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2009-2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Trade practices amendment
(Australian Consumer Law) bill (No.2) 2010
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Competition Policy and Consumer Affairs,
the Hon Dr Craig Emerson MP)
Table of contents
Glossary 1
General outline and financial impact 3
Chapter 1 Preliminary matters 19
Chapter 2 Introduction 21
Chapter 3 Misleading or deceptive conduct 35
Chapter 4 Unconscionable conduct 41
Chapter 5 Unfair contract terms 57
Chapter 6 Unfair practices 77
Chapter 7 Consumer Guarantees 177
Chapter 8 Unsolicited selling 211
Chapter 9 Lay-by sales 233
Chapter 10 Safety of consumer goods and product related services 241
Chapter 11 Information standards 279
Chapter 12 Liability of manufacturers for goods with safety defects
289
Chapter 13 Offences 303
Chapter 14 Enforcement 317
Chapter 15 Remedies 329
Chapter 16 Country of origin representations 361
Chapter 17 Application of the Australian Consumer Law 373
Chapter 18 Commonwealth enforcement and administration 385
Chapter 19 Administration and enforcement of consumer product safety
395
Chapter 20 Liability of suppliers and credit providers 427
Chapter 21 Infringement notices 435
Chapter 22 Amendments to Part IVB of the TP Act 445
Chapter 23 Regulation Impact Statement: The Australian Consumer Law -
Reforms based on best practice in State and Territory consumer
laws 455
Chapter 24 Regulatory Impact Statement: The Australian Consumer Law -
Aspects of the new national product safety law 565
Chapter 25 Regulatory Impact Statement: The Australian Consumer Law - A
national consumer guarantees law 595
Index 637
Do not remove section break.
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
|Abbreviation |Definition |
|ACCC |Australian Competition and |
| |Consumer Commission |
|ACL |Australian Consumer Law |
|ACL Bill or Bill |Trade Practices Amendment |
| |(Australian Consumer Law) |
| |Bill (No. 2) 2010 |
|Applied ACL |Applied Australian Consumer |
| |Law |
|ASIC Act |Australian Securities and |
| |Investments Commission Act |
| |2001 (Cth) |
|CC Act |Competition and Consumer Act |
| |2010 |
|Corporations Act |Corporations Act 2001 (Cth) |
|Corporations law |The ASIC Act and the |
| |Corporations Act 2001 (Cth) |
|COAG |Council of Australian |
| |Governments |
|Federal Court |Federal Court of Australia |
|first ACL Bill |Trade Practices Amendment |
| |(Australian Consumer Law) |
| |Bill 2009 |
|FT Act or FT Acts |State and Territory Fair |
| |Trading Legislation, |
| |including Fair Trading Act |
| |1987 (New South Wales), Fair |
| |Trading Act 1999 (Victoria), |
| |Fair Trading Act 1989 |
| |(Queensland), Fair Trading |
| |Act 1987 and Consumer |
| |Transactions Act 1972 (South |
| |Australia), Fair Trading Act |
| |1987 and Consumer Affairs Act|
| |1971 (Western Australia), |
| |Fair Trading Act 1990 |
| |(Tasmania), Fair Trading Act |
| |1987 and Fair Trading |
| |(Consumer Affairs) Act 1973 |
| |(Australian Capital |
| |Territory) and Consumer |
| |Affairs and Fair Trading Act |
| |1990 (Northern Territory). |
|Abbreviation |Definition |
|IGA |Intergovernmental Agreement |
| |for the Australian Consumer |
| |Law signed on 2 July 2009 by |
| |COAG |
|LI Act |Legislative Instruments Act |
| |2003 (Cth) |
|MCCA |Ministerial Council on |
| |Consumer Affairs |
|NPA |National Partnership |
| |Agreement to Deliver a |
| |Seamless National Economy |
|PC |Productivity Commission |
|Regulators |The ACCC and the consumer |
| |agencies of the States and |
| |Territories, including: NSW |
| |Office of Fair Trading, |
| |Consumer Affairs Victoria, |
| |Queensland Office of Fair |
| |Trading, Department of |
| |Commerce - Consumer |
| |Protection (Western |
| |Australia), Office of |
| |Consumer and Business Affairs|
| |(South Australia), Department|
| |of Justice - Consumer Affairs|
| |and Fair Trading (Tasmania), |
| |Department of Justice - |
| |Consumer Affairs (Northern |
| |Territory) and Department of |
| |Justice and Community Safety |
| |- Office of Regulatory |
| |Services - Fair Trading |
| |(Australian Capital |
| |Territory) |
|TP Act |Trade Practices Act 1974 |
| |(Cth) |
General outline and financial impact
Outline
The Trade Practices Amendment (Australian Consumer Law) Bill 2010
(the ACL Bill) is a Bill for an Act to amend the Trade Practices
Act 1974 (TP Act) to complete the initial text of the Australian
Consumer Law (ACL), to make related amendments to the TP Act, the
Australian Securities and Investments Commission Act 2001 (ASIC
Act), the Corporations Act 2001 (Corporations Act) and to make
consequential amendments to other Commonwealth Acts.
The ACL Bill will deliver the agreements of the Council of
Australian Government (COAG) made on July 2008 and October 2008, to
create a single national consumer law for Australia, including a
national product safety law. The Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (first ACL Bill) will implement
the first tranche of these reforms.
The first ACL Bill creates a new Part XI of the TP Act, which makes
provision for the application, administration and amendment of the
ACL. The text of the ACL is contained in Schedule 2 of the TP Act.
The first ACL Bill will also implement the new national unfair
contract terms law.
The measures in the ACL Bill complete the initial text of the ACL
by:
. incorporating the fair trading and consumer protection
provisions of the TP Act into the ACL, including unfair
contract terms and provisions implementing enhanced
enforcement powers, penalties and redress options;
. creating a national legislative scheme for consumer
product safety, to replace the existing Commonwealth,
State and Territory regulatory schemes;
. creating a national legislative scheme for statutory
consumer guarantees, to replace the existing Commonwealth
and State and Territory legislation concerning implied
conditions and warranties in consumer transactions; and
. augmenting the fair trading and consumer protection
provisions of the TP Act with changes drawn from existing
provisions of the consumer laws of the States and
Territories, as agreed by the Ministerial Council on
Consumer Affairs (MCCA) at its meeting on 4 December 2009.
The ACL Bill also creates an infringement notice regime that will
apply to specified provisions of the ACL. The infringement notice
regime will be a law of the Commonwealth but may used as the basis
for provisions in the application Act of a State or Territory to
complement enforcement of the ACL in that jurisdiction. The
infringement notice provisions are not included in the ACL as some
States have their own State-wide infringement notice schemes.
In addition, the ACL Bill implements other measures:
. changing the name of the TP Act to the Competition and
Consumer Act 2010 (CC Act) and making necessary
consequential changes to the TP Act and other Acts;
. amending the consumer protection provisions of the ASIC
Act and Corporations Act, where relevant, to maintain
consistency with the ACL;
. providing for Commonwealth-specific enforcement and
administrative provisions, to enable Commonwealth agencies
and judicial bodies to enforce the ACL as a law of the
Commonwealth; and
. making changes to the enforcement powers for Part IVB of
the TP Act, which implements key elements of the
Australian Government's response to the Parliamentary
Joint Committee on Corporations and Financial Services
inquiry Opportunity not opportunism: improving conduct in
Australian franchising.
The Australian Consumer Law
Legislative arrangements for the administration and enforcement of
the ACL are provided in Part XI of the TP Act. The text of the ACL
is contained in Schedule 2 of the TP Act. Currently, the ACL
contains only the provisions relating to unfair contract terms.
On 2 July 2009, COAG signed the Intergovernmental Agreement for the
Australian Consumer Law (IGA). The IGA sets out the arrangements
for creating the initial text of the ACL, as well as procedures for
future changes to the ACL by agreement of the Australian, State and
Territory Governments.
The Bill completes the text of the ACL, in accordance with the
requirements of the IGA. Under the IGA, the ACL is to commence on
1 January 2011.
The IGA requires that the ACL is based on the fair trading and
consumer protection provisions of the TP Act, modified as agreed by
MCCA.
The TP Act fair trading and consumer protection provisions
comprise:
. Part IVA (unconscionable conduct);
. Part V (consumer protection);
. Part VA (liability of manufacturers and importers for
defective goods);
. Part VC (offences); and
. relevant parts of Part VI (enforcement and remedies).
At its meeting on 4 December 2009, MCCA agreed to amendments to the
TP Act fair trading and consumer protection provisions to be
included in the ACL. MCCA also agreed to include in the ACL some
fair trading and consumer protection provisions that currently
exist in the FT Acts of the States and Territories only.
The ACL is a generic law that applies to all sectors of the
economy. However, separate laws dealing with financial products
and services are necessary, due to constitutional issues relating
to the States' referral of those powers under the Corporations
Agreement 2002. The IGA requires the Commonwealth to enact changes
to the investor protection provisions of the ASIC Act and, to the
extent necessary, the Corporations Act, to ensure that they are
consistent with the ACL. This Bill enacts changes to the ASIC Act
and Corporations Act, consistent with the objectives of the IGA.
Commonwealth, State and Territory industry-specific legislation
will continue to apply in some areas to the extent that it does not
duplicate or is inconsistent with the ACL. Under the IGA, the
Australian Government and the governments of the States and
Territories are to repeal or modify any laws which duplicate or are
inconsistent with the ACL.
MCCA will commence a process of reviewing existing sector-specific
laws to remove inconsistent or duplicative provisions following
commencement of the ACL.
Administration and enforcement
In October 2008, COAG agreed that the ACL will be administered
jointly by the Australian Governments and the governments of the
States and Territories.
Through the Standing Committee of Officials of Consumer Affairs,
the Australian Competition and Consumer Commission (ACCC), the
Australian Securities and Investments Commission (ASIC) and the
State and Territory offices of fair trading (regulators) are
developing a Memorandum of Understanding (MOU) and supporting
frameworks to guide coordinated administration of the ACL.
New Zealand's Ministry of Economic Development and Commerce
Commission will also participate in the MOU to facilitate greater
coordination of consumer law administration and enforcement between
Australia and New Zealand.
Product safety
The ACL Bill creates a national consumer product safety regulatory
regime as part of the ACL.
The national consumer product safety provisions in the ACL replace
the product safety provisions in Part V, Division 1A of the TP Act
and equivalent provisions in State and Territory FT Acts.
Product safety law and regulation differs between jurisdictions.
In broad terms current Commonwealth, State and Territory consumer
product safety laws are similar and allow governments to:
. regulate the supply of products that pose a risk to
consumers, through the imposition of mandatory standards
for the design, manufacture and labelling of such
products;
. prohibit outright the supply of products that pose a risk
to consumers, through the imposition or interim or
permanent bans; and
. monitor or direct recalls of consumer products that have
already been supplied.
Under the ACL, permanent product bans and mandatory safety
standards will only be able to be made to apply nationally. This
ensures that product safety concerns that are identified in one
jurisdiction can be addressed consistently on a national basis.
Individual State and Territory Ministers retain the ability to
issue interim bans and to conduct recalls. Interim bans and
recalls are temporary regulatory measures that usually need to be
implemented rapidly after a consumer safety hazard is identified.
As is the case with the other provisions of the ACL, the national
product safety law is to be administered jointly by the ACCC and
the State and Territory regulators.
The product safety provisions of the ACL implement a number of
recommendations made by the Productivity Commission (PC) in its
Review of the Australian Consumer Product Safety System, including:
. expanding the scope of product safety regulation to cover
services related to the supply, installation or
maintenance of consumer goods in all jurisdictions;
. allowing product safety standards, bans and recalls to be
put in place where a reasonable foreseeable use, or
misuse, may render an otherwise safe product dangerous;
. allowing regulators to undertake product recalls directly
where no supplier can be found; and
. requiring suppliers to report serious product incidents to
regulators.
The ACL Bill also streamlines the operation of the temporary
exemption process for product bans and standards under the Mutual
Recognition Agreement and the Trans-Tasman Mutual Recognition
Agreement.
In addition to the legislative reforms contained in the ACL Bill,
MCCA charged the ACCC and State and Territory product safety
agencies with implementing a number of non-legislative reforms to
the product safety framework. These reforms include:
. creating a hazard identification system based on a
clearing house approach;
. creating a national system for exchange of consumer
product safety complaint information;
. establishing an internet based consumer product safety
'one stop shop';
. undertaking a review of existing recall guidelines to
determine how recalls might be improved;
. developing guidelines for encouraging suppliers to explain
to consumers and retailers how they can notify the
supplier of unsafe products; and
. moving to a 'hazard focused', rather than 'product
focused' approach to developing mandatory safety
standards.
These non-legislative reforms will be implemented throughout 2010
in time for commencement of the ACL on 1 January 2011.
Consumer guarantees
The ACL Bill provides for statutory consumer guarantees that will
apply uniformly across Australia. Statutory consumer guarantees
replace conditions and warranties that were implied into contracts
by the TP Act and FT Acts.
The ACL provides consumers with the following guarantees in respect
of supplies of goods:
. a guarantee that the supplier has the right to sell the
goods;
. a guarantee that goods are free from any undisclosed
security;
. a guarantee that the consumer will have undisturbed
possession of the goods;
. a guarantee that goods are of 'acceptable quality';
. a guarantee that goods are fit for a purpose that the
consumer makes known to the supplier;
. a guarantee that goods match their description or a
sample;
. a guarantee that spare parts and facilities for the repair
of goods are reasonably available for a reasonable period;
and
. a guarantee that any express warranty is complied with.
The ACL provides the following guarantees in respect of supplies of
services:
. a guarantee that the services are carried out with due
care and skill;
. a guarantee that services are fit for a purpose made known
to the supplier; and
. a guarantee that services are provided within a reasonable
time.
The ACL sets out the remedies that are available to consumers when
goods or services fail to meet consumer guarantees. The
appropriate remedy varies depending on whether a failure to comply
with a guarantee is major or not major, but generally includes
refunds, repairs and replacements. Damages are also available
against suppliers and manufacturers in certain circumstances.
Offences, enforcement and remedies
The ACL contains a single set of enforcement powers, penalties,
remedies and redress provisions applicable to breaches of the
consumer protection provisions, which will apply nationally and in
each State and Territory.
These provisions allow for:
. court-enforceable undertakings to allow administrative
resolution with the regulator for minor breaches;
. injunctions to restrain conduct or require something to be
done;
. damages to redress loss or damage caused by a breach;
. non-punitive orders such as orders for community service;
. punitive orders - adverse publicity orders, which require
a person to publish particular information;
. compensatory orders to allow compensation for breaches of
the ACL;
. civil pecuniary penalties of up to $1.1 million for bodies
corporate and $220,000 for persons other than a body
corporate for breaches of many provisions of the ACL;
. disqualification orders to prevent a person from managing
a corporation;
. substantiation notices to allow a regulator to assess
claims relating to goods or services;
. infringement notices to allow regulators to issue a
penalty that a person can (but does not have to) pay to
avoid liability to further court action;
. redress provisions allowing regulators to seek redress for
consumers that are not identified as a party to
proceedings to receive redress such as refunds or
variation of contract; and
. public warning notices for regulators to warn the public
about conduct.
These enforcement powers, penalties and remedies apply to the
majority of the provisions in the ACL. Each enforcement, penalty
or remedy provision identifies those other provisions of the ACL to
which it applies.
Many of the consumer protection provisions have corresponding
criminal offences with maximum fines of up to $1.1 million for
bodies corporate and $220,000 for persons other than a body
corporate.
Product safety
The ACL includes an enhanced market surveillance and enforcement
framework for the new national product safety law. The framework
recognises the greater role of the responsible Commonwealth
Minister and the ACCC will play under the national product safety
law as well as the focus of product safety regulatory activity on
proactively removing hazardous products from the marketplace.
Product safety market surveillance enforcement powers include the
power to:
. enter premises to which the public has access in order to
inspect, take photographs of, or purchase any consumer
goods or product related services;
. require a person who supplies consumer goods or product
related services in trade or commerce, to provide the ACCC
or the Minister with information, documents or evidence
about those goods or services; and
. enter premises under a search warrant, or without a
warrant in cases where the occupier has consented or there
is an immediate danger to life or public safety, and
exercise search-related powers.
Amendments that do not form part of the ACL
Amendments to facilitate administration and enforcement of the ACL
by the Commonwealth
Schedule 2 of the Bill provides Commonwealth-specific
administrative and enforcement provisions. These provisions relate
to:
. procedures to be followed by the ACCC when undertaking
investigations or bringing proceedings for alleged
breaches of the ACL;
. rules to be followed by Commonwealth Courts in conducting
proceedings or making findings or awards in respect of the
ACL; and
. saving of State and Territory laws and equitable and
common law principles, where appropriate.
Similar provisions may be included in State and Territory ACL
application legislation, as required.
Schedule 2 of the Bill provides for an infringement notice scheme
in respect of specified provisions of the ACL.
In Schedule 5 of the Bill, the short title of the TP Act is changed
to the Competition and Consumer Act 2010. The long title of the
CC Act is changed to 'An Act relating to competition, fair trading
and consumer protection, and for other purposes'.
In Schedules 5 and 6, consequential amendments are made to the CC
Act and other Acts to reflect this and to alter references to
sections of the TP Act that are repealed and replaced by sections
in the ACL.
Amendments to the corporations law
Separate laws dealing with financial products and services are
necessary, due to constitutional issues relating to the States'
referral of powers to regulate those matters under the Corporations
Agreement 2002.
Part 2, Division 2 of the ASIC Act currently contains consumer
protection provisions in respect of financial services. Schedule 4
of the ACL Bill amends certain provisions of the ASIC Act to
maintain consistency with the ACL.
In addition, Schedule 4 of the ACL Bill makes some amendments to
the Corporations Act to facilitate the disqualification of persons
from managing corporations, in respect of breaches of the ACL.
Government response to the Parliamentary Joint Committee on
Corporations and Financial Services
The ACL Bill implements a strengthened enforcement and redress
regime for industry codes of conduct prescribed under Part IVB of
the TP Act.
These measures were announced in the Australian Government's
response to the Parliamentary Joint Committee's franchising inquiry
and comprise:
. substantiation notices for suspected breaches of
prescribed industry codes;
. public warning notices for repeated or serious breaches of
prescribed industry codes;
. non-party redress where there has been a breach of a
prescribed industry code; and
. a random audit power to allow the ACCC to inspect
documents or records required to be kept pursuant to a
prescribed industry code.
The ACCC is responsible for enforcing industry codes prescribed
under Part IVB.
Part IVB of the TP Act does not form part of the ACL.
Date of effect: The ACL Bill will commence on different dates for
different purposes.
Sections 1 to 3 of the ACL Bill and the remaining provisions of the
Bill not included in Schedules 1 to 7 commence on the day of Royal
Assent.
Schedules 1 to 5, Schedule 6, items 1 to 46, Schedule, items 48 to
141, Schedule 6, items 143 to 191 and Schedule 7 commence on the
later of 1 January 2011 or the commencement of Schedule 1 of the
Trade Practices Amendment (Australian Consumer Law) Bill 2009 (the
first ACL Bill). The first ACL Bill is currently before the
Parliament.
The remaining items of Schedule 6 commence either on the date of
the commencement of the remainder of Schedule 6, or a later date,
to be determined by reference to the passage of other legislation.
The Australian, State and Territory governments have agreed, in
accordance with the National Partnership Agreement to Deliver a
Seamless National Economy (NPA), to enact the ACL as a law of each
f their respective jurisdictions by 1 January 2011.
Proposal announced: On 2 October 2008, the COAG agreed to a new
consumer policy framework comprising a single national consumer
law, having agreed to develop a national consumer law on 3 July
2008.
In so doing, COAG based its decision on the proposals of MCCA,
which were announced on 15 August 2008.
At its meeting on 4 December 2009, MCCA agreed to the final form of
the ACL.
Financial impact: This Bill has no significant financial impact on
Commonwealth expenditure or revenue at this time.
Compliance cost impact: Moderate. The ACL Bill applies regulatory
provisions and concepts in a single national law, drawing on
Commonwealth and State and Territory laws that exist in only some
jurisdictions presently.
Four Regulation Impact Statements (RIS) have been prepared in
respect of measures included in the ACL. All four of these RISs
were considered by MCCA in the context of developing the ACL.
. Framework and unfair contract terms. This RIS examined
recommendations made by the Productivity Commission in its
Review of Australia's Consumer Policy Framework. These
recommendations form the basis of the ACL.
The measures considered in this RIS will be implemented by
first ACL Bill and the RIS is published in the explanatory
memorandum to that Bill.
. Reforms based on best practice in State and Territory
consumer laws. This RIS examined measures intended to
modify or augment the existing consumer protection
provisions of the TP Act, based on existing best practice
provisions in State and Territory consumer laws. These
reforms are of two types: those that which create a
single, simplified national law; and those which draw on
best practice in State and Territory laws.
The full text of this RIS is included at Chapter 23.
. Product safety. This RIS examines the case for
implementing legislative recommendations made by the
Productivity Commission in its Review of the Australian
Consumer Product Safety System.
The full text of this RIS is included at Chapter 24.
A separate RIS was prepared in May 2008 to support the
agreement of MCCA to create a national product safety
system.
. Consumer guarantees. This RIS examines the case for
implementing the findings of the Commonwealth Consumer
Affairs Advisory Committee's report Consumer rights:
Reforming statutory implied conditions and warranties.
The full text of this RIS is included at Chapter 25.
Summary of regulation impact statement
Regulation Impact: Reforms based on best practice in State and Territory
laws
Impact:
Moderate. This Bill establishes a single, national consumer law
framework and, in doing so, promotes consistency and protections
across all Australian jurisdictions. This framework will reduce
multi-jurisdictional complexities and result in lower compliance
costs for businesses operating nationally. Once implemented, major
parts of 17 jurisdictional laws dealing with generic consumer
protections will be reduced to one law, substantially reducing
business compliance costs.
There will be a transitional cost for these businesses as they
adjust to the operation of the new, national regime and,
specifically, to the new unfair contract terms provisions.
The compliance cost in relation to the new penalties, enforcement
and consumer redress powers will be minimal, as these provisions
provide for additional powers to deal with existing breaches of, or
the investigation of suspected breaches of, the ACL and the new
unfair contract terms provisions. Once the ACL takes effect, there
will be common national enforcement powers covering all of
Australia's consumer law agencies.
The publication of national guidance on subjects under the ACL,
developed jointly by the ACCC and the State and Territory
regulators (and, where appropriate, ASIC), will assist business in
compliance with the ACL.
Once the initial period of implementation is completed, ongoing
compliance with the ACL will not impose significantly greater costs
on businesses, as they should already comply with provisions in the
ACL as they are either similar to existing laws or the same as
existing national, State and Territory obligations.
Main points:
. The PC estimated that the implementation of a national
consumer law could result in benefits to Australian
consumers of between $1.5 billion and $4.5 billion a year.
. Businesses will benefit from consistent national
regulation, which will reduce complexity and compliance
costs by eliminating significant jurisdictional variation.
This will provide:
- savings for businesses currently operating nationally;
- incentives for expansion and innovation for businesses
previously unwilling to deal with the complexity of
multi-jurisdictional regulation;
- greater incentives for new entrants to markets due to a
simpler regulatory framework;
- greater clarity and certainty in relation to consumer
law, allowing for more efficiency in the markets;
- easier understanding of consumer contracts and greater
opportunities for exercising choice when considering
consumption possibilities; and
- greater consistency in enforcement for businesses and a
realignment of resources as more emphasis can be placed
on effective enforcement by the most appropriate
consumer law agency.
. Consumers will also benefit from the changes through:
- greater confidence in dealing with businesses due to
more consistent laws;
- easier understanding of consumer contracts and greater
opportunities for exercising choice when considering
consumption possibilities;
- greater confidence in dealing with businesses due to
greater consistency in the enforcement of these laws;
and
- lower prices for goods and services to the extent that
businesses pass on the benefits of lower compliance
costs to their customers.
Regulation Impact: Product Safety
Impact: Moderate. This measure affects suppliers of consumer
goods or product related services, to the extent that they are
required to comply with a consumer safety order (such as a safety
standard, ban or recall) or a reporting requirement. The consumer
safety provisions of the ACL are modelled on the current product
safety provisions of the TP Act and State and Territory FT Acts.
Where a supplier is already required to comply with a similar
safety requirement in respect of a good or service, the additional
compliance costs, if any, associated with a safety order made under
the national consumer law will be minimal. Separate regulatory
impact analysis must be undertaken on a case-by-case basis before
bans, standards or recalls can be issued under the ACL.
Main points:
. Product safety regulatory actions impose requirements only
on suppliers where particular consumer goods or product
related services are judged to pose a risk of injury.
. The ACL will create a single national set of product
safety standards and permanent bans that will apply in all
jurisdictions.
Reasonable foreseeable use or misuse
. Incorporating the concept of 'reasonably foreseeable use
or misuse' into the threshold tests for imposing safety
bans and recalls may impose additional compliance burdens
on suppliers as bans and recalls will no longer be
confined to circumstances where the primary, normal or
intended use of a good creates a risk of injury.
Suppliers will also have to consider the possibility that
an improper or unintended use or misuse of the goods,
which is foreseeable, may pose a risk of injury.
Product related services
. Where applicable, the consumer safety provisions of the
ACL extend to cover product related services. Suppliers
of such services would incur compliance costs, but only if
the services they supply are of the kind to which a safety
order relates.
. Suppliers of services required to comply with requirements
under industry-specific regulation would need to continue
observing those requirements, together with any extra
requirement in a safety order made under the generic
consumer safety provisions of the ACL, with the more
industry-specific requirement prevailing to the extent of
any inconsistency between the two requirements.
Mandatory reporting
. The requirement for suppliers to report incidents where
consumer goods or product related services have been
associated with death or serious injury would impact on
suppliers only to the extent that they become aware of
incidents within their ordinary course of business. This
provision does not require suppliers to gather information
they would not otherwise have gathered.
Regulator-led recalls
. Where regulators undertake a recall directly, there would
be no compliance cost impact on businesses. Rather this
measure will help manage consumer expectations and
concerns about unsafe goods where no supplier of the goods
can be found.
Regulation Impact: Consumer Guarantees
Impact: Moderate. This measure affects businesses that supply
goods or services to consumers. The obligations imposed upon such
businesses are similar to those that apply under pre-existing law.
Compliance costs for business are expected to be reduced under a
national system of consumer guarantees, when compared to laws that
imply conditions and warranties that vary slightly across each
jurisdiction within Australia. This is especially the case for
suppliers who trade in more than one State or Territory of
Australia.
Main points:
. Statutory consumer guarantees provide consumers with a
basis for seeking redress when goods or services do not
meet the standards that they are entitled to expect.
. Statutory consumer guarantees replace conditions and
warranties that were implied into contracts by the TP Act
and the FT Acts. The substantive rights and obligations
under statutory consumer guarantees are broadly similar to
those that were implied under pre-existing laws.
. Implied conditions and warranties are difficult for
consumers and businesses to understand, leading to
confusion, increased disputation and increased costs.
. Statutory consumer guarantees will be more readily
understood by businesses and consumers since archaic
terms, such as 'merchantable quality', will be replaced
and, in some instances, defined, when previously the
meaning of these terms was determined only by judicial
pronouncement.
. Remedies applicable to consumer guarantees are set out in
the ACL. Previously, businesses and consumers required an
understanding of remedies under the law of contract to
effectively apply implied conditions and warranties to
their particular situation. By setting out the applicable
remedies, the ACL will reduce costs for businesses and
consumers when they seek to assert, or defend, their
rights.
Chapter 1
Preliminary matters
Outline of chapter
1. The ACL Bill changes the long title and short title of the Trade
Practices Act 1974 (TP Act).
Context of amendments
2. On 24 June 2009, the Minister for Competition Policy and Consumer
Affairs announced that the name of the TP Act will be changed to the
Competition and Consumer Act 2010.
Detailed explanation of new law
Competition and Consumer Act 2010
3. The long title of the TP Act is changed from 'An Act relating to
certain Trade Practices' to 'An Act relating to competition, fair
trading and consumer protection, and for other purposes'. [Schedule
5, item 1]
4. The short title of the TP Act is changed from 'Trade Practices Act
1974' to 'Competition and Consumer Act 2010'. [Schedule 5, item 2]
Application and transitional provisions
5. The ACL commences on the later of 1 January 2011 or the commencement
of Schedule 1 of the Trade Practices Amendment (Australian Consumer
Law) Bill 2009 (the first ACL Bill). The first ACL Bill is
currently before the Parliament. [Section 2]
Consequential amendments
6. Consequential amendments are made to the CC Act and a wide range of
Commonwealth Acts which refer to the TP Act by name, or to sections
of the TP Act which are now repealed and replaced by sections of the
applied ACL as a law of the Commonwealth. [Schedule 5, items 1 to
129 and Schedule 6, items 1 to 191]
Chapter 2
Introduction
Outline of chapter
7. The Australian Consumer Law (ACL) includes definitions, application
and miscellaneous provisions in Chapter 1.
Context of amendments
8. At its meeting on 4 December 2009, the Ministerial Council on
Consumer Affairs (MCCA), agreed to the final form of the ACL.
9. The provisions of the ACL Bill build upon the first ACL Bill. The
first ACL Bill creates the ACL as a schedule to the TP Act and
introduced unfair contract terms regulation into the schedule. The
first ACL Bill also introduces a range of penalties, enforcement and
redress provisions into the TP Act.
10. The first ACL Bill makes similar amendments to the Australian
Securities and Investments Commission Act 2001 (ASIC Act), to
maintain consistency between the consumer protection provisions of
the TP Act and ASIC Act.
11. The States and Territories are able to apply schedule version of the
ACL, containing only the unfair contract terms provisions, as laws
of their jurisdictions from 1 July 2010, if they choose to do so.
Summary of new law
12. Chapter 1 of the ACL covers the defined terms and other definitions
that are relied on throughout the ACL.
Detailed explanation of new law
Definitions
13. The ACL applies to the extent provided by Part XI of the CC Act or a
State or Territory's application law. [Schedule 1, item 1: Chapter
1, section 1]
14. Section 2 of the ACL defines terms that are relevant to the
understanding, interpretation and application of the provisions of
the ACL. [Schedule 1, item 1: Chapter 1, section 2]
15. These terms are explained in the context of the provisions in which
they are used, as they are discussed in this explanatory memorandum.
The meaning of 'consumer'
16. For many purposes the provisions of the ACL apply to all persons and
are not limited to a defined class of consumers. However, for some
purposes, provisions apply with respect to a defined class of
consumer on the basis that it is not appropriate to extend the
protection afforded by the relevant provision more broadly.
17. A reference to a supply of goods or services to a consumer in the
ACL, is a reference to a supply to a person who is taken to have
acquired them as a consumer within the meaning of section 3 of the
ACL. [Schedule 1, item 1: Chapter 1, subsection 3(5)]
18. The definition of a consumer is relevant to the following provisions
in the ACL:
. consumer guarantees; [Schedule 1, item 1: Chapter 3, Part
3-2, Division 1]
. unsolicited consumer agreements; [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 2]
. lay-by sales agreements; [Schedule 1, item 1: Chapter 3,
Part 3-2, Division 3]
. the provision of itemised bills; [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 4, section 101]
. the definition of continuing credit contracts; [Schedule
1, item 1: Chapter 1, section 14]
. linked credit contracts. [Schedule 1, item 1: Chapter 5,
Part 5-5, Division 1]
19. The use of the term consumer in the unconscionable conduct
provisions of Part 2-2 of the ACL [Schedule 1, item 1: Chapter 2,
Part 2-2] is not linked to the definition of consumer in section 3.
A consumer for the purposes of the unconscionable conduct provisions
is the other person to whom a person supplies or will possibly
supply with goods and services. [Schedule 1, item 1: Chapter 2,
Part 2-2, section 21(1)]
20. The definitions of consumer good in section 2 and consumer contract
in section 23 of the ACL are couched in similar terms to the
definition of consumer in section 3, but are not subject to that
definition.
21. The definition of non-party consumer in section 2 of the ACL is not
defined by reference to the definition of consumer in section 3.
22. The definition establishes when a person is a consumer, which is
determined by reference to the nature of the goods or services
acquired or to be acquired. [Schedule 1, item 1: Chapter 1, section
3] The concept of consumer is defined separately with respect to
the supply of goods and the supply of services.
23. A person is taken to have acquired goods as a consumer if:
. the goods were of a kind ordinarily acquired for personal,
domestic or household use or consumption [Schedule 1, item
1: Chapter 1, paragraph 3(1)(a)]. This is an objective
assessment based on the nature and usual purpose of the
goods; or
. the goods consisted of a vehicle or trailer acquired for
use principally in the transport of goods on public roads
[Schedule 1, item 1: Chapter 1, paragraph 3(1)(b)].
Neither 'vehicle' nor 'trailer' is defined in section 2 of
the ACL or elsewhere in the ACL. The question of whether
a vehicle or trailer is acquired as a consumer is
determined subjectively with reference to the actual
purpose for which the vehicle or trailer were acquired.
24. A person is taken not to have acquired goods as a consumer if the
person acquired the goods, or held himself or herself out as
acquiring the goods for commercial purposes, including for the
purpose of:
. re-supply; or
. using them up in the course of trade or commence.
[Schedule 1, item 1: Chapter 1, subsection 3(2)]
25. A person is taken to have acquired services as a consumer if, and
only if, the services were of a kind ordinarily acquired for
personal, domestic or household use or consumption. [Schedule 1,
item 1: Chapter 1, subsection 3(3)]
26. With regard to the interpretation of goods or services 'of a kind
ordinarily acquired for personal, domestic or household use or
consumption' the jurisprudence relating to section 4B of the TP Act
is relevant.
27. There is a rebuttable presumption that a person is a consumer with
respect to the acquisition or possible acquisition of goods and
services. Where a claimant has alleged that he or she is a
consumer, then it is for the respondent to prove, according to the
civil standard of proof, that the claimant is not a consumer within
the meaning of section 3 of the ACL. [Schedule 1, item 1: Chapter
1, section 3]
Misleading representations with respect to future matters
28. Section 4 of the ACL includes a provision that replaces section 51A
of the TP Act. It places an evidentiary burden on a defendant who
is alleged to have made a representation as to a future matter that
is misleading. When compared to section 51A, the new provision
seeks to clarify that [Schedule 1, item 1: Chapter 1, section 4]
. the burden of proof under this section is evidentiary in
nature and does not place a legal burden on defendants to
prove that representations were not misleading;
. satisfying the burden of proof under this section does not
constitute a substantive defence for breach of any other
section of the ACL; and
. the section can operate in proceedings against accessories
to contraventions as well as primary contraveners.
29. The clarification of the burden as requiring only evidence of
reasonable grounds to be adduced is to reverse the effect of some
past court decisions, such as Australian Competition & Consumer
Commission v IMB Group Pty Ltd[1], that have interpreted section 51A
of the TP Act as requiring a respondent to prove that he, she or it
had reasonable grounds.
30. In certain cases, Section 51A of the TP Act was interpreted in such
a way to, by implication, provide that proving reasonable grounds is
a substantive defence to an allegation of misleading conduct.[2] To
reverse the effect of such decisions, section 4 of the ACL states
explicitly that it does not imply that a representation as to a
future matter is not misleading merely because the person had
reasonable grounds for making the representation.
31. Section 51A of the TP Act has been interpreted to not allow the
provision to apply to alleged accessories to a contravention because
it was worded as to require the 'corporation' to adduce evidence[3].
Section 4 of the ACL reverses the effect of such decisions to allow
its application to accessories.
32. The drafting of section 4 of the ACL clarifies the operation of this
provision and ensures that it has the effect of facilitating the
presentation of evidence to the court when a representation of a
future matter is alleged to be misleading. [Schedule 1, Item 1:
Chapter 1, section 4]
33. Section 12BB of the ASIC Act is in the same terms as section 51A of
the TP Act. The changes made to section 51A for the purposes of its
inclusion in the ACL have been mirrored in the ASIC Act. [Schedule
3, Item 6: section 12BB].
When donations are treated as supplies or acquisitions
34. For the purposes of the provisions of the ACL except those
concerning the safety of consumer goods and product related services
[Schedule 1, item 1: Chapter 3, Part 3-3], information standards
[Schedule 1, item 1: Chapter 3, Part 3-4] and offences relating to
safety of consumer goods and product related services [Schedule 1,
item 1: Chapter 3, Part 4-3] a donation is not treated as a supply
of the goods unless the donation of the goods is for promotional
purposes. Nor is the receipt of a donation of goods or services
treated as an acquisition of those goods or services unless the
donation is for promotional purposes. Neither 'donation' nor
'promotional purposes' are defined specifically in the ACL.
[Schedule 1, item 1: Chapter 1, Subsection 5(1)]
35. For the purposes of the provisions of the ACL concerning the safety
of consumer goods and product related services [Schedule 1, item 1:
Chapter 3, Part 3-3], information standards [Schedule 1, item 1:
Chapter 3, Part 3-4] and offences relating to safety of consumer
goods and product related services [Schedule 1, item 1: Chapter 3,
Part 4-3] any donation is treated as a supply of the goods and the
receipt of a donation of goods or services is treated as an
acquisition of those goods or services. [Schedule 1, item 1:
Chapter 1, Subsection 5(2)]
Related bodies corporate
36. It is recognised that, for the purposes of the ACL, there are many
potential applications of the Law that could be:
. avoided or frustrated unless the activities of all
corporations forming part of a corporate group are treated
in the same way and taken together; or
. may apply inconsistently or inappropriately if the
activities of a corporate group are not recognised and
treated accordingly.
37. The ACL imports the meaning of related bodies corporate from
section 4A(5) of the CC Act [Schedule 1, item 1: Chapter 1,
Subsection 6(1)] Subsection 4A(5) of the CC Act deems a body
corporate to be related to another body corporate where the first-
mentioned body corporate is:
. the holding company of another body corporate;
. a subsidiary of another body corporate; or
. a subsidiary of the holding company of another body
corporate.
