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Defined Terms and Documents
Statutory
Duty or
Statutory
Obligations
Statutory Duty
means, for the purpose of this matter, the tort
laws of duty of care under common law that a government
legislature
established -
(i)
RBA's
Parliamentary Bestowed Mandate,
provides "strong
regulatory powers,
unique
among central banks" ..."...to
ensure that the monetary and banking policy of the Bank
is
directed to the greatest advantage of the people
of Australia and that the powers of the Bank ...
are exercised in such a manner as, in the
opinion of the Reserve Bank Board, will best
contribute to ......
the
economic prosperity and welfare of the
people of Australia";
and
(ii) the
Australian Securities and Investments Commission
(ASIC) is Australia’s corporate, markets and
financial services regulator as
decreed by
the Australian Securities and Investments Commission Act, 2001 (Cth).
Below are extracts from
Reserve Bank of
Australia Bulletin - July 1998 -
Australia’s New Financial Regulatory
Framework that
chronicles the Reserve Bank's powers,
set out in the
Payment Systems (Regulation) Act 1998,
that allow the Reserve Bank to undertake
more direct regulation of ‘designated’
payments systems to –
"... promote competition in the market
for payments services, consistent with
the overall stability of the financial
system..."
when it judges it to be
"in the public interest" which
may involve the imposition of access
rules or operating standards for
participants in such systems:
"The new Payments System Board is
responsible for the Bank’s payments
system policy, the objectives of which
are:
• controlling risk in the financial
system arising from the operation of the
payments system;
• promoting the efficiency of
payments systems; and
•
promoting competition in the
market for payments services, consistent
with the overall stability of the
financial system.
The Bank’s powers in this area, set out
in the
Payment Systems (Regulation) Act 1998,
allow it to undertake more direct
regulation of ‘designated’ payments
systems when it judges it to be in the
public interest. This may involve the
imposition of access rules or operating
standards for participants in such
systems. The Act also provides a
framework for regulation of purchased
payment facilities, such as travellers
cheques and stored-value cards."
Chapter 1
includes:
"ASIC Report 224
"Access to financial advice in Australia" - December 2010
includes:
51
These results, when considered together with Australian Bureau of
Statistics‘ research into Australians‘ general document literacy and
numeracy,15
in particular
their ability to meet the complex demands of a knowledge-based economy,
suggest that about one in two Australians do not have the skills required to
make informed choices in their interactions with the financial services
sector.16
There is also
an identifiable age link, with document proficiency tending to decrease with
age.
14 For
example the 2008 ANZ study of financial literacy found that ‗67% of
respondents said that they understood the principle of compound interest,
but only 28% were
rated with a ‗good level‘ of comprehension when they solved the problem‘,
ANZ Banking Group Limited, ANZ survey of adult financial literacy in Australia, (The Social Research Centre) ANZ Banking Group, Melbourne, 2008, p. 19.
15
As part of an
international study, the ABS measured skills in document literacy, prose
literacy, numeracy and problem solving and found that approximately 7
million (46%) of Australians (and 7.9 million (53%) of Australians aged 15
to 74) had proficiency less than the minimum required for individuals to
meet the complex demands of everyday life and work emerging in the
knowledge-based economy‘ for document literacy and numeracy respectively‘,
Australian Bureau of Statistics,
Adult literacy and life
skills survey results, cat. no. 4228.0, ABS, Canberra, 2006, p.
5.
16
These findings
have implications for our regulatory regime, which relies upon disclosure as
a critical element of our consumer protection system."
References:
The tort action for Breach of Statutory Duty provides an
intersection between the goals of private law and ‘public’ goals as determined
by legislation. But the question as to when, in what circumstances, and why, a
civil action should be available to a claimant whose statutory rights have been
breached, continues to be agitated. This article argues that the tort, far from
deserving the accusations of incoherence and unpredictability sometimes levelled
at it in the common law world, has a respectable and coherent history and
justification within the common law of torts. There are reasons for doubting
whether it should have been abolished in Canada, and its abolition has caused a
distortion of the law of negligence in that jurisdiction. The tort is one that
in other jurisdictions has continued, and should continue, to operate as an
important part of the mechanism of private law for vindicating rights created by
the shapers of public values; the legislature.
Given the vast expansion of legislation emanating
from parliaments in recent years, there clearly need to be some guiding principles
to determine when it is appropriate to allow a personal civil action based on
breach of a statutory right. Those principles have been set out for many years in the
elements of the specific tort of breach of statutory duty.
................The law of breach of statutory duty addresses the
circumstances in which a private remedy exists, as well as the conditions under which it
can be exercised.
Not all statutes are alike.
Courts may differ at varying times as to
whether Parliament intended a
statute to be actionable. The fact that the outcomes of different actions brought under the heading of breach of
statutory duty may seem to be contradictory has led to some suggesting or deciding that the
tort as a whole is incoherent and ought to be abolished, in whole or in part. The
purpose of this article is to clear away some of the misunderstandings about the
tort, and to argue that it is still a valuable weapon in the common law armoury,
which should be maintained to allow citizens to defend, when others will not,
rights given by their democratically elected parliaments.
Fiduciary duties
All representatives have fiduciary duties to their clients including to act in
the best interests of their clients and to avoid conflicts of interests. Many
aspects of the scope of the fiduciary duties are established under the Corporations
Act 2001 (Cth) and the ASX
Market Rules including dealing in securities and disclosure obligations.
However, the scope of those fiduciary duties however is poorly understood by
representatives throughout the industry.
