James Hardie Former Subsidiaries (Winding up and Administration) Act 2005 (NSW)

James Hardie Former Subsidiaries (Winding up and Administration) Act 2005 No 105 An Act to facilitate funding by James Hardie Industries NV of compensation claims against certain former subsidiaries of the James Hardie corporate group for asbestos-related harm and to provide for the winding up of those former subsidiaries; and for other purposes. Part 1 Preliminary 1 Name of Act This Act is the James Hardie Former Subsidiaries (Winding up and Administration) Act 2005. 2 Commencement (1) This Act commences on a day or days to be appointed by proclamation, except as provided by this section. (2) Part 2 is taken to have commenced on the day on which the Bill for this Act was first introduced into Parliament. (3) Clause 3 of Schedule 1 commences on the date of assent to this Act. Note— Clause 3 of Schedule 1 provides that any trust fund established as referred to in section 8 during or after the introduction day but before the assent day is taken to have been validly established for the purposes of the law of the State. (4) The provisions of Part 3 of Schedule 1 commence on the date of assent to the James Hardie Former Subsidiaries (Winding up and Administration) Amendment (Trust Funds) Act 2006. 3 Principal objects of Act (1) The principal objects of this Act are as follows— (a) to set up a State scheme for the winding up and other external administration over an extended period of certain companies that were formerly within the James Hardie corporate group, (b) to ensure that not only present, but also future, liabilities of those companies in respect of personal injury or death of persons arising from exposure to any asbestos or asbestos products that were mined, manufactured, sold, distributed or used by those companies are dealt with— (i) in accordance with the Final Funding Agreement, and (ii) so that preference is given to those claims over other claims which are deferred to the future, and (iii) in a manner that recognises that exposure to such asbestos or asbestos products, or personal injury or death arising from such exposure, may occur for an extended period into the future. (2) To achieve the objects set out in subsection (1), this Act displaces certain provisions of the Corporations Act and includes provisions for the establishment of a trust fund and the administration of the companies concerned during the winding up periods for the companies that are apposite to the unique circumstances of the winding up and administration of the companies. 4 Definitions (1) In this Act— ABN 60 means the company registered under the Corporations Act immediately before the introduction day as ABN 60 Pty Limited (ACN 000 009 263) that was formerly called James Hardie Industries Limited, and includes any successor to or continuation of that company. ABN 60 Foundation means the company registered under the Corporations Act immediately before the introduction day as ABN 60 Foundation Limited (ACN 106 266 611), and includes any successor to or continuation of that company. Amaba means the company registered under the Corporations Act immediately before the introduction day as Amaba Pty Limited (ACN 000 387 342) that was formerly called Jsekarb Pty Limited, and includes any successor to or continuation of that company. Amaca means the company registered under the Corporations Act immediately before the introduction day as Amaca Pty Limited (ACN 000 035 512) that was formerly called James Hardie & Coy Pty Limited, and includes any successor to or continuation of that company. assent day means the day on which this Act received the Royal Assent. assets means any legal or equitable estate or interest (whether present or future, whether vested or contingent and whether personal or assignable) in real or personal property of any description (including money), and includes securities, choses in action and documents. authorised loan facility means a loan facility provided under a relevant loan facility agreement. claim means any claim, demand, action, cause of action or proceedings (whether based in tort, contract, under legislation or otherwise). claims processing expenses of a liable entity means any of the following incurred by the entity (whether before or during the winding up period for the entity as provided by Part 4) in connection with the management of claims made against the entity— (a) expenses, charges or other costs for the provision of legal services to the entity, (b) expenses, charges or other costs for the provision of expert evidence or for the provision of other professional advice to the entity, (c) expenses, charges or other costs arising out of proceedings in a court or other tribunal or the use of any structured negotiation process for the settlement of claims (including mediation, conciliation or arbitration), but does not include any interest or legal costs payable by the entity to a claimant under a final judgment or binding settlement in respect of a proven personal asbestos claim or proven personal asbestos contribution