38. For the purposes of the ACL, it is presumed that bodies corporate
are not related to each other. [Schedule 1, item 1: Chapter 1,
Subsection 6(1)]
39. The provisions are relevant to circumstances in which a body
corporate is either subject to an obligation or a liability under
the ACL.
40. With regard to the interpretation of 'related bodies corporate' the
jurisprudence relating to section 4A of the TP Act is relevant.
Further guidance on the interpretation of concepts associated with
the concept of a 'body corporate' may be found in the Corporations
Act and related jurisprudence.
The meaning of 'manufacturer'
41. The meaning of manufacturer is relevant to the consumer guarantees
[Schedule 1, item 1: Chapter 3, Parts 3-2 and 5-4], liability of
manufacturers for defective goods [Schedule 1, item 1: Chapter 3,
Part 3-5] and country of origin representations [Schedule 1, item 1:
Chapter 1, Part 5-3] of the ACL.
42. The meaning of manufacturer in section 7 of the ACL draws on the
definition of 'manufactured' is the repealed section 74A of the TP
Act. The jurisprudence relating to that definition may be relevant
to the interpretation or understanding of the meaning of
manufacturer under the ACL, insofar as those provisions are similar.
43. The meaning of manufacturer encompasses a wide range of activities
that that represent the first point in the chain of distribution of
a product into an Australian market, whether directly by a person or
in that person's name or brand.
44. For the purposes of the ACL, the activities of a manufacturer
include:
. the activities of a person (being the manufacturer for
these purposes) of growing, extracting, producing,
processing or assembling the goods. [Schedule 1, item 1:
Chapter 1, paragraph 7(1)(a)] These activities encompass
a very wide range of agricultural, mining, forestry,
fishing and aquacultural, manufacturing, product assembly,
trade, craft and artisanal activities.
. the activities of a person (being the manufacturer for
these purposes) who holds himself or herself out to the
public as the manufacturer of the goods. [Schedule 1,
item 1: Chapter 1, paragraph 7(1)(b)] This covers, among
other things, a range of activities that relate to the
activities of importers and agents and entities acting as
the local representative of manufacturers.
. the activities of a person (being the manufacturer for
these purposes) who causes or permits the name of the
person, a name by which the person carries on business or
a brand or mark of the person to be applied to goods
supplied to the person. [Schedule 1, item 1: Chapter 1,
paragraph 7(1)(c)] This covers, among other things, a
range of activities that relate to the activities of
importers and agents and entities acting as the local
representative of manufacturers.
. the activities of a person (the 'first person', being the
manufacturer for these purposes) who causes or permits
another person, in connection with the supply or possible
supply, or the promotion of the supply, of the goods, to
hold out the first person to the public as the
manufacturer of the goods. [Schedule 1, item 1: Chapter
1, paragraph 7(1)(d)] This covers, among other things, a
range of activities that relate to the activities of
importers and agents and entities acting as the local
representative of manufacturers.
. the activities of a person (being the manufacturer for
these purposes) who imports goods into Australia if that
person is not the actual manufacturer of the goods and, at
the time of the importation of the goods, the manufacturer
does not have a place of business in Australia. [Schedule
1, item 1: Chapter 1, paragraph 7(1)(e)] 'Import' is not
specifically defined for the purposes of the ACL.
45. A person is taken to have associated their name or brand with a
product if their name, brand or mark is:
. woven in, impressed on, worked into or annexed or affixed
to the goods;
. it is applied to a covering, label, reel or thing in or
with which the goods are supplied. [Schedule 1, item 1:
Chapter 1, paragraph 7(2)(a)]
46. It is presumed for the purposes of the ACL that if a person's name,
brand or mark is applied to goods, then that person caused their
name, brand or mark to be so applied. [Schedule 1, item 1: Chapter
1, paragraph 7(2)(b)]
47. If goods are imported into Australia on behalf of a person, that
person is taken to have imported the goods. [Schedule 1, item 1:
Chapter 1, subsection 7(3)]
Goods affixed to land or premises
48. For the purposes of the ACL, goods are taken to be supplied to a
consumer (within the meaning of section 3) even if they are affixed
to land or premises at the time of the supply. Goods supplied in
relation to another transaction, for example the transfer of an
interest in a property, are subject to the ACL for certain purposes.
This could include, for example, kitchen or laundry fittings
supplied as part of a home construction contract, which would
otherwise become fixtures at the time of their installation.
[Schedule 1, item 1: Chapter 1, section 8]
The meaning of 'safety defect' in relation to goods
49. The meaning of safety defect is relevant to the provisions of the
ACL dealing with the liability of manufacturers for goods with
safety defects. [Schedule 1, item 1: Chapter 5, Part 5-3]
50. The general test for the existence of a safety defect in a good is
whether the safety of the goods is not such as persons generally are
entitled to expect. [Schedule 1, item 1: Chapter 1, subsection
9(1)]
51. The concept of safety or what a person is generally entitled to
expect is not defined. However the provision sets out a non-
exhaustive set of principles to which a court or tribunal may have
regard in determining this question. [Schedule 1, item 1: Chapter
1, subsection 9(2)]
52. The question of whether a good has a safety defect is an absolute,
rather than relative, proposition and must be determined with
reference to the state of scientific or technical knowledge that
existed at the time the goods were supplied. The ACL provides that
an inference is not to be made that a good has a safety defect only
because:
. after they were supplied by their manufacturer, safer
goods of the same kind were supplied; or
. the goods complied with a Commonwealth mandatory standard
that was not the safest possible standard having regard to
the latest state of scientific or technical knowledge.
[Schedule 1, item 1: Chapter 1, subsections 9(3) and 9(4)]
Asserting a right to payment
53. The meaning of asserting a right to payment is relevant to the
provisions of the ACL relating to asserting a right to payment for
unsolicited goods or services, and unauthorised directory entries or
advertisements. [Schedule 1, item 1: Chapter 3, Part 3-1, Division
2, sections 40 and 43] [Chapter 4, Part 4-1, Division 2, sections
162 and 163]
54. A person is taken to assert a right to payment from another person
if the person takes some action with a view to obtaining payment
from the other person. Such actions could include:
. making a demand for payment or asserting a present or
future right to payment for the goods or services;
. threatening to commence legal proceedings with a view to
obtaining payment;
. placing or causing to be placed the name of the person on
a list of defaulters or debtors, or threatening to do so,
with a view to obtaining payment;
. invoking or causing to be invoked any other collection
procedure, or threatening to do so, with a view to
obtaining payment;
. sending any invoice or other document that:
- states the amount of the payment (to which a right to
payment is asserted); or
- sets out the price of unsolicited goods or unsolicited
services (to which a right to payment is asserted); or
- sets out the charge for placing, in a publication, an
entry of advertisement (to which a right to payment is
asserted),
and does not contain a statement, to the effect that the payment is
not an assertion of a right to payment, that complies with any
requirements prescribed by the regulations. [Schedule 1, item 1:
Chapter 1, subsection 10(1)]
55. Regulations specifying the requirements for statements concerning
the assertion of rights to payment have not yet been prepared.
56. An invoice or other document purporting to have been sent by or on
behalf of a person is taken to have been sent by that person unless
the contrary is established. [Schedule 1, item 1: Chapter 1,
subsection 10(2)]
ASIC Act
57. A provision in similar terms to section 10 of the ACL is included in
the ASIC Act. Section 12BEA of the ASIC Act deals with the meaning
of asserting a right to payment in the context of financial services
and products. [Schedule 3, item 8: section 12BEA]
References to acquisition, supply and re-supply
58. Section 11 of the ACL is relevant to the many provisions of the ACL
covering conduct concerning the acquisition, supply or re-supply of
goods and services. It draws on section 4C of the CC Act, which
will continue to apply only for the purposes of the CC Act, and not
the ACL. The jurisprudence relating to section 4C may be relevant
to the interpretation or understanding of the meaning of section 11
of the ACL, insofar as those provisions are similar.
59. For the purposes of the ACL:
. a reference to the acquisition of goods includes a
reference to the acquisition of property in, or rights in
relation to, goods pursuant to a supply of the goods; and
. a reference to the supply or acquisition of goods or
services includes a reference to agreeing to supply or
acquire goods or services; and
. a reference to the supply or acquisition of goods includes
a reference to the supply or acquisition of goods together
with other property or services, or both; and
. a reference to the supply or acquisition of services
includes a reference to the supply or acquisition of
services together with property or other services, or
both; and
. a reference to the re-supply of goods acquired from a
person includes a reference to:
- a supply of the goods to another person in an altered
form or condition; and
- a supply to another person of goods in which the first-
mentioned goods have been incorporated; and
. a reference to the re-supply of services (the 'original
services) acquired from a person (the 'original supplier')
includes a reference to:
- a supply of the original services to another person in
an altered form or condition; and
- a supply to another person of other services that are
substantially similar to the original services, and
could not have been supplied if the original services
had not been acquired by the person who acquired them
from the original supplier.
[Schedule 1, item 1: Chapter 1, section 11]
60. The purpose of this provision is to make clear the circumstances in
which transactions may be covered by the ACL.
Application of Schedule in relation to leases and licenses of land
and buildings
61. This provision is relevant to any provision of the ACL that applies
to a contract which involves a lease of, or licence in respect of,
land or a building. It clarifies that any reference to a contract
includes a reference to a lease of, or licence in respect of, land
or a building, regardless of whether there are express references to
leases or licences in the provisions of the ACL). [Schedule 1, item
1: Chapter 1, section 12]
62. Similarly, a reference to making or entering into a contract for
such a lease or licence refers to granting or taking the lease or
licence, and a reference to a party to a contract in respect of such
a lease or licence includes any person bound by, or entitled to the
benefit of, any provision contained in the lease or licence.
Loss or damage to include injury
63. For the purposes of the ACL, references to 'loss or damage' includes
injury. [Schedule 1, item 1: Chapter 1, subsection 13(a)] Injury
includes bodily or personal injury and may extend to other forms of
harm.
64. A reference to the amount of any loss or damage includes a reference
to damages in respect of any injury. [Schedule 1, item 1: Chapter
1, subsection 13(b)]
65. 'Loss and damage' is not defined for the purposes of the ACL.
Continuing credit contract
66. Section 12 of the ACL provides, for the purposes of the provisions
of the ACL dealing with liability of suppliers and credit providers
[Schedule 1, item 1: Chapter 5, Part 5-5], that a continuing credit
contract is one where:
. a creditor agrees to provide credit for goods or services
(either supplied by the creditor or another person) or
cash paid to the consumer or another person;
. they have an arrangement or course of dealing; and
. the amounts owing and paid are kept in accounts for the
purposes of the arrangement or dealing. [Schedule 1, item
1: Chapter 1, subsection 14(1)]
67. Where the credit relates to goods, services or cash provided by
another person, the creditor is taken to have provided credit to the
consumer even though the payments were not to the consumer.
[Schedule 1, item 1: Chapter 1, subsection 14(2)]
Contraventions of the ACL
68. Conduct covered by:
. the voiding of a unfair contract term under section 23(1)
of the ACL;
. a failure to honour the consumer guarantees set out in
Division 1 of Part 3-2; or
. a failure to meet obligations under the provisions dealing
with the liability of manufacturers for goods with safety
defects in Part 3-5,
are not contraventions of the ACL. [Schedule 1, item 1: Chapter 1,
section 15]
Severability
69. A provision in a contract which causes that contract to contravene
the ACL, is severable from that contract. The concept of
severability means that the contract remains valid and enforceable
otherwise than in relation to the particular provision, so far as it
can be without that provision. [Schedule 1, item 1: Chapter 1,
subsection 16(1)]
70. Where an order made under a provision of Part 5-2, Division 4 of the
ACL applies to a contract, the rule created by section 16 of the ACL
applies subject to those orders. [Schedule 1, item 1: Chapter 1,
subsection 16(2)] Part 5-2, Division 4 covers a wide range of
potential remedies for breaches of the ACL that may, among other
things, include variations to provisions in a contract.
References to provisions in the ACL
71. A reference to a section in the ACL is a reference to that section
only, and cannot be taken to be a reference to the same numbered
section in the CC Act or any other Act, unless otherwise provided
for. [Schedule 1, item 1: Chapter 1, section 17]
Chapter 3
Misleading or deceptive conduct
Outline of chapter
72. The ACL contains a general prohibition against misleading and
deceptive conduct in trade or commerce.
Context of amendments
73. The ACL includes a provision to replace the prohibition on
misleading or deceptive conduct currently set out in section 52 of
the TP Act , without substantive change. A similar prohibition is
in the FT Acts of the States and Territories in substantially the
same form as section 52 of the TP Act.
74. The only change made in including the prohibition in the ACL is to
apply the prohibition to 'a person' rather than 'a corporation'.
This reflects the broader application of the ACL.
75. The jurisprudence associated with the understanding and
interpretation of section 52 of the TP Act and the equivalent
provisions in State and Territory fair trading laws is still
relevant.
Summary of new law
76. Subsection 18(1) of the ACL provides that a person must not, in
trade or commerce, engage in misleading or deceptive conduct or
conduct that is likely to mislead or deceive. This is a general
prohibition, which creates a norm of business conduct in the market.
77. Section 19 of the ACL provides that the provisions relating to
misleading or deceptive conduct do not apply to an information
provider if the information provider made a publication in the
course of carrying on a business of providing information, unless
the publication is related directly to the business activities of
the person publishing the notice.
Comparison of key features of new law and current law
|New law |Current law |
|Engaging in misleading or|Engaging in misleading or|
|deceptive conduct is |deceptive conduct is |
|prohibited. |prohibited in section 52 |
| |of the TP Act. |
| |Provisions in essentially|
| |the same form as section |
| |52 of the TP Act exist in|
| |the FT Acts of the States|
| |and Territories, namely: |
| | |
| |Section 42 NSW FT Act |
| |Section 9 Vic. FT Act |
| |Section 38 Qld FT Act |
| |Section 56 SA FT Act |
| |Section 10 WA FT Act |
| |Section 14 Tas. FT Act |
| |Section 12 ACT FT Act |
| |Section 42 NT FT Act |
|The prohibition of |A similar provision is |
|misleading or deceptive |contained in section 65A |
|conduct does not apply to|of the TP Act and section|
|an information provider |12DN of the ASIC Act. |
|if the information |Provisions with the same |
|provider made the |effect as section 65A of |
|publication in the course|the TP Act exist in the |
|of carrying on a business|FT Acts of the States and|
|of providing information,|Territories, namely: |
|unless the publication |Section 60 NSW FT Act |
|is: |Section 32 Vic. FT Act |
|an advertisement; |Section 51 Qld FT Act |
|in connection with the |Section 63 WA FT Act |
|supply of certain goods |Section 74 SA FT Act |
|or services; or |Section 28 Tas. FT Act |
|in connection with the |Section 31 ACT FT Act |
|sale or grant of certain |Section 60 NT FT Act |
|interests in land, or the| |
|promotion of such a sale | |
|or grant. | |
Detailed explanation of new law
78. Section 18(1) of the ACL prohibits a person from engaging in
conduct in trade or commerce that is:
. misleading and deceptive; or
. likely to mislead or deceive.
[Schedule 1, item 1: Chapter 2, Part 2-1, subsection 18(1)]
79. Section 18(2) provides that the application of section 18(1) is not
(and cannot be) limited by the operation of a provision in Chapter
3, Part 3-1, which prohibits specific unfair practices, and the
provisions may apply concurrently. [Schedule 1, item 1: Chapter 2,
Part 2-1, subsection 18(2)]
80. The provisions of the ACL apply to all persons - whether they are
individual persons or bodies corporate - as it will be a law both of
the Commonwealth and of each State and Territory. Section 131 of
the CC Act applies the ACL to the conduct of corporations.
[Schedule 3, item 1: section 131]
81. The prohibition on misleading or deceptive conduct creates a broad
norm of conduct in the market. A finding that the prohibition is
proven according to the relevant standard of proof does not result
in exposure to a criminal sanction or civil penalty under the ACL.
Rather, such a finding exposes the person who has breached the
provision to the wide range of remedies available under Chapter 5,
Part 5-2 of the ACL, including redress for non-party consumers.
[Schedule 1, item 1: Chapter 5, Part 5-2]
82. Section 18 of the ACL replaces the repealed section 52 of the
TP Act. The substance of the drafting of the prohibition has not
been changed, other than changing the reference to 'a corporation'
to 'a person'. Accordingly, the well-developed jurisprudence
relating to section 52 of the TP Act is relevant to the
interpretation or understanding of the meaning and application of
section 18 of the ACL.
83. Section 18 of the ACL applies to conduct 'in trade or commerce'.
'Trade or commerce' is defined as meaning 'trade or commerce within
Australia, or between Australia and places outside Australia, and
includes any business or professional activity (whether or not
carried on for profit)'. The ACL applies to conduct engaged in
outside of Australia, provided that at least some aspect of the
trading relationship between two or more parties has taken place in
Australia. [Schedule 1, item 1: Chapter 1, section 2]
84. The High Court has found, for the purposes of section 52 of the TP
Act, that 'trade or commerce' includes conduct which is itself an
aspect or element of activities or transactions which, of their
nature, bear a trading or commercial nature.[4]
85. 'Misleading or deceptive' is not defined for the purposes of the
ACL. The High Court has found that, for conduct to be misleading or
deceptive, the conduct must either induce error or be capable of
inducing error.[5]
86. Section 18 of the ACL does not specify a requirement for intention
on the part of the person engaged in the conduct to be shown. The
High Court has found that intention is not a requirement for a
person to have engaged in misleading or deceptive conduct.[6]
87. Section 18 of the ACL refers only to 'conduct' which is misleading
or deceptive or is likely to mislead or deceive. The High Court has
found that the ambit of 'conduct' is not limited to a positive
action or representation, and that silence can be considered
misleading or deceptive in certain circumstances.[7]
Enforcement and remedies
88. The following enforcement powers and remedies apply to section 18 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders[Schedule 1, item 1: Chapter 5, Part 5-
2, Division 5, section 246]
89. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
Information providers
90. The prohibition in section 18 of the ACL does not apply to
publications by an information provider, where the information
provider made the publication in the course of carrying on a
business of providing information or, in the case of a radio or
television broadcaster, the publication was by radio or television
broadcast by the information provider. This exemption does not
apply to:
. advertisements;
. a publication in connection with the supply (or promotion
of the supply) of goods or services by the information
provider; or
. a publication in connection with the sale or grant (or
promotion of the sale or grant) of an interest in land by
the information provider.
[Schedule 1, item 1: Chapter 2, Part 2-1, section 19]
91. Section 19 of the ACL operates in the same way as the repealed
subsections 65A(1) and (2) of the TP Act, and the jurisprudence on
the understanding, interpretation and application of those
provisions is relevant to section 19.
92. In particular, subsections 19(3) and (4) have been drafted in such a
way as to maintain the High Court's interpretation of section 65A of
the TP Act in ACCC v Channel Seven Brisbane Pty Limited [2009] HCA
19. In that case, the High Court held that the second exception
applies for publications made on behalf of, or pursuant to a
contract, arrangement or understanding with a person who supplies
goods or services, rather than for publications made in connection
with relevant goods or services in relation to the information
provider. The exceptions have a wide application rather than a
narrow one. [Schedule 1, item 1: Chapter 2, Part 2-1, subsections
19(2)-(4)]
93. Information provider is defined expansively for the purposes of the
ACL in subsections 19(5) and (6), and includes media organisations
such as radio and television stations (including the Australian
Broadcasting Corporation and the Special Broadcasting Service
Corporation), as well as publishers of newspapers and magazines.
This definition operates in the same way as the one in the repealed
subsection 65A(3) of the TP Act. [Schedule 1, item 1: Chapter 2,
Part 2-1, subsections 19(5) and (6)]
ASIC Act
94. Section 12DN of the ASIC Act is repealed and replaced by a new
provision which reflects section 19 of the ACL. [Schedule 3, item
29: section 12DN]
Application and transitional provisions
95. The ACL commences on the later of 1 January 2011 or the commencement
of Schedule 1 of the Trade Practices Amendment (Australian Consumer
Law) Bill 2009 (the first ACL Bill). The first ACL Bill is
currently before the Parliament. [Section 2]
96. Chapter 2, Part 2-1 applies to all relevant conduct occurring in
trade or commerce on or after 1 January 2011.
97. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
98. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
99. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
100. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Chapter 4
Unconscionable conduct
Outline of chapter
101. The Australian Consumer Law (ACL) includes provisions prohibiting
persons from engaging in unconscionable conduct towards consumers or
businesses.
Context of amendments
102. Part IVA of the Trade Practices Act 1974 (TP Act) prohibits
corporations from engaging in unconscionable conduct.
103. There are three substantive prohibitions currently in Part IVA:
. section 51AA prohibits unconscionable conduct within the
meaning of the unwritten law of the States and
Territories;
. section 51AB prohibits conduct in connection with the
supply of goods or services to 'consumers' that is, in all
the circumstances, unconscionable; and
. section 51AC prohibits conduct in connection with the
supply of goods or services to a 'business consumer', or
in connection with the acquisition of goods or services
from a 'small business supplier', that is, in all the
circumstances, unconscionable.
104. Section 51AB was first inserted into the TP Act in 1986,
section 51AA was inserted in 1992 and 51AC was inserted in 1998.
105. Every State and Territory has similar provisions to 51AB in their FT
Acts. Western Australia, Victoria and Tasmania also have
equivalents to section 51AC and Victoria also has an equivalent to
section 51AA.
106. Since 1988, the TP Act unconscionable conduct provisions have been
mirrored in Part 2, Division 2, Subdivision C of the Australian
Securities and Investments Commission Act 2001 (ASIC Act), which
applies in respect of financial services.
107. Section 51AA defines unconscionable conduct by reference to the
unwritten law from time to time of the States and Territories.
108. While, the meaning of unconscionable conduct in the current sections
51AB and 51AC of the TP Act is based in the equitable doctrine,
statutory guidance is provided to the courts by lists of factors set
out in those sections. These factors are not an exhaustive list,
but are specific factors to which the court may have regard in
making a decision about whether unconscionable conduct has occurred.
109. In accordance with the Intergovernmental Agreement for the
Australian Consumer Law (IGA), the TP Act unconscionable conduct
provisions will be included in the ACL.
Future changes to statutory unconscionable conduct
110. In December 2008, the Senate Standing Committee on Economics (Senate
Committee) released an inquiry report into the need, scope and
content of a definition of unconscionable conduct for the purposes
of Part IVA of the TP Act. The Senate Committee recommended:
. a clarifying amendment to ensure that section 51AC applies
to the behaviour of parties under a contract, in addition
to their behaviour during the process of agreeing the
terms of the contract;
. that the Government further consider the need for a
guiding statement of principles in the law, with
particular regard to the retail tenancy leasing and
franchising industries; and
. that the Australian Competition and Consumer Commission
(ACCC) should undertake targeted investigation and funding
of unconscionable conduct test cases.
111. An amendment giving effect to the first recommendation of the Senate
Committee is included in section 22(2)(j) of the ACL.
112. On 5 November 2009, the Australian Government released its response
to the Senate Committee. The Government agreed to a clarifying
amendment to the 51AC, along the lines of that recommended by the
Senate Committee. The Government also established an expert panel
to consider:
. whether a list of examples of unconscionable conduct
should be incorporated into the TP Act; and
. the case for amendments to strengthen the Franchising Code
of Conduct.
113. The expert panel reported to the Government in February 2010 and on
3 March 2010, the Government responded to the expert panel's report.
The Government has announced that it will:
. insert a statement of interpretative principles into the
provisions; and
. redraft sections 51AB and 51AC to either harmonise or
unify them.
114. No amendments to implement the Government's response to the expert
panel report are included in the ACL Bill. The Government has
announced that it will implement its response through separate
legislative amendments to be introduced later in 2010 and in
cooperation with the States and Territories.
Summary of new law
115. Part 2-2 of the ACL includes prohibitions against a person engaging
in unconscionable conduct.
116. The concept of 'unconscionable conduct' is not defined for the
purposes of the ACL. However:
. section 20 provides that conduct that is unconscionable
within the unwritten law of the States and Territories,
from time to time, is unconscionable for the purposes of
the ACL;
. section 21 provides a non-exhaustive list of types of
conduct which may be unconscionable in the context of a
business's dealings with consumers; and
. section 22 provides two non-exhaustive lists of types of
conduct that may be unconscionable in the context of a
business's dealings with other businesses, either as a
customer or a supplier to those businesses.
117. The inclusion of a prohibition on unconscionable conduct within the
ACL ensures that consumers and businesses are able to access a range
of remedies under the ACL, and that regulatory agencies are able to
access penalties under the ACL, in addition to any remedies courts
may provide under the common law or the principles of equity.
118. The unconscionable conduct provisions also guide the courts'
application of the common law and equitable principles of
unconscionable conduct in the context of consumer and business
interactions that take place during the course of trade or commerce.
Comparison of key features of new law and current law
|New law |Current law |
|A person must not, in |Section 51AA of the TP |
|trade or commerce, engage|Act prohibits a |
|in unconscionable conduct|corporation, in trade or |
|within the meaning of the|commerce, from engaging |
|unwritten law. |in unconscionable conduct|
| |within the meaning of the|
| |unwritten law of the |
| |States and Territories. |
| |Section 12CA of the ASIC |
| |Act prohibits a person, |
| |in trade or commerce, |
| |from engaging in conduct |
| |in relation to financial |
| |services that is |
| |unconscionable within the|
| |meaning of the unwritten |
| |law of the States and |
| |Territories. |
| |Section 7 of the Vic FT |
| |Act prohibits a person, |
| |in trade or commerce, |
| |from engaging in |
| |unconscionable conduct |
| |within the unwritten law.|
|New law |Current law |
|A person must not, in |Section 51AB of the TP |
|trade or commerce, in |Act provides that a |
|connection with the |corporation, in trade or |
|supply or possible of |commerce, must not in |
|goods or services to |relation to the supply or|
|another person, engage in|possible supply of goods |
|conduct which is in all |or services to a person, |
|the circumstances |engage in conduct which |
|unconscionable. |is in all the |
| |circumstances |
| |unconscionable. |
| |Section 12CB of the ASIC |
| |Act provides that a |
| |person must not, in trade|
| |or commerce, in |
| |connection with the |
| |supply or possible supply|
| |of financial services to |
| |a person, engage in |
| |conduct that is, in all |
| |the circumstances, |
| |unconscionable. |
| |Section 43 of the NSW FT |
| |Act |
| |Section 8 of the Vic. FT|
| |Act |
| |Section 39 of the Qld FT |
| |Act |
| |Section 11 of the WA FT |
| |Act |
| |Section 57 of the SA FT |
| |Act |
| |Section 15 of the Tas. |
| |FT Act |
| |Section 13 of the ACT FT |
| |Act |
| |Section 43 of the NT CAFT|
| |Act |
|New law |Current law |
|A person must not, in |Subsection 51AC(1) of the|
|trade or commerce, in |TP Act provides that a |
|connection with the |corporation must not, in |
|supply or possible supply|trade or commerce, in |
|of goods or services to |connection with the |
|another person, other |supply or possible supply|
|than a listed public |of goods or services to a|
|company, engage in |person, other than a |
|conduct that is in all |listed public company, |
|the circumstances |engage in conduct that is|
|unconscionable. |in all the circumstances |
| |unconscionable. |
| |Subsection 51AC(2) of the|
| |TP Act provides that a |
| |person must not, in trade|
| |or commerce, in |
| |connection with the |
| |supply or possible supply|
| |of goods or services to a|
| |corporation, other than a|
| |listed public company, |
| |engage in conduct that is|
| |in all the circumstances |
| |unconscionable. |
| |Section 12CC of the ASIC |
| |provides that a person |
| |must not, in trade or |
| |commerce, in connection |
| |with the supply or |
| |possible supply of |
| |financial services to |
| |another person, other |
| |than a listed public |
| |company, engage in |
| |conduct that is, in all |
| |the circumstances, |
| |unconscionable. |
| |Section 8A of the Vic. |
| |FT Act |
| |Section 11A of the WA FT |
| |Act |
| |Section 15A of the Tas. |
| |FT Act |
|New law |Current law |
|A person must not, in |Subsection 51AC(1) of the|
|trade or commerce, in |TP Act provides that a |
|connection with the |corporation must not, in |
|acquisition or possible |trade or commerce, in |
|acquisition of goods or |connection with the |
|services from another |acquisition or possible |
|person, other than a |acquisition of goods or |
|listed public company, |services from another |
|engage in conduct that |person, other than a |
|is, in all the |listed public company, |
|circumstances, |engage in conduct that |
|unconscionable. |is, in all the |
| |circumstances, |
| |unconscionable. |
| |Subsection 51AC(2) of the|
| |TP Act provides that a |
| |person must not, in trade|
| |or commerce, in |
| |connection with the |
| |acquisition or possible |
| |acquisition of goods or |
| |services from a |
| |corporation, other than a|
| |listed public company, |
| |engage in conduct that |
| |is, in all the |
| |circumstances, |
| |unconscionable. |
| |Section 12CC of the ASIC |
| |Act provides that a |
| |person must not, in trade|
| |or commerce, in |
| |connection with the |
| |acquisition or possible |
| |acquisition of financial |
| |services from another |
| |person, other than a |
| |listed public company, |
| |engage in conduct that |
| |is, in all the |
| |circumstances, |
| |unconscionable. |
| |Section 8A of the Vic. |
| |FT Act |
| |Section 11A of the WA FT |
| |Act |
| |Section 15A of the Tas. |
| |FT Act |
Detailed explanation of new law
Unconscionable conduct within the meaning of the unwritten law
119. Section 20 of the ACL creates a general prohibition against a person
engaging in unconscionable conduct within the meaning of the
unwritten law, from time to time, in the course of trade or
commerce. [Schedule 1, item 1: Chapter 2, Part 2-2, subsection
20(1)]
120. Trade or commerce is defined for the purposes of the ACL as meaning
'trade or commerce within Australia, or between Australia and places
outside Australia, and includes any business or professional
activity (whether or not carried on for profit)'. The ACL applies
to conduct engaged in outside of Australia, provided that at least
some aspect of the trading relationship between two or more parties
has taken place in Australia. [Schedule 1, item 1: Chapter 1,
section 2]
121. The 'unwritten law, from time to time' is the array of common law
and equitable principles that have developed in the Australian
courts over many years as they apply and relate to the concept of
unconscionable conduct. Previous jurisprudence developed in the
courts of England and Wales prior to the independence of the
Australian judicial system, which occurred with the reception of the
laws and statutes of England and Wales and the establishment of the
colonial Supreme Courts in the nineteenth century, is also relevant,
as are the decisions of the Privy Council exercising its now ended
appellate jurisdiction over State courts.
122. The principal purpose and function of section 20 of the ACL is to
allow the penalties and remedies available under Chapter 5 of the
ACL to be imposed with respect to conduct that is found to be
considered to be unconscionable within the meaning of the unwritten
law, from time to time.
123. A person contravening section 20 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
124. The following enforcement powers and remedies apply to section 20 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
125. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
126. The ACCC may issue an infringement notice for a contravention of
section 20 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person.
[Schedule 2, item 1: Part XI, Division 5]
127. The prohibition in section 20 applies only to conduct that is not
covered by the more specific prohibitions in sections 21 and 22 of
the ACL, that is:
. the supply or possible supply of goods or services to
consumers or businesses; or
. the acquisition or possible acquisition of goods or
services from businesses.
[Schedule 1, item 1: Chapter 2, Part 2-2, subsection 20(2)]
Unconscionable conduct towards consumers
128. Section 21 of the ACL prohibits a person from engaging in
unconscionable conduct towards another person in connection with the
supply or possible supply of goods or services. [Schedule 1, item
1: Chapter 2, Part 2-2, subsection 21(1)]
129. This section does not define 'unconscionable conduct', but it also
does not limit it to the concept as understood under the 'unwritten
law, from time to time'.
The meaning of 'consumer' with respect to unconscionable conduct in
the ACL
130. Section 21 only applies in respect of persons who are 'consumers'.
It does not apply the definition of consumer that is contained in
section 3 of the ACL, although the provisions are consistent. The
concept of 'consumer' used in section 21 limits the application of
the section to situations where:
. the goods or services involved in the conduct are goods or
services of a kind ordinarily acquired for personal,
domestic or household use or consumption; and
. supply is not taken to include supply or possible supply
for the purposes of re-supply or for the purpose of using
goods up or transforming them in trade or commerce.
[Schedule 1, item 1: Chapter 2, Part 2-2, subsections
21(5) and 21(6)
131. The concept of 'ordinarily acquired for personal, domestic or
household use or consumption is drawn from the definition of
consumer in section 3 of the ACL. This is an objective concept that
is determined with reference to the nature of the goods or services
acquired, rather than the actual purpose for which the goods or
services were acquired.
132. The concept of 'supply' is also drawn from the definition of
consumer in section 3 of the ACL. This is a subjective concept that
must be determined with reference to the actual purpose for which
particular goods were acquired.
Misleading representations within respect to future matters
133. Section 4 of the ACL, concerning the treatment of misleading
representations as to future matters, applies in the same way to
Chapter 2, Part 2-2 of the ACL as it does to Chapter 3, Part 3-1,
Division 1. [Schedule 1, item 1: Chapter 2, Part 2-2, subsection
21(7)]
Matters to which the court must or may have regard
134. A court must consider allegations of unconscionable conduct in the
context of all of the circumstances surrounding the relevant
parties' conduct towards each other. [Schedule 1, item 1: Chapter
2, Part 2-2, subsection 21(1].
135. In doing this, the court may have regard to a list of matters
specified in subsection 21(2) the ACL, but may also consider any
other matter that it thinks relevant. [Schedule 1, item 1: Chapter
2, Part 2-2, subsection 21(2)].
136. The existence of a legal dispute, manifest in legal proceedings,
between two parties is not in itself determinative of unconscionable
conduct on behalf of either party. Subsection 21(3) of the ACL
provides that a person is not taken to have engaged in
unconscionable conduct merely because the person instituted legal
proceedings or another arbitration process against another person.
[Schedule 1, item 1: Chapter 2, Part 2-2, subsection 21(3)]
137. In determining whether conduct is unconscionable, the court must not
have regard to any circumstances that were not reasonably
foreseeable at the time of the alleged contravention. [Schedule 1,
item 1: Chapter 2, Part 2-2, paragraph 21(4)(a)]
138. In determining whether conduct is unconscionable, the court may have
regard to conduct engaged in, or circumstances existing, before the
commencement of section 21 of the ACL (that is, before 1 January
2011). [Schedule 1, item 1: Chapter 2, Part 2-2, paragraph
21(4)(b)]
Enforcement
139. A person contravening section 21 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
140. The following enforcement powers and remedies apply to section 21 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
141. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
142. The ACCC may issue an infringement notice for a contravention of
section 21 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person.
[Schedule 2, item 1: Part XI, Division 5]
Unconscionable conduct towards businesses
143. Section 22 of the ACL prohibits a person from engaging in
unconscionable conduct towards another person in connection with:
. the supply or possible supply of goods or services in
trade or commerce to a person, being a 'business
consumer'; or
. the acquisition of or possible acquisition of goods and
services in trade or commerce from a person, being a
'small business supplier'.
[Schedule 1, item 1: Chapter 2, Part 2-2, subsections 22(1), (6)
and (7)]
144. This section does not define 'unconscionable conduct', but it also
does not limit it to the concept as understood under the 'unwritten
law, from time to time'.
145. Section 22 does not apply to conduct relating to the supply or
possible supply of goods or services to or from a listed public
company. [Schedule 1, item 1: Chapter 2, Part 2-2, paragraphs
22(1)(a) and (b)] A listed public company is defined in section 2
of the ACL. [Schedule 1, item 1: section 2]
The meaning of 'business consumer' with respect to unconscionable
conduct in the ACL
146. Section 22(2) of the ACL, which specifies those matters to which the
court must have regard in determining whether unconscionable conduct
has occurred with respect to the supply of goods and services,
applies to persons who are 'business consumers'. [Schedule 1, item
1: Chapter 2, Part 2-2, subsection 22(2)]
147. It does not apply the definition of consumer that is contained in
section 3 of the ACL. The concept of 'business consumer' used in
section 22 limits the application of the section to situations where
the person to be supplied is not a listed public company.
The meaning of 'small business supplier' with respect to
unconscionable conduct in the ACL
148. Section 22(3) of the ACL, which specifies those matters to which the
court must have regard in determining whether unconscionable conduct
has occurred with respect to the acquisition of goods and services,
applies to persons who are 'small business suppliers'. [Schedule 1,
item 1: Chapter 2, Part 2-2, subsection 22(3)]
Misleading representations with respect to future matters
149. Section 4 of the ACL, concerning the treatment of misleading
representations as to future matters, applies in the same way to
Chapter 2, Part 2-2 of the ACL. [Schedule 1, item 1: Chapter 2,
Part 2-2, subsection 22(8)]
Matters to which the court must or may have regard concerning the
supply or acquisition of goods and services
150. A court must consider allegations of unconscionable conduct in the
context of all of the circumstances surrounding the relevant
parties' conduct towards each other. [Schedule 1, item 1: Chapter
2, Part 2-2, subsection 22(1].
151. In doing this, the court, in considering whether there has been
unconscionable conduct in a transaction between a supplier for the
supply or possible supply of goods and services to a business
consumer, may have regard to a list of matters specified in
subsection 22(2) the ACL, but may also consider any other matter
that it thinks relevant. [Schedule 1, item 1: Chapter 2, Part 2-2,
subsection 22(2)].
152. In doing this, the court, in considering whether there has been
unconscionable conduct in a transaction between an acquirer for the
acquisition or possible acquisition of goods and services from a
small business supplier, may have regard to a list of matters
specified in subsection 22(3) the ACL, but may also consider any
other matter that it thinks relevant. [Schedule 1, item 1: Chapter
2, Part 2-2, subsection 22(3)].
