) of the WA Associations Act seek to sculpt an exception to the statutory exclusion of the Corporations Act in respect of incorporated associations, namely provisions that relate to the role of an incorporated association in the formation of a company, are intended to refer to the provisions of Part 5B.1 of the Corporations Act. In any event, if I am incorrect in my construction of that exception, I would not accept that it follows that the WA Associations Act somehow implicitly authorises the transfer of registration so as to avoid an ‘absurd result’. If the WA legislature had intended to provide for the transfer of registration of incorporated associations, it would have explicitly done so, in line with the legislatures of other States of Australia.
I am of the opinion, essentially for the reasons I have already indicated concerning the meaning and scope of operation of subs 601BD(8) of the Corporations Act, that ASIC’s appeal must be upheld. I agree with the orders proposed by Emmett J.

I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.
Associate:
Dated: 25 August 2005

Counsel for the Appellant: S Gageler SC and S Lloyd

Solicitor for the Appellant: Australian Securities & Investments Commission

Counsel for the Respondent: J Sackar QC and M J Dawson

Solicitor for the Respondent: TressCox

Date of Hearing: 3 August 2005

Date of Judgment: 25 August 2005

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 294 OF 2005

BETWEEN:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION APPELLANT
AND:	MEDICAL DEFENCE ASSOCIATION OF WESTERN AUSTRALIA INC RESPONDENT
JUDGES:	FINN, EMMETT & CONTI JJ
DATE OF ORDER:	25 AUGUST 2005
WHERE MADE:	SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 294 OF 2005

BETWEEN:	AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION APPELLANT
AND:	MEDICAL DEFENCE ASSOCIATION OF WESTERN AUSTRALIA INC RESPONDENT

JUDGES:	FINN, EMMETT & CONTI JJ
DATE:	25 AUGUST 2005
PLACE:	SYDNEY

ASSOCIATIONS	COMPANIES
Only able to be formed for limited purposes (eg religious, educational, political) and not able to be formed for the purposes of trading or securing a profit for members: s 4.	No statutory limit on the objects that a company may pursue. Company has all the legal capacity and powers of an individual and some specific ones related to bodies corporate: s 124. Constitution may limit objects: s 125.
Upon incorporation, the corporate name of the association must conclude with the word “Incorporated” or the abbreviation “Inc”: s 10.	The name of a company must conclude with words or an abbreviation that designate the type of company: s 148.
Doctrine of ultra vires continues to apply in cases of actual notice of a deficiency in the legal capacity of the association: s 15.	Doctrine of ultra vires abolished. Acts not invalid merely because they are contrary to objects in constitution: s 125.
Legislation specifies matters for which the constitution must make provision including qualifications for membership, fees, meeting formalities, custody of records: s 16 & Sch 1.	No equivalent requirement. "Replaceable rules" cover some aspects and statutory obligations cover others. For example, there are statutory provisions relating to calling and voting at meetings.
An alteration of the name of an association does not take effect until the proposed name has been approved by the Commissioner: s 18.	The process for changing the name of a company is completely different: ss 157-161.
Amendment of objects of association subject to approval by Commissioner: s 19.	No equivalent requirement.
No general requirements about the duties of persons (*committee members*) managing the affairs of the association.	General duties on directors and other officers of a company to act in the best interest of the company and not to misuse their position.

Committee members who have a pecuniary interest in a contract must not participate in any deliberation about it: s 22.	Directors of public companies may participate in decisions about matters in which they have a material personal interest with the approval of the disinterested directors or ASIC approval in some circumstances: s 195. No limitations on directors of proprietary companies.
Requirement to maintain a record of details of officers and make it available on request to members: s 29.	Requirement to notify ASIC of details of directors: s 205B.
No distribution of surplus property to members on voluntary winding up: r 6(3).	Surplus property may be distributed to members on voluntary winding up: s 501.
No distribution of surplus property to members on court ordered winding up; property only able to be disposed of to incorporated association or charity: s 33.	Members may have rights to surplus property on court ordered winding up.
Committee members do not commit an offence where association trades while insolvent.	Directors commit offence where company trades while insolvent: s 588G.

JUDGE:	FINN, EMMETT & CONTI JJ
DATE:	25 AUGUST 2005
PLACE:	SYDNEY

Counsel for the Appellant:	S Gageler SC and S Lloyd
Solicitor for the Appellant:	Australian Securities & Investments Commission
Counsel for the Respondent:	J Sackar QC and M J Dawson
Solicitor for the Respondent:	TressCox
Date of Hearing:	3 August 2005
Date of Judgment:	25 August 2005