National Security (Capital Issues) Regulations (Cth)

STATUTORY RULES.

1946. No. 193.

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REGULATIONS UNDER THE NATIONAL SECURITY ACT 1939-1946.*

I, THE GOVERNOR-GENERAL in and over the Commonwealth of Australia, acting with the advice of the Federal Executive Council, hereby make the following Regulations under the National Security Act 1939-1946.

Dated this eighteenth day of December, 1946.

HENRY

Governor-General.

By His Royal Highness’s Command,

J. B. CHIFLEY

for and on behalf of the Minister of State for Defence.

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NATIONAL SECURITY (CAPITAL ISSUES) REGULATIONS.

Part I.—Preliminary.

Citation.

1. These Regulations may be cited as the National Security (Capital Issues) Regulations.

Commencement

2. These Regulations shall come into operation on the nineteenth day of December, 1946.

Repeal.

3.—(1.) The National Security (Capital Issue) Regulations (being Statutory Rules 1940, No. 218, as amended by Statutory Rules 1940, Nos. 242 and 291; 1941, Nos. 150 and 304; 1942, Nos. 23, 126, 196, 366 and 424; 1945, Nos. 26, 107, 133 and 187) are repealed.

(2.) Any consent granted or continued in force, or order made or continued in force, under the Regulations so repealed shall, subject to these Regulations, continue in force as if these Regulations had not been made, and shall for all purposes be deemed to be a consent granted or order made under these Regulations.

Parts.

4. These Regulations are divided into Parts, as follows:—

Part I—Preliminary.

Part II.—Companies.

Part III.—Securities, Mortgages and Charges.

Part IV.—Deposits.

Part V.—Miscellaneous.

Definitions.

5. In these Regulations, unless the contrary intention appears—

“building society” means any society registered as a building society or co-operative housing society under the law of any State;

* Notified in the Commonwealth Gazette on 19th December, 1946.

7287.—Price 8d.

 

“company” includes a society, club or association which has for its purposes, or for one of its purposes, the pecuniary profit or gain of its members;

“co-operative society” means any body registered under the law of a State or Territory of the Commonwealth as a co-operative society, co-operative company or co-operative association, and includes any body which the Treasurer, by order, declares to be a co-operative society for the purposes of this Part;

“declared pastoral company” means a company or body which the Treasurer, by order, declares to be a pastoral company for the purposes of these Regulations;

“deposit” means unsecured loan;

“loan” includes advance and any other principal moneys secured, or intended to be secured, by a mortgage or charge;

“local authority” includes—

(a) any city, county, municipal, district or shire council; and

(b) any water board, electricity board, sewerage board,. harbour board, public hospital board, fire brigade board, transport board or roads board constituted by or under the law of a State or Territory of the Commonwealth,

and any other body which the Treasurer, by order, declares to be a local authority for the purposes of these Regulations;

“preference share” means a share of a company, whether described as a preference share or otherwise, the owner of which is or may be entitled to a dividend preferential to the dividend payable on any other type of share issued by that company or which that company has power to issue and “preference stock” has a corresponding meaning;

“securities” means bonds, debentures, debenture stock and inscribed stock;

“the preceding two years”, in relation to any act or transaction, means the period of twenty-four months ending on the date of the act or transaction;

“the preceding year”, in relation to any act or transaction, means the period of twelve months ending on the date of the act or transaction;

“the previous Regulations” means any Regulations (other than these Regulations) having the title National Security (Capital Issues) Regulations.

Interpretation.

6. For the purposes of these Regulations—

(a) where a company has received, or receives, an amount by way of premium on the issue of shares or stock, the company shall be deemed to have made, or to make, an issue of authorized capital equal to that amount; and

(b)where, upon the receipt by a person of any loan, the whole or any part of the property or assets of that person becomes mortgaged or charged with the repayment of that loan, that person shall be deemed to have mortgaged or charged that property or those assets, and the amount of that loan shall be deemed to be the amount of the mortgage or charge.

 

Part II.—Companies.

Issue of capital by companies.