153. The existence of a legal dispute, manifest in legal proceedings,
between two parties is not in itself determinative of unconscionable
conduct on behalf of either party. Subsection 21(3) of the ACL
provides that a person is not taken to have engaged in
unconscionable conduct merely because the person instituted legal
proceedings or other arbitration process against another person.
[Schedule 1, item 1: Chapter 2, Part 2-2, subsection 22(4)]
154. In determining whether conduct is unconscionable, the court must not
have regard to any circumstances that were not reasonably
foreseeable at the time of the alleged contravention. [Schedule 1,
item 1: Chapter 2, Part 2-2, paragraph 22(5)(a)]
155. In determining whether conduct is unconscionable, the court may have
regard to conduct engaged in, or circumstances existing, before the
commencement of section 21 of the ACL (that is, before 1 January
2011). [Schedule 1, item 1: Chapter 2, Part 2-2, paragraph
22(5)(b)]
ASIC Act changes
156. Section 12CC of the ASIC Act is amended to reflect section 22 of the
ACL. [Schedule 3, items 8, 9, 10, 11, 12 and 13]
Enforcement
157. A person contravening section 22 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
158. The following enforcement powers and remedies apply to section 22 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
159. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
160. The ACCC may issue an infringement notice for a contravention of
section 22 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person.
[Schedule 2, item 1: Part XI, Division 5]
Application and transitional provisions
161. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
162. Chapter 2, Part 2-2 applies to all relevant conduct occurring in
trade or commerce on or after 1 January 2011.
163. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
164. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
165. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
166. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Chapter 5
Unfair contract terms
Outline of chapter
167. The Australian Consumer Law (ACL) includes provisions that address
the use of unfair contract terms in consumer contracts.
Context of amendments
168. On 2 October 2008, the Council of Australian Governments (COAG)
agreed to establish a national law addressing unfair contract terms,
as proposed by the Ministerial Council on Consumer Affairs (MCCA) on
15 August 2008.
169. The national unfair contracts law is based on the recommendations
made by the Productivity Commission (PC).
170. On 15 August 2008, the MCCA considered the PC's recommendations, and
agreed to the introduction of a national consumer law, that includes
an unfair contract terms provisions. The MCCA-agreed model for an
unfair contract terms provision would have the following features:
. the term is unfair when it causes a significant imbalance
in the parties' rights and obligations arising under the
contract and it is not reasonably necessary to protect the
legitimate interests of the supplier;
. a remedy could only be applied where the claimant shows
detriment, or a substantial likelihood of detriment, to
the consumer (individually or as a class). Detriment is
not limited to financial detriment;
. it would relate only to standard form (that is, non-
negotiated) contracts. Should a supplier allege that the
contract at issue is not a consumer contract, then the
onus will be on the supplier to prove that it is not;
. it would exclude the upfront price of the good or service,
using the approach currently adopted in Regulation 6(2) of
the United Kingdom's Unfair Terms in Consumer Contracts
Regulations 1999; and
. it would require all of the circumstances of the contract
to be considered, taking into account the broader
interests of consumers, as well as the particular
consumers affected.
171. MCCA further agreed that:
. where these criteria are met, the unfair term will be
voided only for the contracts of those consumers or class
of consumers subject to detriment (or the substantial
likelihood thereof), with suppliers also potentially
liable to damages for that detriment, along with other
remedies available under the Trade Practices Act 1974
(TP Act);
. the drafting of any new provision should ensure the
potential for private (and regulator-led) representative
actions for damages by a class of consumers detrimentally
affected by unfair contract terms, in keeping with the
PC's recommendation that representative actions be
improved;
. the provision should also permit the prescription of
certain terms that are, in all circumstances, considered
to be unfair. This regulation making power would rest
with the Commonwealth Minister, who would prescribe terms
in accordance with the national consumer law amendment
process set out in the Intergovernmental Agreement (IGA)
and the requirements of regulatory impact assessment;
. the provision should be supported by national guidance on
its enforcement, developed by the national and State and
Territory regulators, in accordance with a process set out
in the IGA;
. transitional arrangements should be put in place after
enactment, which would give businesses the time to modify
their contracts; and
. the operation and effects of the new provision should be
reviewed within seven years of its introduction.
The provisions included in the ACL Bill reflect the provisions
as the Government proposes that they be amended in the first ACL
Bill, presently before the Parliament.
Summary of new law
172. Chapter 2, Part 2-3 of the ACL includes provisions dealing with the
use of unfair contract terms in consumer contracts.
173. The unfair contract terms provisions apply to consumer contracts
only. A consumer contract is defined in the ACL as a contract for a
supply of goods or services or a sale or grant of an interest in
land to an individual whose acquisition of the goods, services or
interest is wholly or predominantly for personal, domestic or
household use or consumption.
174. A term in a consumer contract is void if:
. the term is unfair; and
. the contract is in a standard form contract.
175. A term in a consumer contract is unfair if the term:
. would cause a significant imbalance in the parties' rights
and obligations under the standard form contract; and
. is not reasonably necessary to protect the legitimate
interests of the party who would be advantaged by the
term; and
. would cause financial or non-financial detriment to a
party if the term were to be applied or relied on.
176. There is a rebuttable presumption that an unfair term is not
reasonably necessary to protect the legitimate interests of the
party who would be advantaged by the application or reliance on that
term, unless that party can prove otherwise.
177. In finding that a term in a consumer contract is unfair, a court may
take into account any matters it considers relevant. However, the
court must take into account the following:
. the extent to which a term is transparent; and
. the contract as a whole.
178. Terms that:
. define the main subject matter of the contract;
. set the upfront price payable under the consumer contract;
or
. that are required or expressly permitted by a law of the
Commonwealth, State or Territory,
are not subject to the unfair contract terms provisions.
179. Examples of terms used in consumer contracts that may be unfair are
listed. The provision setting out the examples does not presume
such terms to be unfair.
180. The unfair contract terms provisions of the ACL apply to new
consumer contracts entered into on or after the commencement of the
provisions. The provisions will not apply to contracts entered into
before the date on which the provisions commence, unless such a
contract is renewed or varied after that date, but then only to the
extent of that renewal or variation.
Comparison of key features of new law and current law
|New law |Current law |
|A term in a consumer |Part 2 of the ACL as to |
|contract is void: if the |be applied in the first |
|term is unfair; and the |ACL Bill. |
|contract is in a standard|Similar provisions exist |
|form contract. |in Part 2B of the Vic. |
| |FT Act. |
|A consumer contract is |Part 2 of the ACL as to |
|defined as a contract |be applied in the first |
|for: |ACL Bill . |
|a supply of goods or |Similar provisions exist |
|services; or |in Part 2B of the Vic. |
|a sale or grant of an |FT Act. |
|interest in land; | |
|to an individual whose | |
|acquisition of the goods,| |
|services or interest is | |
|wholly or predominantly | |
|for personal, domestic or| |
|household use or | |
|consumption. | |
|New law |Current law |
|A term in a consumer |Part 2 of the ACL as to |
|contract is unfair if the|be applied in the first |
|term: would cause a |ACL Bill. |
|significant imbalance in |Similar provisions exist |
|the parties' rights and |in Part 2B of the Vic. |
|obligations under the |FT Act. |
|consumer contract, and is| |
|not reasonably necessary | |
|to protect the legitimate| |
|interests of the party | |
|who would be advantaged | |
|by the term; and would | |
|cause financial or | |
|non-financial detriment | |
|to a party if the term | |
|were to be applied or | |
|relied on. | |
|There is a presumption | |
|that a term is not | |
|reasonably necessary to | |
|protect the legitimate | |
|interests of the party | |
|who would be advantaged | |
|by the term, unless that | |
|party can prove | |
|otherwise. | |
|The court may take |Part 2 of the ACL as to |
|account of any |be applied in the first |
|consideration it thinks |ACL Bill. |
|is relevant when |Similar provisions exist |
|determining whether a |in Part 2B of the Vic. |
|term in a consumer |FT Act. |
|contract is unfair. | |
|However, the court must | |
|take into account whether| |
|the term is transparent, | |
|and the contract as a | |
|whole. | |
|Terms in a consumer |Part 2 of the ACL as to |
|contract that define the |be applied in the first |
|main subject matter of |ACL Bill. |
|the contract, set out the| |
|upfront price payable | |
|under the contract, or | |
|are required or expressly| |
|permitted by a law of the| |
|Commonwealth, State or | |
|Territory are also | |
|excluded from the | |
|application of the unfair| |
|contract terms provisions| |
|in this Bill. | |
Detailed explanation of new law
Unfair terms
181. The scope of the unfair contract terms provisions in the ACL is
restricted to business-to-consumer transactions as the provisions
apply only to a consumer contract in which at least one of the
parties is an individual.
182. Contracts between businesses are excluded from the scope of the
unfair contract terms provisions, except in respect of 'sole
traders'.
183. A term in a consumer contract is void if the term is unfair and the
contract is a standard form contract. A finding by a court that a
term is unfair, and therefore void, means that the term is treated
as if it never existed. [Schedule 1, item 1: Chapter 2, Part 2-3,
subsections 23(1) and (2)]
184. In the context of the ACL, a consumer contract is defined as a
contract entered into for:
. a supply of goods or services; or
. a sale or grant of an interest in land;
to an individual whose acquisition of the goods, services or
interest is wholly or predominantly for personal, domestic or
household use or consumption. [Schedule 1, item 1: Chapter 2, Part
2-3, section 2 and subsection 23(3)]
185. This definition does not limit the operation of the unfair contract
terms provisions to things of a personal, domestic or household
nature, and would include the supply of any good, service or
interest in land to a consumer provided the acquisition of what is
supplied under the contract is wholly or predominantly for personal,
domestic or household use or consumption.
186. An interest in relation to land, is taken to mean one of the
following:
. a legal or equitable estate or interest in the land; or
. a right of occupancy of the land or of a building or part
of building erected on the land, arising by virtue of the
holding of shares, or by virtue of a contract to purchase
shares, in an incorporated company that owns the land or
building; or
. a right, power or privilege over, or in connection with,
the land. [Schedule 1, item 1: Chapter 2, Part 2-3,
section 2]
187. A relevant contract does not include:
. a contract that is a shipping contract; and
. a contract that is a constitution of a company, managed
investment scheme or other kind of body. [Schedule 1,
item 1: Chapter 2, Part 2-3, section 28]
Meaning of 'unfair'
188. A term in a consumer contract is unfair if:
. it would cause a significant imbalance in the parties'
rights and obligations arising under the contract; and
. the term is not reasonably necessary to protect the
legitimate interests of the party who would be advantaged
by the supplier; and
. it would cause financial or non-financial detriment to a
party if the term were to be applied or relied on.
[Schedule 1, item 1: Chapter 2, Part 2-3, section 2 and
subsection 24(1)]
First element of the test
189. The first element of the test requires the court to consider whether
the term would cause a significant imbalance in the parties' rights
and obligations arising under the contract. This will involve a
factual determination of whether any such significant imbalance
would exist. [Schedule 1, item 1: Chapter 2, Part 2-3, paragraph
24(1)(a)]
190. A claimant in proceedings is required to prove this element of the
test on the balance of probabilities.
Second element of the test
191. The second element of the test requires the court to consider
whether the term is reasonably necessary to protect the legitimate
interests of the party who would be advantaged by the term.
[Schedule 1, item 1: Chapter 2, Part 2-3, section 2, paragraph
24(1)(b)]
192. In respect of the second element of the test, a term of a consumer
contract is presumed not to be reasonably necessary in order to
protect the legitimate interests of the party who would be
advantaged by the term, unless that party can prove otherwise in a
court. [Schedule 1, item 1: Chapter 2, Part 2-3, subsection 24(4)]
193. Where a claimant in proceedings has alleged that a term is unfair,
it is for the respondent to establish that a term is reasonably
necessary to protect its legitimate interests on the balance of
probabilities. The respondent may introduce any evidence relevant
to this element of the test.
194. While it is ultimately a matter for the court to determine whether a
term is reasonably necessary to protect the legitimate interests of
the respondent, the provision will require the respondent to
establish, at the very least, that its legitimate interest is
sufficiently compelling on the balance of probabilities to overcome
any detriment caused to the consumer, or a class of consumers, and
that therefore the term was 'reasonably necessary'.
Third element of the test
195. The third element of the test requires the court to consider whether
the term would cause financial or non-financial detriment to a party
if the term were to be applied or relied on. This will involve a
factual determination of whether any such detriment does exist or
would exist if the term was relied on. [Schedule 1, item 1: Chapter
2, Part 2-3, paragraph 24(1)(c)]
196. A claimant in proceedings is required to prove this element of the
test on the balance of probabilities.
197. By requiring evidence of whether detriment has existed or would
exist in the future, the provision requires more than a hypothetical
case to be made out by the claimant. In this context, a claimant
does not need to have proof of having suffered actual detriment, but
that detriment would exist in the future as a result of the
application of or reliance on the term.
198. In this regard, a term does not need to be enforced in order to be
unfair, although the possibility of such enforcement may impact on
the decisions made by the party that would be disadvantaged by the
term's practical effect, to that party's detriment.
199. Detriment is not limited to financial detriment. This is designed
to allow the court to consider situations where there may be other
forms of detriment that have affected or would affect the party
disadvantaged by the practical effect of the term.
200. Where it is found that a term is unfair and that only future
detriment would arise from the application of or reliance on that
term, then the remedies available would likely be limited to a
declaration that the term is an unfair term and an injunction
preventing the party advantaged by it applying or relying on it, or
purporting to do so. Any form of compensatory remedy would likely
be limited to those situations where there is actual detriment
proven.
Considerations the court may take into account
201. In determining whether a term in a consumer contract is unfair, the
court may take into account any matter which it thinks is relevant,
but the court must take into account the following matters:
. the extent to which the term is transparent; and
. the contract as a whole. [Schedule 1, item 1: Chapter 2,
Part 2-3, subsection 24(2)]
Transparency
202. The court must have regard to whether a term is transparent in
determining whether that term is 'unfair'. [Schedule 1, item 1:
Chapter 2, Part 2-3, paragraph 24(2)(a)]
203. A term is transparent if the term is:
. expressed in reasonably plain language;
. legible;
. presented clearly; and
. readily available to any party affected by the term.
[Schedule 1, item 1: Chapter 2, Part 2-3, section 1 and
subsection 24(3)]
204. A lack of transparency in the terms of a consumer contract may be a
strong indication of the existence of a significant imbalance in the
rights and obligations of the parties under the contract.
205. Transparency, on its own account, cannot overcome underlying
unfairness in a contract term. Furthermore, the extent to which a
term is not transparent is not, of itself, determinative of the
unfairness of a term in a consumer contract and the nature and
effect of the term will continue to be relevant.
206. The elements set out in paragraphs 24(3)(a)-(c) of the ACL relate to
the way in which a term is presented in a consumer contract. The
remaining element covers situations where the term is set out by the
party who seeks to rely upon it in a document which is not
physically available to the other party at or before the time the
parties entered into the contract.
Contract as a whole
207. The court must have regard to the contract as a whole in determining
whether that term is 'unfair'. [Schedule 1, item 1: Chapter 2,
Part 2-3, paragraph 24(2)(b)]
Examples of unfair terms
208. There is a non-exhaustive, indicative list of examples of the types
of terms that may be considered 'unfair'. [Schedule 1, item 1:
Chapter 2, Part 2-3, subsection 25(1)]
209. Without limiting the meaning of 'unfair', the following examples are
provided:
. a term that permits, or has effect of permitting, one
party (but not another party) to avoid or limit
performance of the contract;
. a term that permits, or has the effect of permitting, one
party (but not another party) to terminate the contract;
. a term that penalises, or has the effect of penalising,
one party (but not another party) for a breach or
termination of the contract;
. a term that permits, or has the effect of permitting, one
party (but not another party) to vary the terms of the
contract;
. a term that permits, or has the effect of permitting, one
party (but not another party) to renew or not renew the
contract;
. a term that permits, or has the effect of permitting, one
party to vary the upfront price payable under the contract
without the right of another party to terminate the
contract;
. a term that permits, or has the effect of permitting, one
party unilaterally to vary the characteristics of the
goods or services to be supplied, or the interest in land
to be sold or granted, under the contract;
. a term that permits, or has the effect of permitting, one
party unilaterally to determine whether the contract has
been breached or to interpret its meaning;
. a term that limits, or has the effect of limiting, one
party's vicarious liability for its agents;
. a term that permits, or has the effect of permitting, one
party to assign the contract to the detriment of another
party without that other party's consent;
. a term that limits, or has the effect of limiting, one
party's right to sue another party;
. a term that limits, or has the effect of limiting, the
evidence one party can adduce in proceedings relating to
the contract; and
. a term that imposes, or has the effect of imposing, the
evidential burden on one party in proceedings relating to
the contract. [Schedule 1, item 1: Chapter 2, Part 2-3,
paragraphs 25(1)(a)-(m)]
210. The examples in subsection 25(1) of the ACL provide statutory
guidance on the types of terms which may be regarded as being of
concern. They do not prohibit the use of those terms, nor do they
create a presumption that those terms are unfair.
211. Any consideration of a term of a type listed as an example is
subject to the test set out in subsection 24(1) of the ACL. In this
context, there may be circumstances in which the use of such a term
is reasonably necessary in order to protect a party's reasonable
business interests.
212. The Minister may prescribe additional examples of terms of a kind,
or a term that has an effect of a kind, prescribed by the
regulations. [Schedule 1, item 1: Chapter 2, Part 2-3, paragraph
25(1)(n)]
213. Prior to prescribing additional examples of terms of a kind, or a
term that has an effect of a kind, the relevant Minister must
consider the following factors:
. the detriment that a term of that kind would cause to
consumers;
. the impact on business generally of prescribing that kind
of term or effect; and
. the public interest. [Schedule 2, item 1: Part XI,
subsection 139G(2)]
214. The requirement of the relevant Minister to consider the three
factors in subsection 25(2) of the ACL prior to prescribing
additional examples of terms does not change the effect of the
regulation-making power. Any terms added to the list would continue
to be examples only, and would not be binding on a court.
Terms permitting unilateral changes by one party to the contract
215. Paragraphs 25(1)(a), (b), (d), (e), (f), (g) and (h) are examples of
types of terms that allow a party to make changes to key elements of
a contract, including terminating it, on a unilateral basis.
216. The inclusion of these examples does not prohibit unilateral
variation terms, not does it create a presumption that such terms
are unfair. Indeed, the need for the unilateral variation of
contract terms is expressly contemplated by legislation in specific
contexts, including for example sections 63 to 107 of the National
Credit Code (formerly Parts 4 and 5 of the Uniform Consumer Credit
Code).
Terms limiting the rights of parties to a consumer contract
217. Paragraphs 25(1)(i), (k), (l) and (m) are examples of types of terms
that have the effect of limiting the rights of the party to whom the
consumer contract is presented.
218. Paragraph 25(1)(i) specifically deals with limitation of liability
clauses. There are many instances in which limitations of liability
are expressly permitted by national, State or Territory legislation
for legitimate public policy reasons.
219. In this regard, paragraph 26(1)(c) of the ACL expressly excludes
references to terms that are required, or expressly permitted, by a
law of the Commonwealth or a State or Territory from the application
of the unfair contract terms provisions. However, this exclusion
applies only to the extent that such terms are required or expressly
permitted.
Terms which penalise a party for a breach or termination of the
contract
220. Paragraph 25(1)(c) refers to terms that penalise, or have the effect
of penalising, one party for a breach or termination of the
contract.
221. This provision reflects the common law concept of 'penalties'. To
be valid, a penalty imposed by a contract must be a genuine pre-
estimate of the loss likely to be suffered by the party as a result
of the breach or early termination, and should not be an arbitrary
sum. However, under the unfair contract terms provision the
relevant consideration is whether the term is unfair, within the
meaning given to that term by the provisions.
Terms which permit the assignment of a contract to the detriment of
the other party without their consent
222. Paragraph 25(1)(j) refers to terms that allow for a party to assign
the contract to the detriment of the other party, without the other
party's consent.
223. This example does not prohibit the use of such clauses. Indeed,
assignment of contracts is expressly contemplated by other
legislation, for example section 188 of the National Credit Code
(formerly section 166 of the Uniform Consumer Credit Code).
Terms that define the subject matter etc of consumer contracts are
unaffected
224. Certain terms of a consumer contract are unaffected by
subsection 23(1) of the ACL, but only to the extent that the term:
. defines the main subject matter of a consumer contract;
. sets the 'upfront price' payable under the contract; or
. is a term required, or expressly permitted, by a law of
the Commonwealth or a State or Territory. [Schedule 1,
item 1: Chapter 2, Part 2-3, section 26(1)]
Main subject matter of the contract
225. The exclusion of terms that define the main subject matter of a
consumer contract ensures that a party cannot challenge a term
concerning the basis for the existence of the contract. [Schedule
1, item 1: Chapter 2, Part 2-3, paragraph 26(1)(a)]
226. Where a party has decided to purchase the goods, services, land,
financial services or financial products that are the subject of the
contract, that party cannot then challenge the fairness of a term
relating to the main subject matter of the contract at a later
stage, given that the party had a choice of whether or not to make
the purchase on the basis of what was offered.
227. The main subject matter of the contract may include the decision to
purchase a particular type of good, service, financial service or
financial product, or a particular piece of land. It may also
encompass a term that is necessary to give effect to the supply or
grant, or without which, the supply or grant could not occur.
Upfront price
228. The upfront price payable under a consumer contract is consideration
that is:
. provided, or is to be provided, for the supply, sale or
grant under the contract; and
. is disclosed at or before the time the contract is entered
into,
but does not include any other consideration that is contingent on
the occurrence or non-occurrence of a particular event. [Schedule
1, item 1: Chapter 2, Part 2-3, section 2, paragraph 26(1)(b) and
subsection 26(2)]
229. Consideration includes any amount or thing provided as consideration
for the supply of a good, service, financial service, financial
product or a grant of land. It would also include any interest
payable under a consumer contract.
230. The exclusion of upfront price means that a term concerning the
upfront price cannot be challenged on the basis that it is unfair.
Having agreed to provide a particular amount of consideration when
the contract was made, which was disclosed at or before the time the
contract was entered into, a person cannot then argue that that
consideration is unfair at a later time. The upfront price is a
matter about which the person has a choice and, in many cases, may
negotiate.
231. The upfront price covers the cash price payable for a good, service,
financial service, financial product or land at the time the
contract is made. It also covers a future payment or a series of
future payments.
232. The definition also requires that the upfront price must be
disclosed at or before the time the contract was entered into by the
parties. In the case of most transactions this is reasonably
straightforward, as a key pre-condition of the transaction occurring
is an understanding of the price to be paid.
233. A key consideration for a court in considering whether a future
payment, or a series of future payments, forms the upfront price may
be the transparency of the disclosure of such a payment, or the
basis on which such payments may be determined, at or before the
time the contract is made.
234. In the context of non-financial services contracts, another relevant
consideration is compliance with section 53C of the TP Act (which
commenced on 25 May 2009), which imposes specific obligations in
relation to the disclosure of a single price in many cases.
235. Other consideration (that is, further forms of consideration which
are not part of the upfront price) under the consumer contract that
is contingent on the occurrence or non-occurrence of a particular
event, is excluded from the determination of the upfront price.
236. Terms that require further payments levied as a consequence of
something happening or not happening at some point in the duration
of the contract are covered by the unfair contract terms provisions.
Such payments are additional to the upfront price, and are not
necessary for the provision of the basic supply, sale or grant under
the contract.
Terms required as a matter of law
237. The exclusion of terms 'required, or expressly permitted, by a law
of the Commonwealth or a State or Territory' ensures that a court is
not required to determine the fairness of terms that are required to
be included, or expressly permitted to be included, in consumer
contracts as a matter of public policy. There are many examples of
mandated consumer contracts or terms that are required to be used or
are expressly permitted to be used in order to ensure the validity
of specific transactions, which apply in the laws of the
Commonwealth, the States or the Territories. [Schedule 1, item 1:
Chapter 2, Part 2-3, paragraph 26(1)(c)]
Meaning of standard form contract
238. To account for circumstances where a question about whether a
contract is in a standard form is the subject of dispute between the
parties in proceedings, there is a rebuttable presumption that a
contract the subject of proceedings is a standard form contract.
The respondent in those proceedings must then show that, on the
balance of probabilities, the contract is not in a standard form.
[Schedule 1, item 1: Chapter 2, Part 2-3, subsections 27(1) and
27(2)]
239. If a party wishes to argue that the contract has been negotiated and
is not in a standard form, then the rebuttable presumption requires
the party that presents the contract to show that the contract is
not a standard form contract. This reflects that:
. the claimant will usually only have evidence of the
existence of one contract - their own; and
. the respondent is best placed to bring evidence regarding
the nature of the contracts it uses and the way in which
it deals with other parties to such contracts, including
whether negotiations have been entered into.
240. In determining whether a contract is a standard form contract, the
court may consider any matter it thinks relevant. However, it must
have regard to certain factors. These include:
. whether one of the parties has all or most of the
bargaining power relating to the transaction;
. whether the contract was prepared by one party before any
discussion relating to the transaction commenced;
. whether another party was, in effect, required to accept
or reject the terms in the contract (other than terms
excluded by subsection 26(1) of the ACL) in the form in
which they were presented (that is, on a 'take-it-or-leave-
it' basis);
. whether another party was given an effective opportunity
to negotiate the terms of the contract that were not terms
excluded by subsection 26(1) of the ACL;
. whether the terms of the contract (other than terms
excluded by subsection 26(1) of the ACL) take into account
the specific characteristics of another party or the
particular transaction; and
. any other matter prescribed by the regulations. [Schedule
1, item 1: Chapter 2, Part 2-3, subsection 27(2)]
241. Additional factors may be added to the list of factors by way of
regulations made by the relevant Minister. This will permit the
expansion of the list in response to changes in markets and the way
in which standard form contracts are constructed and used. The
making of such regulations will be subject to:
. the Australian Government's best-practice regulation
requirements; and
. the voting process for amending the ACL set out in the
IGA,
as any regulations will form part of the ACL.
Contracts exempted from the unfair contract terms provisions
242. Certain contracts are excluded from the application of the unfair
contract terms provisions of the ACL to the extent that:
. the contract relates to certain shipping contracts; and
. the contract is a constitution of a company, managed
investment scheme or other kind of body. [Schedule 1,
item 1: Chapter 2, Part 2-3, section 28]
Shipping contracts
243. The unfair contract terms provisions will not apply to consumer
contracts which are shipping contracts. Shipping contracts include:
. contracts of marine salvage or towage;
. a charter party of a ship; or
. a contract for the carriage of goods by ship. [Schedule
1, item 1: Chapter 2, Part 2-3, subsection 28(1)]
244. A ship is given the meaning it has under section 3 of the Admiralty
Act 1968 for the purposes of the unfair contract terms provisions in
the ACL. [Schedule 1, item 1: Chapter 2, Part 2-3, section 2]
245. These shipping contracts are already subject to a comprehensive
legal framework (nationally and internationally) that deals with
contractual terms in a maritime law context.
246. The reference to a contract for the carriage of goods by ship
includes a reference to any contract covered by a sea carriage
document within the meaning of the amended Hague Rules referred to
in subsection 7(1) of the Carriage of Goods by Sea Act 1991.
[Schedule 1, item 1: Chapter 2, Part 2-3, section 28(2)]
247. The amended Hague Rules consists of the text set out in Schedule 1
of the Carriage of Goods by Sea Act which, in its unmodified form,
is the English translation of Articles 1 to 10 of the International
Convention for the Unification of Certain Rules of Law relating to
Bills of Lading, done at Brussels on 25 August 1924 (otherwise
referred to as the Brussels Convention). The Brussels Convention
was amended by Articles 1 to 5 of the Visby Protocol on 23 October
1968, and Article II of the SDR Protocol on 21 December 1979.
Constitutions of companies etc
248. The unfair contract terms provisions will not apply to contracts
which are constitutions of companies, managed investment schemes or
other kinds of bodies. [Schedule 1, item 1: Chapter 2, Part 2-3,
subsection 28(3)]
249. A constitution is given the meaning it has under section 9 of the
Corporations Act 2001. [Schedule 1, item 1: Chapter 2, Part 2-3,
section 2]
Effect of the Insurance Contracts Act 1984 on certain consumer
contracts
250. Section 15 of the Insurance Contracts Act 1984 provides that a
contract of insurance (as defined by that Act) is not capable of
being made the subject of relief under any other Commonwealth Act, a
State Act or an Act or Ordinance of a Territory. In this context
'relief' means relief in the form of:
. the judicial review of a contract on the ground that it is
harsh, oppressive, unconscionable, unjust, unfair or
inequitable; or
. relief for insureds from the consequences in law of making
a misrepresentation,
but does not include relief in the form of compensatory damages.
The effect of section 15 is to mean that the unfair contract terms
provisions of either the ACL or the ASIC Act do not apply to
contracts of insurance covered by the Insurance Contracts Act 1984,
to the extent that that Act applies.
Enforcement and remedies
251. Without limiting any other power of the court to make declarations,
the Australian Competition and Consumer Commission (ACCC) may seek a
declaration from a court that a term of a standard form consumer
contract is an unfair term. [Schedule 1, item 1: Chapter 5, Part 5-
2, Division 5, section 249]
252. Where a court has declared a term in a consumer contract to be an
unfair term, it is a contravention of the ACL for a person to apply
or rely on, or purport to apply or rely on, that term.
253. In such circumstances, the following enforcement powers and remedies
apply:
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 3]
. compensatory orders and redress for non-parties;
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 4]
254. For further information on these powers and remedies generally see
Chapters 14 and 15.
255. A reference to a contravention of a provision of the ACL includes a
reference to applying or relying on, or purporting to apply or rely
on, a declared term of a consumer contract for the purposes of the
court's power to:
. grant an injunction in such terms as the court determines
appropriate;
. make an order to redress non-party consumers (other than
an award of damages) as the court thinks appropriate; and
. make any order as the court thinks appropriate, such as
specific performance, payment of compensation or exemplary
damages. [Schedule 1, item 1: Chapter 2, Part 2-3,
section 2, subsection 232(3), subparagraph 237(1)(a)(ii)
and paragraph 238(1)(b)]
Application and transitional provisions
256. The unfair contract terms provisions set out in the first ACL Bill
(which are now contained in Part 2-3 of the ACL) will commence on
1 July 2010 or on a date to be proclaimed by the Governor-General
that can not be before 1 July 2010. If the Governor-General has not
proclaimed the commencement of the provisions within six months of
the date of the Royal Assent, then the provisions will commence on
the first day after a day six months after the date of Royal Assent.
[Schedule 7, item 8]
257. The provisions apply to new consumer contracts entered into on or
after the date on which the provisions of the first ACL Bill
commenced. [Schedule 7, item 8]
258. The provisions do not apply to consumer contracts entered into
before the date on which the provisions of the first ACL Bill
commenced, unless such a contract is:
. renewed on or after that commencement, in which case the
unfair contract terms provisions apply to the contract as
renewed on and from the day on which the renewal takes
effect (the renewal day) in relation to conduct that
occurs on or after the renewal day; or
. varied on or after that commencement, in which case the
unfair contract terms provisions apply to the contract as
varied on and from that day on which the variation takes
effect (the variation day), in relation to conduct that
occurs on or after the variation day.
259. While provisions apply to consumer contracts to the extent that they
are renewed or varied after the date on which the provisions of the
first ACL Bill commenced, the unfair contract terms provisions do
not apply to a consumer contract to the extent that the operation of
the provisions would result in an acquisition of property from a
person otherwise than on just terms, within the meaning of section
51(xxxi) of the Australian Constitution. [Schedule 7, item 8]
Chapter 6
Unfair practices
Outline of chapter
260. The Australian Consumer Law (ACL) includes prohibitions on specific
conduct that is generally regarded as being unfair. These
prohibitions apply generally to all forms of business activity in
all sectors of the economy, rather than to specific industry
sectors.
261. Unlike the general prohibitions provided for in Chapter 2 of the
ACL, the provisions in Chapter 3 are targeted at particular kinds or
activities, rather than the effect that more general conduct might
have on a consumer.
262. Part 3-1 of the ACL includes provisions that are:
. equivalent to all of the existing provisions of Part V,
Divisions 1 and 1AAA of the TP Act and their associated
criminal offences in Division 2 of Part VC, with some
provisions amended to draw on best practice in State and
Territory consumer laws; and
. amendments to those provisions which draw on best practice
in State and Territory consumer laws, as agreed by the
Ministerial Council on Consumer Affairs (MCCA).
263. Part 4-1 of the ACL creates associated criminal offences with
respect to most of the provisions of Part 3-1.
264. The ACL also includes requirements for a proof of transaction and
itemised bills at Part 3-2, Division 4.
Context of amendments
265. The Council of Australian Governments (COAG) has agreed that the ACL
should be based on the TP Act, drawing on the recommendations of the
Productivity Commission in its Review of Australia's Consumer Policy
Framework and best practice in State and Territory consumer laws.
266. At its meeting on 4 December 2009, the Ministerial Council on
Consumer Affairs (MCCA) agreed to the ways in which the consumer
provisions of the TP Act will be amended for the purposes of their
incorporation in the ACL. In respect of unfair practices, MCCA
agreed that the ACL should:
. prohibit false or misleading testimonials about goods or
services;
. clarify the operation of the provisions relating to
representations as to future matters;
. clarify that, when a business offers a gift or a prize to
a consumer, that gift or prize should be provided as
described to the consumer within a reasonable time;
. clarify that, when a business agrees to supply goods or
services to a consumer, the goods or services should be
supplied to the consumer as described and within the
specified time, or if no time is specified, within a
reasonable time;
. prohibit the assertion of a right to payment for
unauthorised advertisements, and that any document seeking
payment for unsolicited goods or services, or unauthorised
entries or advertisements, must include a statement to the
effect that it is not a bill payable by the consumer;
. provide that a consumer is not liable to pay for
unsolicited services;
. clarify the operation of the pyramid selling provisions;
. clarify that goods with multiple prices displayed should
be sold at the lowest displayed price unless the seller
chooses to withdraw them from sale;
. provide consumers with a right to receive a receipt for
purchases of $75 or more where businesses are not already
required to provide consumers with a tax invoice under the
Commonwealth goods and services tax (GST) legislation; and
. provide consumers with a right to request an itemised bill
for the supply of services.
267. In addition, all of the provisions of that have been included in
Part 3-1 and Part 4-1 of the ACL have been drafted to reflect that:
. the ACL is to be applied by the States and Territories as
an application law. Specifically:
- the provisions refer to 'a person' as opposed to 'a
corporation' in the TP Act (the TP Act drafting
reflected a constitutional limitation on the
Commonwealth);
- the penalty amounts for criminal offences and civil
pecuniary penalties are expressed as dollar amounts,
rather than penalty units, as each jurisdiction has its
own definition of how much one penalty unit is worth;
and
- mental elements for offences have been specified.
. much of the TP Act has been in place for over 30 years, so
a number of ACL provisions have been redrafted to comply
with the requirements of plain English drafting.
False or misleading representations etc.
False or misleading representations about goods or services
268. Section 53 of the TP Act prohibited the making of certain false or
misleading representations, in connection with the supply or
possible supply of goods or services. These specific prohibitions
supplemented the prohibition on conduct that is misleading or
deceptive, or likely to mislead to deceive, in trade or commerce in
section 52 of the TP Act.
269. MCCA agreed that the prohibition on false and/or misleading
representations in the TP Act will be expanded for the purposes of
the ACL to:
. ensure that specific representations are prohibited on the
basis that they are false or misleading; and
. include additional prohibitions relating to:
- representations that are testimonials and
representations about testimonials; and
- representations concerning consumer guarantees.
270. Section 53 of the TP Act proscribed specific representations, some
of which are prohibited from being false, some from being false or
misleading, and others from being about qualities the goods or
services do not have. There appears to be no rationale as to why,
through various amendments, the different forms of wording were used
for different elements of section 53 of the TP Act.
271. For example, there is little reason to prohibit false or misleading
representations concerning the availability of spare parts (section
53(ea) of the TP Act) but only prohibiting false, but not
misleading, representations that goods are new (section 53(b) of the
TP Act).
272. Section 29 of the ACL replaces section 53 of the TP Act and has been
drafted to remove this distinction and apply to false or misleading
representations and includes the new forms of prohibited
representation.
False or misleading representations about the sale of land etc.
273. Section 53A of the TP Act prohibited the making of certain false or
misleading representations in connection with the supply or possible
supply of goods or services.
274. Dealings in relation to land are neither a good nor a service and,
accordingly, this specific prohibition on false or misleading
representations about the sale of land and other forms of land
transaction was added to the TP Act in 1987. Similar prohibitions
exist in the FT Acts of most States and Territories.
275. Section 30 of the ACL replaces section 53A of the TP Act.
Misleading conduct relating to employment
276. Section 53B of the TP Act prohibited the making of certain false or
misleading representations in connection with the supply or possible
supply of goods or services.
277. Section 53B of the TP Act was inserted into the Act in 1988 for two
reasons:
. representations in relation to employment are not
necessarily made 'in trade or commerce', but rather 'in
respect of trade or commerce', so the other provisions in
the TP Act, which are mostly concerned with conduct 'in
trade or commerce', would not apply; and
. employment is neither a good nor a service.
278. A similar provision currently exists in the fair trading Acts of all
States and Territories.
279. Section 31 of the ACL replaces section 53B of the TP Act.
Offering rebates, gifts, prizes etc.
280. Section 54 of the TP Act prohibited offering gifts, prizes or other
free items without intending to provide them, or not providing them
as offered. Section 54 is, among other things, intended to prevent
people from being enticed into buying goods or services entirely or
partly on the basis of accompanying free items that they are never
going to receive.