claim. Compensation Foundation means the company registered under the Corporations Act immediately before the introduction day as the Medical Research and Compensation Foundation (ACN 095 924 137), and includes any successor to or continuation of that company. compensation funds means the following— (a) the SPF, (b) the discretionary fund. concurrent wrongdoer, in relation to a personal asbestos claim or other claim, means a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim. contravene includes fail to comply with. Corporations Act means the Corporations Act 2001 of the Commonwealth. Corporations legislation means the Corporations legislation to which Part 1.1A of the Corporations Act applies. damages includes any form of monetary compensation. discretionary fund means any discretionary trust fund— (a) established in accordance with the SPF trust deed and the Final Funding Agreement with respect to any income derived from assets that form part of the SPF, and (b) in respect of which the SPF trustee is also the trustee. exercise a function includes perform a duty. Final Funding Agreement means the deed entitled "A deed in respect of a Final Funding Agreement in respect of the provision of long term funding for compensation arrangements for certain victims of Asbestos-related diseases in Australia" that was entered into by the State, James Hardie Industries NV and LGTDD Pty Limited (ACN 116 110 948) on 1 December 2005, as in force from time to time. finalisation day, in relation to a liable entity, means the finalisation day in relation to the entity within the meaning of section 43. function includes a power, authority or duty. general law means the common law and equity. insurance proceeds right means any right of a person to the proceeds (or part of the proceeds) of a contract of insurance or re-insurance of a liable entity that is conferred by or under section 30. introduction day means the day on which the Bill for this Act was first introduced into Parliament. James Hardie Industries NV means the foreign company incorporated in the Netherlands registered under the Corporations Act immediately before the introduction day as James Hardie Industries NV (ARBN 097 829 895), and includes such successors to or continuations of that company, or other entities having obligations under the Final Funding Agreement, as may be prescribed by the regulations. legislation includes— (a) any statute of a legislature (whether enacted or made in Australia or elsewhere), and (b) any proclamation, regulation, rule, by-law, order or any other kind of subordinate legislation (however described) made under the authority of a statute (whether enacted or made in Australia or elsewhere). liable entity means each of the following— (a) ABN 60, (b) Amaba, (c) Amaca. loan repayment, in relation to an authorised loan facility, means— (a) the repayment of any part of the principal payable under the facility, or (b) the payment of any interest (whether or not the interest is capitalised) payable under the facility, or (c) the payment of any other amounts that are payable under, or in connection with, the facility. loan security expense of a liable entity means any amount that the entity is required to pay under, or in connection with, a relevant loan facility agreement. management of claims includes the handling, finalisation or payment of such claims. Member Register of a company means a register of members of the company kept under Chapter 2C of the Corporations Act. MRCF Investments means the company registered under the Corporations Act immediately before the introduction day as MRCF (Investments) Pty Limited (ACN 095 926 837), and includes any successor to or continuation of that company. operating expenses of a liable entity— (a) means any expenses, charges or other costs (including taxes and duties), other than claims processing expenses, incurred by the entity in carrying on its business (whether before or during the winding up period for the entity as provided by Part 4), and (a1) includes any loan security expenses of the entity, and (b) includes any expenses, charges or other costs, other than claims processing expenses, incurred by the entity (including costs awarded against the entity) in connection with the making of an application to the Supreme Court under a provision of this Act. payable claimant of a liable entity means any person to whom the entity has incurred a payable liability. payable liability of a liable entity means a liability of the entity to pay any of following— (a) a proven personal asbestos claim made against the entity in an Australian court or other Australian tribunal, but only to the extent that the exposure to asbestos or asbestos products to which the claim relates occurred wholly within the territorial limits of Australia, (b) a proven personal asbestos contribution claim made against the entity in an Australian court or other Australian tribunal, but only to the extent that the exposure to asbestos or asbestos products to which the claim relates occurred wholly within the territorial limits of