Statutory duties under the financial services laws
All representatives are under a wide variety of statutory duties under both
Commonwealth and State or Territory legislation. Legislation which sets out
these statutory duties includes the Corporations
Act 2001 (Cth), the Corporations
Regulations, the Australian
Securities & Investments Commission Act 2001 (Cth)
and State and Territory fair trading legislation.
A breach of a statutory duty may result in the obligation to report the breach
to the Australian Securities & Investments Commission.
General statutory obligations
Australian Financial Services Licensees are under a general obligation to ensure that their
representatives comply with the financial services laws. It is therefore crucial
that all representatives understand each of their legal obligations under the
financial services laws and any changes to those laws.
Extracts from
"Duty of care and the law"
by Clayton Utz:
Government agencies and
decision-makers are under a duty of care in many situations, some of which are
covered in this pamphlet. A duty of care can be owed to the public, as well as
to government employees.
In addition to being a legal
obligation, “duty of care” as a concept is sometimes used within government to
convey the special (but broader) responsibilities that are owed to the
community.
Even though, in this extended sense, the duty of care might not be
enforceable by legal action or by the payment of damages, the concept is
nonetheless important in defining the obligations of government. It is, for
example, within the province of the Ombudsman to investigate complaints about
defective government administration and to make recommendations for corrective
action. Government agencies commonly aspire as well, in service charters and
other formal written commitments, to observe standards of decision-making that
supplement the legal obligations of government.
In summary, the law
imposes an obligation on people to stand back from any situation, and to
appraise the risks and dangers to others, especially to those who are in
proximity by reason of contact, dealings or functions.
A person who has
suffered injury as a result of negligent action is entitled to be compensated,
and placed as near as possible in the same position as before. To accomplish
that objective a court might award damages for items such as loss of earning
capacity, medical expenses, physical pain and suffering, property damage, or
loss of profit.
The liability to pay
damages for loss arising from negligent action is normally owed both by the
person who was negligent, and by their employer (this is called vicarious
liability).
A major function of government is to
regulate the conduct of others, so as to safeguard public health, prevent
environmental damage, ensure building safety, control public order, and similar
objectives. There is a duty to take reasonable care in conducting that
regulation.
A government agency must
still discharge its responsibilities and perform its functions. Tasks that are
being performed must be performed carefully.
A duty of care is sometimes imposed by statute, and does not arise from a
relationship between the claimant (the person injured) and the defendant.
Extracts from "The 'Stolen Generation' - Finding A Fiduciary Duty":
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"A fiduciary will be in breach of (their) fiduciary obligations if an
act or decision cannot reasonably be said to be in the best interests of
their beneficiary".[26] However, "it is one
thing to restrict a fiduciary's freedom of action, it is quite another to
require a fiduciary to act as to advance the beneficiary's interests".[27]Any
sustainable allegations of breaches of fiduciary obligations made by
indigenous people for acts committed by guardians must be those in which
there was "exposure of children to physical, sexual or emotional abuse and
deprivation from family and cultural heritage".[28]Such
acts are positive breaches which can be readily identified as clearly in
violation of the traditional fiduciary obligations.
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The National Inquiry Into The Separation Of Aboriginal And Torres Strait
Islander Children From Their Families identifies "three ways in which
Protectors or Boards failed in their guardianship duties to Indigenous wards
or children to whom they had statutory responsibilities".[29] These
breaches are failure to provide wards with contemporary standards of care;
failure to protect from harm and failure to involve indigenous parents in
decision making about their own children.[30]
All three breaches are considered to be in contravention of the State's
statutory duty to adopt the role of guardian.
Liability on tortious basis
On general principles,
the regulator could in theory incur tortious liability in negligence to a
depositor/investor who suffers loss as a result of placing funds with a
supervised entity. The claimant would however have to establish that
there exists -
(i) a duty of care owed by the regulator to a specific person or
class of persons (including the claimant),
(ii) a breach of that duty and (iii) actual loss suffered by the
claimant as a result of that breach of duty.
Alternatively, the claimant might seek
to establish the tort of breach of
statutory duty.
He would have to demonstrate that
(i)
there was a statutory duty to supervise the institution,
(ii) the
duty was imposed for the benefit of an identifiable class of persons,
(iii) the
claimant is a member of that class; and
(iv) there has
been a breach of the duty.
B elow is an
extract from
The Merits of the Civil Action for Breach
of Statutory Duty
- Neil Foster - 2011:
"Kitto J. refers to the existence of a ‘private right’. What is
the nature of this right? How does an enactment by Parliament confer such a private
right in these cases? A detailed jurisprudential justification of this process
is not really possible in this overview of the existing law.
But it seems worth noticing that the
logic is fairly straightforward.
The court finds that the implication of what Parliament has enacted is that
Parliament intended to legislate for the protection of a class of persons which includes
the claimant."
See also:
Comparing Apples and Oranges: The Fiduciary Principle in Australia and Canada after Breen v Williams
Ethical and
fiduciary duties v's competition laws
Glenn Stevens, Governor
- Governance
Arrangements for Effective Public
Financial Policies: A Central Banker's
Perspective - 19 October 2005
THE REGULATION OF TRUSTEE GOVERNANCE
IN AUSTRALIA: TIME FOR A RETHINK?
A Stolen
generation - Finding A
Fiduciary Duty
What is the liability of an agent or principal in Australia?
VICARIOUS LIABILITY IN THE AGENCY CONTEXT
HOLDING THE GOVERNMENT TO ACCOUNT: THE ‘STOLEN WAGES’ ISSUE, FIDUCIARY DUTY AND TRUST LAW
Fiduciary Relationships
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Power Point presentation by
Professor
Cameron Stewart,
Pro Dean at Sydney Law School, Sydney University
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