281. MCCA agreed that an equivalent provision will be included in the
ACL, as well as a new requirement that the person provide the
rebate, gift, prize or other free items in the specified time or, if
no time has been specified, within a reasonable time, drawing on the
existing similar requirement in section 16(b) of the Victorian FT
Act. This is designed to prevent traders from subjecting consumers
to unnecessarily long delays in receiving promised gifts, prizes,
rebates or other free items.
282. Section 32 of the ACL replaces section 54 of the TP Act.
Certain misleading conduct in relation to goods or services
283. Following Australia's ratification of the Paris Convention for the
Protection of Industrial Property, section 55 of the TP Act was
included as a specific prohibition against conduct that is liable to
mislead the public in relation to certain aspects of goods. Section
55A was added to the TP Act in 1987 to cover services in the same
way. A similar provision currently exists in the TP Acts of all
States and Territories.
284. Sections 33 and 34 of the ACL replace section 55 and 55A of the TP
Act.
Bait advertising
285. Bait advertising is the practice of offering goods or services at a
particular price to attract consumers, when the advertiser is aware
that it will not be able to supply the goods or services at that
price in reasonable quantities.
286. Section 56 of the TP Act prohibited advertising in this manner if
the supplier ought reasonably be aware that there are reasonable
grounds for believing that the supplier will not be able to supply
the goods or services at reasonable quantities or for a reasonable
period. While this practice might have been covered by other
provisions in the TP Act, section 56 provided further, specific
requirements that the goods or services must be available in
reasonable quantities.
287. Section 56(2) of the TP Act specified that a corporation that
advertised goods or services for supply at a specified price must
ensure that such goods or services are available at that price in
reasonable quantities for a reasonable time, having regard to the
nature of the market in which the corporation carries on business
and the nature of the advertisement.
288. A similar provision exists in the fair trading Acts of all States
and Territories.
289. Section 35 of the ACL replaces section 56 of the TP Act.
Wrongly accepting payment
290. Section 58 of the TP Act prohibited a supplier from accepting
payment for goods or services without intending to supply or where
there are reasonable grounds for believing the goods or services
will not be able to be provided.
291. Section 36 of the ACL replaces section 58 of the TP Act and augments
it with a requirement to provide goods or services for which payment
has been accepted within the specified time, or if no time is
specified, within a reasonable time. MCCA agreed on 4 December 2009
that the ACL should include such a requirement, drawing on section
19 of the Victorian FT Act.
292. The expanded scope of section 36 of the ACL is to prevent traders
from subjecting people to unnecessarily long delays in receiving
goods or services for which they have paid.
293. While a person may have remedies available under the law of contract
section 36 of the ACL is not intended to impose a contravention for
a trader that genuinely endeavours to fulfil its supply agreements.
Subsection 36(5) provides an exception to the prohibition if the
failure to supply was due to something beyond the trader's control
and it had exercised due diligence and took reasonable precautions
to avoid the failure.
Misleading representations about certain business activities
294. Section 53 of the TP Act prohibited the making of certain false or
misleading representations in connection with the supply or possible
supply of goods or services. However, this prohibition does not
necessarily cover representations regarding the profitability, risk
or other aspects of particular types of business activity, such as
home-based businesses or those that require a person to invest
either personal effort or money into a business (such as a
franchising arrangement).
295. Section 59 of the TP Act prohibited making false or misleading
representations about the profitability, risk or other material
aspect of any business activity that can be carried on from home.
In 1967, section 59 was amended to prohibit the making of false or
misleading representations about the profitability, risk or other
material aspect of any business activity that requires work or
investment by a person. A similar provision currently exists in the
FT Acts of all States and Territories.
296. Section 37 of the ACL replaces section 59 of the TP Act.
Application of provisions of this Division to information providers
297. Section 65A of the TP Act made provision for the application of the
provisions in Part V, Division 1 of the TP Act to information
providers.
298. In Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd
(1983) 47 ALR 497 and Global Sportsman Pty Ltd v Mirror Newspapers
Ltd (1984) 55 ALR 25, the Federal Court found that the publication
of news in a newspaper had the potential to constitute a
contravention of the misleading or deceptive conduct provisions in
section 52 of the TP Act. As a result section 65A was included in
the TP Act in 1984 to exclude the application of all of the
provisions described above (except for misleading conduct in
relation to employment) for prescribed information providers when
these providers are carrying on a business of providing information.
Such providers include radio stations, television stations, and
publishers of newspapers and magazines. A similar provision
currently exists in the FT Acts of all States and Territories.
299. Section 38 of the ACL replaces section 65A of the TP Act.
Unsolicited supplies
300. The practice of providing consumers with unsolicited goods, and then
demanding payment for those goods, is regarded as sufficiently
detrimental to consumers that specific provisions dealing with these
practices have been part of the TP Act since its first enactment.
Specifically:
. section 64 of the TP Act prohibited a person from
asserting a right to payment for unsolicited goods unless
the person has a reason to believe he or she is entitled
to payment. Section 64 also applied to unauthorised
directory entries and also sets out rules for determining
when a payment has been solicited and what are reasonable
grounds for believing a supplier has a right to payment;
and
. section 65 of the TP Act also provided that a consumer is
not liable to pay for unsolicited goods, or for loss or
damage to those goods, unless the loss or damage is the
result of a wilful and unlawful act by the consumer. A
similar provision, at subsection 64(4), gave protection to
consumers against liability for unauthorised directory
entries.
301. After the enactment of the TP Act, it emerged that corporations that
engage in the practice of sending unsolicited credit cards or debit
cards to consumers may not be covered by the TP Act provisions
against unsolicited goods or services. As a result, section 63A,
prohibiting the sending of unsolicited credit cards or debit cards
to a consumer (except at the written request of the consumer), was
inserted into the TP Act in 1985.
302. Furthermore, a new provision was added to section 64 of the TP Act
prohibiting the assertion of a right to payment for unsolicited
services was added in 1987, which recognises that it is just as easy
for a supplier to demand payment for unsolicited services as it is
for unsolicited goods.
303. The ACL will retain provisions concerning these prohibitions in
sections Chapter 3, Part 3-1, Division 2, and will extend them to
cover entries that are like directory entries but are not published
in directories.
304. While no provision for liability resulting from the supply of
unsolicited services existed in the TP Act, Victoria has had such a
provision in its FT Act since 1999. This provision is incorporated
into section 43 of the ACL.
Pyramid schemes
305. Provisions regulating pyramid schemes have existed in the TP Act
since its enactment in 1974. Part V, Division 1AAA of the TP Act
was incorporated in 2002 to present the provisions in plain English.
Similar provisions exist in the FT Acts of most States and
Territories.
306. The prohibition of pyramid schemes is driven by the prevalence of
scams that require a person to join a scheme by paying a fee, and
the only way to make that money back is by enticing or recruiting
others to join the scheme. These schemes inevitably collapse when
they fail to attract new members to join, leaving those still in the
scheme out of pocket.
307. On 4 December 2009, MCCA agreed that the existing pyramid schemes
provisions will be retained in the ACL, with some minor changes to
clarify the operation of the provisions.
308. Chapter 3, Part 3-1, Division 3 of the ACL will replace Part V,
Division 1AAA of the TP Act.
Pricing
Multiple pricing
309. Sections 52 (misleading and deceptive conduct) and 53 (false or
misleading representations) of the TP Act are applicable to multiple
prices being displayed for the same goods or services. However,
these prohibitions often require the interpretation of the court or
the intervention of a regulator to be pursued should a dispute
arise.
310. MCCA agreed on 4 December 2009 that the ACL should include a
specific requirement relating to multiple pricing, drawing on the
existing similar requirement in section 40 of the NSW FT Act. This
requirement will provide a clear rule that people (including
traders) can understand if multiple prices are displayed for a
product. If multiple prices are displayed at the same time for
goods, those goods must not be sold for more than the lowest of the
prices. Section 47 of the ACL will not force businesses to sell the
goods, businesses have a right to withdraw the goods from sale and
correct pricing errors if they occur.
311. Section 47 of the ACL will deal with multiple pricing.
Single price to be specified in certain circumstances
312. Section 53C of the TP Act regulated the practice of component
pricing but did not seek to prohibit component pricing. When
amended in 2008, it clarified that under the TP Act a corporation
must not make a representation as to the partial price of a good or
service without also specifying, in a prominent way and as a single
figure, the single price.
313. Section 48 of the ACL replaces section 53C of the TP Act.
Other unfair practices
Referral selling
314. Section 57 of the TP Act regulated referral selling. Selling by
commission is a popular method of attracting custom. However, some
suppliers attach conditions to the commissions based on future,
unknown events, which may mean that consumers do not actually
receive a commission for their efforts if the future event does not
occur. Section 57 of the TP Act addressed this issue by prohibiting
a corporation from inducing a consumer to buy goods or services by
representing that the consumer will receive some benefit for
assisting the corporation to supply goods or services to other
customers, when the receipt of this benefit is contingent on an
event occurring after the contract for the initial sale is made.
315. Section 49 of the ACL replaces section 57 of the TP Act.
Harrassment and coercion
316. Traders have resorted to illegal or inappropriate behaviour in
pursuing consumers to either supply goods or services to them or
demand payment for such supply. Section 60 of the TP Act prohibited
the use of physical force, undue harassment or coercion by a servant
or agent of a corporation at certain locations in connection with
the supply of goods or services or payment for those goods or
services. Similar provisions exist in the FT Acts of all States and
Territories.
317. Section 50 of the ACL will replace section 60 of the TP Act, with
changes to extend the application of the prohibition to land
transactions.
Proof of transaction and itemised bills
318. No provisions relating to a proof of transaction existed in the TP
Act. Since 1999, the Victorian FT Act has had a requirement for a
proof of transaction to be given to consumers under certain
circumstances.
319. Similarly, no provisions relating to an itemised bill existed in the
TP Act. Since 1999, the Victorian FT Act has had a requirement for
an itemised bill to be provided to a consumer upon request when the
consumer has been supplied with services.
320. On 4 December 2009, MCCA agreed that requirements for a proof of
transaction and an itemised bill will be incorporated into the ACL
and these are dealt with in sections 100 and 101 of the ACL.
Summary of new law
321. The ACL has provisions that prohibit a number of unfair practices
and ensures that a norm of conduct is established for suppliers in
dealing with consumers.
322. Part 3-1 deals with:
. False or misleading representations or conduct. The ACL
prohibits the making of representations that are false or
misleading in relation to specific matters, including
goods or services, testimonials, sale or grant of
interests in land, employment, and certain business
activities. Information providers are exempt from these
requirements under specified circumstances.
. Unsolicited supplies. The ACL prohibits sending
unsolicited credit cards or debit cards, and asserting a
right to payment for unsolicited goods or services, or
unauthorised entries or advertisements.
. Pyramid schemes. The ACL prohibits a person from
participating in, or inducing another person to
participate in, a pyramid scheme, but excludes legitimate
multi-level marketing schemes from the definition of a
pyramid scheme.
. Pricing. The ACL contains rules addressing the display of
multiple prices for goods, as well as a requirement to
state a total single price for goods or services where
quantifiable.
. Other unfair practices. The ACL prohibits practices
relating to bait advertising, and harassment and coercion.
. Miscellaneous. The ACL also requires that a consumer
should be given a proof of transaction or an itemised bill
under certain circumstances.
False or misleading representations etc.
False or misleading representations about goods or services
323. Section 29 of the ACL prohibits a person from making false or
misleading representations of certain types in connection with the
supply, possible supply or promotion by any means of the supply or
use of goods or services.
324. Section 29 of the ACL covers false or misleading representations of
the following types:
. that goods are of a particular standard, quality, value,
grade, composition, style or model or have had a
particular history or particular previous use; or
. that services are of a particular standard, quality, value
or grade; or
. that goods are new; or
. that a particular person has agreed to acquire goods or
services; or
. that purports to be a testimonial by any person relating
to goods or services; or
. concerning:
- testimonial by any person; or
- a representation that purports to be such a testimonial;
relating to goods or services; or
. that goods or services have sponsorship, approval,
performance characteristics, accessories, uses or
benefits; or
. that the person making the representation has a
sponsorship, approval or affiliation; or
. with respect to the price of goods or services; or
. concerning the availability of facilities for the repair
of goods or of spare parts for goods; or
. concerning the place of origin of goods; or
. concerning the need for any goods or services; or
. concerning the existence, exclusion or effect of any
condition, warranty, guarantee, right or remedy (including
a guarantee under Part 3-2, Division 1); or
. concerning a requirement to pay for a contractual right
that:
- is wholly or partly equivalent to any condition,
warranty, guarantee, right or remedy (including a
guarantee under Part 3-2, Division 1); and
- a person has under a law of the Commonwealth, a State or
a Territory (other than an unwritten law).
325. This provision substantially reflects the section 53 of the TP Act,
with the following changes:
. it has been redrafted for ease of use and accessibility;
. all the prescribed types of representations listed in
section 29 are prohibited from being either false or
misleading;
. it includes a specific prohibition on false or misleading
representations concerning testimonials (or
representations that purport to be testimonials);
. it includes an evidentiary burden on a respondent to
adduce evidence in court that representations concerning
testimonials are not false or misleading, as the case may
be;
. it includes a reference to consumer guarantees (as set out
Part 3-2, Division 1) in the prohibition of false or
misleading representations concerning the existence,
exclusion or effect of any condition, warranty, guarantee,
right or remedy; and
. it includes a new prohibition of a false or misleading
representation as to a requirement to pay for a
contractual right that is wholly or partly equivalent to
any condition, warranty, guarantee, right or remedy
(including a guarantee under Part 3-2, Division 1) or that
a person has under a law of the Commonwealth, a State or a
Territory.
False or misleading representations about land
326. Section 30 of the ACL provides that a person must not, in trade or
commerce, make certain false or misleading representations in
connection with the sale or grant of an interest in land, or the
promotion of this sale or grant.
Misleading conduct relating to employment
327. Section 31 of the ACL provides that a person must not engage in
conduct that is liable to mislead persons seeking employment as to
matters relating to the employment.
Offering gifts and prizes etc.
328. Section 32 of the ACL provides that in connection with certain
conduct relating to goods, services or land:
. a person must not offer a rebate, gift, prize or other
free item with the intention of not providing it, or not
providing it as offered; and
. the rebate, gift, prize or other free item must be
provided, in accordance with the offer, within the time
specified in the offer, or if no time is specified, within
a reasonable time of the offer.
329. An exception is provided to the new requirement to supply within the
specified or a reasonable time - if the failure to provide was due
to something beyond the supplier's control and he, she or it had
exercised due diligence and took reasonable precautions to ensure
that businesses are not dissuaded from offering prizes or other free
items.
330. The term 'rebates' has been added to the prohibition to make certain
that the provision applies to 'cash-back' offers that are by
redemption or application.
331. Section 32 of the ACL also covers the contents of
paragraph 53A(1)(c) of the TP Act in relation to land, but with the
additions of specifically mentioning 'rebates' and the new
requirement to provide the rebate, gift, prize or other free item
within the time specified in the offer, or if no time is specified,
within a reasonable time. This provides clarity through locating
all the prohibitions relating specifically to gifts and prizes in
the same section.
Certain misleading conduct in relation to goods or services
332. Sections 33 and 34 of the ACL provide that a person must not, in
trade or commerce, engage in conduct that is liable to mislead the
public as to the nature, the characteristics, the suitability for
their purpose or the quantity of any goods or services, or the
manufacturing process of any goods.
Bait advertising
333. Section 35 of the ACL provides that a person must not, in trade or
commerce, advertise goods or services at a specified price if there
are reasonable grounds, of which the person should be aware, to
believe that the person would not be able to supply reasonable
quantities of the goods or service at the advertised price for a
reasonable period.
334. Section 35 also provides that, to advertise goods or services at a
specified price, a person must offer such goods or services, in
trade or commerce, for a reasonable period at reasonable quantities.
335. Section 35 applies having regard to the nature of the advertisement
for the goods or services and the market in which the person is
carrying on business.
Wrongly accepting payment
336. Section 36 of the ACL prohibits a person from accepting payment or
other consideration for goods or services where, at the time of the
acceptance, the corporation:
. intends not to supply the goods or services;
. intends to supply materially different goods or services;
or
. there are reasonable grounds, of which the corporation is
aware or ought reasonably to be aware, for believing the
corporation will not be able to supply the goods in the
time specified or, if no time is specified, within a
reasonable time.
There is also a new requirement in the section 36 of the ACL - to
provide goods or services for which payment has been accepted
within the specified time, or if no time is specified, within a
reasonable time.
337. An exception is provided for the new requirement if the failure to
supply was due to something beyond the supplier's control and he,
she or it had exercised due diligence and took reasonable
precautions to ensure that businesses are not dissuaded from, in
appropriate circumstances, accepting payment until goods are able to
be delivered.
338. Section 36 also allows a consumer to accept different goods or
services if he or she agrees to do so. This will ensure that a
supplier is not put in an impossible position of being required to
supply something he, she or it has genuinely tried to provide but
cannot and an equivalent replacement is available.
Misleading representations about certain business activities
339. Section 37 of the ACL provides that a person must not make, in trade
or commerce, false or misleading representations in relation to the
profitability, risk or any other material aspect of any business
activity that the person:
. has represented as one that can be carried on at or from a
person's place of residence; or
. invites other persons to participate by investing in or
performing work for the business.
Information providers
340. Section 38 of the ACL provides that various provisions relating to
false or misleading representations do not apply to an information
provider if the information provider made a publication in the
course of carrying on a business of providing information, unless
the publication is:
. an advertisement;
. in connection with the supply of certain goods or
services; or
. in connection with the sale or grant of certain interests
in land, or the promotion of such a sale or grant.
Unsolicited supplies
Unsolicited cards
341. Section 39 of the ACL provides that a person must not send a credit
card or a debit card to another person except:
. if it is at the written request of the other person; or
. the card is for the renewal, replacement or substitution
of a card of the same kind.
342. Section 39 also provides that a person cannot enable a credit card
to be used as a debit card, or a debit card to be used as a credit
card, except at the written request of the cardholder.
Assertion of right to payment
343. Section 40 of the ACL provides that a person must not, in trade or
commerce, assert a right to payment for unsolicited goods or
services unless the person has reasonable cause to believe that
there is a right to payment.
344. Section 43 of the ACL provides that a person must not assert a right
to payment for unauthorised entries or advertisements, relating to
another person or their profession, trade or occupation, unless the
person knows, or has reasonable cause to believe, that the other
person has authorised the placing of the entry or advertisement in
the publication.
345. Section 43 also provides that any invoice or similar document that
is provided to the consumer with unsolicited goods or services, or
unauthorised entries or advertisements, must contain a warning
statement to the effect that such a document is not an assertion of
a right to payment.
Liability of recipient for unsolicited goods or services
346. Sections 41 and 42 of the ACL provides that a person is not liable
to pay for unsolicited goods or services that are supplied to them
in trade or commerce.
347. Section 41 also provides that a person is not liable to pay for loss
or damage to unsolicited goods unless the loss or damage is due to a
wilful and unlawful action by the person, as well as the right for
the sender of the unsolicited goods to retrieve them from the
recipient within a certain period.
348. Section 42 also provides that a person is not liable to pay for loss
or damage as a result of the supply, in trade or commerce, of
unsolicited services to them.
Pyramid schemes
349. Section 44 of the ACL provides that a person must not participate,
or induce or attempt to induce another person to participate, in a
pyramid scheme.
350. Section 46 of the ACL provides that a scheme that involves the
marketing of goods or services may or may not be a pyramid scheme,
depending on:
. whether the participation payments bear a reasonable
relationship to the goods or services offered;
. the emphasis given in the promotion of the scheme to the
entitlement of the participants to the goods or services,
compared to the emphasis given to recruitment payments;
and
. any other matter the court deems to be relevant.
Pricing
Multiple pricing
351. Section 47 provides that if more than one selling price is displayed
for goods, a supplier must not sell the goods for more than the
lowest of those prices.
352. Suppliers are not obliged to sell the goods and have the right to
withdraw the goods from sale until the prices are corrected. An
exception that allows a business to publish retractions for
advertising errors is also available.
Single price to be specified in certain circumstances
353. Section 48 prohibits using a component price when making a
representation as to the price of a good or service without also
prominently specifying the single figure price a consumer must pay
to obtain the product or service, to the extent that a single figure
price is quantifiable at the time of making a representation.
Other unfair practices
Referral selling
354. Section 49 provides that a person must not, in trade or commerce,
induce a consumer to buy goods or services by representing that he
or she will receive some benefit for assisting the corporation to
supply goods or services to other customers, when the receipt of
this benefit is contingent on an event occurring after the contract
for the initial sale is made
Harassment and coercion
355. Section 50 provides that a person must not use physical force, undue
harassment or coercion in connection with the supply of goods or
services, payment for goods or services, or the sale or grant, or
the possible sale or grant, of an interest in land.
Proof of transaction and itemised bills
356. Section 100 provides that a proof of transaction must be given to a
consumer if he or she is supplied with goods or services with a
total price of $75 or more.
357. Section 100 also provides that, if the goods or services supplied to
the consumer have a total price of less than $75, the supplier must
provide a proof of transaction to the consumer if the consumer
requests.
358. Section 101 provides that, if a supplier supplies services to a
consumer, the consumer may request an itemised bill from the
supplier.
Comparison of key features of new law and current law
False or misleading representations or conduct
|New law |Current law |
|All the prescribed types |For the types of listed |
|of representations listed|representations in |
|in section 29 are |section 53 of the TP Act,|
|prohibited from being |some are prohibited from |
|either false or |being false, some from |
|misleading. |being false or misleading|
| |and some from being about|
| |qualities the goods or |
| |services do not have. |
| |Similar prohibitions |
| |exist in section 12DB of |
| |the ASIC Act and in all |
| |State and Territory FT |
| |Acts: |
| |Section 44 NSW FT Act |
| |Sections 10, 11 and 12 |
| |Vic. FT Act |
| |Section 40 Qld FT Act |
| |Sections 12 and 13 WA FT |
| |Act |
| |Section 58 SA FT Act |
| |Section 16 Tas. FT Act |
| |Section 14 ACT FT Act |
| |Section 44 NT FT Act |
|False or misleading |False or misleading |
|representations |representations |
|concerning testimonials |concerning testimonials |
|will be listed as |are not specifically |
|prohibited in section 29 |listed in section 53 of |
|of the ACL. |the TP Act. However, the|
| |section 14 of the Vic. |
| |FT Act provides such a |
| |prohibition. |
|In court proceedings, a |Currently, the only |
|person accused of making |burden that is on a |
|a false or misleading |person accused of |
|representation concerning|breaching certain parts |
|a testimonial will be |of section 53 of the TP |
|required to adduce |Act is if a |
|evidence to the contrary |representation as to a |
|or the representation |future matter is alleged |
|will be deemed to be |to be misleading (by |
|misleading. |virtue of section 51A of |
| |the TP Act). However, |
| |the section 14 of the |
| |Vic. FT Act does provide|
| |a burden on the |
| |representor in relation |
| |to testimonials. |
|New law |Current law |
|Section 26(1)(m), which |Section 53(g) of the TP |
|prohibits false or |Act prohibits false or |
|misleading |misleading |
|representations |representations |
|concerning the existence,|concerning the existence,|
|exclusion or effect of |exclusion or effect of |
|any condition, warranty, |any condition, warranty, |
|guarantee, right or |guarantee, right or |
|remedy now includes a |remedy. There is no |
|specific reference to |specific mention of Part |
|guarantees under Division|V, Division 2 of the TP |
|1 of Part 3 2 to ensure |Act (implied warranties |
|the section covers |and conditions). |
|representations about | |
|that regime. | |
|A new prohibition has |No explicit equivalent in|
|been added regarding a |section 53 of the TP Act.|
|false or misleading | |
|representation as to a | |
|requirement to pay for a | |
|contractual right that is| |
|wholly or partly | |
|equivalent to any | |
|condition, warranty, | |
|guarantee, right or | |
|remedy (including a | |
|guarantee under Division | |
|1 of Part 3-2) or that a | |
|person has under a law of| |
|the Commonwealth, a State| |
|or a Territory (other | |
|than the unwritten law). | |
|A person must not make |Similar provisions are |
|false or misleading |currently contained in |
|representations in |section 53A of the |
|connection with the sale,|TP Act, section 12DC of |
|grant, possible sale or |the ASIC Act, and the |
|grant, or promotion in |following State and |
|relation to the sale or |Territory FT Acts: |
|grant, of an interest in |Section 45 NSW FT Act |
|land. |Section 40A Qld FT Act |
| |Section 59 SA FT Act |
| |Sections 12 and 13 WA FT |
| |Act |
| |Section 17 Tas. FT Act |
| |Section 15 ACT FT Act |
| |Section 45 NT FT Act |
|New law |Current law |
|A representation as to a |Section 51A of the TP Act|
|future matter made |provides that a |
|without reasonable |representation as to a |
|grounds is misleading. |future matter made |
|Failure to adduce |without reasonable |
|evidence of reasonable |grounds is misleading. |
|grounds will result in |Failure to adduce |
|the representation being |evidence of reasonable |
|deemed as misleading. |grounds will result in |
| |the representation being |
| |deemed as misleading. |
| |A similar provision |
| |exists in section 12BB of|
| |the ASIC Act and in all |
| |State and Territory FT |
| |Acts: |
| |Section 41 NSW FT Act |
| |Section 4 Vic. FT Act |
| |Section 37 Qld FT Act |
| |Section 54 SA FT Act |
| |Section 9 WA FT Act |
| |Subsections 3(7)-(9) Tas.|
| |FT Act |
| |Section 11 ACT FT Act |
| |Section 41 NT FT Act |
|The evidentiary burden is|court interpretation has |
|clarified to require only|differed and, in some |
|that evidence of |cases, section 51A of the|
|reasonable grounds be |TP Act had been |
|adduced. |interpreted to impose a |
| |persuasive or legal |
| |burden requiring the |
| |respondent to prove |
| |reasonable grounds. |
|Satisfying the |Some court decisions have|
|evidentiary burden |interpreted section 51A |
|discharges the onus only |of the TP Act to give |
|and does not provide a |respondents a substantive|
|defence to an allegation |defence to an allegation |
|of misleading conduct. |that a representation was|
| |misleading if the onus |
| |was discharged. |
|The evidentiary onus can |The wording of section |
|apply to alleged |51A of the TP Act was |
|accessories to |held to not permit |
|contraventions. |application to alleged |
| |accessories. |
|New law |Current law |
|A person must not engage |Similar provisions are |
|in conduct that is liable|currently contained in |
|to mislead persons |section 53B of the TP Act|
|seeking employment about |and the following State |
|matters relating to the |and Territory FT Acts: |
|employment. |Section 46 NSW FT Act |
| |Section 13 Vic. FT Act |
| |Section 41 Qld FT Act |
| |Section 60 SA FT Act |
| |Section 14 WA FT Act |
| |Section 18 Tas. FT Act |
| |Section 16 ACT FT Act |
| |Section 46 NT FT Act |
|Offering a rebate, gift, |The same as the new law |
|prize or other free item |(section 54 of the TP |
|with the intention of not|Act), but without the |
|providing it is |reference to 'rebate'. |
|prohibited. |Similar prohibitions |
| |exist in section 12DE of |
| |the ASIC Act and in all |
| |State and Territory FT |
| |Acts: |
| |Section 48 NSW FT Act |
| |Section 16 Vic. FT Act |
| |Section 43 Qld FT Act |
| |Section 62 SA FT Act |
| |Section 16 WA FT Act |
| |Section 19 Tas. FT Act |
| |Section 18 ACT FT Act |
| |Section 51 NT FT Act |
|Rebates, gifts, prizes or|No such prohibition in |
|other free items must be |the TP Act. |
|provided within the time |A similar prohibition |
|specified in the offer, |exists in section 16 of |
|or if no time is |the Vic. FT Act. |
|specified, within a | |
|reasonable time. | |
|Defences where the | |
|failure was beyond the | |
|person's control are also| |
|provided for this part of| |
|the section. | |
|In addition to goods and |Land is dealt with |
|services, the section |separately from goods and|
|applies to a rebate, |services (section 53A(c) |
|gift, prize or other free|as opposed to section 54)|
|item offered in |in the TP Act. |
|connection with the sale,| |
|possible sale or | |
|promotion by any means of| |
|the sale or grant of an | |
|interest in land. | |
|New law |Current law |
|A person must not engage |Similar provisions are |
|in conduct that is liable|currently contained in |
|to mislead the public as |section 55 of the TP Act |
|to the nature, the |and the following State |
|manufacturing process, |and Territory FT Acts: |
|the characteristics, the |Section 49 NSW FT Act |
|suitability for their |Section 10 Vic. FT Act |
|purpose or the quantity |Section 44 Qld FT Act |
|of any goods. |Section 63 SA FT Act |
| |Section 17 WA FT Act |
| |Section 20 Tas. FT Act |
| |Section 19 ACT FT Act |
| |Section 47 NT FT Act |
|A person must not engage |Similar provisions are |
|in conduct that is liable|currently contained in |
|to mislead the public as |section 55A of the TP |
|to the nature, the |Act, section 12DF of the |
|characteristics, the |ASIC Act, and the |
|suitability for their |following State and |
|purpose or the quantity |Territory FT Acts: |
|of any services. |Section 50 NSW FT Act |
| |Section 11 Vic. FT Act |
| |Section 45 Qld FT Act |
| |Section 64 SA FT Act |
| |Section 18 WA FT Act |
| |Section 21 Tas. FT Act |
| |Section 20 ACT FT Act |
| |Section 48 NT FT Act |
|A person must not |Similar provisions are |
|advertise goods or |currently contained in |
|services at a specified |section 56 of the TP Act,|
|price if there are |section 12DG of the ASIC |
|reasonable grounds, of |Act, and the following |
|which the person should |State and Territory FT |
|be aware, to believe that|Acts: |
|the person would not be |Section 51 NSW FT Act |
|able to supply reasonable|Section 17 Vic. FT Act |
|quantities of the goods |Section 46 Qld FT Act |
|or service at the |Section 65 SA FT Act |
|advertised price for a |Section 19 WA FT Act |
|reasonable period. |Section 22 Tas. FT Act |
|To advertise goods or |Section 21 ACT FT Act |
|services at a specified |Section 52 NT FT Act |
|price, a person must | |
|offer such goods or | |
|services for a reasonable| |
|period at reasonable | |
|quantities, having regard| |
|to the nature of the | |
|advertisement and the | |
|market in which the | |
|person is carrying on | |
|business. | |
|New law |Current law |
|Accepting payment for |Same as the new law |
|goods or services with |(section 58 of the TP |
|the intention of not |Act). |
|providing them as agreed |Similar prohibitions |
|or where there are |exist in section 12DI of |
|reasonable grounds for |the ASIC Act and in all |
|believing the supply will|State and Territory FT |
|not be possible is |Acts: |
|prohibited. |Section 53 NSW FT Act |
| |Section 19 Vic. FT Act |
| |Section 48 Qld FT Act |
| |Section 67 SA FT Act |
| |Section 21 WA FT Act |
| |Section 24 Tas. FT Act |
| |Section 24 ACT FT Act |
| |Section 54 NT FT Act |
|'Accepting payment' |Not specifically stated |
|includes partial payments|in the law. |
|such as deposits. | |
|Suppliers are required to|No such requirement in |
|provide goods or services|the TP Act. |
|within the specified | |
|time, or if no time is | |
|specified, within a | |
|reasonable time of | |
|accepting payment. | |
|This requirement does not| |
|apply if the failure to | |
|supply is beyond the | |
|person's control and he, | |
|she or it has taken | |
|reasonable precautions | |
|and exercised due | |
|diligence. | |
|A consumer may agree to | |
|accept different goods if| |
|the agreed goods cannot | |
|be provided. | |
|A person must not make |Similar provisions are |
|false or misleading |currently contained in |
|representations in |section 59 of the TP Act |
|relation to the |and the following State |
|profitability, risk or |and Territory FT Acts: |
|any other material aspect|Section 54 NSW FT Act |
|of any business activity |Section 20 Vic. FT Act |
|that the person: |Section 49 Qld FT Act |
|has represented as one |Section 68 SA FT Act |
|that can be carried on at|Section 22 WA FT Act |
|or from a person's place |Section 25 Tas. FT Act |
|of residence; or |Section 25 ACT FT Act |
|invites other persons to |Section 49 NT FT Act |
|participate by investing | |
|in or performing work for| |
|the business. | |
|New law |Current law |
|Various provisions |Similar provisions are |
|relating to false or |currently contained in |
|misleading |section 65A of the TP |
|representations do not |Act, section 12DN of the |
|apply to an information |ASIC Act, and the |
|provider if the |following State and |
|information provider made|Territory FT Acts: |
|the publication in the |Section 60 NSW FT Act |
|course of carrying on a |Section 32 Vic. FT Act |
|business of providing |Section 51 Qld FT Act |
|information, unless the |Section 74 SA FT Act |
|publication is: |Section 63 WA FT Act |
|an advertisement; |Section 28 Tas. FT Act |
|in connection with the |Section 31 ACT FT Act |
|supply of certain goods |Section 60 NT FT Act |
|or services; or | |
|in connection with the | |
|sale or grant of certain | |
|interests in land, or the| |
|promotion of such a sale | |
|or grant. | |
Unsolicited supplies
|New law |Current law |
|A person must not send a |Similar provisions are |
|credit card, a debit |currently contained in |
|card, or an article that |section 63A of the TP |
|may be used as both a |Act, section 12DL of the |
|credit card and a debit |ASIC Act, and the |
|card, to another person |following State and |
|unless it is at the |Territory FT Acts: |
|written request of the |Section 57 NSW FT Act |
|other person, or as a |Section 23 Vic. FT Act |
|replacement for a similar|Section 71 SA FT Act |
|card previously requested|Section 28 WA FT Act |
|by the other person. |Section 27 Tas. FT Act |
| |Section 28 ACT FT Act |
| |Section 57 NT FT Act |
|New law |Current law |
|A person must not assert |Similar provisions are |
|a right to payment for |currently contained in |
|unsolicited goods or |section 64 of the TP Act,|
|services unless the |section 12DM of the ASIC |
|person has reasonable |Act, and the following |
|cause to believe that |State and Territory FT |
|there is a right to |Acts: |
|payment. |Section 58 NSW FT Act |
| |Sections 24 and 28 Vic. |
| |FT Act |
| |Section 52 Qld FT Act |
| |Section 72 SA FT Act |
| |Sections 29 and 30 WA FT |
| |Act |
| |Section 28 ACT FT Act |
| |Section 57 NT FT Act |
|A person must not assert |Provisions relating to |
|a right to payment for |unauthorised directory |
|unauthorised entries or |entries are currently |
|advertisements unless the|contained in section 64 |
|person knows, or has |of the TP Act and the |
|reasonable cause to |following State and |
|believe, that the other |Territory FT Acts: |
|person has authorised the|Section 58 NSW FT Act |
|placing, in a |Sections 27 and 28 Vic. |
|publication, of the entry|FT Act |
|or advertisement. |Section 52 Qld FT Act |
| |Section 72 SA FT Act |
| |Sections 29 and 30 WA FT |
| |Act |
| |Section 29 ACT FT Act |
| |Section 58 NT FT Act |
| |There is no equivalent of|
| |the provisions relating |
| |to unauthorised |
| |advertisements in the TP |
| |Act. A similar provision|
| |currently exists in the |
| |following State and |
| |Territory FT Acts: |
| |Section 58A NSW FT Act |
| |Sections 27 and 28 Vic. |
| |FT Act |
| |Section 52 Qld FT Act |
|Any document that is an |There is no equivalent |
|invoice or other document|provision in the TP Act. |
|that seeks payment for |There is a similar |
|unsolicited goods or |provision in section 58A |
|services, or the making |of the NSW FT Act. |
|of unauthorised directory| |
|entries or | |
|advertisements, must | |
|contain a statement to | |
|the effect that the | |
|document is not a bill. | |
|New law |Current law |
|A person is not liable to|Similar provisions are |
|pay for unsolicited |currently contained in |
|goods, nor for any loss |section 65 of the TP Act |
|or damage to those goods,|and the following State |
|unless such loss or |and Territory FT Acts: |
|damage is due to a |Section 59 NSW FT Act |
|willful and unlawful act |Section 25 Vic. FT Act |
|in relation to the goods |Section 53 Qld FT Act |
|by the person. |Section 73 SA FT Act |
| |Section 31 WA FT Act |
| |Section 30 ACT FT Act |
| |Section 59 NT FT Act |
|A person is not liable to|There is no equivalent |
|pay for unsolicited |provision in the TP Act. |
|services, nor for any |There is a similar |
|loss or damage arising as|provision in section 26 |
|a result of the supply of|of the Victorian FT Act. |
|those services. | |
Pyramid schemes
|New law |Current law |
|A person must not |Similar provisions are |
|participate in, or induce|currently contained in |
|or attempt to induce |section 65AAC of the TP |
|another person to |Act, section 12DK of the |
|participate in, a pyramid|ASIC Act, and the |
|scheme. |following State and |
| |Territory FT Acts: |
| |Section 60U NSW FT Act |
| |Section 22 Vic. FT Act |
| |Section 55D Qld FT Act |
| |Section 70 SA FT Act |
| |Section 24 WA FT Act |
| |Section Tas. FT Act |
| |Section 25B ACT FT Act |
| |Section 60D NT FT Act |
|New law |Current law |
|In determining whether a |Section 65AAE of the TP |
|scheme is a marketing |Act currently provides |
|scheme rather than a |that a court may have |
|pyramid scheme, a court |regard to: |
|must have regard to: |the extent to which the |
|whether the participation|participation payment |
|payment bear a reasonable|bear a reasonable |
|relationship to the value|relationship to the value|
|of the goods or services |of the goods or services |
|that participants are |that participants are |
|entitled to be supplied |entitled to be supplied |
|under the scheme; and |under the scheme; and |
|the emphasis on the |the emphasis on the |
|entitlement of |entitlement of |
|participants to the goods|participants to the goods|
|or services as opposed to|or services as opposed to|
|their entitlement to |their entitlement to |
|recruitment payments. |recruitment payments. |
| |Similar provisions to |
| |section 65AAE are |
| |contained in the |
| |following State and |
| |Territory FT Acts: |
| |Subsection 60T(4) NSW FT |
| |Act |
| |Section 25D ACT FT Act |
| |Section 60C NT FT Act |
Pricing
|New law |Current law |
|If more than one selling |No Commonwealth |
|price is displayed for |equivalent. |
|goods, a supplier must |A similar requirement |
|not sell the goods for |exists in section 40 of |
|more than the lowest of |the NSW FT Act and |
|those prices. |section 22 of the ACT FT |
| |Act. |
|Suppliers retain the |Suppliers retain the |
|right to withdraw items |right to withdraw items |
|from sale. |from sale. |
|The section applies to | |
|advertisements such as | |
|catalogues. | |
|Retractions can be | |
|published for mistakes in| |
|advertising. | |
|The provision does not | |
|apply to wholly obscured | |
|prices, prices not in | |
|Australian currency, is a| |
|partial price such as a | |
|unit price, or is not | |
|expressed in such a way | |
|that it is unlikely to be| |
|interpreted to an amount | |
|New law |Current law |
|A person must not use a |Similar provisions are |
|component price when |currently contained in |
|making a representation |section 53C of the TP |
|as to the price of a good|Act. |
|or service without also |Similar prohibitions |
|prominently specifying |exist in section 12DD of |
|the single figure price a|the ASIC Act and in all |
|consumer must pay to |State and Territory FT |
|obtain the product or |Acts: |
|service, to the extent |Section 47 NSW FT Act |
|that a single figure |Section 15 Vic. FT Act |
|price is quantifiable at |Section 42 Qld FT Act |
|the time of making a |Section 61 SA FT Act |
|representation. |Section 15 WA FT Act |
| |Section 21A Tas. FT Act |
| |Section 17 ACT FT Act |
| |Section 50 NT FT Act |
| |However, it should be |
| |noted that these other |
| |provisions have not been |
| |updated to reflect the |
| |amendments made in the |
| |Commonwealth Trade |
| |Practices Amendment |
| |(Clarity in Pricing) Act |
| |2008. |
Other unfair practices
|New law |Current law |
|A person must not induce |Similar provisions are |
|a consumer to buy goods |currently contained in |
|or services by |section 57 of the TP Act,|
|representing that he or |section 12DH of the ASIC |
|she will receive some |Act, and the following |
|benefit for assisting the|State and Territory FT |
|corporation to supply |Acts: |
|goods or services to |Section 52 NSW FT Act |
|other customers, when the|Section 18 Vic. FT Act |
|receipt of this benefit |Section 47 Qld FT Act |
|is contingent on an event|Section 66 SA FT Act |
|occurring after the |Section 20 WA FT Act |
|contract for the initial |Section 26A Tas. FT Act |
|sale is made |Section 23 ACT FT Act |
| |Section 53 NT FT Act |
|New law |Current law |
|A person must not use |Similar provisions are |
|physical force, undue |currently contained in |
|harassment or coercion in|section 60 of the TP Act,|
|connection with either |section 12DJ of the ASIC |
|the supply of goods or |Act, and the following |
|services to a consumer or|State and Territory FT |
|payment by a consumer for|Acts: |
|goods or services. |Section 55 NSW FT Act |
| |Section 21 Vic. FT Act |
| |Section 50 Qld FT Act |
| |Section 69 SA FT Act |
| |Section 23 WA FT Act |
| |Section 26 Tas. FT Act |
| |Section 26 ACT FT Act |
| |Section 55 NT FT Act |
|A proof of transaction |There is no equivalent |
|must be given to a |provision in the TP Act. |
|consumer if he or she is |Similar provisions |
|supplied with goods or |currently exist in |
|services with a total |section 160A of the |
|price of $75 or more. |Victorian FT Act. |
|If the goods or services | |
|supplied to the consumer | |
|have a total price of | |
|less than $75, the | |
|supplier must provide a | |
|proof of transaction to | |
|the consumer if the | |
|consumer requests. | |
|If a supplier supplies |There is no equivalent |
|services to a consumer, |provision in the TP Act. |
|the consumer may request |Similar provisions |
|an itemised bill from the|currently exist in |
|supplier. |section 160A of the |
| |Victorian FT Act. |
Detailed explanation of new law
False or misleading representations etc.
