The evolving legal relationship between england and australia

No longer tied to Britain, Australia is still searching for its place in the world

the evolving legal relationship between england and australia

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There was no requirement to disclose details of contracts entered into by the company with its promoters, so investors had little opportunity to ascertain the circumstances behind company promotions.

Apart from the important exception of the gold mining industry, initially there appeared to be little local need for companies legislation and it was not for another 20 years that the company form became widely used. This slow development in the number of company incorporations outside the mining sector is consistent with developments in England, where it also took several decades after the introduction of companies legislation for the number of company registrations to increase appreciably.

Moreover, the Australian economy and business sectors were much smaller and far less diversified than those of England. Even though the Companies Statute Vic had little or no impact on most business organisations, it enabled companies — especially in the mining sector — to be incorporated far more easily and with a minimum of compliance requirements, the main one of which was to require annual reports to be lodged.

There was not even a prescribed form which had to be used and, in any case, the enforcement of compliance requirements was generally lax. This ability to incorporate and seek listing on a stock exchange was important for capital raising. This marked increase in the market value of listed shares shows that, despite the initial lack of interest, the transplant of English companies legislation and limited liability in particular encouraged the promotion of companies listed on the stock exchange and the trading of their shares.

Certainly, the capital markets of the Australian colonies were less developed than their contemporary equivalents in England, but by the s there was already significant and growing share market activity, especially in gold mining shares, which led to the establishment of several stock exchanges. The main reason for this adoption of the company form was that it allowed greater flexibility in the capital structure of the enterprise, especially by enabling the issue of large numbers of shares in the event of a company becoming successful.

Cooperatives generally had a small number of shares, whereas gold mining companies registered under the Companies Statute Vic were more accessible to large numbers of investors. A characteristic feature of most early gold mining companies was the issue of high par value, partly paid shares.

2. Overview of Australia's trade with the United Kingdom

In the gold mining industry, very few mines were continuously profitable as deep leads changed course, ran into a neighbouring lease or yields fell, possibly rising again at greater depth. When a rich ore body was found, this generated speculative activity in the share market. Calls on shares would be made by companies that owned the mines where ore bodies were discovered, and owners of other mines in the vicinity were also encouraged to further explore their leases and make calls on their shareholders, who were often prepared to pay the calls so as to enable further exploration.

Inevitably, the extravagant expectations of investors would not be met and the burst of speculation would be replaced by a more cautious approach, leading to a fall in share prices.

However, companies still required funding and so continued to make calls, the payment of which operated as a further dampener on share prices as it reduced the amounts available to purchase other shares and float new companies. The money paid for calls then fell as investors chose to cut their losses or successful companies funded their development needs from profits. Eventually, optimism would return and another speculative cycle would begin. Hall considers that this cyclical nature of the gold mining industry played a positive role in encouraging investment in a key economic sector and enabled gold output to reach very high levels.

Inquartz mining companies paid a fifth of total dividends paid by all public companies in Victoria. These developments also required companies to be able to efficiently raise capital and establish suitable management and administrative structures. The ability to tap the market for capital was particularly important because it was the nature of quartz mining that considerable expense had to be incurred, and development work undertaken, before any profit could be earned and dividends paid. These industry characteristics meant that widely held listed companies were the most efficient means of financing.

Hence the Victorian mining companies, and ultimately the mining industry itself, benefited greatly from the introduction of a general incorporation system and limited liability legislation. Cooperatives, which had been the prevalent forms of business organisation in the mining industry when it was smaller scale and mostly engaged in alluvial mining, were inappropriate and highly inefficient as a means of conducting quartz mining.

They issued relatively few shares and therefore were not generally able to raise capital from large numbers of passive investors as cooperative members retained unlimited liability. The practice of issuing partly paid shares was also a further benefit of the limited company form, as it was advantageous in the gold mining industry for a company to retain the ability to seek further capital from its shareholders as the need arose during the exploration and development phases.

The importance of mining shares, especially in Victoria, gave the share markets a highly speculative, high risk character. The gold mining industry was particularly subject to speculative booms and downturns, and a large number of investors displayed a considerable, but necessary, appetite for risk.

This would probably have encouraged diversification of the portfolios of gold mining companies on the expectation that for every successful company there would be several that would become worthless, making the introduction of limited liability a very important feature of the legislation. Of course, the vast majority of small businesses in the Australian colonies did not adopt the limited liability form, but instead remained sole traders or partnerships.

It was not until the s, some 20 years after the introduction of companies legislation, that the number of company registrations significantly increased, and even then from a low base. McQueen calculates that in there were over registrations of firms partnerships and company registrations in NSW. Certainly, it is only in some industries that the organisational form of a company is advantageous. However, in order to determine whether the introduction of companies legislation was appropriate for the local conditions, it is necessary to consider the degree to which this form was utilised by particular key industries, most notably the mining industry.