Australia, (c) a pre-commencement claim against the entity, (d) an operating expense of the entity, (e) a claims processing expense of the entity, (f) a claim for the payment of an insurance proceeds right that is declared to be a payable liability by regulations made for the purposes of section 30, (g) an amount in respect of which the SPF trustee has a right to be indemnified by the entity under section 36 (2) (b), (h) a statutory recovery claim against the entity. Note— Section 32 (2) of this Act provides that certain proven personal asbestos claims made against a liable entity may not be paid during its winding up period if the claimant has already received compensation for the personal injury or death to which the claim relates from a specified person. personal asbestos claim against a liable entity or concurrent wrongdoer means a claim by any of the following persons for damages (whether arising before, during or after the assent day) in respect of personal injury or death arising from exposure to any asbestos or asbestos products that were mined, manufactured, sold, distributed or used by or on behalf of the liable entity or concurrent wrongdoer (as the case may be)— (a) the person who sustains the personal injury, (b) the legal personal representative of a deceased person who sustained the injury or died as a result of the injury, (c) a relative of a deceased person who sustained the injury or died as a result of the injury, and includes such a claim against a liable entity or concurrent wrongdoer pursuant to the joinder of the liable entity or concurrent wrongdoer as a party to proceedings. Note— Part 4 of the James Hardie (Civil Liability) Act 2005 provides that Amaca is liable for certain personal asbestos claims against Marlew Mining Pty Limited in connection with its asbestos mining operations in Baryulgil. That Part also provides that the claims for which Amaca is liable are to be treated as personal asbestos claims against Amaca for the purposes of this Act. personal asbestos claimant means a person who has, or may at any time in the future have, a personal asbestos claim. personal asbestos contribution claim against a liable entity means any claim against the entity by a concurrent wrongdoer for contribution (whether arising before, during or after the assent day) in respect of a personal asbestos claim that has been made against the wrongdoer. power includes an authority. pre-commencement claim against a liable entity means any claim that was made or brought in legal proceedings commenced before 1 December 2005. proceeds of asset realisations of a liable entity includes the proceeds of a relevant insurance contract of the entity within the meaning of section 30. proven personal asbestos claim against a liable entity means a personal asbestos claim against the entity in respect of which— (a) a final judgment has been entered by a court or other tribunal against the entity, or (b) a binding settlement has been entered into by the entity, but only to the extent that the judgment or settlement gives rise to a liability of the entity (including any liability to pay damages, interest or legal costs to the claimant). Note— Part 4 of the James Hardie (Civil Liability) Act 2005 provides that Amaca is liable for certain personal asbestos claims against Marlew Mining Pty Limited in connection with its asbestos mining operations in Baryulgil. That Part also provides that claims for which Amaca is liable and in respect of which final judgment has been entered or a binding settlement entered are to be treated as proven personal asbestos claims against Amaca for the purposes of this Act. Section 32 (2) of this Act provides that certain proven personal asbestos claims made against a liable entity may not be paid during its winding up period if the claimant has already received compensation for the personal injury or death to which the claim relates from a specified person. proven personal asbestos contribution claim against a liable entity means a personal asbestos contribution claim against the entity by a concurrent wrongdoer in respect of which— (a) a final judgment has been entered by a court or other tribunal against the entity, or (b) a binding settlement has been entered into by the entity, but only to the extent that the judgment or settlement gives rise to a liability of the entity (including any liability to pay damages, interest or legal costs to the claimant). Related Agreement means any agreement as in force from time to time that is entered into (whether before, during or after the assent day) as contemplated by the terms of the Final Funding Agreement. relevant loan facility agreement means any agreement that is authorised by section 30A, as in force from time to time. small claim—see section 4A. SPF means the trust fund established as referred to in section 8 or, if that trust fund is terminated, such other trust fund as may be prescribed by the regulations. SPF trust deed means the deed that established the SPF, as in force from time to time. SPF trustee means the person who is the trustee of the