False or misleading representations about goods or services
359. Section 29 of the ACL prohibits a person from making a range of
specified false or misleading representations, in trade or commerce
and in connection with:
. the supply of goods or services; or
. the possible supply of goods or services; or
. the promotion by any means of the supply or use of goods
or services.
360. The representations specifically identified in section 29 of the ACL
include:
. representations that goods are of a particular standard,
quality, value, grade, composition, style or model or have
had a particular history or particular previous use.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
paragraph 29(1)(a)]
. representations that services are of a particular
standard, quality, value or grade. [Schedule 1, item 1:
Chapter 3, Part 3-1, Division 1, paragraph 29(1)(b)]
. representations that goods are new. [Schedule 1, item 1:
Chapter 3, Part 3-1, Division 1, paragraph 29(1)(c)]
. representations that a particular person has agreed to
acquire goods or services. For example, inducing a
sportsperson to buy a new type of sporting goods by
asserting that competitors had purchased the items when he
or she had not. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 1, paragraph 29(1)(d)]
. representations that purports to be a testimonial by any
person relating to goods or services. [Schedule 1, item
1: Chapter 3, Part 3-1, Division 1, paragraph 29(1)(e)]
. representations concerning a testimonial by any person or
a representation that purports to be such a testimonial
relating to goods or services. [Schedule 1, item 1:
Chapter 3, Part 3-1, Division 1, subsection 29(1)(f)]
. representations that goods or services have sponsorship,
approval, performance characteristics, accessories, uses
or benefits. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 1, paragraph 29(1)(g)]
. representations that the person making the representation
has a sponsorship, approval or affiliation. [Schedule 1,
item 1: Chapter 3, Part 3-1, Division 1, paragraph
29(1)(h)]
. representations with respect to the price of goods or
services. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 1, paragraph 29(1)(i)]
. representations concerning the availability of facilities
for the repair of goods or of spare parts for goods.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
subsection 29(1)(j)]
. representations concerning the place of origin of goods.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
paragraph 29(1)(k)]
. representations concerning the need for any goods or
services. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 1, paragraph 29(1)(l)]
. representations concerning the existence, exclusion or
effect of any condition, warranty, guarantee, right or
remedy (including a guarantee under Chapter 3, Part 3-2,
Division 1). [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 1, paragraph 29(1)(m)]
. representations concerning a requirement to pay for a
contractual right that:
- is wholly or partly equivalent to any condition,
warranty, guarantee, right or remedy (including a
guarantee under Chapter 3, Part 3-2, Division 1); and
- a person has under a law of the Commonwealth, State or
Territory (other than the unwritten law).
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
29(1)(n)]
361. Section 29 applies to any transaction that takes place in trade or
commerce. 'Trade or commerce' is defined in section 2 of the ACL as
meaning 'trade or commerce within Australia, or between Australia
and places outside Australia, and includes any business or
professional activity (whether or not carried on for profit)'. The
ACL applies to conduct engaged in outside of Australia, provided
that at least some aspect of the trading relationship between two or
more parties has taken place in Australia. [Schedule 1, item 1:
Chapter 1, section 2]
362. The application of section 29 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
363. The concept of 'supply' is defined in section 2 of the ACL.
[Schedule 1, item 1: Chapter 1, section 2]
Representations
364. The representations identified in paragraphs 29(1)(a), (c), (d),
(e), (f), (g), (i), (j), (k) and (l) relate to goods.
365. The representations identified in paragraphs 29(1)(b), (d), (e),
(f), (g), (i) and (l) relate to services.
366. The representations identified in paragraphs 29(1)(m) and (n) relate
to consumer guarantees and warranties, conditions, rights or
remedies.
Meaning of concepts used in section 29
367. The ACL does not specifically define many of the concepts used in
the drafting of section 29 of the ACL. As section 29 is couched in
substantially the same form as section 53 of the TP Act, the
jurisprudence relating to the concepts applicable to section 53 of
the TP Act is relevant to those concepts as they exist in section 29
of the ACL.
Representations as to goods only
368. A representation that goods are of a particular standard, quality,
value, grade, composition, style or model or have had a particular
history or particular previous use could cover, for example and
without limitation:
. representations about the nature of the goods, which could
include:
- the way in which the goods were manufactured, including
specific methods or processes; or
- the materials from which the goods were manufactured; or
- the correspondence of the actual goods, their contents
or the way in which those goods were made with a
description of those goods, their contents or the way in
which they were made;
. representations about the standard, quality or grade of
the goods, which could include:
- the suitability of the goods for the uses to which they
might reasonably be put; or
- the purity, strength, cleanliness, fineness (or
otherwise) of the goods, or any other standard, quality
or grade by which the goods may be assessed or compared;
. representations about the value of the goods, which could
include:
- the price of the goods; or
- the cost of the contents of the goods; or
- the cost of the process by which the goods were
manufactured or distributed; or
- the market value of the goods;
. representations about the style of the goods, which could
include:
- the design or the designer of the goods; or
- the accuracy of a reproduction of other goods;
. representations about the model of the goods, which could
include whether the goods match the characteristics of a
particular make or model of the goods;
. representations about the previous history or use of the
goods, including:
- the origin and age of the goods; or
- the previous ownership of the goods; or
- the historical uses or associations of the goods either
in a specific context or by specified persons.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
29(1)(a)]
369. A representation that goods are new could cover, for example and
without limitation, representations that goods, which are in fact
not new, are new. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 1, paragraph 29(1)(c)]
370. A representation concerning the availability of facilities for the
repair of goods or of spare parts for goods could cover, for example
and without limitation, a representation that spare parts, or
specific spare parts, will be available when no such parts are
available or a representation that there are facilities for the
repair of the goods which are not, in fact, available. [Schedule 1,
item 1: Chapter 3, Part 3-1, Division 1, subsection 29(1)(j)]
371. A representation concerning the place of origin of goods could
cover, for example and without limitation:
. a representation that goods were manufactured in a
particular place; or
. a representation that the contents of the goods came from
a particular place; or
. a representation that the goods were 'made in', the
'product of' or 'grown in' a particular place.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
29(1)(k)]
372. The country of origin provisions set out in Chapter 5, Part 5-3
provide a series of defences with respect to this provision
concerning the use of particular claims on the labels of goods.
[Schedule 1, item 1: Chapter 5, Part 5-3]
Representations as to services only
373. A representation that services are of a particular standard,
quality, value or grade could cover, for example and without
limitation [Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
paragraph 29(1)(b)]:
. representations about the nature of the services, which
could include:
- the way in which the services are, have been or might be
undertaken, including specific methods or processes; or
- the persons who will or might undertake the services and
whether those persons have undertaken the services
previously; or
- the correspondence of the actual services or the way in
which those services are undertaken with a description
of those services;
. representations about the standard, quality or grade of
the goods, which could include:
- the suitability of the services for the purposes to
which they are to be put or the matter to which they
relate; or
- the qualifications and previous experience of the
persons who will undertake the services; or
- the amount of work to be undertaken as part of the
supply of the services and the relationship of that work
with the cost of the services.
Representations as to goods and services
374. A representation that a particular person has agreed to acquire the
goods or services could cover, for example and without limitation
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
29(1)(d)]:
. that another person has, may or will acquire the goods or
services; or
. that that other person has, may or will acquire the goods
or services for a particular price or at a particular
time; or
. that that other person has, may or will acquire a specific
form of the goods or services.
375. A representation that the goods or services have sponsorship,
approval, performance characteristics, accessories, uses or benefits
could cover, for example and without limitation:
. representations that the goods or services are, in some
way, sponsored by another person or entity. This could
include persons or entities not engaged in trade or
commerce, such as charities, religious institutions,
educational institutions, professional and trades bodies
and governments.
. representations that a person or other entity has approved
of the goods or services, including representations that
such an approval is a formal or informal endorsement,
certification or other indication of approval made by a
person or entity. This could include persons or entities
not engaged in trade or commerce.
. representations that the goods or services will or could:
- reach specified or non-specified performance standards
or levels in their use or provision; or
- deliver specified or non-specified benefits or
enhancements in the use of other goods or the
undertaking of other services; or
- with respect to goods, last for specified or non-
specified periods of time or a specified or non-
specified number of uses, and with respect to services,
be provided or undertaken for a specified or unspecified
period of time or a specified or unspecified number of
times; or
- tolerate specified or non-specified physical
circumstances (including, for example, pressures or
stresses) in their use or undertaking;
. representations that the goods or services come with other
accessories, including the provision of additional goods
or services either generally or in the event that certain
things occur;
. representations that the goods or services have particular
uses either generally or in addition to those for which
they are to be or have been supplied;
. representations that the goods or services will provide
the person acquiring them or other persons with benefits.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
29(1)(g)]
376. A representation that the person making the representation has
sponsorship, approval or affiliation could cover, for example and
without limitation:
. representations that the person is, in some way, sponsored
by, approved of or affiliated with another person or
entity. This could include persons or entities not
engaged in trade or commerce, such as charities, religious
institutions, educational institutions, professional and
trades bodies and governments.
. representations that a person or other entity has
sponsored, approved of or extend an affiliation to the
person, including representations that such an approval is
a formal or informal endorsement, certification,
qualification or other indication of approval made by a
person or entity. This could include persons or entities
not engaged in trade or commerce.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
29(1)(h)]
377. A representation with respect to the price of goods or services
could cover, for example and without limitation:
. a representation that the goods or services:
- will be supplied for a particular price or at a
particular discount; or
- may be paid for in a particular way or at a particular
time or times.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
29(1)(i)]
378. A representation concerning the need for any goods or services could
cover, for example and without limitation:
. a representation that the goods or services are necessary
in particular circumstances or at all; or
. a representation that the goods and services are required
in the light of a specific event or as a consequence of
specific circumstances; or
. a representation that a failure to provide the goods or
services will result in specific things occurring or not
occurring.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
29(1)(l)]
Testimonials
379. Paragraphs 29(1)(e) and (f) of the ACL prohibit false or misleading
representations in trade or commerce:
. that purport to be a testimonial by any person relating to
goods or services; or [Schedule 1, item 1: Chapter 3,
Part 3-1, Division 1, paragraph 29(1)(e)]
. concerning:
- a testimonial by any person; or
- a representation that purports to be such a testimonial;
relating to goods or services; [Schedule 1, item 1: Chapter 3,
Part 3-1, Division 1, paragraph 29(1)(f)]
380. Paragraphs 29(1)(e) and (f) apply to representations whether or not
the testimonial was genuine or not, for example where a genuine
testimonial is misrepresented or misquoted or where a fictitious
testimonial was published. False or misleading testimonials are not
specifically listed as types of false or misleading representations
in the section 53 of the TP Act. [Schedule 1, item 1: Chapter 3,
Part 3-1, Division 1, paragraphs 29(e) and (f)]
381. There is a rebuttable presumption that a representation concerning a
testimonial as described in paragraphs 29(1)(e) and (f) are
misleading and deceptive. Failure to adduce evidence to the
contrary when it is alleged that a person has made a false or
misleading representation concerning a testimonial will result in
the representation being found to be misleading. [Schedule 1, item
1: Chapter 3, Part 3-1, Division 1, paragraphs 29(2)-(3)]
382. This onus is evidentiary in nature, the person accused does not have
to disprove the alleged breach: he or she must put evidence to the
contrary of the allegation before the court. Similarly, adducing
such evidence does not provide the accused with a defence to any
allegation that the representation is false or misleading: it merely
discharges the onus on them. A person can discharge the evidentiary
onus and still be found to have made a misleading representation.
The evidentiary onus does not apply to any other paragraphs in
section 29 other than paragraphs 29(1)(e) and (f).
383. To avoid doubt, just because some evidence may be adduced to the
contrary, a representation is not, purely on that basis, false or
misleading. The evidence must be sufficient to displace the
presumption that that the representation was false or misleading.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
29(3)(a)]
384. Similarly, paragraph 29(2) of the ACL does not place an onus on a
person to prove that a representation is not misleading. [Schedule
1, item 1: Chapter 3, Part 3-1, Division 1, paragraph 29(3)(b)]
Representations as to guarantees etc.
385. Paragraph 29(1)(m) of the ACL prohibits false or misleading
representations in trade or commerce concerning the existence,
exclusion or effect of any condition, warranty, guarantee, right or
remedy. The paragraph includes a specific reference to guarantees
under Chapter 3, Part 3-2, Division 1 of the ACL to ensure the
prohibition covers representations about statutory guarantees
provided by the ACL. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 1, paragraph 29(1)(m)]
386. This could cover representations made by a person (generally a
trader) to a person (generally a consumer as defined in section 3 of
the ACL) that a condition, warranty, guarantee, right or remedy,
including the statutory guarantees provided by the ACL:
. does or does not exist with respect to the goods or
services, either at all or in specified circumstances; or
. may or may not be excluded with respect to the goods or
services, either at all or in specified circumstances; or
. may or may not have a particular effect with respect to
the goods or services, either at all or in specified
circumstances.
387. Paragraph 29(1)(n) of the ACL prohibits false or misleading
representations as to a requirement to pay for a contractual right
that is wholly or partly equivalent to any condition, warranty,
guarantee, right or remedy or that a person has under a law of the
Commonwealth, a State or a Territory (other than the unwritten law).
The paragraph includes a specific reference to guarantees under
Chapter 3, Part 3-2, Division 1 of the ACL to ensure the prohibition
covers representations about statutory guarantees provided by the
ACL. [Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
paragraph 29(1)(n)]
388. This could cover representations made by a person (generally a
trader) to a person (generally a consumer as defined in section 3 of
the ACL) that a condition, warranty, guarantee, right or remedy,
including the statutory guarantees provided by the ACL must be paid
for, either at all or in specified circumstances.
Criminal offence
389. Section 29 of the ACL has an associated criminal offence in section
151 of the ACL. The maximum fine payable for a contravention of
section 151 of the ACL is $1.1 million for a body corporate and
$220,000 for any other person. [Schedule 1, item 1: Chapter 4, Part
4-1, section 151]
390. The offence in section 151 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
391. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
392. A person contravening section 29 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
393. The following enforcement powers and remedies apply to section 29 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
394. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
395. The ACCC may issue an infringement notice for a contravention of
section 29 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
ASIC Act
396. Section 12DB of the ASIC Act is repealed and replaced with a new
section 12DB to reflect section 29 of the ACL, with respect to
financial products and services. [Schedule 3, item 14]
False or misleading representations etc about sale etc of land
397. Section 30 of the ACL provides that a person must not, in trade or
commerce, make specified types of false or misleading
representations in relation to:
. the sale or grant, or the possible sale or grant, of an
interest in land; or
. the promotion of the sale or grant of an interest in land.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, subsection
30(1)]
398. The types of false or misleading representations specified in
section 30 of the ACL include:
. representations that the person making the representation
has a sponsorship, approval or affiliation; [Schedule 1,
item 1: Chapter 3, Part 3-1, Division 1, paragraph
30(1)(a)]
. representations concerning the nature of the interest in
land; [Schedule 1, item 1: Chapter 3, Part 3-1, Division
1, paragraph 30(1)(b)]
. representations concerning the price payable for the land;
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
paragraph 30(1)(c)]
. representations concerning the location of the land;
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
paragraph 30(1)(d)]
. representations concerning the characteristics of the
land; [Schedule 1, item 1: Chapter 3, Part 3-1, Division
1, paragraph 30(1)(e)]
. representations concerning the use to which the land is
capable of being put or may lawfully be put; or [Schedule
1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
30(1)(f)]
. representations concerning the existence or availability
of facilities associated with the land. [Schedule 1, item
1: Chapter 3, Part 3-1, Division 1, paragraph 30(1)(g)]
Sponsorship, approval or affiliation
399. A representation that the person making the representation has
sponsorship, approval or affiliation could cover, for example and
without limitation:
. representations that the person is, in some way, sponsored
by, approved of or affiliated with another person or
entity. This could include persons or entities not
engaged in trade or commerce, such as charities, religious
institutions, educational institutions, professional and
trades bodies and governments.
. representations that a person or other entity has
sponsored, approved of or extend an affiliation to the
person, including representations that such an approval is
a formal or informal endorsement, certification,
qualification or other indication of approval made by a
person or entity. This could include persons or entities
not engaged in trade or commerce.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
30(1)(a)]
Interests in land
400. A representation concerning the nature of the interest of the land
could cover, for example and without limitation:
. representations that the relevant interest in the land
exists when it does not; or
. representations that the relevant interest in the land is
different to what it actually is; or
. representations as to the nature of any encumbrances or
any other interests in the land which may affect the title
or other interest of the acquirer to that land.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
30(1)(b)]
Price payable
401. A representation concerning the price payable for the land could
cover, for example and without limitation:
. representations that the price is a particular amount or
includes certain things, such as taxes, fees and charges;
or
. representations that the price for the land is different
to what it actually is; or
. representations as to the price for the land is or is not
affected by another matter which may affect the price
paid, or the ability of the acquirer to that land to pay.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
30(1)(c)]
Location
402. A representation concerning the location of the land could cover,
for example and without limitation:
. representations about the location of the land; or
. representations about matters relating to the location of
the land, including access to it.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
30(1)(d)]
Characteristics
403. A representation concerning the characteristics of the land could
cover, for example and without limitation:
. representations about the features of the land; or
. representations about matters relating to the topography,
geology, hydrology or other physical characteristics of
the land; or
. representations about the fertility of the land or the
suitability of the land for particular uses.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
30(1)(e)]
Uses of the land
404. A representation concerning the uses of the land could cover, for
example and without limitation:
. representations about the uses to which the land might be
appropriately put, having regard to its location and
physical features; or
. representations about relevant administrative approvals,
or licences concerning the use of the land.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
30(1)(g)]
Facilities
405. A representation concerning the facilities associated with the land
could cover, for example and without limitation:
. representations that the land has, or may or may not have,
certain facilities or access to such facilities; or
. representations about the nature of those facilities and
the uses to which they may be put; or
. representations as any interests or other rights that
other persons may have with respect to those facilities.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, paragraph
30(1)(g)]
Interpretation
406. The ACL does not specifically define many of the concepts used in
the drafting of section 30 of the ACL. As section 30 is couched in
substantially the same form as section 53A of the TP Act the
jurisprudence relating to the concepts applicable to section 53A of
the TP Act is relevant to those concepts as they exist in section 30
of the ACL.
407. Section 30 applies to any land transaction. A land transaction may
not be a supply of 'goods' or 'services' and therefore this
provision is included to avoid any doubt about the application or
scope of section 29 of the ACL.
408. The application of section 30 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
409. The types of representations prohibited mainly relate to various
aspects of the land in question, including its nature, price,
location or characteristics, uses for the land, and the existence or
availability of facilities associated with the land. In addition,
the person making the representation must not make a false or
misleading representation that the person has a sponsorship,
approval or affiliation.
410. This provision recognises that dealings associated with land are
neither a good nor a service, so a separate clause prohibiting false
or misleading representations in relation to land is necessary.
This provision only applies if the representations are made in
connection with transactions involving the sale or grant of
interests in land, and not if only in connection with a person's
general business activities, even if those business activities
involve the selling of land.[8]
411. To avoid doubt, it is specified that the references to interests in
land in this section does not affect the operation of other
provisions such as the misleading or deceptive conduct provisions in
Part 2-1 and other provisions in Part 3-1. [Chapter 3, Part 3-1,
Division 1, subsection 30(2)]
Criminal offence
412. Section 30 of the ACL has an associated criminal offence in section
152 of the ACL. The maximum fine payable for a contravention of
section 152 of the ACL is $1.1 million for a body corporate and
$220,000 for any other person. [Schedule 1, item 1: Chapter 4, Part
4-1, section 152]
413. The offence in section 152 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
414. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
415. A person contravening section 30 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
416. The following enforcement powers and remedies apply to section 30 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
417. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
418. The ACCC may issue an infringement notice for a contravention of
section 30 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person.
[Schedule 2, item 1: Part XI, Division 5]
Misleading conduct relating to employment
419. Section 31 of the ACL provides that a person must not engage in
conduct that is liable to mislead persons seeking employment about:
. matters relating to the employment, including, but not
limited to, the availability, nature, terms or conditions
of the employment; or
. any other matter relating to employment.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, subsection
31]
Interpretation
420. Section 31 recognises that representations in relation to employment
are not necessarily made 'in trade or commerce', but rather 'in
respect of trade or commerce'. Accordingly, sections 19 and 29 of
the ACL, which are concerned with conduct in trade or commerce, do
not apply.
421. Employment, or the 'performance of work under a contract of
service', is also explicitly excluded from the definition of
'service' in section 2 of the ACL.
422. The ACL does not specifically define many of the concepts used in
the drafting of section 31 of the ACL. As section 31 is couched in
substantially the same form as section 53B of the TP Act the
jurisprudence relating to the concepts applicable to section 53B of
the TP Act is relevant to those concepts as they exist in section 31
of the ACL.
423. The application of section 31 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
Criminal offence
424. Section 31 of the ACL has an associated criminal offence in section
153 of the ACL. The maximum fine payable for a contravention of
section 153 of the ACL is $1.1 million for a body corporate and
$220,000 for any other person. [Schedule 1, item 1: Chapter 4, Part
4-1, section 153]
425. The offence in section 153 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
426. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
427. A person contravening section 31 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
428. The following enforcement powers and remedies apply to section 31 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
429. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
430. The ACCC may issue an infringement notice for a contravention of
section 31 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Offering rebates, gifts, prizes etc
431. Section 32 of the ACL prohibits a supplier offering gifts, prizes
and other free items (including services), in trade or commerce, in
connection with:
. the supply, or possible supply of goods or services; or
. the promotion by any means of goods or services:
without intending to provide them. [Schedule 1, item 1: Chapter 3,
Part 3-1, Division 1, subsection 32(1)]
432. Section 32 also provides that the same requirements apply in
relation to the:
. sale or grant or possible sale or grant of an interest in
land; or
. promotion of a grant or sale of an interest in land.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
subsections 32(1)(c)-(d)]
433. Section 32 of the ACL refers to 'rebates', which were not explicitly
included in section 54 of the TP Act. This has been included to
specifically include 'cash-back' offers within the scope of this
provision. While rebates will still be able to be conditional on
certain conditions being fulfilled by a consumer, once those
obligations have been fulfilled this section will have effect.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, section 32]
Reasonable time
434. Section 32 of the ACL also includes a provision which prohibits a
person from not providing gifts, prizes, rebates or other free items
offered in connection with:
. the supply, or possible supply, of goods or services;
. the promotion by any means of goods or services;
. the sale or grant or possible sale or grant of an interest
in land; or
. the promotion of a grant or sale of an interest in land.
within the time specified in the offer, or, if no time is
specified, within a reasonable time of making the offer. [Schedule
1, item 1: Chapter 3, Part 3-1, Division 1, subsection 32(2)]
435. The specified time requirement requires that if an offer is made,
subject to clearly stated terms of delivery, the person making the
offer will not be forced to meet a shorter timeframe than that which
had been stated. Similarly, the reasonable time requirement also
requires that consumers are not subject to unreasonably long delays-
for example, where a cash-back offer is made but it takes two years
to receive the money.
436. Where no time is specified, the determination of a 'reasonable time'
is a subjective assessment, which will include consideration of such
issues as the nature of the gifts and prizes offered and any
representations or inferences made about their availability.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
subsection 32(2)]
437. Section 32 of the ACL also provides that the requirement to supply
within the specified or reasonable time does not apply where the
reason the supplier could not supply was beyond their control,
providing he, she or it had taken reasonable precautions and
exercised due diligence. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 1, subsection 32(3)]
438. Section 32 of the ACL also permits a person to accept a different
prize, rebate or other free item if he or she agrees to do so. This
avoids the situation where a trader is put in an impossible position
of being required to supply something it has genuinely tried to
provide but cannot, even where an appropriate substitute is
available. It allows the trader to offer something in place of the
prize that cannot be supplied. The person is not obliged to accept
the different item if he or she wishes to retain other rights to
compensation he or she may have. If a person accepts the substitute
item then the trader should still provide it within a reasonable
time. [Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
subsection 32(4)]
Interpretation
439. The ACL does not specifically define many of the concepts used in
the drafting of section 32 of the ACL. As section 32 is couched in
substantially the same form as section 54 of the TP Act the
jurisprudence relating to the concepts applicable to section 54 of
the TP Act is relevant to those concepts as they exist in section 32
of the ACL.
440. The application of section 32 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
441. The concept of 'supply' is defined in section 2 of the ACL.
[Schedule 1, item 1: Chapter 1, section 2]
Criminal offence
442. Section 32 of the ACL has an associated criminal offence in section
154 of the ACL. The maximum fine payable for a contravention of
section 154 of the ACL is $1.1 million for a body corporate and
$220,000 for any other person. [Schedule 1, item 1: Chapter 4, Part
4-1, section 154]
443. The offence in section 154 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
444. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
445. A person contravening section 32 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
446. The following enforcement powers and remedies apply to section 32 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
447. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
448. The ACCC may issue an infringement notice for a contravention of
section 32(2) of the ACL. The amount of the penalty specified in
the infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
ASIC Act
449. Section 12DE of the ASIC Act is amended to reflect section 32 of the
ACL, with respect to financial products and services. [Schedule 3,
items 18-23]
Certain misleading conduct in relation to goods
450. Section 33 of the ACL provides that a person must not, in trade or
commerce, engage in conduct that is liable to mislead the public as
to the nature, the manufacturing process, the characteristics, the
suitability for their purpose or the quantity of any goods. This
operates in the same way as the current section 55 of the TP Act.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1, section 33]
451. This provision gives effect to Australia's ratification of the Paris
Convention for the Protection of Industrial Property; specifically,
paragraph (3)(iii) of Article 10bis of that Convention. The
Convention establishes global rules in relation to 'patents, utility
models, industrial designs, trademarks, service marks, trade names,
indications of source or appellations of origin, and the repression
of unfair competition'.[9] The operation of section 33 is based on
Australia's ratification of the Convention.
Interpretation
452. An important distinction between section 33 of the ACL and most
other provisions in Chapter 3 is that it applies to conduct that is
liable to mislead the public. This means that the conduct must have
a public element - not necessarily applying to the world at large,
but involving a general segment of the community that is
sufficiently large.[10]
453. The ACL does not specifically define many of the concepts used in
the drafting of section 33 of the ACL. As section 33 is couched in
substantially the same form as section 55 of the TP Act the
jurisprudence relating to the concepts applicable to section 55 of
the TP Act is relevant to those concepts as they exist in section 33
of the ACL.
454. The application of section 33 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
455. The concept of 'supply' is defined in section 2 of the ACL.
[Schedule 1, item 1: Chapter 1, section 2]
Criminal offence
456. Section 33 of the ACL has an associated criminal offence in section
155 of the ACL. The maximum fine payable for a contravention of
section 155 of the ACL is $1.1 million for a body corporate and
$220,000 for any other person. [Schedule 1, item 1: Chapter 4, Part
4-1, section 155]
457. The offence in section 155 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
458. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
459. A person contravening section 33 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
460. The following enforcement powers and remedies apply to section 33 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
461. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
462. The ACCC may issue an infringement notice for a contravention of
section 33 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Certain misleading conduct in relation to services
463. Section 34 of the ACL provides that a person must not, in trade or
commerce, engage in conduct that is liable to mislead the public as
to the nature, the characteristics, the suitability for their
purpose or the quantity of any services. [Schedule 1, item 1:
Chapter 3, Part 3-1, Division 1, section 34]
464. This provision largely follows the same form as section 33, except
that this relates to services and the Industrial Property Convention
relates to goods. The reference to manufacturing process has also
been removed from this provision as it is not relevant to services.
Interpretation
465. An important distinction between section 34 of the ACL and most
other provisions in Chapter 3 of the ACL is that it applies to
conduct that is liable to mislead the public. This means that the
conduct must have a public element - not necessarily applying to the
world at large, but involving a general segment of the community
that is sufficiently large.[11]
466. The ACL does not specifically define many of the concepts used in
the drafting of section 34 of the ACL. As section 34 is couched in
substantially the same form as section 55A of the TP Act the
jurisprudence relating to the concepts applicable to section 55A of
the TP Act is relevant to those concepts as they exist in section 34
of the ACL.
467. The application of section 34 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
468. The concept of 'supply' is defined in section 2 of the ACL.
[Schedule 1, item 1: Chapter 1, section 2]
Criminal offence
469. Section 34 of the ACL has an associated criminal offence in section
156 of the ACL. The maximum fine payable for a contravention of
section 156 of the ACL is $1.1 million for a body corporate and
$220,000 for any other person. [Schedule 1, item 1: Chapter 4, Part
4-1, section 156]
470. The offence in section 156 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
471. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
472. A person contravening section 34 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
473. The following enforcement powers and remedies apply to section 34 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
474. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
475. The ACCC may issue an infringement notice for a contravention of
section 34 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Bait advertising
476. Section 35 of the ACL provides that a person must not, in trade or
commerce, advertise goods or services at a specified price when
there are reasonable grounds for believing that the person will not
be able to supply those goods or services at that price for a
reasonable period at reasonable quantities, having regard to the
nature of the advertisement and the market in which the person
carries on the business, and the person ought reasonably be aware of
those grounds. [Schedule 1, item 1: Chapter 3, Part 3-1, Division
1, subsection 35(1)]
477. A person who, in trade or commerce, advertises goods or services at
a specified price must offer such goods or services for supply at
that price for a reasonable period at reasonable quantities, having
regard to the nature of the advertisement and the market in which
the person carries on the business. [Schedule 1, item 1: Chapter 3,
Part 3-1, Division 1, subsection 35(2)]
Interpretation
478. The ACL does not specifically define many of the concepts used in
the drafting of section 35 of the ACL. As section 35 is couched in
substantially the same form as section 56 of the TP Act the
jurisprudence relating to the concepts applicable to section 56 of
the TP Act is relevant to those concepts as they exist in section 35
of the ACL.
479. The application of section 35 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
480. The concept of supply is defined in section 2 of the ACL. [Schedule
1, item 1: Chapter 1, section 2]
Criminal offence
481. Section 35 of the ACL has an associated criminal offence in section
157 of the ACL. The maximum fine payable for a contravention of
section 157 of the ACL is $1.1 million for a body corporate and
$220,000 for any other person. [Schedule 1, item 1: Chapter 4, Part
4-1, section 157]
482. The offence in section 157 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
483. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
484. A person contravening section 35 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
485. The following enforcement powers and remedies apply to section 35 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
486. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
487. The ACCC may issue an infringement notice for a contravention of
section 35(2) of the ACL. The amount of the penalty specified in
the infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Wrongly accepting payment
488. Subsections 36(1)-(3) of the ACL provide that a person is prohibited
from accepting payment, in trade or commerce, where the supplier:
. intends not to supply the goods or services;
. intends to supply materially different goods or services;
or
. there are reasonable grounds, of which the corporation is
aware or ought reasonably to be aware, for believing the
corporation will not be able to supply the goods in the
time specified or, if no time is specified, within a
reasonable time.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
subsections 36(1)-(3)]
489. Section 36 of the ACL further provides that a person must provide
goods or services within the specified time, or if no time is
specified, within a reasonable time of accepting payment for them.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
subsection 36(4)]
490. Paragraph 36(4)(a) provides that a specified time for provision of
the goods or services will be considered a reasonable time, if
communicated to the person at or before the time the consumer made
payment. If an offer is made, subject to clearly stated terms of
delivery, the person supplying the goods or services will not be
forced to deliver the goods or services within a shorter timeframe
than that which has been stated. [Schedule 1, item 1: Chapter 3,
Part 3-1, Division 1, paragraph 36(4)(a)]
491. Where no time is specified, the determination of a 'reasonable time'
is a subjective assessment, which will include consideration of such
issues as the nature of the goods or services and any
representations or inferences made about their availability.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
paragraph 36(4)(b)]
492. Section 36 also provides that the requirement to supply within the
specified or reasonable time does not apply where the reason the
trader could not supply was beyond its control, providing it had
taken reasonable precautions and exercised due diligence. [Schedule
1, item 1: Chapter 3, Part 3-1, Division 1, subsection 36(5)]
493. Subsection 36(6) of the ACL also permits a person to accept a
different good or service if he or she agrees to do so. This avoids
the situation where a trader is put in an impossible position of
being required to supply something it has genuinely tried to provide
but cannot, even where an appropriate substitute is available. It
allows the trader to offer something in place of the good or service
that cannot be supplied. The person is not obliged to accept the
different good or service if he or she wishes to retain other rights
to compensation that he or she may have. If a person accepts the
substitute good or service then the trader should still provide it
within a reasonable time. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 1, subsection 36(6)]
494. Section 36 also provides that the intent or knowledge-based
requirements in subsections 36(1), (2) and (3) apply whether or not
full consideration has been paid. This ensures that a trader could
not accept deposits with no intention of providing the goods or
services. [Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
subsection 36(7)]
Interpretation
495. The ACL does not specifically define many of the concepts used in
the drafting of section 36 of the ACL. As section 36 is couched in
substantially the same form as section 58 of the TP Act the
jurisprudence relating to the concepts applicable to section 58 of
the TP Act is relevant to those concepts as they exist in section 36
of the ACL.
496. The application of section 36 of the ACL is not limited to
transactions involving consumers as defined in section 3 of the ACL.