7. A company, or any person acting for, or on behalf of, a company, shall not, without the consent in writing of the Treasurer—

(a) make an issue of authorized capital of the company of such an amount that the total amount of authorized capital issued by the company during the preceding two years (including the issue then made), together with—

(i) the amount of any mortgage or charge given by the company during that period, not being a mortgage or charge referred to in sub-regulation (3.) of regulation 14 of these Regulations; and

(ii) the amount of any deposit accepted or received by the company during that period,

would exceed Twenty-five thousand pounds;

(b)make an issue of preference shares or preference stock of the company; or

(c) make an issue of shares of the company which could not have been made if—

(i) the value of the assets of the company, including goodwill, had not, directly or indirectly, been written up since the first day of September, 1939; or

(ii) there had not been applied, directly or indirectly, as consideration for the issue, a reserve, however described, which has been created or increased since that date by any action which has resulted, directly or indirectly, in such a writing up.

Limitation of power to alter memorandum and articles of association of companies.

8. An alteration which is made after the commencement of this regulation to the memorandum of association or articles of association of a company and provides for an increase in the rate of dividends on preference shares shall not have any effect unless and until the Treasurer has consented to the alteration.

Syndicates, &c.,

9.—(1.) The object of this regulation is to supplement the provisions of this Part relating to companies by providing for the control of the raising of money by persons other than companies from the public or any section of the public for the purpose of business, commercial or industrial enterprises, to an extent which would be prohibited, in the case of companies, except with the consent of the Treasurer, and this regulation shall be administered accordingly.

(2.) Except with the consent of the Treasurer, a person (other than a body corporate) or persons carrying on, or proposing to carry on, either alone or together with other persons, any business shall not, whether directly or through the interposition of trustees or agents or otherwise, indirectly accept from any person any valuable consideration in consideration of any persons becoming entitled, either immediately or upon any condition or contingency to, or to an option to acquire, an interest or increased interest in the business or in the profits or assets of the business where—

(a) the total number of persons from whom any valuable consideration has been or is so accepted, together with any other persons who have an interest in the business or in the profits or assets thereof, exceeds nineteen in number; and

 

(b)the total amount or value of the consideration so accepted during the preceding two years (including the amount then accepted) would exceed Twenty-five thousand pounds.

Application for consent of Treasurer.

10. An application for the consent of the Treasurer under this Part shall be in writing and shall be accompanied by particulars in writing of the matter for which consent is applied for, together with such further information as the Treasurer directs.

Part III.—Securities, Mortgages and Charges.

Securities, &c., not to be issued without consent.

11.—(1.) A person shall not, without the consent in writing of the Treasurer, issue any securities, or mortgage or charge the whole or any part of his property or assets.

(2.) Nothing in this regulation shall prevent or affect in any way the issue of a security, or the giving of a mortgage or charge, by a local authority—

(a) to the Government of the State in which the local authority is constituted; or

(b)with the approval of the Treasurer of that State, to a person other than the Government of that State.

(3.) An application for the consent of the Treasurer under this regulation shall be in writing and shall be accompanied by particulars in writing of the purpose of the proposed issue, mortgage or charge and such other information as the Treasurer directs.

Certain payments prohibited without consent.

12.—(1.) A person shall not, without the consent in writing of the Treasurer, in respect of any mortgage or charge to which consent has been given under these Regulations or under the previous Regulations—

(a) pay or charge interest at a rate higher than the rate of interest payable under the mortgage or charge; or

(b)repay, or receive by way of repayment, any amount of capital in excess of the amount of the mortgage or charge.

(2.) A mortgagor or chargor under a mortgage or charge to which consent has been given under these Regulations or the previous Regulations shall not, without the consent in writing of the Treasurer, make any payment to the mortgagee or chargee, or to any other person, the effect of which is that the mortgage or charge is given at a discount or the mortgagor or chargor does not receive the benefits of the full amount borrowed under the mortgage or charge.

