When the 1983 amendments were made to the national companies securities legislation, it was stated in the accompanying explanatory memorandum that one of the purposes of the new provisions was to “abolish the doctrine of ultra vires” — an ambitious aim given the tenacity of the doctrine despite widespread criticism on many grounds, perhaps best summed up in the comment, “[u]ltra vires was the expression of a social policy that failed.”
Of course, it has now been realised that the 1983 amending Act did not achieve its stated purpose. It may have achieved a partial elimination of the doctrine but it has left a large area for its continued operation in a different form and in some respects has opened new opportunities for development.
These aspects are explored below but it should be noted here that one curious side of the new provisions is that no explanation was offered of the defects in the previous statutory provisions, ss 67-68 of the Companies Act (Cth) (“the Act”) and its forerunner, s 20 of the State uniform companies legislation, nor was it explained how the new ss 67-68 were intended to remedy those defects. The new regime was simply offered as a better general solution to the ultra vires problem. Unfortunately, in this case, it is not the final solution.