497. The concept of supply is defined in section 2 of the ACL. [Schedule
1, item 1: Chapter 1, section 2]
Criminal offence
498. Section 36 of the ACL has an associated criminal offence in section
158 of the ACL. The maximum fine payable for a contravention of
section 158 of the ACL is $1.1 million for a body corporate and
$220,000 for any other person. [Schedule 1, item 1: Chapter 4, Part
4-1, section 158]
499. The offence in section 158 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
500. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
501. A person contravening section 36 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
502. The following enforcement powers and remedies apply to section 36 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
503. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
504. The ACCC may issue an infringement notice for a contravention of
section 36(4) of the ACL. The amount of the penalty specified in
the infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Misleading representations about certain business activities
505. Section 37 of the ACL provides that a person must not, in trade or
commerce, make false or misleading representations in relation to
the profitability, risk or any other material aspect of any business
activity that the person has represented as one that can be carried
on at or from a person's place of residence. [Schedule 1, item 1:
Chapter 3, Part 3-1, Division 1, subsection 37(1)]
506. A person must not, in trade or commerce, make false or misleading
representations in relation to the profitability, risk or any other
material aspect of any business activity that a person invites other
persons to participate by performing work for or investing in the
business. [Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
subsection 37(2)]
Interpretation
507. Section 37 recognises that a general prohibition on the making of
certain false or misleading representations in connection with the
supply or possible supply of goods or services does not necessarily
cover representations regarding the profitability, risk or other
aspects of particular types of business activity, such as home-based
businesses or those that require a person to invest either personal
effort or money into a business (such as a franchising arrangement).
508. The ACL does not specifically define many of the concepts used in
the drafting of section 37 of the ACL. As section 37 is couched in
substantially the same form as section 59 of the TP Act the
jurisprudence relating to the concepts applicable to section 59 of
the TP Act is relevant to those concepts as they exist in section 37
of the ACL.
509. The application of section 37 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
Criminal offence
510. Section 37 of the ACL has an associated criminal offence in section
159 of the ACL. The maximum fine payable for a contravention of
section 159 of the ACL is $1.1 million for a body corporate and
$220,000 for any other person. [Schedule 1, item 1: Chapter 4, Part
4-1, section 159]
511. The offence in section 159 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
512. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
513. A person contravening section 37 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
514. The following enforcement powers and remedies apply to section 37 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
515. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
516. The ACCC may issue an infringement notice for a contravention of
section 37 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Information providers
517. The provisions of Chapter 3, Part 3-1, Division 1 which prohibit the
making of false or misleading representations in different contexts
do not apply to publications by an information provider, where the
information provider made the publication in the course of carrying
on a business of providing information or, in the case of a radio or
television broadcaster, the publication was by radio or television
broadcast by the information provider. [Schedule 1, item 1: Chapter
3, Part 3-1, Division 1, subsection 38(1)]
518. This exemption does not apply to:
. advertisements;
. a publication in connection with the supply (or promotion
of the supply) of goods or services by the information
provider; or
. a publication in connection with the sale or grant (or
promotion of the sale or grant) of an interest in land by
the information provider.
These exceptions operate in the same way as those outlined in the
repealed paragraphs 65A(1)(a) and (b) of the TP Act. In
particular, subsections 38(3) and (4) have been constructed to
maintain the High Court's interpretation in ACCC v Channel Seven
Brisbane Pty Limited.[12] In that case, the High Court held that
the second exception applies for publications made on behalf of, or
pursuant to a contract, arrangement or understanding with a person
who supplies goods or services, rather than for publications made
in connection with relevant goods or services in relation to the
information provider. This supports the view that the exceptions
have a wide application rather than a narrow one. [Schedule 1,
item 1: Chapter 3, Part 3-1, Division 1, subsections 38(2)-(4)]
519. An 'information provider' is a defined term in the ACL, and includes
media organisations such as radio and television stations (including
the Australian Broadcasting Corporation and the Special Broadcasting
Service Corporation), as well as publishers of newspapers and
magazines. [Schedule 1, item 1: Chapter 3, Part 3-1, Division 1,
subsections 20(5) and (6)]
520. Similarly, information providers are also exempt from the related
criminal offences provisions in sections 151, 152, 155, 156 and 159
of the ACL. [Schedule 1, item 1: Chapter 4, Part 4-1, Division 2,
section 160]
ASIC Act
521. The ASIC Act includes a provision in the same terms as section 38 of
the ACL, which replaces the current section 12DN of the ASIC Act.
This gives a similar exclusion to information providers in relation
to publications made by these providers in the course of carrying on
a business of providing information, has been replaced with an
updated version reflecting current drafting practices. [Schedule 3,
item 29, section 12DN]
Unsolicited supplies
Unsolicited cards
522. Section 39 of the ACL provides that a person must not send a credit
card, a debit card, or an article that may be used as both a credit
card and a debit card, to another person unless it is at the written
request of the other person, or as a replacement for a similar card
previously requested by the other person. [Schedule 1, item 1:
Chapter 3, Part 3-1, Division 2, subsection 39(1)]
523. However, the prohibition in subsection 39(1) of the ACL does not
apply unless the card or article is sent by or on behalf of the
issuer of the card or article. [Schedule 1, item 1: Chapter 3, Part
3-1, Division 2, subsection 39(2)]
524. A person is prohibited from taking any action to enable another
person (that is, the person in receipt of the card) a credit card to
be used as a debit card, or a debit card to be used as a credit
card, except at the written request of the cardholder. [Schedule 1,
item 1: Chapter 3, Part 3-1, Division 2, subsections 39(3) and (4)]
Interpretation
525. For the purposes of section 39 of the ACL a 'credit card' is an
article that is one or more of the following:
. an article of a kind commonly known as a credit card;
. a similar article intended for use in obtaining cash,
goods or services on credit; or
. an article of a kind that persons carrying on business
commonly issue to their customers, or their prospective
customers, for use in obtaining goods or services from
those persons on credit,
and it includes an article that may be used as one of these things.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 2, subsection
39(5)]
526. For the purposes of section 39 of the ACL, a 'debit card' is an
article intended for use by a person in obtaining access to an
account that is held by the person for the purpose of withdrawing or
depositing cash or obtaining goods or services, or an article that
may be used for these purposes. [Schedule 1, item 1: Chapter 3,
Part 3-1, Division 2, subsection 39(6)]
527. 'Article' is defined in section 2 of the ACL, and includes, for
example, items such as cards, microchips or other devices embedded
in cards, and any other token or document that can be used as a
credit card or a debit card. [Schedule 1, item 1: Chapter 1,
section 2]
528. The ACL does not specifically define many of the other concepts used
in the drafting of section 39 of the ACL. As section 39 is couched
in substantially the same form as section 63A of the TP Act the
jurisprudence relating to the concepts applicable to section 63A of
the TP Act is relevant to those concepts as they exist in section 39
of the ACL.
529. The application of section 39 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
Criminal offence
530. Section 39 of the ACL has an associated criminal offence in section
161 of the ACL. The maximum fine payable for a contravention of
section 161 of the ACL is $1.1 million for a body corporate and
$220,000 for any other person. [Schedule 1, item 1: Chapter 4, Part
4-1, section 161]
531. The offence in section 161 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
532. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
533. A person contravening section 39 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
534. The following enforcement powers and remedies apply to section 39 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
535. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
536. The ACCC may issue an infringement notice for a contravention of
section 39 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Asserting a right to payment for unsolicited goods or services
537. Section 40 of the ACL provides that a person must not, in trade or
commerce, assert a right to payment from another person for
unsolicited goods or services, unless the first person has
reasonable cause to believe that there is a right to the payment.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 2, subsections
40(1) and (2)]
538. Section 40 further provides that a person must not, in trade or
commerce, send an invoice or other document to another person that
states the amount due or sets out the charge for unsolicited goods
or services without a warning statement that complies with the
requirements set out in regulations. This provision establishes a
specific prohibition for the use of an invoice in this way to
complement the rules about the use of an invoice set out in section
10 of the ACL, which defines the meaning of 'assert a right to
payment'. [Schedule 1, item 1: Chapter 3, Part 3-1, Division 2,
subsection 40(3)]
539. In any proceedings under section 40 of the ACL, the onus is on the
person asserting their right to payment from the other person to
prove that he or she knew or had reasonable cause to believe that
there was a right to payment for the unsolicited goods or services.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 2,
subsection 40(4)]
Interpretation
540. 'Assert a right to payment' is a defined concept for the purposes of
the ACL and is dealt with in section 10. It deems certain conduct,
such as taking steps to demand payment or to collect a debt, to be
asserting a right to payment. Section 10 is in substantially the
same form as subsections 64(5) and (7) of the TP Act. [Schedule 1,
item 1: Chapter 1, section 10]
541. The ACL does not specifically define many of the other concepts used
in the drafting of section 40 of the ACL. As section 40 is couched
in substantially the same form as section 64 of the TP Act the
jurisprudence relating to the concepts applicable to section 64 of
the TP Act is relevant to those concepts as they exist in section 40
of the ACL.
542. The application of section 40 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
Criminal offence
543. Section 40 of the ACL has an associated criminal offence in section
162 of the ACL. The maximum fine payable for a contravention of
section 162 of the ACL is $1.1 million for a body corporate and
$220,000 for any other person. [Schedule 1, item 1: Chapter 4, Part
4-1, section 162]
544. The offence in section 162 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
545. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
546. A person contravening section 40 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
547. The following enforcement powers and remedies apply to section 40 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
548. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
549. The ACCC may not issue an infringement notice for a contravention of
section 40 of the ACL.
ASIC Act
550. Section 12DM of the ASIC Act is amended to reflect section 40 of the
ACL, with respect to financial products and services. [Schedule 3,
items 24-28]
Liability etc. of recipient for unsolicited goods or services
Unsolicited goods
551. If a person, in trade or commerce, supplies unsolicited goods to
another person, the other person:
. is not liable to make any payment for those unsolicited
goods; or
. is not liable for any loss or damage to those goods,
unless the loss or damage resulted from the person
receiving the good's wilful and unlawful act during the
recovery period. [Schedule 1, item 1: Chapter 3, Part 3-
1, Division 2, subsection 41(1)]
552. The 'recovery period' is defined in subsection 41(4) of the ACL as
being whichever of the following periods ends first:
. a period of 3 months starting on the day after the day on
which the person received the goods;
. if the person who receives the unsolicited goods gives
notice with respect to the goods to the supplier or sender
in accordance with subsection 41(5), a period of 1 month
starting on the day on which the notice is given.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 2,
subsection 41(4)]
553. A notice under section 41 must be in writing, state the name and
address of the person who received the unsolicited goods, state the
address of the place at which the goods may be recovered by the
owner or sender and contain a statement to the effect that the goods
are unsolicited goods. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 2, subsection 41(5)]
554. The 'recovery period' is relevant to the ability of the person
supplying unsolicited goods to retain title to those goods:
. a person who supplies unsolicited goods is not entitled to
take action to recover the goods after the end of the
recovery period; and
. the goods become the property of the person who has
received them at the end of the recovery period, free of
any lien or charge on those goods which might be asserted
by the person who supplied them or any other person.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 2, subsection
41(2)]
555. The provisions governing the ownership of the goods set out in
subsection 41(2) of the ACL are subject to caveats relating to the
conduct of the person who has received the goods. Subsection 41(2)
will not apply when:
. the person who received unsolicited goods has, at any time
during the recovery period, unreasonably refused to permit
the sender or the owner of the goods to take possession of
them; or
. the sender or owner of the goods has within the recovery
period taken possession of the goods; or
. the goods were received by the person in circumstances in
which the person knew, or might reasonably have been
expected to have known, that the goods were not intended
for him or her. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 2, subsection 41(3)]
556. Section 12DMA is included in the ASIC Act in relation to liability
for unsolicited financial products. This specifies that a person is
not liable to make any payment for unsolicited financial products
and is not liable for loss or damage as a result of the supply of
the financial products. [Schedule 3, item 28, section 12DMA]
Unsolicited services
557. A person is not liable to make any payment for unsolicited services,
or for loss or damage arising as a result of the supply of such
services. This is intended to exclude a person from liability for
not just the unsolicited services themselves, but other loss or
damage arising from the supply of such services. Unlike unsolicited
goods, there is no provision for traders to retrieve unwanted
unsolicited services as it is not possible for unsolicited services
to be 'retrieved'. [Chapter 3, Part 3-1, Division 2, section 42]
558. Section 12DMA is included in the ASIC Act in relation to liability
for unsolicited financial services. This specifies that a person is
not liable to make any payment for unsolicited financial services
and is not liable for loss or damage as a result of the supply of
the financial services. [Schedule 3, item 28, section 12DMA]
559. As with the provision in the ACL, no enforcement or remedies apply
to the ASIC Act provision.
Interpretation
560. The ACL does not specifically define many of the other concepts used
in the drafting of sections 41 and 42 of the ACL. As sections 41
and 42 are couched in substantially the same form as section 64 of
the TP Act the jurisprudence relating to the concepts applicable to
section 64 of the TP Act is relevant to those concepts as they exist
in sections 41 and 42 of the ACL.
561. The application of sections 41 and 42 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
Enforcement and remedies
562. Sections 41 and 42 of the ACL establish rules about the liability of
persons who receive unsolicited goods or services. As such, no
enforcement or remedies apply to either of these provisions as any
'breach' will be covered under the section 40, which relates to
asserting a right to payment for unsolicited goods or services.
Asserting a right to payment for unauthorised entries or
advertisements
563. Subsection 43(1) of the ACL provides that a person must not, in
trade or commerce, assert a right to payment from another person for
placing, in a publication, an entry or advertisement relating to
that person or their profession, business, trade or occupation.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 2, subsection
43(1)]
564. Section 43 operates in a similar way to the repealed
subsection 64(3) of the TP Act, except it has been expanded to
include entries that are like 'directory entries' but are not
included in directories.
565. Subsection 12DMB(1) is included in the ASIC Act, which treats
assertions for payment for unauthorised entries or advertisements
for financial services or financial products in the same way as
section 43 of the ACL. [Schedule 3, item 28, subsection 12DMB(1)]
566. Subsection 43(2) of the ACL provides that a person must not, in
trade or commerce, send an invoice or other document to another
person that states the amount due or sets out the charge for
placing, in a publication, an entry or advertisement in relation to
the other person or their profession, trade or occupation, without a
warning statement that complies with the requirements set out in
regulations. [Schedule 1, item 1: Chapter 3, Part 3-1, Division 2,
subsection 43(2)]
567. Subsection 12DMB(2) is included in the ASIC Act, which treats
documents asserting a right to payment for unauthorised entries or
advertisements for financial services or financial products in the
same way as section 43 of the ACL. [Schedule 1, item 1: Chapter 3,
Part 3-1, Division 2, subsections 43(2)][Schedule 3, item 28,
subsection 12DMB(2)]
568. Subsection 43(2) of the ACL and subsection 12DMB(2) establish a
specific prohibition for the use of an invoice in this way to
complement the rule about the use of an invoice set out in section
10 of the ACL and section 12BF of the ASIC Act. [Schedule 1, item
1: Chapter 1, section 10]
569. Under section 43(4) a person is not liable to make any payment to
another person for placing an entry or advertisement in a
publication, and can recover any such payment made through court
action. [Schedule 1, item 1: Chapter 3, Part 3-1, Division 2,
subsections 43(4)]
570. Subsection 12DMB(4) is included in the ASIC Act, which treats
liability for payment for unauthorised entries or advertisements for
financial services or financial products in the same way as section
43 of the ACL. [Schedule 3, item 28, subsection 12DMB(4)]
571. Section 43(4) of the ACL operates in a similar way to the repealed
subsection 64(4) of the TP Act, except that it has been expanded to
include entries that are like 'directory entries' but are not
included in directories.
572. Subsections 43(1) and (2) of the ACL and subsections 12DMB(1) and
(2) of the ASIC Act do not apply if the person asserting their right
to payment knows, or has reasonable cause to believe, that the other
person authorised the placing of the entry or advertisement.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 2, subsections
43(1) and (2)] [Schedule 3, item 28, subsections 12DMB(1) and (2)]
Interpretation
573. Section 43 of the ACL and section 12 DMB of the ASIC Act do not
apply to:
. publications with an audited circulation of 10,000 copies
or more a week;
. a body corporate related to the publisher of such a
publication;
. the Commonwealth, a State, a Territory, or an authority of
the Commonwealth, State or Territory; or
. a person specified in the regulations.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 2, subsection
43(3)] [Schedule 3, item 28, subsection 12DMB(3)]
574. In relation to the audited circulation of a publication referred to
in paragraph 43(3)(a) of the ACL or paragraph 12DMB(3)(a) of the
ASIC Act, the audit is to be performed by a body as specified in
regulations. [Schedule 1, item 1: Chapter 3, Part 3-1, Division 2,
subsection 43(3)] [Schedule 3, item 28, subsection 12DMB(3)]
575. An 'advertisement' is not a defined term for the purposes of the
ACL.
576. For clarity, the subsection 43(5) of the ACL and section 12DMB(5) of
the ASIC Act specifies that a person has not authorised the placing,
in a publication, of an entry or advertisement unless certain
conditions, based around ensuring that the person has taken
positive, documented steps to authorise such actions, are met.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 2,
subsection 43(5)][Schedule 3, item 28, subsection 12DMB(5)]
577. In proceedings relating to section 43 of the ACL and 12DMB of the
ASIC Act the onus is on the person asserting their right to payment
from another person to prove that he or she knew or had reasonable
cause to believe that the other person had authorised the placing,
in a publication, of the entry or advertisement. [Schedule 1, item
1: Chapter 3, Part 3-1, Division 2, subsection 43(6)][Schedule 3,
item 28, subsection 12DMB(6)]
578. The ACL does not specifically define many of the other concepts used
in the drafting of section 43 of the ACL. As section 43 is couched
in substantially the same form as parts of section 64 of the TP Act
the jurisprudence relating to the concepts applicable to section 64
of the TP Act is relevant to those concepts as they exist in section
43 of the ACL.
579. The application of section 43 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
Criminal offence
580. Section 43 of the ACL has associated criminal offences in section
163 of the ACL. The maximum fine payable for a contravention of a
provision of section 163 of the ACL is $1.1 million for a body
corporate and $220,000 for any other person. [Schedule 1, item 1:
Chapter 4, Part 4-1, section 163]
581. The offence in section 163 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
582. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
583. A person contravening section 43 of the ACL is liable to pay a civil
pecuniary penalty of up to:
. $1.1 million for a body corporate;
. $220,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section
224]
584. The following enforcement powers and remedies apply to section 43 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
585. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
586. The ACCC may not issue an infringement notice for a contravention of
section 43 of the ACL.
587. For breaches of the new ASIC Act provisions, the existing
enforcement and remedies in Part 2, Subdivision 2G of the ASIC Act
apply.
Pyramid schemes
Participation in pyramid schemes
588. A person must not [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 3, subsections 44(1) and (2)]:
. participate in a pyramid scheme, or
. induce, or attempt to induce, another person to
participate in a pyramid scheme.
589. The meaning of 'participate' in a pyramid scheme is [Schedule 1,
item 1: Chapter 3, Part 3-1, Division 3, subsection 44(3)]:
. to establish or promote the scheme (whether alone or
together with another person). This covers both those who
create the scheme and those who propagate it, whether
those persons are connected directly with the creators of
the scheme or not.
. to take part in the scheme in any capacity (whether or not
as an employee or agent of a person who establishes or
promotes the scheme, or who otherwise takes part in the
scheme). This covers any person who is part of the
scheme, including persons who agree to join the scheme and
who may become its victims when it collapses.
Meaning of a pyramid scheme
590. The meaning of 'pyramid scheme' is defined in section 45 of the ACL.
It describes a scheme where [Schedule 1, item 1: Chapter 3, Part 3-
1, Division 3, section 45]:
. new participants in the scheme must provide a
participation payment, which is a benefit (of either a
financial or non-financial nature) to the participant or
participants in the scheme and or, in some cases, partly
to other persons; and
. the main incentive for new participants to participate in
the scheme is the prospect of receiving a recruitment
payment, which includes benefits (of either a financial or
non-financial nature) from new participants who join the
scheme after them.
Marketing schemes as pyramid schemes
591. A scheme that involves the marketing of goods or services as its
primary purpose is not a pyramid scheme. To clarify how the courts
interpret this provision, a court may have regard to any matter it
considers relevant in working out whether participation payments
paid by new entrants to a scheme are entirely or substantially
induced by the prospect of entitlement to future recruitment
payments, but the court must have regard to [Schedule 1, item 1:
Chapter 3, Part 3-1, Division 3, section 46]:
. whether the participation payments bear a reasonable
relationship to the value of the goods or services that
participants are entitled to be supplied under the scheme;
and
. the emphasis given in the promotion of the scheme to the
entitlement of participants to the supply of goods or
services by comparison with the emphasis given to their
entitlement to recruitment payments.
Interpretation
592. The ACL does not specifically define many of the other concepts used
in the drafting of sections 44, 45 and 46 of the ACL. As sections
44, 45 and 46 are couched in substantially the same form as parts of
Part V, Division 1AAA of the TP Act the jurisprudence relating to
the concepts applicable to that Division of the TP Act is relevant
to those concepts as they exist in sections 44, 45 and 46 of the
ACL.
593. The application of sections 44, 45 and 46 of the ACL is not limited
to transactions involving 'consumers' as defined in section 3 of the
ACL.
Criminal offence
594. Subsections 44(1) and (2) of the ACL has associated criminal
offences in section 164 of the ACL. The maximum fine payable for a
contravention of a provision of section 164 of the ACL is $1.1
million for a body corporate and $220,000 for any other person.
[Schedule 1, item 1: Chapter 4, Part 4-1, section 164]
595. The offence in section 164 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
596. Part 4-6 of the ACL provides the following defences applicable to
criminal proceedings:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person, or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; [Schedule 1, item 1: Chapter 4, Part 4-6,
section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
597. A person contravening subsections 44(1) and (2) of the ACL is liable
to pay a civil pecuniary penalty of up to [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 1, section 224]:
. $1.1 million for a body corporate;
. $220,000 for other persons.
598. The following enforcement powers and remedies apply to subsections
44(1) and (2) of the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
599. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
600. The ACCC may issue an infringement notice for a contravention of
subsections 44(1) and (2) of the ACL. The amount of the penalty
specified in the infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Pricing
Multiple pricing
601. Subsection 47(1) of the ACL prohibits a person who, in trade or
commerce, from supplying goods where [Schedule 1, item 1: Chapter 3,
Part 3-1, Division 4, subsection 47(1)]:
. the goods have more than one displayed price; and
. the supply takes place for a price which is the not the
lower, or not the lowest, of the displayed prices.
602. Section 47 of the ACL does not exclude a person's right to withdraw
an item from sale, for example, where a pricing error has occurred.
The person is not obliged by section 47 to sell a mislabelled item,
but if the person does choose to sell it without withdrawing it from
sale and correcting the pricing, then he, she or it must not sell it
for more than the lowest price.
Interpretation
603. Subsection 47(2) provides that a displayed price includes a price
for the goods, or any representation that may reasonably be inferred
to be a representation of a price for the goods:
. that is annexed or affixed to, or is written, printed,
stamped or located on, or otherwise applied to, the goods
or any covering, label, reel or thing used in connection
with the goods;
. that is used in connection with the goods or anything on
which the goods are mounted for display or exposed for
supply;
. that is determined on the basis of anything encoded on or
in relation to the goods;
. that is published in relation to the goods in a catalogue
available to the public if:
- a time is specified in the catalogue as the time after
which the goods will not be sold at that price and that
time has not passed;
- in any other case-the catalogue may reasonably be
regarded as not out of date; or
. that is in any other way represented in a manner from
which it may reasonably be inferred that the price or
representation is applicable to the goods;
and includes such a price or representation that is partly obscured
by another such price or representation that is written, stamped or
located partly over that price or representation. [Schedule 1,
item 1: Chapter 3, Part 3-1, Division 4, subsection 47(2)]
604. If prices are displayed in a catalogue, and that catalogue is only
applicable to certain sales (such as in NSW), the price is taken to
be a displayed price in NSW but not, for instance, in Victoria.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 4,
subsection 47(3)]
605. If a price is completely obscured, such as where a new label is
placed completely over an old one, it is not a displayed price.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 4,
paragraph 47(4)(a)]
606. If a price is not the total selling price, such as a unit price per
kilogram; then that is not a displayed price. Unit price
information required to be provided under the Trade Practices
(Industry Code - Unit Pricing) Regulations 2009 is an example of
price information that is not to be considered a 'displayed price'
for the purposes of section 45. [Schedule 1, item 1: Chapter 3,
Part 3-1, Division 4, paragraph 47(4)(b)]
607. Prices that are not in Australian currency, or that are expressed in
a way not likely to be interpreted as being in Australian currency,
are not displayed prices. If a product has a foreign price printed
on it and it is not clear that it is not the amount in Australian
currency, that price may need to be covered if it is incorrect.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 4,
paragraphs 47(4)(c)-(d)]
608. To recognise that pricing is easier to correct for prices affixed to
goods than in broader advertisements, where a pricing error is made
in a catalogue or advertisement, a supplier can publish a retraction
of at least a similar circulation or audience and the retracted
price will no longer be considered a displayed price from that point
on. For example, if a national catalogue incorrectly stated $10
instead of $100, a notice could be placed in newspapers, provided
the circulation is at least similar to that of the catalogue.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 4,
subsection 47(5)]
Criminal offence
609. Subsection 47(1) of the ACL has an associated criminal offence in
section 165 of the ACL. The maximum fine payable for a
contravention of a provision of section 165 of the ACL is $1.1
million for a body corporate and $220,000 for any other person.
[Schedule 1, item 1: Chapter 4, Part 4-1, section 165]
610. The offence in section 165 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
611. Part 4-6 of the ACL provides the following defences to criminal
proceedings:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person, or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
612. A person contravening subsection 47(1) of the ACL is liable to pay a
civil pecuniary penalty of up to [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 1, section 224]:
. $5,000 for a body corporate;
. $1,000 for other persons.
613. The following enforcement powers and remedies apply to subsection
47(1) of the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
614. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
615. The ACCC may issue an infringement notice for a contravention of
subsection 47(1) of the ACL. The amount of the penalty specified in
the infringement notice is [Schedule 2, item 1: Part XI, Division
5]:
. 10 penalty units for a body corporate ; and
. 2 penalty units for any other person.
Single price to be specified in certain circumstances
616. If an amount that is part of the price for goods or services is
stated in connection with their promotion or supply in trade or
commerce, a single price for the supply of those goods or services
must be stated at least as prominently as the part price. This
operates in the same way as the current section 53C of the TP Act.
[Schedule 1, item 1: Chapter 3, Part 3-1, Division 4, subsection
48(1)]
617. A person is not prohibited from using component pricing. However,
if a component price is used (that is, a partial price
representation is made), the person should also prominently specify,
as a single figure, the price a consumer will be required to pay to
obtain the product or service.
1.
A person could continue to represent prices as:
. $299 + $29.90 GST for a total price of $328.90; or
. $79 + $35 taxes fees and charges for a total price of $114.
618. There is an exception to the general requirement for all components
of price to be included in the single price; for charges relating to
sending goods from the supplier to a customer. [Schedule 1, item 1:
Chapter 3, Part 3-1, Division 4, subsection 48(2)]
619. However, where a person does not include charges relating to sending
goods from the supplier to a customer in the single price, but such
charges must be paid by a customer and that amount is known, the
corporation must disclose the minimum amount of those charges as a
separate component of price. A person may also choose to include
the minimum amount of such charges in the single price. [Schedule
1, item 1: Chapter 3, Part 3-1, Division 4, subsection 48(3)]
620. The scope of 'charges relating to sending the goods from the
supplier to the customer' is not defined. However, these provisions
create an exemption for costs that are necessary in order to send
goods from a supplier to a consumer. This includes charges such as
postage, courier fees and packaging that is appropriate for the
goods being sent. For example, it would be equally acceptable for a
product to be advertised as:
. $30.00 + $5 postage and handling; or alternatively as
. $35.00 including postage and handling.
621. This provision does not apply to representations that are made only
to bodies corporate. In effect, this provision applies only to
representations to persons that are not engaged in business or other
activities through a corporate structure (that is, consumers).
Where a representation is made to consumers as well as businesses or
governments, this provision applies. [Schedule 1, item 1: Chapter
3, Part 3-1, Division 4, subsection 48(4)]
'at least as prominently'
622. A consumer should be able to easily identify the single price in a
price representation. The single price must be specified at least
as prominently as the most prominent of the other components of the
price. [Schedule 1, item 1: Chapter 3, Part 3-1, Division 4,
subsection 48(5)]
623. The 'at least as prominently' disclosure requirement does not apply
to contracts that provide for the supply of services for the term of
the contract, which also provide for periodic payments, and if goods
are also supplied under the contract - they are directly related to
the services in question. This allows for disclosure of the
periodic component of the single price for the services to be
displayed more prominently than the single price over the life of
the contract. [Schedule 1, item 1: Chapter 3, Part 3-1, Division 4,
paragraphs 48(6)(a) and (b)]
624. The single price for the supply of services includes any set-up
costs or costs for hardware which must be bought from the supplier
to obtain those services. For example [Schedule 1, item 1: Chapter
3, Part 3-1, Division 4, paragraph 48(6)(c)]:
. the cost of company-specific pay television connection
equipment would be required to be included in the single
price; but
. the cost of a broadband modem where the purchaser could
either buy their own or purchase one from the service
supplier would not need to be included.
'single price'
625. The single price is a defined term in the ACL, and only includes
amounts that are quantifiable at the time of the representation
concerned. The total price is not quantifiable if, at the time of
the representation concerned, it cannot be readily converted into a
dollar amount. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 4, subsection 48(7)]
626. The single price includes each of the amounts listed in the
subsection if they are quantifiable. Consequently, where the final
price will be a mixture of quantifiable and non-quantifiable
charges, the charges that are quantifiable should be represented as
a single price. In such circumstances, to comply with other
provisions of the ACL, the representation may need to indicate that
not all components are included in the single price.
627. Where a total price is not quantifiable but a minimum total price is
known, that minimum price must be disclosed as a single price.
628. The term 'minimum quantifiable consideration' is not intended to
preclude negotiation of a lower price between the customer and the
corporation making the representation.
1.
A motor vehicle dealer may advertise the price of a vehicle
as $32,990. However a customer may negotiate with the
dealer to pay only $31,500. The representation of $32,990
would not be in breach of the provision provided that it
includes all elements of the price that are quantifiable at
the time of making the representation. The fact that a
lower price has been negotiated and a subsequent
representation about that lower price has been made to the
consumer does not cause the dealer's earlier representation
to be in breach.
629. Certain elements of a price do not need to be included in the
'single price' disclosure where they represent costs that are
payable only at the option of the consumer.
1.
Where a consumer can only purchase a service by using a
credit card, and a compulsory surcharge is imposed for the
use of a credit card, that charge should be included in the
single price; but
2.
Where a consumer can purchase a service through means other
than a credit card, and those other means do not attract a
compulsory surcharge, the credit card surcharge does not
need to be included in the single price.
630. The definition of 'single price' provides that the single price
should also include all amounts imposed on the selling corporation
in relation to the supply concerned. This amount, comprising part
of the single price, need only be included if it forms part of the
consideration for the supply of the goods or services in question.
That is, if it is passed on to the purchaser in the price he or she
must pay.
631. The definition of single price provides all amounts paid or payable
by the person in relation to the supply concerned that would have
otherwise been payable by the purchaser should be included.
632. Where the total price will depend on the quantity purchased by a
consumer, the 'single price' should continue to be specified as a
per quantity amount.
Interpretation
633. The ACL does not specifically define many of the other concepts used
in the drafting of section 48 of the ACL. As section 48 is couched
in substantially the same form as section 53C of the TP Act the
jurisprudence relating to the concepts applicable to section 53C of
the TP Act is relevant to those concepts as they exist in section 48
of the ACL.
634. The application of section 48 of the ACL is not limited to
transactions involving 'consumers' as defined in section 3 of the
ACL.
Criminal offence
635. Subsection 48(1) of the ACL has an associated criminal offence in
section 166 of the ACL. The maximum fine payable for a
contravention of a provision of section 166 of the ACL is $1.1
million for a body corporate and $220,000 for any other person.
[Schedule 1, item 1: Chapter 4, Part 4-1, section 166]
636. The offence in section 166 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
637. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
638. A person contravening subsection 48(1) of the ACL is liable to pay a
civil pecuniary penalty of up to [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 1, section 224]:
. $1.1 million for a body corporate;
. $220,000 for other persons.
639. The following enforcement powers and remedies apply to subsection
48(1) of the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
640. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
641. The ACCC may issue an infringement notice for a contravention of
subsection 48(1) of the ACL. The amount of the penalty specified in
the infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Other unfair practices
Referral selling
642. Section 49 of the ACL provides that a person must not, in trade or
commerce, induce a consumer to buy goods or services by representing
that he, she or it will, after the contract effecting that sale is
made, receive a rebate, commission or other benefit in return for:
. giving the person the names of prospective customers; or
. otherwise assisting the corporation to supply goods or
services to other consumers,
when the receipt of this rebate, commission or other benefit is
contingent on an event occurring after the contract for the initial
contract of sale is made. [Schedule 1, item 1: Chapter 3, Part 3-
1, Division 5, section 49]
643. Section 49 is directed to preventing the practice of inducing
consumers to buy goods or services with the promise of a rebate,
commission or other benefit in return for the consumer assisting the
supplier sell goods or services to other consumers, when there is,
in fact, no assurance that such a rebate, commission or other
benefit will be provided by the supplier, because it depends on
something else occurring or not occurring.
Interpretation
644. The ACL does not specifically define many of the other concepts used
in the drafting of section 49 of the ACL. As section 49 is couched
in substantially the same form as section 57 of the TP Act, the
jurisprudence relating to the concepts applicable to section 57 of
the TP Act is relevant to those concepts as they exist in section 49
of the ACL.
Criminal offence
645. Section 49 of the ACL has an associated criminal offence in section
167 of the ACL. The maximum fine payable for a contravention of a
provision of section 167 of the ACL is $1.1 million for a body
corporate and $220,000 for any other person. [Schedule 1, item 1:
Chapter 4, Part 4-1, section 167]
646. The offence in section 167 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person breaching this
provision, whether or not he or she intended to engage in the
contravention.
647. Part 4-6 of the ACL provides the following defences applicable to
criminal proceedings:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person, or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; [Schedule 1, item 1: Chapter 4, Part 4-6,
section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
648. A person contravening section 49 of the ACL is liable to pay a civil
pecuniary penalty of up to [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 1, section 224]:
. $1.1 million for a body corporate;
. $220,000 for other persons.
649. The following enforcement powers and remedies apply to section 49 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
650. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
651. The ACCC may issue an infringement notice for a contravention of
section 49 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Harassment and coercion
652. Section 50 of the ACL provides that a person must not use physical
force, undue harassment or coercion in connection with [Schedule 1,
item 1: Chapter 3, Part 3-1, Division 5, subsection 50(1)]:
. the supply of goods or services;
. payment for goods, services or an interest in land;
. the sale or grant, or the possible sale or grant, of an
interest in land.
653. This provision sets a norm of conduct in which the use of physical
force, undue harassment or coercion is deemed to be unacceptable.
Generally, a person will be harassed by another when the former is
troubled repeatedly by the latter. Whether such harassment is undue
will depend on the reasonableness of the conduct and whether the
harassment is unwarranted or excessive. Coercion indicates the
presence of force or compulsion, or threats of force or compulsion,
which negates the choice or freedom for a person to act.[13]
654. References to an interest in land in sections 50 and 168 of the ACL
do not affect the operation of other provisions in Part 2-1 or in
Part 3-1 of the ACL. [Schedule 1, item 1: Chapter 3, Part 3-1,
Division 5, subsection 50(2)][Chapter 4, Part 4-1, Division 5,
subsection 169(3)]
Interpretation
655. The ACL does not specifically define the concepts used in the
drafting of section 50 of the ACL. As section 50 is couched in
substantially the same form as section 60 of the TP Act, in relation
to goods or services, and subsection 53A(2) of the TP Act, in
relation to interests in land, the jurisprudence relating to the
concepts applicable to sections 60 and 53A of the TP Act is relevant
to those concepts as they exist in section 50 of the ACL.
Criminal offence
656. Section 50 of the ACL has an associated criminal offence in section
168 of the ACL. The maximum fine payable for a contravention of a
provision of section 168 of the ACL is $1.1 million for a body
corporate and $220,000 for any other person. [Schedule 1, item 1:
Chapter 4, Part 4-1, section 168]
657. The offence in section 168 is one of strict liability so that it is
not necessary to consider the intent of the person committing the
offence. The strict liability nature of this offence reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not he or she intended to engage in the
contravention.
658. Part 4-6 of the ACL provides the following defences to criminal
proceedings:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
659. A person contravening section 50 of the ACL is liable to pay a civil
pecuniary penalty of up to [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 1, section 224]:
. $1.1 million for a body corporate;
. $220,000 for other persons.
660. The following enforcement powers and remedies apply to section 50 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
661. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
662. The ACCC may issue an infringement notice for a contravention of
section 50 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 600 penalty units for a listed corporation;
. 60 penalty units for a body corporate other than a listed
corporation; and
. 12 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Proof of transaction and itemised bills
Supplier must provide proof of transaction etc.
663. Subsection 100(1) of the ACL provides that, if a person (being the
supplier), in trade or commerce, supplies goods or services to a
consumer, and the total price (excluding any liability for payment
of the Goods and Services Tax) is $75 or more, then the supplier
must give the consumer a proof of transaction as soon as practicable
after the goods or services are supplied. [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 4, subsection 100(1)]
664. Subsection 100(2) of the ACL provides that, where a consumer that
has been supplied with goods or services with a total price of less
than $75, then that consumer may request a proof of transaction from
the supplier. Upon such a request, the supplier must give the proof
of transaction to the consumer within seven days after the request
is made. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 4,
subsections 100(2) and (3)]
665. A 'proof of transaction' is defined in subsection 100(4) of the ACL.
It details certain information that needs to be included in the
proof of transaction, and also deems certain documents, such as a
tax invoice (for the purposes of transactions in respect of which
GST is payable) and a lay-by agreement, to satisfy the requirements
for a proof of transaction. [Schedule 1, item 1: Chapter 3, Part 3-
2, Division 4, subsection 100(4)]
666. The requirements of section 100 of the ACL do not impose any greater
requirement than those imposed on any person currently complying
with the requirements of the GST. The threshold of $75 aligns with
the current low value transactions threshold for a tax invoice under
the Commonwealth GST law.