(3.) Nothing in this regulation shall prevent the payment by the mortgagor or chargor, or the receipt by the mortgagee or chargee, of any amount representing capitalized interest, or rates, taxes, insurance repairs or other outgoings paid or incurred by the mortgagee or chargee for the enforcement, protection or preservation of his security, or any costs, charges or expenses paid or incurred by the mortgagee or chargee under or in relation to the security.

Certain transactions not affected.

13. Nothing in this Part shall prevent or affect in any way the issue of any security or the giving of any mortgage or charge, in respect of a loan made bona fide by the Commonwealth, a State, an authority of the Commonwealth or State, a bank, a declared pastoral company, a building society or a co-operative society.

 

Certain loans not affected.

14.—(1.) Subject to the next succeeding sub-regulation, nothing in this Part shall prevent or affect in any way the giving of any mortgage or charge by any person—

(a) if the total amount of mortgages and charges given (including the mortgage or charge then given) by that person during the preceding year does not exceed Five thousand pounds; and

(b)if the total amount of mortgages and charges given (including the mortgage or charge then given) by that person, being a company, during the preceding two years, does not, together with the amount of any authorized capital issued by that company during that period and the amount of any deposits accepted or received by that company during that period, exceed Twenty-five thousand pounds.

(2.) The last preceding sub-regulation shall not affect the application of any other provision of this Part to the giving of any mortgage or charge if—

(a)the property or assets the subject of the mortgage or charge consist of, or include, land;

(b)the mortgage or charge is a first mortgage or charge, or is a second or subsequent mortgage or charge to a person who already holds a first mortgage or charge on that property or those assets or any part thereof; and

(c) the rate of interest payable under the mortgage or charge exceeds the maximum rate which is, in accordance with the National Security (Economic Organization) Regulations, lawfully payable under the mortgage or charge or, if there is no such maximum rate, the rate of Four pounds fifteen shillings per centum per annum.

(3.) For the purpose of calculating the amount of Five thousand pounds referred to in paragraph (a) of sub-regulation (1.) of this regulation, or the amount of Twenty-five thousand pounds referred to in paragraph (b)of that sub-regulation, account shall not be taken of—

(a) any mortgage or charge, exempted, by order of the Treasurer, from the application of these Regulations or of the previous Regulations;

(b)any mortgage or charge given in connexion with a loan of the kind referred to in the last preceding regulation; or

(c) any amount representing rates, taxes, insurance, repairs or other outgoings paid or incurred by a mortgagee or chargee for the enforcement, protection or preservation of his security, or any costs, charges or expenses paid or incurred by a mortgagee or charger under or in relation to the security.

Declaration to be made where consent not given to mortgage or charge.

15.—(1.) Where the consent of the Treasurer has not been given to any mortgage or charge (not being a mortgage or charge of the kind referred to in paragraph (a) or paragraph (b) of sub-regulation

(3.) of the last preceding regulation), the mortgagor or charger shall—

(a) declare in the instrument (if any) of mortgage or charge that the consent of the Treasurer thereto is not required; or

 

(b)deliver to the mortgagee or charger, at the time of giving the mortgage or charge, or at the time of receiving any further loan thereunder, a statutory declaration stating that the consent of the Treasurer to the mortgage, charge or further loan is not required.

(2.) A person shall not make any false statement in any declaration or statutory declaration made under the last preceding sub-regulation.

Part IV.—Deposits.

Limitation of interest on deposits with bodies other than banks building societies, declared pastoral companies and partnerships.

16. A body, whether corporate or unincorporate (other than a bank, a building society, a co-operative society, a declared pastoral company or a partnership), shall not, without the consent in writing of the Treasurer, pay interest—

(a)in respect of any period commencing on or after the twenty-ninth day of March, 1940, on any existing deposit made before that date with that body by any person other than a bank or a declared pastoral company—

(i) at a rate higher than the rate of interest on the deposit on that date; or

(ii) at a rate higher than One pound ten shillings per centum per annum,

whichever is the higher;

(b)on any deposit made after the twenty-ninth day of March, 1940, but not after the twelfth day of March, 1942, with that body by a person other than a bank or a declared pastoral company—at a rate higher than One pound ten shillings per centum per annum;

(c) on any deposit made after the twelfth day of March, 1942, but not after the twelfth day of March, 1945, with that body by a person other than a bank or a declared pastoral company—at a rate higher than One pound five shillings per centum per annum; or

(d)on any deposit made after the twelfth day of March, 1945, with that body by a person other than a bank or a declared pastoral company—at a rate higher than Ten shillings per centum per annum.