Moreover, it should be noted that there was also a slow uptake of the limited liability company structure by small businesses in England until several decades after the introduction of limited liability. Given the importance of the gold mining industry in Victoria and the necessity of raising capital from large numbers of investors after the development of deep quartz mining, it is neither surprising that legislative innovation in Victoria would address a difficulty that arose in relation to the raising of capital by gold mining companies, nor that it would be passed almost precisely at the time that quartz mining was becoming the dominant mining activity.

The following background to the no liability legislation is based on the account by Hall. Companies often found it difficult to pursue shareholders who failed to pay calls and the costs involved often did not justify taking legal proceedings.

This situation created difficulties for the company, which had to meet the claims of creditors despite some shareholders reneging on their liabilities. It also resulted in situations where shareholders failed to pay calls, but if the company became profitable they could again become entitled to dividends and the benefit of a higher share price by paying the outstanding calls.

The forfeited shares could then either be purchased by existing shareholders or sold at auction. This provided a mining company with greater certainty in relation to supply of capital, as it received the proceeds of the sale of forfeited shares and thereby ensured that shareholders who provided calls during times of exploration or uncertainty would gain the benefit of share ownership when the company became profitable.

The practice of forfeiture and sale was certainly an effective response to dummy shareholders and those who refused to pay calls. Nevertheless, the legal uncertainty remained for another year before the introduction of the no liability legislation — the Mining Companies Act Vic — which sought to formalise the practice of forfeiture of partly paid shares upon failure to pay calls.

The effect of this new legislation was to extend limited liability to unpaid share capital. This practice was already becoming less common both in England and Australia as lower par value shares attracted more investors and enhanced the marketability of shares. The Mining Companies Act Vic introduced a stricter regulatory regime for mining companies in Victoria than that which applied to trading companies under the Companies Statute Vic.

These stricter investor protection provisions reflected the fact that mining companies dominated the share market lists and had the widest spread of shareholders. However, despite these investor protection provisions, the government offices charged with the responsibility of administering the legislation were largely incapable of ensuring widespread compliance with these legislative requirements. As noted above, the introduction of the no liability legislation in coincided with a period of intense speculative fervour surrounding the sudden dominance of the Bendigo quartz mines.

This speculation resulted in a marked increase in gold mining company registrations and investment. Certainly, extreme fluctuations in investment in the mining industry occurred from time to time, and the timing of a speculative boom increased the urgency of legislation designed to assist capital raising.

One such wild fluctuation can be seen in the fact that capital raised in by new mining company registrations fell back to near levels. This raises the possibility that the boom in was directly related to the introduction of the no liability legislation, or that it at least encouraged mining company investment.

Hall argues that the no liability legislation encouraged a regular supply of investment in an inherently risky but very important industry and that its continued existence for more than a century confirms its success in achieving this objective. This is discussed further in Part VII. The decline of the mining sector after the turn of the century may be explained by the replacement of a large number of relatively small companies financed by investors who had a high appetite for risk, with a smaller number of larger, more risk averse companies.

He argues that the introduction of no liability legislation was a direct result of this failure to enforce and inability to ensure compliance. It was, and still is, a private matter for companies to enforce calls made on their shares.

As discussed above, the introduction of this legislation coincided with a boom in gold mining share activity and probably played a beneficial and significant role in encouraging this growth of investment in a critical colonial export industry that depended for finance upon the share market.

The latter half of the s saw a major speculative boom especially in Melbourne in the shares of land companies and finance companies that speculated in mostly urban land, as well as in mining shares in companies operating at Broken Hill and in Queensland and Tasmania.

the evolving legal relationship between england and australia

The land and mining booms were fuelled by heavy investment in public infrastructure works, such as railways, irrigation works, roads, tramways, water systems and sewerage. During the boom of the s, there was a substantial increase in the number of Victorian registered companies. Trading company registrations were below per year until the late s when they jumped to in and inabout half of which were land and finance companies.

The activity of land companies was typically to purchase large tracts of agricultural land on the fringes of cities and then seek to subdivide and auction housing lots. The scale of these activities was largest in Melbourne, where the population increase was greatest.

Blainey considered that there was also more of a gambling culture in Melbourne: They were of the belief that Mr Love ought to be prosecuted. The distinction they drew was between whether he ought to be prosecuted in the US or in the UK. And so where does this leave the future of cases of people who may have committed offences that, in the main, took place in the UK, and other countries such as the US might be seeking to extradite them.

We are likely to see more and more of these cases. The US in particular is quite strict, quite firm, some might say harsh in its efforts to prosecute and extradite individuals accused of these crimes, and other countries may also wish to adapt their extradition legislation to take account of some of the issues that arose in Mr Love's case. There are other questions that Australia may wish to consider. Another difference between our legislation and the legal situation in the UK is that in the UK the European Convention on Human Rights as incorporated into British domestic law provides an additional layer of protection and there's nothing like that in Australia.