SPF from time to time. statutory recovery claim against a liable entity means any of the following claims— (a) a claim against the entity under section 8E of the Workers' Compensation (Dust Diseases) Act 1942 for reimbursement of compensation paid or payable by the Workers' Compensation (Dust Diseases) Board, (b) any other claim against the entity for the payment of compensation, or the reimbursement of compensation paid, under a statute enacted in Australia in circumstances of a kind prescribed by the regulations. the State means the State of New South Wales. transfer of a share includes— (a) an assignment (whether or not for consideration) of the share, and (b) an assignment or transfer, or the creation, of any legal or beneficial interest (or both) in the share. winding up period for a liable entity—see section 20. (2) In this Act, the following terms have the meanings given in section 9 of the Corporations Act— ACN ARBN ASIC books company constitution contributory director foreign company insolvent member negotiable instrument officer public document registered company auditor registered office (3) In this Act, a reference to winding up of a liable entity includes a reference to any scheme of arrangement, receivership or other form of external administration of the liable entity (including, without limitation, the administration of a liable entity by the SPF trustee and the Minister under this Act). (4) If this Act provides for an event or other thing to occur on a particular day, that event or thing is taken to occur at the beginning of that day. (4A) Unless the context or subject-matter indicates or requires otherwise, a reference in this Act to the payment or discharge (whether in whole or in part) by the SPF trustee of a payable liability of a liable entity on the entity's behalf or for its benefit is a reference to the payment or discharge of such a liability by the SPF trustee in its capacity as the trustee of the SPF or the discretionary fund or in both capacities (as the case may be). (5) Notes included in this Act do not form part of this Act. 4A Meaning of "small claim" (1) For the purposes of this Act, a claim is a small claim if it is a claim for an amount that does not exceed $25,000 or any other amount adjusted in accordance with this section from time to time that is applicable at the time when a claim is payable. (2) If an approved payment scheme under section 35 is or will be in force on 1 July of any year, the Minister is to declare on or before that date, by order published on the NSW legislation website, the amount that is to apply, as from the date specified in the order, for the purposes of subsection (1). (3) The amount declared is to be the amount applicable under subsection (1) (or that amount as last adjusted in accordance with this section) that is adjusted— (a) in the case of the first adjustment that is required to be made following the commencement of this section—by the percentage change in the amount estimated by the Australian Statistician of the average weekly total earnings of full-time adults in Australia over the number of quarters since the commencement of this section that precede the date of the declaration for which those estimates are, at that date, available, or (b) in the case where an adjustment was made for 1 July of the previous year—by the percentage change in the amount estimated by the Australian Statistician of the average weekly total earnings of full-time adults in Australia over the 4 quarters that precede the date of the declaration for which those estimates are, at that date, available, or (c) in the case where the previous adjustment that was required to be made was for 1 July of a year before the previous year—by the percentage change in the amount estimated by the Australian Statistician of the average weekly total earnings of full-time adults in Australia over the number of quarters since the previous adjustment that precede the date of the declaration for which those estimates are, at that date, available. (4) An amount declared for the time being under this section applies to the exclusion of the amount of $25,000 or an amount previously adjusted in accordance with this section. (5) If the Australian Statistician fails or ceases to estimate the amount referred to in subsection (3), the amount declared is to be determined in accordance with the regulations. (6) In adjusting an amount to be declared for the purposes of subsection (1), the amount determined in accordance with subsection (3) is to be rounded to the nearest $500 (with the amounts of $250 and $750 being rounded up). (7) A declaration made or published on the NSW legislation website after 1 July in a year and specifying a date that is before the date it is made or published as the date from which the amount declared by the order is to apply has effect as from that specified date. 5 Extraterritorial operation of Act (1) It is the intention of the Parliament of New South Wales that the operation of this Act should, as far as possible, include operation in relation to the following— (a) things