Interest on renewed deposits.

17. Nothing in this Part shall affect the rate of interest payable on any deposit renewed in whole or in part, where—

(a) the deposit renewed was in existence on the twenty-ninth day of March, 1940;

(b)the parties to the renewed deposit are the same as the parties to the original deposit;

(c) the period for which the deposit is renewed is not shorter than the period of the original deposit, or if the deposit has previously been renewed, of the last preceding renewal; and

 

(d)the rate of interest payable in respect of the renewed deposit does not exceed—

(i) the rate payable when the deposit was made, or, in the case of a deposit which has previously been renewed, the rate payable when the deposit was last renewed; or

(ii) the rate of Ten shilling per centum per annum,

whichever is the higher.

Non-liability for interest above maximum rate.

18. A body shall not be legally liable to pay interest on any deposit at a rate higher than the maximum rate (if any) payable on that deposit under this Part and the remedies for enforcing any agreement to pay interest on any such deposit shall be limited to enforcing payment of interest at the maximum rate so payable.

Limitation on acceptance of deposits by certain bodies.

19. A body, whether corporate or unincorporate (other than a bank, a building society, a co-operative society, a declared pastoral company or a partnership) shall not, without the consent in writing of the Treasurer, accept or receive any deposit—

(a) if the total amount of deposits accepted or received by that body (including the deposit then accepted or received) during the preceding year exceeds Five thousand pounds; and

(b)if the total amount of deposits accepted or received by that body, being a company (including the deposit then accepted or received) during the preceding two years, together with the amount of authorized capital issued by the body during that period and the amount of any mortgage or charge given by that body during that period (not being a mortgage or charge referred to in sub-regulation (3.) of regulation 14 of these Regulations), exceeds Twenty-five thousand pounds.

Interpretation.

20.For the purposes of this Part, any sum repaid or repayable in excess of the net amount deposited shall be regarded as interest and shall be taken into account in calculating the rate of interest on the deposit.

Part V.—Miscellaneous.

Consent of Treasurer.

21.— (1.) Where application is made for the consent of the Treasurer under any provision of these Regulations, the Treasurer may, in his absolute discretion, grant the consent, either unconditionally or subject to such conditions as he thinks fit, or refuse to grant the consent.

(2.) Where the consent of the Treasurer is granted subject to conditions, a person, company or body shall comply with all such conditions as are applicable to him or it.

(3.) Where the consent of the Treasurer has been granted under any provision of the previous Regulations or has been or is granted under any provision of these Regulations, the consent shall cease to be in force at the expiration of the period of twelve months after the date on which the consent was granted, but nothing in this sub-regulation shall affect the period during which any such consent has effect by virtue of the terms of the consent.

 

Use of consent.

22.—(1.) A company or body or any person on its behalf, shall not in furtherance of the objects of the company or body, make use of the fact of any consent of the Treasurer granted under these Regulations or the previous Regulations.

(2.) A company or body, or any person on its behalf, which or who makes any intimation, whether orally, in writing or in any other way, of the fact of the Treasurer’s consent to an application under these Regulations or the previous Regulations shall include in the intimation a statement in the following terms or in terms of the like effect:—

“The fact that the Treasurer of the Commonwealth has consented to [here insert particulars of the matters consented to by the Treasurer]is not to be taken in any way as a guarantee of the actual or probable financial stability or success of the company [or body, as the case may be].”.

Declaration of secrecy.

23.—(1.) Every officer having duties connected with applications made under any of these Regulations or of the previous Regulations shall, unless he has made a declaration of secrecy under the previous Regulations, before entering upon his duties, make before a Justice of the Peace, a Commissioner for taking affidavits or a Commissioner for Declarations, a declaration of secrecy in accordance with the Form in the Schedule to these Regulations.