667. A proof of transaction provided to a consumer under this provision
must be transparent [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 4, subsection 100(5)]. Transparent is defined in section 2
of the ACL as being, in relation to a document, expressed in
reasonably plain language, legible and presented clearly. [Schedule
1, item 1: Chapter 1, section 2]
Enforcement powers, penalties and remedies
668. A person contravening section 100 of the ACL is liable to pay a
civil pecuniary penalty of up to [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 1, section 224]:
. $15,000 for a body corporate;
. $3,000 for other persons.
669. The following enforcement powers and remedies apply to section 100
of the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
670. For further information on these powers, remedies and penalties
generally see Chapters 15 and 15.
671. The ACCC may issue an infringement notice for a contravention of
section 100 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 20 penalty units for a body corporate; and
. 4 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Consumer may request an itemised bill
672. Section 101 of the ACL provides that a consumer is entitled to ask
for an itemised bill from a supplier if they are supplied with
services by that supplier. [Schedule 1, item 1: Chapter 3, Part 3-
2, Division 4, subsection 101(1)]
673. The itemised bill must include certain information, namely [Schedule
1, item 1: Chapter 3, Part 3-2, Division 4, subsection 101(1)]:
. specifying how the price of the services was calculated;
. including, if applicable, the number of hours of labour
that related to the supply of the services and the hourly
rate for that labour; and
. including, if applicable, a list of materials used to
supply the services and the amount charged for those
materials.
674. A request for an itemised bill must be made within 30 days after the
consumer receives a bill or account from the supplier for the supply
of the services, or within 30 days after the services have been
supplied, whichever is the later. Upon such a request, the supplier
must give the itemised bill to the consumer within seven days.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 4, subsections
101(2) and (3)]
675. A supplier cannot charge the consumer for an itemised bill.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 4, subsection
101(4)]
676. An itemised bill provided to a consumer under this provision must be
transparent. Transparent is defined in section 2 of the ACL as
being, in relation to a document, expressed in reasonably plain
language, legible and presented clearly. [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 4, subsections 101(5)]
Enforcement powers, penalties and remedies
677. A person contravening section 101 of the ACL is liable to pay a
civil pecuniary penalty of up to [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 1, section 224] :
. $15,000 for a body corporate;
. $3,000 for other persons.
678. The following enforcement powers and remedies apply to section 101
of the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
679. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
680. The ACCC may issue an infringement notice for a contravention of
section 101 of the ACL. The amount of the penalty specified in the
infringement notice is:
. 20 penalty units for a body corporate; and
. 4 penalty units for any other person. [Schedule 2, item
1: Part XI, Division 5]
Application and transitional provisions
681. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
682. Part 3-1, Divisions 1, 2, 3 and 4, and Part 3-2, Division 4 will
commence on 1 January 2011 and apply to conduct on or after that
date.
683. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
684. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
685. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
686. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Do not remove section break.
Outline of chapter
687. The Australian Consumer Law (ACL) contains provisions that form the
basis for the national law on consumer guarantees.
688. This national law on consumer guarantees replaces provisions that
imply conditions and warranties into consumer contracts that are
currently within Part V, Division 2 of the TP Act and equivalent
State and Territory FT Acts and related Acts.
Context of amendments
689. The States and Territories each have laws in their FT Acts and
related laws which include provisions that imply conditions and
warranties into contracts entered into by consumers. The TP Act
also implies conditions and warranties into such contracts.
690. The Productivity Commission's 2008 Review of Australia's Consumer
Policy Framework noted that many minor differences exist between the
laws of Australian jurisdictions that imply conditions and
warranties into consumer contracts. It also noted that these
differences create additional costs for business and create
confusion for consumers. The PC recommended that the adequacy of
existing legislation related to implied warranties and conditions be
examined as part of the development of a national consumer law.
691. In March 2009 the Australian Government announced that the
Commonwealth Consumer Affairs Advisory Council (CCAAC) would
undertake a review of the current laws on implied conditions and
warranties in the TP Act and State and Territory fair trading and
sale of goods laws.
692. CCAAC considered the adequacy of the current laws on implied
conditions and warranties, the need for a 'lemon law' in Australia
to protect consumers who purchase goods that repeatedly fail, and
extended warranties.
693. On 30 October 2009, CCAAC reported to the Australian Government.
CCAAC found that:
. Australia should adopt a system of statutory consumer
guarantees to replace existing laws that imply conditions
and warranties into consumer contracts;
. Australia does not need special 'lemon laws' for motor
vehicles or other goods. CCAAC considered that consumer
guarantees will adequately deal with goods that repeatedly
fail; and
. Australia does not need special laws dealing with extended
warranties. CCAAC considered that improved awareness of
statutory consumer guarantees will enhance the ability of
consumers to make informed decisions regarding extended
warranties.
694. On 4 December 2009, the Ministerial Council on Consumer Affairs
(MCCA) agreed that the ACL should include a single national law
providing for statutory consumer guarantees. The consumer
guarantees provisions in the ACL replace the current State and
Territory laws dealing with implied conditions and warranties in
consumer contracts.
Summary of new law
695. Chapter 3, Part 3-2, Division 1, Subdivision A of the ACL sets out
consumer guarantees that provide consumers with a statutory basis
for seeking remedies when:
. goods are not of acceptable quality;
. goods are not fit for a purpose that the consumer made
known to the supplier or manufacturer;
. goods are not fit for a purpose that the supplier told the
consumer that they will meet;
. goods do not match their description;
. goods sold by reference to a sample or demonstration model
do not correspond to the sample or demonstration model;
. the consumer does not acquire proper title to the goods;
. other people claim to have a right to the goods, for
example, under a charge or a security agreement;
. spare parts and facilities for repair of the goods are not
available for a reasonable period; or
. a person does not comply with an express warranty in
relation to the goods.
Chapter 3, Part 3-2, Division 1, Subdivision B of the ACL sets out
consumer guarantees that provide consumers with a statutory basis
for seeking remedies when:
. services are not rendered with due care and skill;
. services, and any product resulting from the services, are
not fit for a purpose that the consumer made known to the
supplier; or
. services are not supplied within a reasonable time.
The provisions set out in Part 3-2, Division 1 of the ACL are
couched in terms broadly similar to those used in the New Zealand
Consumer Guarantees Act 1993 and the jurisprudence applicable to
that Act is of relevance to those provisions.
696. Chapter 3, Part 3-2, Division 1, Subdivision C of the ACL provides
that consumer guarantees cannot be excluded by contract. This
ensures that a supplier or manufacturer cannot avoid obligations
under consumer guarantees by reaching an agreement with a consumer
to the effect that consumer guarantees do not apply. Section 64 of
the ACL also provides that it is not possible for a contract to
displace consumer guarantees by specifying that some other law, such
as the law of the country where the supplier resides, applies to the
contract.
697. Part 5-4 of the ACL sets out the remedies that are available when
consumer guarantees are not complied with. In general terms,
consumers are entitled to have a supplier offer a refund,
replacement or repairs if the standards required by a guarantee are
not met. The applicable remedy depends on which guarantee has not
been complied with and the nature of the failure to comply.
698. Consumers will be able to seek damages from a manufacturer if goods
are not of acceptable quality, do not match their description or if
spare parts and repair facilities are not made available for a
reasonable period. As is the case under existing law, manufacturers
are required to indemnify suppliers in respect of the costs of
complying with the guarantee obligations related to acceptable
quality, descriptions applied to goods by manufacturers and fitness
for a purpose that a consumer makes known to a manufacturer.
699. Part 5-4 of the ACL also provides that suppliers of goods and
services must provide remedies to consumers within a reasonable
time. If a remedy is not provided within a reasonable time a
consumer may have the failure remedied elsewhere and have the
supplier pay for the remedy.
700. Consumers have the right to reject goods that are subject to a major
failure, if a supplier refuses to provide a remedy and when a remedy
is not provided within a reasonable time. If goods are rejected,
the consumer has the right to choose whether a refund or replacement
should be provided.
Comparison of key features of new law and current law
|New law |Current law |
|If a person supplies |The TP Act implies the |
|goods to a consumer, the |following into contracts |
|following guarantees |entered into by |
|apply: |consumers: |
|a guarantee as to title; |A condition that the |
|a guarantee as to |supplier has the right to|
|undisturbed possession; |sell the goods; |
|a guarantee as to |A warranty that the |
|undisclosed securities; |consumer enjoys quiet |
|a guarantee as to |possession of the goods; |
|acceptable quality; |A warranty that goods are|
|a guarantee of fitness |free from any charge or |
|for a disclosed purpose; |encumbrance not disclosed|
|a guarantee that goods |to the consumer; |
|match their description; |A condition that goods |
|a guarantee that goods |are of merchantable |
|match a sample or |quality; |
|demonstration model; |A condition that goods |
|a guarantee as to the |are fit for purpose; |
|availability of repairs |A condition that goods |
|and spare parts; and |will correspond with |
|a guarantee that any |their description; and |
|express warranty is |A condition that goods |
|complied with. |correspond to a sample. |
|Notable differences |The laws of each of the |
|compared to the current |States and Territories |
|law include the |include provisions that |
|replacement of an implied|imply conditions and |
|condition of |warranties into contracts|
|'merchantable quality' |for the supply of goods |
|with a guarantee of |that are similar, but |
|'acceptable quality'. |often not identical, to |
|The former term is used |those in the TP Act. |
|undefined in TP Act and |The TP Act and FT Acts |
|the FT Acts, whereas the |also provide consumers |
|new law defines |with a right to |
|acceptable quality. |compensation if |
| |facilities for repairs or|
| |spare parts are not |
| |reasonably available. |
|New law |Current law |
|If a person supplies |The TP Act implies the |
|services to a consumer, |following into contracts |
|the following guarantees |entered into by |
|apply: |consumers: |
|A guarantee that services|A warranty that services |
|will be provided with due|will be rendered with due|
|care and skill; |care and skill; and |
|A guarantee that |A warranty that services |
|services will be fit for |will be fit for a purpose|
|a purpose that the person|that the consumer makes |
|makes known to the |known to the supplier. |
|supplier; and |To the extent that they |
|A guarantee that services|provide for implied terms|
|will be provided within a|and conditions that apply|
|reasonable time. |to supplies of services, |
| |the FT Acts are broadly |
| |similar to the TP Act. |
| |The FT Acts of |
| |Queensland, Tasmania and |
| |the Australian Capital |
| |Territory do not imply |
| |conditions into contracts|
| |for the supply of |
| |services. |
|Remedies for breaches of |Under current law, |
|consumer guarantees are |consumers must pursue the|
|set out in the Bill. |applicable contract law |
|Consumers are generally |remedies for breaches of |
|entitled to a repair, |conditions or warranties.|
|refund or replacement if |A breach of a condition |
|guarantee is not complied|allows a consumer to |
|with. |cancel a contract and |
|When a failure to comply |seek a refund, whereas a |
|with a guarantee is a |breach of a warranty |
|'major failure', the |allows a consumer to seek|
|consumer can reject the |to have the relevant |
|goods and choose between |breach addressed - |
|a refund and a |usually by seeking to |
|replacement. |have goods repaired. |
|The new law specifically |The TP Act and the FT |
|provides that guarantees |Acts of New South Wales, |
|cannot be excluded by |Victoria, Western |
|contract. Only the |Australia, South |
|guarantees as to title, |Australia and the |
|undisturbed possession |Northern Territory |
|and undisclosed |specifically provide that|
|securities apply to |implied conditions and |
|private sales. |warranties cannot be |
| |excluded by contract. |
|New law |Current law |
|Only the guarantees as to|Implied conditions and |
|title, undisturbed |warranties, other than |
|possession and |those related to title, |
|undisclosed securities |undisturbed possession |
|apply to private sales. |and undisclosed |
| |securities, generally do |
| |not apply to private |
| |sales in the TP Act or |
| |the laws of the States or|
| |Territories. The Qld |
| |Sale of Goods Act applies|
| |a condition that goods |
| |match their description |
| |to private sales. |
|Consumer guarantees will |Implied conditions and |
|not apply to auctions |warranties, apart from |
|where an auctioneer is |those related to title, |
|acting as an agent for |undisturbed possession |
|the seller of goods. |and undisclosed |
|Businesses that sell |securities, do not apply |
|goods directly to |to auctions. This |
|consumers via auction |includes online auctions |
|websites will be required|whereby businesses sell |
|to provide consumers with|goods directly to |
|the same guarantees that |consumers without the |
|apply if goods were sold |intervention of an |
|in a shop. |auctioneer acting as |
| |their agent. |
|Consumer guarantees apply|The implied warranty that|
|to all occupations, |services are fit for a |
|including architects and |purpose that the consumer|
|engineers. |makes known to the |
| |supplier does not apply |
| |to services provided by |
| |architects and engineers.|
Detailed explanation of new law
Guarantees relating to the supply of goods
701. Part 3-2, Division 1, Subdivision A of the ACL provides a basic set
of protections for consumers who acquire goods from Australian
suppliers, importers or manufacturers. They provide consumers with
a statutory basis for seeking remedies when:
. the goods are not of acceptable quality;
. they are not acquiring proper title to the goods;
. other people claim to have a right to the goods;
. the goods are not fit for a purpose that the consumer
makes known to the supplier;
. the goods are not fit for a purpose that the supplier says
that that will suit;
. they do not match any description, sample or demonstration
model used by the supplier;
. repairs and spare parts have not been made available for a
reasonable period; or
. any express warranty has not been complied with.
702. These guarantees apply if goods are supplied in trade or commerce.
With the exception of the guarantees as to title, undisturbed
possession and undisclosed securities, they do not apply to sales by
individuals outside of the business context. They also do not apply
to sales made by way of a traditional auction where an auctioneer
acts as an agent for a person to sell goods. They do apply to sales
made by businesses on the internet by way of online 'auction'
websites when the website operator does not act as an agent for the
seller.
703. The guarantees cannot be excluded by contract [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 1, section 64]. This ensures that
consumers cannot be pressured or tricked into surrendering their
rights by agreeing that the guarantees do not apply. It is also not
possible to avoid providing consumer guarantees by agreeing that the
law of another country applies. [Schedule 1, item 1: Chapter 3,
Part 3-2, Division 1, section 67]
Guarantee as to title
704. The ACL provides a consumer with a guarantee that the supplier has
the right to sell the goods. This section seeks to ensure that
consumers are not disadvantaged by claims (for example, those
seeking repossession) that might be made against goods when the
seller has no right to sell the goods. [Schedule 1, item 1: Chapter
3, Part 3-2, Division 1, subsection 51(1)]
705. If a supply is of limited title, the guarantee as to title does not
apply. A supply of limited title occurs when a supplier tells
prospective purchasers of goods that they do not know whether there
are any claims over particular goods and that, in the event of a
sale, they will be transferring only the title that they have.
Supplies of limited title occur most often in the context of
deceased estates. In such cases, other persons might still seek to
repossess the goods, for example, if they were owed money by the
deceased and the goods were pledged as security for the amount
owing. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 1,
subsection 51(2)]
706. The guarantee as to title does not apply to a hire or lease of
goods. In those circumstances, the hirer or lessee acquires a right
to use goods for a certain period of time and does not acquire title
to goods. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 1,
subsection 51(3)]
Guarantee as to undisturbed possession
707. The ACL provides a consumer with a guarantee of undisturbed
possession of goods. This ensures that consumers who buy goods are
not inconvenienced by others seeking to reclaim the goods, for
example, because the goods have been pledged as security for a loan.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 1, subsection
52(1)]
708. If the consumer is told about securities, charges or encumbrances
that relate to goods, the guarantee as to undisturbed possession
does not apply if possession of goods is disturbed by a person under
a security, charge or encumbrance that he or she was told about
prior to purchasing the relevant goods. [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 1, subsection 52(2)]
709. If a supply is of limited title, the guarantee as to undisturbed
possession only applies to prevent the supplier, or a person whose
title the supplier is transferring (a deceased estate, for example),
from interfering with the goods. Other persons might still seek to
repossess the goods, for example, if they were owed money by the
deceased and the goods were pledged as security for the amount
owing. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 1,
subsection 52(3)]
Guarantee as to undisclosed securities
710. The ACL provides consumers with a guarantee that goods are free from
any security, charge or encumbrance that was not disclosed to the
consumer or created with their consent. This ensures that a
consumer is not inconvenienced by other persons, such as financiers
claiming to be owed money secured by the goods, seeking to repossess
the goods or seeking the payment of money in relation to securities
over the goods. [Schedule 1, item 1: Chapter 3, Part 3-2, Division
1, subsection 53(1)]
711. Subsection 53(1) requires that goods are free from any security,
charge or encumbrance until the time when property in the goods
passes to the consumer. A floating charge is technically a security
interest in goods.
712. Subsection 53(2) alleviates the technical breach of subsection 53(1)
that would occur due to a floating charge over the assets of a
supplier.
713. Unless a floating charge has crystallised, the lender has no right
over the goods that are the subject of the charge after the goods
leave the possession of the chargor. Accordingly, whilst subsection
53(2) is required to remove what would be a technical breach of
subsection 53(1), floating charges do not pose any threat to the
right of a consumer to possess goods free of any charge. [Schedule
1, item 1: Chapter 3, Part 3-2, Division 1, subsection 53(2)]
Guarantee as to acceptable quality
Meaning of acceptable quality
714. The ACL provides a guarantee that goods are of 'acceptable quality'
[Schedule 1, item 1: Chapter 3, Part 3-2. Division 1, subsection
54(1)]. Acceptable quality is defined in the ACL such that goods
are of acceptable quality if they are:
. fit for all the purposes for which goods of that kind are
commonly supplied;
. acceptable in appearance and finish;
. free from defects;
. safe; and
. durable.
715. This definition will be subject to a 'reasonable consumer' test,
such that goods are considered to meet those standards if a
reasonable consumer, who is fully acquainted with the state and
condition of the goods, would regard them as acceptable. [Schedule
1, item 1: Chapter 3, Part 3-2, Division 1, subsection 54(2)]
716. To determine whether goods are of acceptable quality, a number of
matters must be taken into account. These include, the nature of
the goods, the price of the goods (if relevant), any statement made
about the goods on any packaging or label on the goods, any
representation made about the goods by the supplier or manufacturer
of the goods and any other relevant circumstances relating to supply
of the goods. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 1,
subsection 54(3)]
717. What a reasonable consumer can expect from goods in terms of
acceptable quality varies based on the factors set out in subsection
54(3).
1.
The appearance and durability that a reasonable consumer
would expect of a 10 year-old motor vehicle would be of a
much lower standard than would apply to new vehicle. The
age of the goods is relevant under subsection 54(3) under
the heading of 'the nature of the goods'. On the other
hand, the price and nature of the goods are relevant
considerations under subsection 54(3), as the appearance
expected of a vintage motor vehicle purchased for a large
sum might be of a relatively high standard, irrespective of
its age.
Drawing problems with goods to the attention of a consumer
718. Some goods may not be of acceptable quality due to problems that are
known to the supplier. In many circumstances it is wasteful to
require suppliers to dispose of such goods when consumers otherwise
derive benefits from their use despite these problems. A common
example is white goods with cosmetic defects that are sold as
'seconds'. These goods should be able to be sold to consumers,
usually for lower prices, as long as the defects are drawn to their
attention before the sale.
719. The ACL deals with the this issue by providing that goods are of
acceptable quality as long as any reason that would otherwise render
them not of acceptable quality is specifically drawn to the
attention of the consumer [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 1, subsection 54(4)]. This might be achieved by telling
the consumer orally before selling the goods. It may also be
achieved by displaying a notice with the goods. [Schedule 1, item
1: Chapter 3, Part 3-2, Division 1, subsection 54(5)]
Abnormal use of goods
720. The guarantee of acceptable quality includes a requirement that
goods are as durable as a reasonable consumer fully acquainted with
the state and condition of the goods would regard as acceptable.
The use to which goods are put may have an impact on their
durability.
721. The guarantee of acceptable quality is not intended to impose a
requirement that goods sold to consumers are indestructible. Such a
requirement will have an adverse impact on prices and the range of
goods available to consumers.
722. The ACL deals with this issue by providing that goods do not fail to
be of acceptable quality if the consumer causes them to become of
unacceptable quality or fails to take reasonable steps to avoid that
outcome and the use to which the goods were put was abnormal.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 1, subsection
54(6)]
723. The exemption from the guarantee of acceptable quality that applies
when goods are damaged by abnormal use is intended to provide
suppliers with an excuse for avoiding their guarantee obligations
only in exceptional circumstances.
1.
Examples to which the exemption applies are where a mobile
telephone is dropped into a bathtub full of water or a
television is broken by an object hitting the screen.
Examination of goods
724. If a consumer is provided with an opportunity to examine goods
before purchasing them and the examination should have revealed the
reason that the goods are not of acceptable quality, the guarantee
of acceptable quality does not apply to the extent that the
examination should have revealed the relevant defect or defects.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 1, subsection
54(7)]
725. This exemption may be particularly relevant to second-hand goods and
antiques. Such goods are often sold on an 'as-is' basis. In such
circumstances, suppliers are not required to remedy defects that a
consumer should have noticed when examining the goods. The amount
of effort that a consumer should take examining goods depends on the
nature of the goods. For example, in the case of new goods sold by
commercial retailers, very limited or no examination will be
required in almost all cases.
Guarantee as to fitness for any disclosed purpose
726. The guarantee as to acceptable quality provides a general standard
of quality that all goods must satisfy. In certain circumstances
consumers might want goods to achieve a particular purpose that they
have in mind. If a consumer tells a supplier that he or she wants
goods to achieve a particular purpose and the supplier proceeds to
sell goods to the consumer, the supplier is held to guarantee that
the goods will be fit for that purpose. Goods must also be
reasonably fit for any purpose that the supplier tells a consumer
that they will be fit. [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 1, subsection 55(1)]
1.
An example of a use of this subsection is a consumer asking
for "a pair of walking shoes"[14]. Such a request would be
sufficient to give the consumer the benefit of a guarantee
that any shoes subsequently supplied are fit for that
purpose.
727. The ACL provides a definition of 'disclosed purpose' that allows a
consumer to make a purpose known to either the supplier, a person
whom negotiations are conducted in relation to the goods or to a
manufacturer of the goods. This is intended to cover the categories
of people that a consumer most often deals with when purchasing
goods. In any of these cases, the consumer will receive the benefit
of the guarantee if he or she makes their purpose known to the
relevant person.
728. The guarantee of fitness for a disclosed purpose is subject to an
exception if the consumer does not, or it would be unreasonable for
the consumer to, rely on the skill or judgment of the person to whom
the purpose is made known.
1.
An example of the application of this exception is where a
consumer tells a checkout operator at a discount department
store that he or she wants goods to achieve a particular
purpose. In such circumstances, a court might find that it
was not reasonable for the consumer to rely on the skill or
judgment of the supplier and the guarantee of fitness for
purpose would not apply.
729. This guarantee will ordinarily require a higher standard of quality
than the guarantee of acceptable quality.
1.
A lawnmower that is sold to a consumer who does not mention
the purpose for which it is to be used might be expected to
mow the lawn of an ordinary suburban house once per week for
several years without any significant problems to satisfy
the guarantee of acceptable quality. If a consumer
indicates to a supplier that he or she wants a lawnmower to
mow a 4 hectare block of land each week, the standard that
the lawnmower would need to meet to be fit for that
disclosed purpose would be higher than required by the
guarantee of acceptable quality for a domestic lawnmower.
Guarantee relating to the supply of goods by description
730. If goods are described by their supplier any goods subsequently
supplied should match that description. This guarantee provides
consumers with a basis for seeking redress if goods do not match
their description. This guarantee applies if goods supplied are a
different colour to their description, a different size or of a
different kind from those that the consumer had agreed to buy.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 1, subsection
56(1)]
731. The guarantee relating to supply of goods by description applies
irrespective of whether or not the consumer selected the goods.
This ensures that suppliers cannot supply goods that are different
to their description simply because the consumer inspected the goods
prior to agreeing to buy them. [Schedule 1, item 1: Chapter 3, Part
3-2, Division 1, subsection 56(2)]
732. Section 57 of the ACL explains the guarantee relating to supply of
goods by sample or demonstration model. If a description is applied
to goods and a consumer is also shown a sample or demonstration
model, the goods must correspond to their description as well as the
sample or demonstration model. [Schedule 1, item 1: Chapter 3, Part
3-2, Division 1, subsection 56(3)]
Guarantee relating to the supply of goods by sample or
demonstration model
733. This guarantee provides that goods sold by reference to a sample or
demonstration model must correspond to that sample or demonstration
model [Schedule 1, item 1: Chapter 3, Part 3-2, Division 1,
paragraph 57(1)(c)]. This ensures that a consumer has a right of
action if goods do not match a sample or demonstration model that
was shown to him or her by a supplier before he or she agreed to
make the relevant purchase.
1.
An example of a failure to comply with this guarantee is
where a sample of fabric is used to sell a couch and the
couch supplied to a consumer is a different colour to the
sample.
734. If goods are sold by reference to a sample, it is difficult for a
consumer to enforce their rights unless he or she is provided with
an opportunity to compare the goods to the sample. The ACL provides
for this by giving the consumer the benefit of a guarantee that he
or she will have an reasonable opportunity to compare the goods to
the sample [Schedule 1, item 1: Chapter 3, Part 3-2, Division 1,
paragraph 57(1)(d)]. This guarantee does not apply to demonstration
models as, in most cases, it is not reasonable to expect suppliers
to retain demonstration models, for example demonstration models of
cars, to allow consumers the opportunity of comparison.
735. Goods sold by reference to a sample or demonstration model must be
free from any defect that would not be apparent on examination of
the sample or demonstration model in order to be considered to be of
acceptable quality [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 1, paragraph 57(1)(e)].
736. If goods are sold by showing a consumer a sample or demonstration
model and are also described by the supplier, the goods must
correspond to both their description and the sample or demonstration
model. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 1,
subsection 57(2)]
Guarantee as to repairs and spare parts
737. When consumers buy goods they expect that spare parts and repair
facilities will be available for a reasonable time after they make
the purchase. This is particularly the case for expensive goods,
such as cars. The ACL provides consumers with a guarantee that
spare parts and repair facilities will be reasonably available for a
reasonable period. [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 1, section 58]
738. The tests of reasonability that apply to this guarantee allow for
the fact that what is reasonable will depend on the nature of the
goods supplied. For example, it would be reasonable to expect that
tyres for a new car will be available for many years after its
purchase. It may not be reasonable to expect that spare parts for
an inexpensive children's toy are available at all.
Express warranties
739. Suppliers and manufacturers often provide express warranties, when
they sell goods to consumers. The ACL includes a guarantee that any
such guarantees are complied with. This ensures that the full suite
of remedies available for breaches of consumer guarantees are
available when a person fails to comply with an express warranty.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 1, section 59]
Guarantees relating to the supply of services
740. Part 3-2, Division 1, Subdivision B of the ACL provides a basic set
of protections for consumers who acquire services from Australian
suppliers. They provide consumers with a statutory basis for
seeking remedies when:
. services are not rendered with due care and skill;
. services are not fit for a purpose that the consumer makes
known to the supplier; or
. services are not supplied within a reasonable time.
741. The guarantees relating to the supply of services apply to supplies
made in trade or commerce. Accordingly, they do not apply to any
supplies of services that are provided by individuals outside of a
business context.
742. For the avoidance of doubt, guarantees relating to services do not
apply to transportation or storage of goods for the purposes of a
business, trade, profession or occupation carried on by the person
for whom the goods are transported or stored [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 1, paragraph 63(a)].
743. It is necessary to clarify the application of guarantees to these
services since it might otherwise be thought that they fall within
the definition of consumer within section 2 of the ACL. This is
because such services are often acquired for personal, domestic or
household use or consumption.
744. Guarantees relating to the supply of services do not apply to
contracts of insurance as these contracts are covered by legislation
that applies specifically to insurance markets. [Schedule 1, item
1: Chapter 3, Part 3-2, Division 1, paragraph 63(b)]
Guarantee as to due care and skill
745. The ACL provides consumers with the benefit of a guarantee that
services will be rendered with due care and skill. This guarantee
requires that the provider of services must have an acceptable level
of skill in the particular area of activity involved in the supply
of services. The provider must also exercise due care in providing
the services. These requirements ensure that services are provided
in accordance with the specifications agreed and also provide the
consumer with a basis for seeking redress if a service provider
causes damage to other property belonging to the consumer in the
course of providing services. [Schedule 1, item 1: Chapter 3, Part
3-2, Division 1, section 60]
1.
Examples of the application of this guarantee include where
a supplier installs a burglar alarm that is easily bypassed
by burglars[15] and loss or damage to personal luggage in
the course of transportation of passengers by an airline or
cruise ship operator[16]. Whilst the cases cited here were
heard under the comparable implied warranty provision of the
TP Act, the intention is that the guarantee applies to such
services in a similar way. The guarantee would also apply
to services commonly acquired by consumers; such as those
provided by plumbers, electricians, gardeners and
landscapers, to require that those services are rendered
with due care and skill.
Guarantee as to fitness for a particular purpose
746. In certain circumstances a consumer might want services to achieve a
particular purpose that he or she has in mind. If a consumer tells
a supplier that they want services to achieve a particular purpose
and the supplier proceeds to supply services to the consumer, the
supplier is held to guarantee that the services will be fit for that
purpose. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 1,
subsection 61(1)]
1.
An example of a use of this subsection is a consumer asking
an electrician to install lighting that will allow a room to
be used as a home office. If the electrician installs
lighting that is too dull to allow reading of documents and
books in that room, the guarantee as to fitness for a
particular purpose has not been complied with.
747. The ACL allows a consumer to make results that he or she wants
services to achieve known to either the supplier or a person whom
negotiations are conducted in relation to the services. As results
to be achieved are less subjective than a 'purpose', it is
appropriate that the person can make these known to either of these
categories of person. In either of these cases, the consumer will
receive the benefit of the guarantee if he or she makes the desired
results known to the relevant person. [Schedule 1, item 1: Chapter
3, Part 3-2, Division 1, subsection 61(2)]
748. The guarantees of fitness for a particular purpose and fitness to
achieve a desired result are subject to an exception if the consumer
does not, or it would be unreasonable for the consumer to, rely on
the skill or judgment of the person to whom the purpose or result is
made known. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 1,
subsection 61(3)]
Guarantee as to reasonable time for supply
749. It is usual practice for a contract or agreement for the supply of
services to stipulate the time for providing those services. On
occasion, a contract or agreement will not stipulate when services
are to be provided. In that case, a consumer may experience
significant inconvenience if there is a long wait for services to be
provided. The guarantee as to reasonable time for supply provides
consumers with a right to approach a court or tribunal to seek
appropriate orders when services are not provided within a
reasonable time. [Schedule 1, item 1: Chapter 3, Part 3-2, Division
1, section 62]
750. In general, best practice is to ensure that the time for supply of
services is included in a contract or agreement to avoid disputes
about what is a 'reasonable time'. The time period that is
reasonable will vary significantly depending on the nature of the
services to be provided. The reasonable time to build a house will
obviously be much longer than what is reasonable for providing a
tree-lopping service. Accordingly, it is not possible to set out in
the ACL what is reasonable and the courts and tribunals will need to
consider all of the circumstances that apply to a particular case to
determine the time period that is reasonable.
Application of consumer guarantees to supplies of gas, electricity and
telecommunications
751. Special policy considerations apply to supplies of gas, electricity
and telecommunications. Since these goods and services are usually
supplied via an interconnected system of wires or pipes, a
disruption to supply can affect many consumers. These services are
also crucial to many areas of human activity such that the
consequential losses experienced by consumers can in some instances
be substantial. Further, disruptions to supply can be the result of
factors beyond the control of the supplier.
752. Due to the existence of the aforementioned special policy
considerations, legislation has been developed at both the
Commonwealth and State and Territory levels to deal with consumer
issues in relation to these supplies.
753. The ACL provides for the relevant Commonwealth Minister disapplying
consumer guarantees in respect of supplies of electricity, gas and
telecommunications if he or she is satisfied that other laws make
adequate provision for consumer protection in relation to the
relevant supplies. [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 1, section 65]
Display notices and other information to be provided to consumers
Display notices
754. A common practice in New Zealand is for traders to display a sign at
the point of sale that alerts consumers to their rights under the
relevant consumer protection legislation. CCAAC found that similar
signage in Australian shops will enhance the awareness of Australian
consumers in relation to their rights. CCAAC further found that
consumer agencies should distribute a sign that can be used for that
purpose with suppliers initially being asked to voluntarily comply
with a request that it be displayed at the point of sale.
755. In the event that widespread voluntary compliance with a request to
display signs at the point of sale is not forthcoming, the ACL
provides for the relevant Minister determining that a notice must be
displayed [Schedule 1, item 1: Chapter 3, Part 3-2, Division 1,
subsection 66(1)].
756. The determination may set out what information is to be included on
the notice, where the notice must be displayed, how the notice must
be drawn to the attention of consumers and requirements (such as
size of the notice itself and the size of font used on the notice)
for the form of the notice.
757. In the event that the Minister chooses to prescribe a notice, the
ACL requires that the notice is displayed at the premises where a
consumer takes delivery of goods or services or that the notice is
drawn to the attention at the time the consumer agrees to acquire
the goods [Schedule 1, item 1: Chapter 3, Part 3-2, Division 1,
subsection 66(2)].
758. This is intended to cover both shops that have a physical presence
and those that trade via electronic means.
Prescribed requirements for warranties against defects
759. Suppliers and manufacturers often provide promises to consumers that
goods or services supplied will be free from defects for a certain
period of time. Consumers may experience difficulties seeking to
have suppliers or manufacturers fulfil such promises if they lack
access to basic details, such as the name and address of the
supplier. The ACL provides for regulations to be made prescribing
requirements relating to the content and form of such warranties
against defects. [Schedule 1, item 1: Chapter 3, Part 3-2, Division
4, section 102]
760. A warranty against defects is a narrower concept than an express
warranty. A warranty against defects applies only if a person has
promised to repair or replace goods or services, or provide other
compensation to a consumer if goods or services are defective.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 4, subsection
102(3)]
Prescribed requirements for repairs of consumer goods
761. Consumers often complain that a repairer of goods did not warn them
that electronic data on mobile telephones, computers and other
electronic goods would be deleted in the process of affecting a
repair.
762. The ACL provides that a repairer of goods must provide a consumer
with prescribed information before accepting the goods for the
purpose of repairing them. This provision allows the relevant
Minister to make regulations requiring repairers of electronic or
other goods notices warning that electronic data may be deleted in
the course of effecting a repair. [Schedule 1, item 1: Chapter 3,
Part 3-2, Division 4, section 103]
Penalties for failing to display a notice or provide prescribed
information
Display notices
763. If a Minister determines that suppliers must display notices under
section 66(2) of the ACL and a person supplies goods to a consumer
without displaying the notice at the relevant premises or drawing
the notice to the consumer's attention, that person is guilty of an
offence. The offence is one of strict liability and the maximum
penalty is:
. $30,000 for a body corporate; and
. $6,000 for a person who is not a body corporate.
[Schedule 1, item 1: Chapter 4, Part 4-2, Division 1, section 169]
764. A civil pecuniary penalty also applies to a failure to display a
notice in the required form. The maximum penalty is:
. $30,000 for a body corporate; and
. $6,000 for a person who is not a body corporate
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224].
765. The ACCC may also issue a person with an infringement notice in
relation to a contravention of section 66(2). The amount of the
penalty under an infringement notice is:
. 55 penalty units for a body corporate; and
. 11 penalty units for a person who is not a body corporate.
[Schedule 2, Item 1: Part XI, Division 5]
766. The offence of failing to display a notice is one of strict
liability since the question of intention is not relevant to whether
or not a sign is displayed. A consumer will be denied access to the
information on the notice irrespective of whether the supplier
deliberately failed to display the notice. Accordingly, a
prosecution for an offence under section 170 of the ACL does not
need to establish the reasons for the failure of a supplier to
display a notice in the required form. It is enough for a regulator
to prove that there was an obligation on the supplier to display a
notice and that the notice was not displayed.
Warranties against defects
767. If requirements are prescribed for warranties against defects under
section 102 of the ACL and a person does not provide the prescribed
information, or does not provide it in the prescribed form, the
person is guilty of an offence. The offence is one of strict
liability and the maximum penalty is:
. $50,000 for a body corporate; and
. $10,000 for a person who is not a body corporate.
[Schedule 1, item 1: Chapter 4, Part 4-2, Division 4, section 191]
768. A civil pecuniary penalty also applies to a failure to display a
notice in the required form. The maximum penalty is:
. $50,000 for a body corporate; and
. $10,000 for a person who is not a body corporate [Schedule
1, item 1: Chapter 5, Part 5-2, Division 1, section 224].
769. The ACCC may also issue a person with an infringement notice in
relation to a contravention of section 102. The amount of the
penalty under an infringement notice is:
. 60 penalty units for a body corporate; and
. 12 penalty units for a person who is not a body corporate.
[Schedule 2, Item 1: Part XI, Division 5]
Prescribed requirements for repairs
770. If a person does not comply with requirements for providing
prescribed information related to the repair of goods to consumers
under section 103 the person is guilty of an offence. The offence
is one of strict liability and the maximum penalty is:
. $50,000 for a body corporate; and
. $10,000 for a person who is not a body corporate.
[Schedule 1, item 1: Chapter 4, Part 4-2, Division 1, section
193]
771. A civil pecuniary penalty also applies to a failure to provide the
prescribed information. The maximum penalty is:
. $50,000 for a body corporate; and
. $10,000 for a person who is not a body corporate.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224].