situated in or outside the territorial limits of the State, (b) acts, transactions and matters done, entered into or occurring in or outside the territorial limits of the State, (c) things, acts, transactions and matters (wherever situated, done, entered into or occurring) that would, apart from this Act, be governed or otherwise affected by the law of another State, a Territory, the Commonwealth or a foreign country. (2) Without limiting subsection (1), it is the intention of the Parliament of New South Wales that the provisions of this Act have an operation in relation to the things, acts, transactions and matters referred to in that subsection even if the rules of private international law (whether at general law or as provided by legislation) would require the application of a law other than this Act instead of the provisions of this Act. 6 Construction of legislation so as not to exceed legislative power (1) Unless a contrary intention appears, if a provision of this Act or an instrument made under this Act— (a) would, apart from this section, have an invalid application, but (b) also has at least one valid application, it is the intention of the Parliament of New South Wales that the provision is not to have the invalid application, but is to have every valid application. (2) Despite subsection (1), the provision is not to have a particular valid application if— (a) apart from this section, it is clear, taking into account the provision's context and the purposes or objects underlying this Act, that the provision was intended to have that valid application only if every invalid application, or a particular invalid application, of the provision had also been within the legislative power of the Parliament of New South Wales, or (b) the provision's operation in relation to that valid application would be different in a substantial respect from what would have been its operation in relation to that valid application if every invalid application of the provision had been within the legislative power of the Parliament of New South Wales. (3) Subsection (2) does not limit the cases in which a contrary intention may be taken to appear for the purposes of subsection (1). (4) This section is in addition to, and not in derogation of, section 31 of the Interpretation Act 1987. (5) In this section— application means an application in relation to— (a) one or more particular persons, things, matters, places, circumstances or cases, or (b) one or more classes (however defined or determined) of persons, things, matters, places, circumstances or cases. invalid application, in relation to a provision, means an application because of which the provision exceeds the legislative power of the Parliament of New South Wales. valid application, in relation to a provision, means an application which, if it were the provision's only application, would be within the legislative power of the Parliament of New South Wales. 7 Act to bind State and other jurisdictions (1) This Act binds the State and, in so far as the legislative power of the Parliament of New South Wales permits, the other States, the Territories and the Commonwealth. Note— The Interpretation Act 1987 defines the term person to include a body politic. (2) Without limiting subsection (1), this Act has effect despite any privilege or immunity of the Crown in any of its capacities. (3) This Act does not make any State or Territory, the Commonwealth, or the Crown in any of its capacities, liable to be prosecuted for an offence. (4) A reference in this section to a State, Territory or the Commonwealth includes a reference to the Government of the State, Territory or Commonwealth. Part 2 Establishment of SPF 8 SPF may be treated as charitable trust (1) For the avoidance of doubt, it is declared that a trust fund (the SPF) established by James Hardie Industries NV as contemplated by the Final Funding Agreement is a valid charitable trust for the purposes of the law of the State if— (a) the principal purposes for which the trust fund is established include the following purposes— (i) the purpose of receiving and providing funding for the payment, and paying, of payable liabilities of any liable entity, (ii) the purpose of providing services with respect to the management and resolution of claims made against any liable entity, and (b) the instrument that establishes the trust fund makes provision for the trustee of the trust fund to be a company registered under the Corporations Act that is taken under section 119A of that Act to be registered in New South Wales. (2) Without limiting subsection (1), any of the purposes referred to in subsection (1) (a) is to be treated as being a charitable purpose for the purposes of the Charitable Trusts Act 1993 and the general law relating to charitable trusts. (3) If the discretionary fund is for the time being authorised or required under the Final Funding Agreement or the SPF trust deed to receive and provide funding for the payment of, and to pay, any of the payable liabilities of any liable entity instead of or in addition to the