(2.) An officer shall not, except in the course of his duty or to an officer who has made a declaration in accordance with the provisions of this regulation, or of the previous Regulations, divulge any information furnished in connexion with any application made under these Regulations or under the previous Regulations.

False statement.

24. A person shall not make to the Treasurer, or to any officer having duties connected with applications under any of these Regulations, any statement, whether oral or in writing, relating to any matter dealt with under these Regulations which he knows to be untrue in any particular or which is made by him without his having first made proper inquiries to ascertain the truth thereof.

Exemption.

25.—(1.) The Treasurer may, by order (either wholly or to the extent specified in the order) exempt from the application of the whole or any of the provisions of these Regulations any person, company or body, or class of persons, companies or bodies, or any security, mortgage, charge or other transaction or class of securities, mortgages, charges or other transactions.

(2.) An order made under this regulation may be expressed to continue in operation for a period specified in the order and, if so expressed, shall continue in operation for that period and no longer.

Power to obtain information.

26.—(1.) The Treasurer may, by order, require any person (including any officer employed in or in connexion with any department of a Government or by a local authority)—

(a) to furnish to the Treasurer, or to such other person as the Treasurer directs, such information as the Treasurer or that other person requires; and

(b)to attend and give evidence before the Treasurer, or such other person as the Treasurer directs,

 

with respect to any act, transaction, matter or thing prohibited by these Regulations, or to which any provision of these Regulations applies, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto.

(2.) The Treasurer may require the information or evidence to be given on oath or affirmation and either orally or in writing and for that purpose the Treasurer or person before whom the evidence is given may administer an oath.

(3.) A person shall not—

(a) refuse or fail to comply with any requirement made in pursuance of sub-regulation (1.) or (2.) of this regulation; or

(b)with intent to evade the provisions of these Regulations, destroy, mutilate, deface, secrete or remove any book, document or other paper.

Validation of transactions.

27.— (1.) Where a mortgage, charge or other transaction has been entered into, a security has been issued, or an act has been done, in contravention of these Regulations, or where any conditions subject to which consent was given thereto under these Regulations has not been complied with, the mortgage, charge, transaction, security or act shall not thereby be invalidated.

(2.) Where a mortgage, charge or other transaction has been entered into, a security has been issued, or an act has been done, in contravention of the previous Regulations, or any condition subject to which consent was given thereto under the previous Regulations has not been complied with, the mortgage, charge, transaction, security or act shall be as effectual, and the rights, powers and remedies of any person thereunder shall be the same, as if the mortgage, charge, transaction, security or act had not been entered into, issued or done in contravention of the previous Regulations, or the conditions subject to which consent thereto was given had been complied with, as the case may be.

(3.) Nothing in this regulation shall affect the operation of regulation 12 or regulation 18 of these Regulations, or affect the liability of any person to any penalty in respect of any contravention of these Regulations or the previous Regulations.

Contracts to evade Regulations.

28. A person shall not enter into or make any contract or arrangement, whether orally or in writing, for the purpose of, or which has the effect of, in any way, and whether directly or indirectly, defeating, evading or avoiding, or preventing the operation of, these Regulations in any respect.

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THE SCHEDULE.

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Regulation 23.

NATIONAL SECURITY (CAPITAL ISSUES) REGULATIONS.

Declaration by Officer.

I,  , of  

being an officer having duties connected with applications, made under the National Security (Capital Issues) Regulations, do solemnly and sincerely

7287.—2

 

promise and declare that, except in the course of my duty, or to an officer who has made this declaration, I will not divulge any information which is furnished to me or to the Treasurer in connexion with those duties.

Dated this  day of   , 19

(Signature of Officer.)

Declared at   this   day

Of  , 19

Before me—

(Justice of the Peace, Commissioner for taking Affidavits or Commissioner for Declarations.)

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By Authority: L. F. Johnston, Commonwealth Government Printer, Canberra.