But there are also other ways to protect these individuals from extradition. The Minister or the Attorney General in Australia retains the discretion to decline extradition. So, Lauri Love, I think it's good for listeners to hear from you what has been your response all along to the charges and the allegations that were made against you by US authorities. Yes, so I'm still waiting to be charged here in the UK, and the interesting thing about the extradition process, at least between the UK and the USA, is there is no requirement for any evidence to be produced, so via the USA to substantiate their claims.

So when we get to the stage now where I am charged by the grand prosecution service in the UK, there will be the responsibility to provide evidence. It's at that point that I would form a defence.

What is your current situation? Are there legal proceedings afoot to try you in the UK, within the UK courts, on potentially equivalent charges? Strangely enough this is what we hope to happen because the alternative is to have a US indictment open potentially indefinitely and that causes me problems for travel, so I now have my passport back and I'd like to go to Finland to visit family but it's unclear if I might be intercepted or something dramatic like that, so we are hoping that charges are pressed in the UK, I can form a defence, there will be a conviction or an acquittal.

So in my case I would have almost certainly been advised to plead guilty, even if I felt that I was innocent, because now they will have to present a case to the UK…yes, so we do have to rely on their cooperation in order for a case to be made. Can you tell me about his case? Hew Griffiths was involved in software piracy that infringed copyright in the US.

Do extradition laws need to evolve?

He was not a garden-variety software pirate, he was involved in quite a large-scale operation run through a server in Virginia in the United States to break copyright protection on proprietary software.

The US sought his extradition and he was extradited to the US. The Australian courts did not accept that there was any barrier to his extradition to the US. He probably did face a higher jail term in the US than he would have faced in Australia, but the court in deciding that he was eligible for extradition did have to consider the dual criminality requirement and it accepted that by analogy if this offence had been committed in Australia rather than in the US state of Virginia, it still would have been an offence under Australian law.

That the dual criminality requirement does not require that the offences must be exactly the same, nor does it require that the penalty must necessarily be the same. Interestingly, he later brought a claim before the United Nations Human Rights Committee, alleging that he had been arbitrarily detained.

The Human Rights Committee in part found in his favour. They didn't criticise Australia as such for allowing his extradition to the United States, but they did criticise Australia for the length of his detention in Australia while his extradition proceedings were still ongoing, and they did criticise Australia on the grounds that he was not given an appropriate remedy to challenge that arbitrary detention.

the evolving legal relationship between england and australia

So all of these cases deal with online offending and cybercrimes. Given that we all interact online much more now, when you are physically based in one jurisdiction but the harm is felt elsewhere, are our processes good enough at the moment for working out where the person should be tried?

They will need to adapt, there will need to be reconsideration at a domestic level of how we handle these cases. It is an emerging class of cases in which the same offence may be an offence in multiple jurisdictions and there may be multiple governments or authorities seeking to prosecute or able to prosecute under their domestic law.

It's something that might have to be under continuous consideration at the international level. Dr Ian Warren, when we are talking about an interconnected world, does it really matter that someone is sitting in a flat somewhere in England when the harm is being felt in a different jurisdiction?

Don't we have to allow that country, the US, their day in court because they are the jurisdiction that has felt the harm? Without a question, but the issue that that gives rise to is which court should they have their day in. The criminal law is like the crusty old man with the beard and the potbelly, it just plods along with its own territorial concerns and its own philosophy and so forth. The internet puts a spanner in that approach because it readily transcends national borders and we haven't developed adequate cooperative mechanisms to appropriately deal with both the nature and the scale of contemporary cybercrime.

And we also heard from Lauri Love via Skype. That's it for the Law Report. Big thanks to producer Anita Barraud for her help this week.

British Australia was the creation of an imperial decision.

Law of the United Kingdom - Wikipedia

This meant that strong links to Britain, and the British monarchy, continued well into the 20th century. There were occasional republicans who advocated a so-called independent Australia, particularly in the 19th century, but, if anything, enthusiasm for the British Empire increased in the first half of the 20th century.

Australians were Australians, but they were also British. This, of course, was probably true given that London attracted people from all over the empire and was cosmopolitan in a way that Australia was not.

The early settlers were British in a very Australian way. Australianness was embedded in their Britishness; the two were not in conflict. In celebrating Australia Day they were celebrating themselves and their peculiar Australian way.

Such celebrations could not be construed as indicating a desire to be rid of the monarchy or the empire. Moreover, Australians felt a great deal of solidarity with their British cousins. Consider the following quote: Australians know that our future is linked with Britain, not only by ties of race and kinship, but because of hard, practical reasons. No, the speaker was not Robert Menzies but Ben Chifley in