SPF, any trust fund that was originally established for the purposes referred to in subsection (1) (a)— (a) continues to be a valid charitable trust, and (b) is taken to be administered by the SPF trustee for the purposes for which the trust fund was originally established, even though the fund is not the only trust fund being used during that time for the purpose referred to in subsection (1) (a) (i). (4) Despite anything to the contrary in the SPF trust deed or any legislation of the State or the general law— (a) any money provided to the SPF trustee under an authorised loan facility is taken to have been provided to the SPF trustee for the purpose referred to in subsection (1) (a) (i) and, consequently, to be subject to the trust established by the SPF trust deed, and (b) the making of loan repayments in relation to an authorised loan facility by the SPF trustee from the SPF is taken to be a valid application of the trust fund for the purpose referred to in subsection (1) (a) (i). 9 Application of law of charitable trusts to SPF (1) The Charitable Trusts Act 1993 and the general law relating to charitable trusts apply to the SPF, subject to the following modifications— (a) the Supreme Court may not, despite section 6 of the Charitable Trusts Act 1993 or any other law, grant leave to any person (other than the SPF trustee or James Hardie Industries NV) to bring charitable trust proceedings or any other proceedings relating to the administration of the SPF, (b) charitable trust proceedings or any other proceedings relating to the administration of the SPF may only be brought by— (i) the Attorney General (whether with or without a relator), or (ii) the SPF trustee or James Hardie Industries NV, but only with the leave of the Supreme Court under section 6 of the Charitable Trusts Act 1993, (c) for the purposes of determining whether the trust property of the SPF should be applied cy pres, it is to be presumed for all purposes that the only general charitable intention with which the trust property was given was for making or assisting the payment of compensation to personal asbestos claimants having claims against a liable entity, (d) a scheme for the administration of the SPF under Part 4 of the Charitable Trusts Act 1993 may be established subject to the following provisions— (i) the scheme may only be established with the consent of the SPF trustee and James Hardie Industries NV, (ii) section 14 of that Act does not operate to limit the circumstances in which such a scheme may be established, (iii) section 18 of that Act does not enable a person other than the SPF trustee or James Hardie Industries NV to bring an appeal under that section. (2) Accordingly, no court or other tribunal has any jurisdiction or power to entertain charitable trust proceedings or any other proceedings relating to the administration of the SPF, or to grant relief in any such proceedings, unless the proceedings have been brought as provided by subsection (1) (b) by the Attorney General (whether with or without a relator), the SPF trustee or James Hardie Industries NV. (3) In this section, charitable trust proceedings has the same meaning as it has in Part 2 of the Charitable Trusts Act 1993. 10 Part does not alter law of charitable trusts generally Nothing in this Part authorises or permits any person other than James Hardie Industries NV to establish a charitable trust for a purpose that is not a charitable purpose at general law. Part 3 Limitations on corporate restructuring Division 1 Interpretation 11 Definitions In this Part— hold a share includes hold a share on trust or for the benefit of another person. relevant company means any of the following— (a) any liable entity, (b) the Compensation Foundation, (c) MRCF Investments, (d) the ABN 60 Foundation. Division 2 Registered offices and Member Registers 12 Registered offices to be within the State (1) A relevant company must not, without the written approval of the Minister— (a) change the address of its registered office to a location that is outside of the territorial limits of the State, or (b) have its registered office at a location that is outside of the territorial limits of the State. Maximum penalty—1,000 penalty units. Note— If a relevant company contravenes this subsection, section 67 operates to make each person who is a director of the company or who is concerned in the management of the company liable for the offence if the person knowingly authorised or permitted the contravention. (2) It is taken to be a provision of the constitution of each relevant company that— (a) the registered office of the company be located within the territorial limits of the State unless the Minister gives written approval for it to be located outside the territorial limits of the State, and (b) the address of its registered office not be changed to a location that is outside of the territorial limits of the State without the written approval of the Minister, and (c) the provisions of paragraphs (a) and (b) have effect despite any other provisions of the constitution of the company. 13 Mem