772. The ACCC may also issue a person with an infringement notice in
relation to a contravention of section 103. The maximum penalty
under an infringement notice is:
. 60 penalty units for a body corporate; and
. 12 penalty units for a person who is not a body corporate.
[Schedule 2, Item 1: Part XI, Division 5]
Convention on Contracts for the International Sale of Goods
773. The Vienna Sales Convention (VSC) provides uniform rules that govern
contracts for the sale of goods between people located in different
countries.
774. The terms of the VSC are set out in the uniform Sale of Goods
(Vienna Convention) Acts passed in each State and Territory of
Australia. At the time of passage of the ACL, 74 countries were
parties to the VSC.
Remedies relating to guarantees
Action against suppliers of goods
775. The ACL provides for a consumer taking action against a supplier of
goods if goods are supplied in trade or commerce and there is a
breach of any of the guarantees that relate to goods. [Schedule 1,
item 1: Chapter 5, Part 5-4, Division 1, section 258]
776. The remedies available to consumers depend on the severity of a
failure to comply with a guarantee. The ACL classifies failures
into those that are major and those that are not major. A major
failure occurs if:
. a reasonable consumer would not have acquired the goods if
he or she knew about the nature and extent of the problem.
In other words, the problem with the goods is so severe
that such a person would not have purchased the goods if
he or she knew about the problem. [Schedule 1, item 1:
Chapter 5, Part 5-4, Division 1, paragraph 260(a)];
. goods depart significantly from their description or a
sample or demonstration model that was used when selling
the goods. For example, if a consumer orders a red
bicycle from a catalogue and the bicycle actually
delivered is green [Schedule 1, item 1: Chapter 5, Part 5-
4, Division 1, paragraph 260(b)];
. goods cannot be remedied to make them fit for purpose
within a reasonable time. For example, a consumer tells a
retailer that he or she wants a computer to connect to the
internet and it does not have that function and cannot be
modified to provide that function [Schedule 1, item 1:
Chapter 5, Part 5-4, Division 1, paragraphs 260(c) and
(d)]; or
. goods are unsafe [Schedule 1, item 1: Chapter 5, Part 5-4,
Division 1, paragraph 260(e)].
777. Whether or not goods are in their original packaging is irrelevant
to whether or not a supplier is liable to provide a remedy to a
consumer in relation to a failure to comply with a guarantee.
[Schedule 1, item 1: Chapter 5, Part 5-4, Division 1, subsection
258(7)]
Remedies available when a failure is not major
778. If a failure is not major, the usual remedy will be for a consumer
to require the supplier to address the problem. If a consumer asks
a supplier to remedy a problem with goods, the Bill provides that
the remedy must be made available within a reasonable time. What is
reasonable will vary depending on the circumstances. For example,
reasonable time to remedy a problem with an essential good such as a
hot water system would be much shorter than for a games console.
[Schedule 1, item 1: Chapter 5, Part 5-4, Division 1, paragraph
258(2)(a)]
779. If a consumer asks a supplier to provide a remedy the supplier may
choose between providing a refund, a replacement or a repair. If a
failure relates to the title to goods, the supplier may remedy the
failure by addressing the problem with the title. For example, this
might involve paying money owed to another person if that person has
a security interest in the goods. [Schedule 1, item 1: Chapter 5,
Part 5-4, Division 1, section 261]
780. If a supplier fails to provide a remedy within a reasonable time, a
consumer may have the goods repaired and have the supplier pay for
the repair. In some circumstances, it may be appropriate for the
consumer to purchase a replacement and have the supplier pay for the
replacement. The consumer also has a right to have the supplier pay
other costs incurred in having goods remedied elsewhere. In certain
circumstances, these costs might include transportation costs and
costs of having an alternative repairer inspect the goods.
[Schedule 1, item 1: Chapter 5, Part 5-4, Division 1, subparagraph
258(2)(b)(i)]
781. If a consumer suffers losses as a result of a failure of a supplier
to comply with guarantees, the consumer can recover those losses
from the supplier. This type of loss is often known as
'consequential loss'. The losses that are recoverable are limited
to those that are "reasonably foreseeable" to result from the
failure. In other words, the consumer can recover those losses that
are a probable consequence of the failure. An example is water
damage to a carpet that is the result of a failure of a washing
machine to be of acceptable quality. [Schedule 1, item 1: Chapter
5, Part 5-4, Division 1, subsection 258(4)]
782. A consumer cannot recover consequential losses from a supplier if
they were caused by something independent of human control that
occurred after the goods left the control of the supplier. This
ensures that suppliers are not required to pay money to consumers
for problems unrelated to their own conduct or the goods that they
have supplied. [Schedule 1, item 1: Chapter 5, Part 5-4, Division
1, subsection 258(5)]
783. Remedies available when a failure is major
784. If a failure to comply with a guarantee is a major failure, a
consumer may reject goods and choose between a refund and
replacement goods. If a consumer rejects goods, he or she must
notify the supplier of the rejection. After a consumer returns
goods to a supplier, or the goods are collected by the supplier, the
supplier must provide the remedy that the consumer has chosen.
[Schedule 1, item 1: Chapter 5, Part 5-4, Division 1, section 258]
785. If the consumer chooses a refund after rejecting goods, the supplier
is specifically precluded from providing replacement goods to
satisfy the requirement for a refund. [Schedule 1, item 1: Chapter
5, Part 5-4, Division 1, section 263(5)]
786. The property in goods rejected revests in the supplier as soon as
the consumer notifies the supplier of the rejection. This ensures
that any risk to the goods from that time onwards is borne by the
supplier. For example, if the goods are uninsured and are damaged
by a fire after the notification, the loss will be that of the
supplier and not the consumer.
Responsibility for returning goods to a supplier if goods are
rejected
787. The consumer is responsible for returning rejected goods to a
supplier unless the cost of returning, removing or transporting them
is significant because of the size or height of the goods, because
they are attached to something else or due to the nature of the
failure. If goods cannot be returned without significant costs, the
supplier must collect the goods at their own expense and within a
reasonable time. [Schedule 1, item 1: Chapter 5, Part 5-4, Division
1, Section 263]
1.
Examples of circumstances in which a supplier would be
responsible for collecting goods include:
. A 127 centimetre LCD television that is the subject of a
major failure. The supplier would be responsible for
collecting the television as its size would make it costly
for the consumer to return it to the supplier;
. A swimming pool filter that is connected to a swimming pool
by fixed pipes is the subject of a major failure. The
supplier would be responsible for collecting the swimming
pool filter as its method of attachment would make it costly
for the consumer to return the goods; and
. An extension ladder that is stuck in the extended position.
The supplier would be responsible for collecting the ladder
as the nature of the failure in this case would make it
costly for the consumer to return it, so the supplier would
be responsible for organising its collection.
Guarantees apply to replaced goods
788. If goods are replaced, either at the choice of a supplier under
section 261(c), or at the choice of the consumer after goods have
been rejected under section 263(4)(b), the same guarantees apply to
the replaced goods as applied to the goods originally supplied.
[Schedule 1, item 1: Chapter 5, Part 5-4, Division 1, section 264]
789. As replaced goods must be identical to the goods originally
supplied, the guarantees that apply are identical to those that
applied to the original goods.
1.
If a consumer purchased a new mobile telephone from a
supplier and it was replaced by the supplier due to a major
failure six months after its purchase, the guarantees that
apply would be exactly the same as would apply to a new
mobile telephone. It is not the case that, for example, the
guarantee as to acceptable quality would extend for six
months less than would apply to a new mobile telephone
because the consumer had the use of the original telephone
for six months.
Termination of contracts for services connected with rejected goods
790. Consumers often purchase goods in connection with services that are
necessary to effectively utilise the relevant goods. An example is
mobile telephones and associated contracts for network services. In
such cases, the right to reject goods and receive a refund provided
for by sections 261 and 263(4)(a) would often be illusory if the
consumer continued to be bound to make payments under a connected
service contract.
791. When a consumer exercises the right to reject goods under section
262 and services are connected with the rejected goods, the contract
for services is automatically terminated when the consumer elects
that a refund be given under section 263(4)(a). Whether goods are
automatically rejected or not depends on how closely the goods are
connected to the services. There is scope for many different
degrees of 'connection' in arrangements between consumers and
suppliers and each case would need to be considered on its merits.
792. If a consumer rejects goods, elects to seek a refund and a contract
for connected services has been terminated, he or she may also seek
a refund of money or other consideration paid for services. Where
services are provided on a time basis, a consumer might seek a
refund of money or consideration paid for services that were not yet
consumed, or not consumed because the connected goods failed to
allow the services to be used. [Schedule 1, item 1: Chapter 5,
Part 5-4, Division 1, section 265]
1.
A refund might include money paid for access to a mobile
telephone network from the time that a mobile telephone
failed to function.
Rights of donees
793. Consumers often purchase goods and give them to others prior to
using them. In such circumstances any failures related to
guarantees may not be apparent until the goods are in the possession
of that other person.
1.
Christmas and birthday presents given to family members.
794. In many cases it is inconvenient that the original purchaser, rather
than the recipient of a gift, is required to exercise any rights or
remedies under consumer guarantees. Accordingly, the ACL provides
for recipients of gifts having access to the same rights and
remedies as would have been available to the consumer who acquired
the goods from the supplier. [Schedule 1, item 1: Chapter 5, Part 5-
4, Division 1, section 266]
Actions against suppliers of services
795. The ACL provides for a consumer taking action against a supplier of
services if services are supplied in trade or commerce and there is
a failure to comply with any of the guarantees that relate to
services. [Schedule 1, item 1: Chapter 5, Part 5-4, Division 1,
section 267]
796. The remedies available to consumers depend on the severity of a
failure to comply with a guarantee. The ACL classifies failures
into those that are major and those that are not major. A major
failure occurs if:
. a reasonable consumer would not have acquired the services
if he or she knew about the nature and extent of the
failure. In other words, the problem with the services is
so severe that such a person would not have purchased them
if he or she knew about the problem [Schedule 1, item 1:
Chapter 5, Part 5-4, Division 1, paragraph 268(a)];
. the services cannot be remedied within a reasonable time
to make them fit for a purpose that services of that kind
are commonly supplied [Schedule 1, item 1: Chapter 5, Part
5-4, Division 1, paragraph 268(b)];
. the services, and any product resulting from those
services, cannot be remedied within a reasonable time to
make them fit for a purpose that the consumer made known
to the supplier [Schedule 1, item 1: Chapter 5, Part 5-4,
Division 1, paragraph 268(c)];
. the services, and any goods supplied in connection with
the services, cannot be remedied within a reasonable time
to make them achieve a result that the consumer wants them
to achieve and that was made known to the supplier
[Schedule 1, item 1: Chapter 5, Part 5-4, Division 1,
paragraph 268(d)]; or
. the services create an unsafe situation [Schedule 1, item
1: Chapter 5, Part 5-4, Division 1, paragraph 268(e)].
Remedies available when a failure is not major
797. If a failure is not major, the usual remedy will be for a consumer
to require the supplier to address the problem. If a consumer asks
a supplier to remedy a problem with services, the remedy must be
made available within a reasonable time. What is reasonable will
vary depending on the circumstances. [Schedule 1, item 1: Chapter
5, Part 5-4, Division 1, paragraph 267(2)(a)]
1.
Reasonable time to remedy a problem with a haircut would be
much shorter than the reasonable time to remedy a problem
with a landscaping project.
798. If a supplier fails to provide a remedy within a reasonable time, a
consumer can choose between seeking a remedy elsewhere and having
the supplier pay all costs reasonably incurred in seeking that
remedy, and terminating the contract [Schedule 1, item 1: Chapter 5,
Part 5-4, Division 1, paragraph 267(2)(b)(i)]. If the contract is
terminated, the consumer can seek a refund of money or other
consideration paid for the services. [Schedule 1, item 1: Chapter
5, Part 5-4, Division 1, subsection 270(3)]
799. If the consumer terminates the contract, the termination takes
effect from the time the consumer tells the supplier that he or she
wants to terminate. In some circumstances, the consumer may have
difficulty contacting a supplier. In this case the termination
would take effect from the time when he or she indicates to the
supplier that he or she wants to terminate. [Schedule 1, item 1:
Chapter 5, Part 5-4, Division 1, section 269]
1.
An example of this type of termination might involve the
consumer sending a letter to the supplier's last known
address.
800. If a consumer suffers losses as a result of a failure of a supplier
of services to comply with guarantees, the consumer can recover
those losses from the supplier. This type of loss is often known as
'consequential loss'. The losses that are recoverable are limited
to those that are "reasonably foreseeable" to result from the
failure. In other words, the consumer can recover those losses that
are a probable consequence of the failure. [Schedule 1, item 1:
Chapter 5, Part 5-4, Division 1, subsection 268(4)]
1.
An example of this type of loss is a house fire caused by
incorrect installation of electric lighting in the home of a
consumer.
801. Remedies available when a failure is major
802. If a failure to comply with a guarantee relating to services is a
major failure, a consumer can choose between terminating the
contract for supply of the services or recover compensation for any
difference in the value of the services compared to the price paid
[Schedule 1, item 1: Chapter 5, Part 5-4, Division 1, subsection
268(3)]. If the contract is terminated, the consumer can seek a
refund of money or other consideration paid for the services.
[Schedule 1, item 1: Chapter 5, Part 5-4, Division 1, subsection
269(3)]
1.
An example of seeking to recover compensation for the
difference in the value of services compared to the price
paid would involve the services of a builder who constructs
a house that is not of the quality required by the contract.
In those circumstances, the consumer would be entitled to
compensation for the difference between the value of the
house actually constructed and the value of the house that
would have resulted if the contract had been properly
performed.
Termination of contracts for the supply of goods that are connected
to terminated services
803. Consumers often purchase services in connection with goods that are
necessary to effectively utilise the relevant services. An example
is contracts for network services that relate to a purchase of a
mobile telephone. In such cases, the right to terminate a contract
for services and receive a refund provided for by section 268 would
often be illusory if the consumer could not also reject the goods
and receive a refund.
804. When a consumer exercises the right to terminate a contract for
services under section 268 and goods are connected with the
services, the goods are automatically rejected when the consumer
terminates the contract. Whether goods are automatically rejected
or not depends on how closely the goods are connected to the
services. There is scope for many different degrees of 'connection'
in arrangements between consumers and suppliers and each case would
need to be considered on its merits. [Schedule 1, item 1: Chapter
5, Part 5-4, Division 1, section 270]
805. If a consumer terminates a contract for services, he or she may also
seek a refund of money or other consideration paid for goods that
were connected to the services. In order to receive a refund, the
consumer must return the goods to the supplier or, if the goods
cannot be returned without significant cost to the consumer, have
the supplier collect the goods. [Schedule 1, item 1: Chapter 5,
Part 5-4, Division 1, section 270]
Actions for damages against manufacturers of goods
Damages that may be recovered from manufacturers of goods
806. The primary contact point for consumers when they buy goods is the
supplier. Consumers usually have less direct contact with the
manufacturer of goods. Accordingly, the primary source of remedies
for consumers when goods fail to meet the standard required by
guarantees is the person who supplied the goods. Nevertheless, in
certain circumstances consumers may wish to seek remedies directly
from manufacturers.
1.
An example of such circumstances is where the supplier of
particular goods is difficult to locate.
807. The ACL provides that a consumer may recover damages from
manufacturers in respect of failures that relate to acceptable
quality, correspondence with description (if a description was
applied by or on behalf of the manufacturer), availability of
repairs and spare parts, and compliance with express warranties
[Schedule 1, item 1: Chapter 5, Part 5-4, Division 2, subsections
271(1), 271(2), 271(3) and 271(5)]. For detailed explanation of the
content of each of these guarantees, see the relevant sections of
this Chapter, above.
808. The damages that are recoverable from a manufacturer of goods
include the reduction in value of goods below the lower of the price
paid or the average retail price of the goods at the time of the
supply. This approach ensures that manufacturers are not required
to provide excessive compensation to consumers if suppliers charge
high prices for goods. [Schedule 1, item 1: Chapter 5, Part 5-4,
Division 2, paragraph 272(1)(a)]
1.
If goods were purchased for $30, the average retail price at
the time of the supply was $28 and the goods are worth only
$10 as a result of a failure to comply with a guarantee, the
manufacturer would be required to pay the consumer $18.
809. The damages payable by a manufacturer to a consumer also cover
losses that were 'reasonably foreseeable' as a result of the
failure. This type of loss is often known as 'consequential loss'.
The losses that are recoverable are limited to those that are
"reasonably foreseeable" to result from the failure. In other
words, the consumer can recover those losses that are a probable
consequence of the failure. [Schedule 1, item 1: Chapter 5, Part 5-
4, Division 2, paragraph 272(1)(b)]
1.
An example of this type of loss is a house fire caused by a
faulty light fitting in a consumer's home.
810. To avoid doubt, the cost of returning goods or inspecting them to
determine the cause of a failure is to be considered reasonably
foreseeable as a result of failing to comply with a guarantee
[Schedule 1, item 1: Chapter 5, Part 5-4, Division 2, Subsection
272(2)]. Also to avoid doubt, a reduction in value of goods is not
recoverable only under Paragraph 272(1)(a). [Schedule 1, item 1:
Chapter 5, Part 5-4, Division 2, Subsection 272(3)]
811. A manufacturer is not required to pay damages to a consumer if the
consumer has required the manufacturer to provide a repair or
replacement under an express warranty unless the manufacturer has
refused to provide a repair or replacement, or has failed to do so
within a reasonable time. [Schedule 1, item 1: Chapter 5, Part 5-4,
Division 2, subsection 271(6)]
812. A manufacturer is not required to pay damages to a consumer if an
act, default or omission or representation made by some other
person, not being an employee or agent of the manufacturer, resulted
in caused goods to be of less than acceptable quality. This ensures
that manufacturers are not held liable for issues with goods that
are beyond their control. [Schedule 1, item 1: Chapter 5, Part 5-4,
Division 2, paragraph 271(2)(a)]
1.
An example of the application of this exception is where a
mechanic (not associated with the manufacturer) uses the
wrong engine oil in a car and engine damage occurs as a
result of that error. In that case, the mechanic, and not
the manufacturer, would be responsible for providing the
consumer with the necessary redress.
813. A manufacturer is also not liable to provide damages if a failure to
comply with the guarantee as to acceptable quality results from a
cause independent of human control that occurs after the goods left
the control of the manufacturer [Schedule 1, item 1: Chapter 5, Part
5-4, Division 2, subsection 271(2)(b)]. This ensures that
manufacturers are not liable for damage that occurs due to natural
disasters, lighting strikes, and other events over which the
manufacturer has no control. On the other hand, if goods are
damaged by such events before goods leave the control of the
manufacturer, it will be responsible for providing damages if goods
subsequently make their way into the hands of consumers.
814. A manufacturer is not liable to provide consumers with damages if
the only reason that the goods fail to be of acceptable quality is
because the price charged by the supplier is higher than the
recommended retail price or the average retail price for the goods
[Schedule 1, item 1: Chapter 5, Part 5-4, Division 2, paragraph
271(2)(c)]. This is intended to deal with situations where goods
are sold for a relatively high price and paragraph 54(3)(b) has the
effect of imposing a higher standard of acceptable quality on those
goods due to their price. In such cases, manufacturers should be
held only to the standard that would be required if the goods were
sold at the recommended retail price or the average retail price.
Time limit for actions against manufacturers of goods
815. An action against the manufacturer of goods to recover damages can
only be commenced within 3 years after the consumer becomes aware,
or reasonably should have become aware, of a failure to comply with
a guarantee [Schedule 1, item 1: Chapter 5, Part 5-4, Division 2,
section 273]. This is intended to provide manufacturers with some
degree of certainty about their potential liability to consumers for
damages. Without this limitation, manufacturers may experience
difficulties obtaining finance or insurance coverage as their long-
term contingent liabilities might be indeterminate.
Indemnification of suppliers by manufacturers
816. Suppliers have the primary responsibility of providing remedies to
consumers in respect of any failures to comply with guarantees,
other than those that relate to spare parts and repair facilities
and express warranties offered by manufacturers. Accordingly,
suppliers will often be liable to provide consumers with remedies in
circumstances whereby fault more properly lies with a manufacturer
or importer.
817. The ACL provides for an indemnity in favour of the supplier of goods
subject to the guarantees within Chapter 3, Part 3-2, Division 1,
Subdivision A of the ACL.
818. If goods are not of acceptable quality, do not match a description
applied by their manufacturer or are not fit for a purpose made
known to their manufacturer, and a supplier provides a remedy in
respect of those failures, the supplier can recover the costs
incurred from the manufacturer. [Schedule 1, item 1: Chapter 5,
Part 5-4, Division 3, subsection 274(2)]
819. The indemnity also extends to consequential loss if the manufacturer
would otherwise be liable if the action were brought by a consumer
against the manufacturer under section 271 and the supplier is
similarly liable. [Schedule 1, item 1: Chapter 5, Part 5-4,
Division 3, subsection 274(1)]
820. Some manufacturers seek to apply undue pressure on suppliers to
limit remedies provided to consumers in respect of faulty goods.
When this occurs, some suppliers respond by, in turn, attempting to
limit the redress that they provide to consumers in respect of
faulty goods. The indemnity in favour of suppliers is intended to
provide them with a strong legal basis for requiring manufacturers
to comply with their obligations in respect of goods that they
manufacture. Accordingly, the indemnity is not capable of being
excluded or modified by contract. [Schedule 1, item 1: Chapter 5,
Part 5-4, Division 3 , section 274]
821. A supplier must bring an action against a manufacturer within 3
years of providing a consumer with a remedy or within 3 years of the
day on which proceedings were first commenced by a consumer against
the supplier. [Schedule 1, item 1: Chapter 5, Part 5-4, Division 3,
subsection 274(4)]
Limitation of liability for recreational services
822. The States and Territories currently have laws that allow providers
of recreational services to exclude or limit their liabilities in
respect of implied conditions and warranties in consumer contracts.
It is expected that the States and Territories that currently have
such laws in place will choose to have similar laws that exclude
liability in respect of consumer guarantees.
823. The ACL provides for such laws to have effect to limit the
guarantees provided for in Chapter 3, Part 3-2, Division 1,
Subdivision B of the ACL. [Schedule 1, item 1: Chapter 5, Part 5-4,
Division 3, section 275]
824. Part XI of the CC Act provides for suppliers of recreational
services excluding, restricting or modifying their liability to
consumers for death or personal injury of an individual.
825. Recreational services are defined in the CC Act as services that
consist of participation in a sporting activity or similar leisure-
time pursuit or any other activity that involves a significant
degree of physical exertion or physical risk undertaken for purposes
of recreation, enjoyment or leisure. This definition is intended to
encompass activities that involve significant risk or exertion by
the participant.
1.
Examples of activities that are within the scope of this
definition are all forms of sport and other activities such
as hiking, bungee jumping and paintball. Activities that
are not captured include bus tours, shopping and
theatregoing.
Representative actions by regulators
826. Some suppliers and manufacturers may engage in repeated and systemic
conduct that results in failures to comply with guarantees. In such
cases it may be more efficient and effective for a regulator to take
action on behalf of a group of consumers to seek remedies for
failures to comply with guarantees.
827. The ACL provides for regulators to take action, in respect of
failures to comply with guarantees, on behalf of one of more persons
named in an application. The relevant regulator must obtain the
written consent of each person named in an application. [Schedule
1, item 1: Chapter 5, Part 5-4, Division 3, section 277]
Application and transitional provisions
828. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
829. Chapter 3, Part 3-2 applies to all relevant conduct occurring in
trade or commerce on or after 1 January 2011.
830. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
831. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
832. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
833. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Do not remove section break.
Outline of chapter
834. The Australian Consumer Law (ACL) includes provisions dealing with
unsolicited sales practices and the formation of unsolicited selling
agreements.
Context of amendments
835. Unsolicited direct selling (often referred to as door-to-door sales)
is currently regulated through State and Territory legislation.
836. The Do Not Call Register Act 2006 (DNCR Act) and other Commonwealth
legislation applies expressly in respect of telephone sales
practices. In addition, industry specific regulation for telephone
sales practices exists or is being developed - such as the National
Energy Customer Framework (NECF) - and will exist alongside the ACL.
837. Victoria, NSW and South Australia have express provisions in respect
of telephone sales.
838. On 4 December 2009, the Ministerial Council on Consumer Affairs
(MCCA) agreed that the ACL will include a single national law
covering unsolicited sales practices, including door-to-door
selling, telephone sales - to the extent not already covered by the
DNCR Act - and other forms of direct selling which do not take place
in a retail context. The unsolicited selling provisions in the ACL
will replace the current State and Territory regulatory regimes that
apply to unsolicited sales.
Summary of new law
839. Chapter 3, Part 3-2, Division 2 of the ACL will regulate the making
of unsolicited offers to supply goods and services to a consumer and
the agreements arising from such offers. The ACL unsolicited
selling provisions consist of four types.
. In respect of face-to-face marketing approaches, express
supplier obligations about the way in which consumers are
approached and about the making of agreements, including:
- permitted hours of visiting consumers;
- the duty to clearly advise the consumer at the outset of
an approach of their purpose and to display or produce
identification containing certain prescribed
information; and
- the duty to leave a consumer's premises on request.
. In respect of face-to-face and telephone marketing
approaches, express supplier disclosure obligations about
the making of agreements, including:
- the duty to inform the consumer prior to making the
agreement of their rights to terminate the agreement;
and
- formal requirements for valid agreements arising from
suppliers approaching consumers by telephone or
otherwise. A valid agreement must include, for
instance, the terms of the agreement, a termination
notice (containing prescribed information), supplier
information; will need to comply with clarity
requirements; and will need to be given to the consumer.
. In respect of face-to-face and telephone sales, express
consumer rights and obligations, including:
- a 10 day termination right, exercisable by providing the
supplier with a termination notice (containing
prescribed information) via a wide range of delivery
methods;
- provisions specifying that the consumer can also
terminate an agreement after the termination period in
various circumstances related to breaches by the
supplier of certain supplier obligations specified in
the regime;
- provisions specifying the effect of termination under
the termination right and after the termination period;
and
- provisions specifying the entitlement of a consumer to
goods and services on termination.
. In respect of face-to-face and telephone sales, express
supplier obligations about post-contractual behaviour,
including:
- prohibitions during the termination period against a
supplier supplying goods or services, or accepting trade-
in goods; and requiring or accepting payment for goods
or services to be supplied;
- a requirement that a supplier immediately repay money
received under the agreement if the agreement is
terminated;
- prohibitions against a supplier taking action against a
consumer under a terminated agreement, including for the
purpose of recovering amounts allegedly payable; and
- prohibitions against a supplier from seeking to avoid
provisions concerning a termination right or operation
of the regime.
840. Part 4-2, Division 2 of the ACL creates equivalent criminal offences
for specified provisions of Part 3-2.
Comparison of key features of new law and current law
|New law |Current law |
|Subdivision A will |Sections 736, 992A and |
|establish the scope of |992AA of the Corporations|
|the unsolicited selling |Act 2001 (Cth) prohibit |
|provisions, which will |the hawking of |
|regulate unsolicited |securities, certain |
|offers to supply goods |financial products and |
|and services where |managed investment |
|negotiations take place |products. |
|in person - in all places|All State and Territory |
|other than a retail |laws regulate |
|context - or over the |door-to-door selling: |
|telephone, and the |Part 4, Division 3 |
|agreements arising from |(Direct commerce) NSW FT |
|such offers. A |Act |
|regulation-making power |Part 4, Division 2 |
|will provide for the |(Contact sales |
|addition or exemption of |agreements) Vic. FT Act |
|particular offers, |Part 3, Division 4 |
|agreements or industries |(Door-to-door sales) Qld |
|from the scope of the |FT Act |
|regime or certain |Part 3 (Door-to-door |
|provisions of the regime.|trading) SA FT Act |
| |Door to Door Trading Act |
| |1987 (WA) (DTDTA) |
| |DTDTA 1986 (Tas) |
| |DTDTA 1991 (ACT) |
| |Part 7 (Door-to-door |
| |trading) Consumer Affairs|
| |and Fair Trading Act 1990|
| |(NT) |
| |Some State and Territory |
| |laws also regulate |
| |telemarketing and |
| |agreements made |
| |face-to-face in other |
| |contexts: |
| |Part 4, Division 2A |
| |(Telephone marketing |
| |agreements) and Division |
| |3 (Non-contact sales |
| |agreements) Vic. FT Act |
| |Part 4, Division 3 |
| |(Direct commerce) NSW FT |
| |Act ('direct commerce' |
| |refers to both |
| |door-to-door sales and |
| |telemarketing) |
| |Part 3 (Door-to-door |
| |trading) SA FT Act. The |
| |SA Fair Trading |
| |(Telemarketing) Amendment|
| |Act 2009 extended the |
| |operation of Part 3 to |
| |regulate telemarketing in|
| |the same manner. |
|New law |Current law |
|Subdivision B will |The Telecommunications |
|provide for express |(Do Not Call Register) |
|supplier obligations |(Telemarketing and |
|about the way in which |Research Calls) Industry |
|consumers are approached,|Standard 2007 establishes|
|including provisions |standards in respect of |
|regulating permitted |calling hours, specific |
|visiting hours; |information a |
|disclosing purpose and |telemarketer must provide|
|identity; and duties to |during a call, and the |
|leave premises on request|termination of calls. |
|and inform a consumer of |Most State and Territory |
|their rights to terminate|laws have provisions with|
|the agreement. |similar effect: |
| |Sections 40D, 40I and 40J|
| |NSW FT Act |
| |Sections 62A, 62B, 62C, |
| |67B, 67C and 62D Vic. FT|
| |Act |
| |Sections 63 and 64 Qld FT|
| |Act |
| |Sections 19 and 20 SA FT |
| |Act |
| |Sections 9, 10 and 11 |
| |DTDTA (WA) |
| |Sections 9, 10 and 11 |
| |DTDTA (Tas) |
| |Sections 9 and 10 |
| |DTDTA(ACT) |
| |Sections 103, 104 and 105|
| |Consumer Affairs and Fair|
| |Trading Act 1990 (NT) |
|Subdivision C will |No equivalent. |
|provide for express |Most State and Territory |
|supplier obligations |laws have provisions with|
|about the making of |similar effect: |
|agreements, including |Section 40D NSW FT Act |
|formal requirements for |Sections 61 and 67E Vic. |
|valid agreements and the |FT Act |
|duty to give the |Section 61 Qld FT Act |
|agreement to the |Section 17 SA FT Act |
|consumer. |Section 7 DTDTA (WA) |
| |Section 7 DTDTA (Tas) |
| |Section 7 DTDTA (ACT) |
| |Section 101 Consumer |
| |Affairs and Fair Trading |
| |Act 1990 (NT) |
|New law |Current law |
|Subdivision D will |No equivalent. |
|contain express consumer |Most State and Territory |
|rights, including a 10 |laws have provisions with|
|day termination right, |similar effect. |
|grounds for termination |Sections 40E, 40F and 40H|
|after the termination |NSW FT Act |
|period; provisions |Sections 63-67, 67H-67L |
|specifying the effect of |and 80 Vic FT Act |
|termination; consumer and|Sections 61, 62 and 66-69|
|supplier rights and |Qld FT Act |
|obligations on |Sections 17, 18, and |
|termination of the |22-25 SA FT Act |
|agreement; and |Sections 3, 8 and 13-16 |
|termination period |DTDTA (WA) |
|prohibitions against the |Sections 3, 8 and 13-16 |
|supplier supplying goods |DTDTA (Tas) |
|and services, and |Section 2, 8 and 12-15 |
|accepting payment. |DTDTA (ACT). |
| |Sections 97, 102, 107, |
| |109 and 110 Consumer |
| |Affairs and Fair Trading |
| |Act 1990 (NT) |
|Subdivision E will |No equivalent. |
|provide for express |Most State and Territory |
|supplier obligations |laws have provisions with|
|about post-contractual |similar effect: |
|behaviour, including a |Sections 40C, 40F and 40K|
|requirement to repay |NSW FT Act |
|consumers money received |Sections 65 and 81 Vic. |
|upon termination; |FT Act |
|supplier prohibitions |Sections 59, 68, 70 and |
|against taking action |71 Qld FT Act |
|against a consumer under |Sections 15, 24, 26 and |
|a terminated agreement, |27 SA FT Act |
|and seeking to avoid |Sections 5, 15, 17 and 18|
|provisions concerning a |DTDTA (WA) |
|termination right or |Sections 5, 15, 17 and 18|
|operation of the |DTDTA (Tas) |
|unsolicited selling |Sections 5, 14, 16 and 17|
|regime; and waiving |DTDTA1 (ACT) |
|rights provisions. |Sections 99, 109, 111 and|
| |112 Consumer Affairs and |
| |Fair Trading Act 1990 |
| |(NT) |
Detailed explanation of new law
Meaning of 'unsolicited consumer agreement'
841. The ACL defines unsolicited consumer agreement. Four elements need
to be satisfied. [Schedule 1, item 1: Chapter 3, Part 3-2, Division
2, subsection 69(1)]
842. If an agreement meets this definition, the negotiations around the
formation of that agreement, as well as the agreement itself, are
covered by Part 3-2 and Part 4-2, Division 2 of the ACL.
First element of the test
843. The first element of the test requires the agreement to be for the
supply, in trade or commerce, of goods or services to a consumer.
The terms supply, trade or commerce, goods, services and consumer
are defined in the ACL. [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 2, paragraph 69(1)(a)] [Schedule 1, item 1: Chapter 1,
sections 2 and 3]
Second element of the test
844. The second element of the test requires the agreement to have
resulted from negotiations between a dealer and the consumer either
in person (at a place other than the business or trade premises of
the supplier) or by telephone, regardless of whether other
negotiations preceded the making of the agreement. This provision
is designed to prevent dealers from avoiding the unsolicited selling
provisions by, for example, making an uninvited telephone call and
persuading the consumer to make an appointment to carry out the
negotiations at home. [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 2, paragraph 69(1)(b)]
845. The provisions apply to all forms of unsolicited direct selling
which take place in a non-retail context, regardless of whether a
supplier has a traditional 'bricks and mortar' business or trade
premises. The provisions apply to suppliers who do not have an
established place of business but whose business models involve, for
example, selling from trucks or the back of car boots, or trading in
public places.
Third element of the test
846. The third element of the test requires that the consumer did not
invite the dealer to approach or telephone them for the purpose of
entering into negotiations to supply goods or services. [Schedule
1, item 1: Chapter 3, Part 3-2, Division 2, paragraph 69(1)(c)]
847. Circumstances may arise where a consumer initially solicits a
supplier for the purpose and expectation of providing a particular
product or service, or quoting for such a good or service (whether
free of charge or for a fee), and when the supplier subsequently
comes to the consumer's home or otherwise approaches the consumer,
the supplier makes an unsolicited offer of a related or unrelated
product or service.
848. The provisions regulate the making of such unanticipated offers to
supply goods and services to a consumer and the agreements arising
from such offers.
1.
Examples of solicited sales that are captured by the draft
provisions include:
. where a consumer agrees to attend a seminar on the basis
that the seminar is advice-based or marketing-based and does
not anticipate sales to take place (as opposed to seminars
where sales are anticipated or made explicit beforehand);
and
. sales that relate to, or follow on from, an assessment or
quote.
849. The provisions clarify that, for the purposes of the third element
of the test, an invitation to quote a price for a good or service is
not taken to be an invitation to enter into negotiations to supply
that good or service. [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 2, paragraph 69(2)]
Fourth element of the test
850. The fourth element of the test requires that the total price paid or
to be paid under the agreement is over $100 or cannot be determined
at the time the agreement is made. [Schedule 1, item 1: Chapter 3,
Part 3-2, Division 2, paragraph 69(1)(d)]
851. This element contains a regulation-making power to change the
monetary threshold of agreements that will be captured by
provisions. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
paragraph 69(1)(d)(ii)]
852. The ACL contains a regulation-making power to provide that a certain
kind of agreement is, or is not, an unsolicited consumer agreement.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
subsections 69(3) and (4)]
853. There is a rebuttable presumption that an agreement (or a proposed
agreement) is presumed to be an unsolicited consumer agreement (or
would be one if it were made). The presumption applies only to
civil proceedings relating to the contravention or possible
contravention of the express supplier obligations included in the
unsolicited selling provisions. [Schedule 1, item 1: Chapter 3,
Part 3-2, Division 2, section 70]
854. The rebuttable presumption operates if a party to the proceeding
alleged that the (proposed) agreement is one to which the
unsolicited selling provisions apply, and no other party to the
proceedings proves that this is not the case.
855. The effect of the presumption is that, once the issue has been
raised by a claimant in proceedings (a consumer or an enforcer), the
respondent must show, on the balance of probabilities, that the
agreement is not an unsolicited consumer agreement (or would not be
one if it were made).
856. Questions about whether an agreement falls within the scope of the
unsolicited selling provisions, which are likely to focus on the
issue of solicitation, may be the subject of potential dispute
between the parties to a proceeding. This will place claimants at a
significant disadvantage should they be required to prove that this
is the case. The rebuttable presumption has been included to ensure
that the potential for a successful action by a claimant under this
provision is not impeded.
Meaning of other terms
857. The ACL defines dealer, which refers to whether the person who
enters into negotiations with, or who contacts, a consumer intends
to make an agreement to supply goods or services to the consumer. A
dealer does not need to be the supplier of the goods and services.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 2, section 71]
858. The ACL defines negotiation, which includes any discussion or
dealing between a dealer and a consumer directed towards making the
agreement or proposed agreement. [Schedule 1, item 1: Chapter 3,
Part 3-2, Division 2, section 72]
Express supplier obligations about the way in which consumers are
approached and about the negotiation of agreements
859. The ACL sets out express supplier obligations about the way in which
consumers are approached by dealers for the purpose of negotiating
an agreement (or for an incidental or related purpose) and about the
negotiation of agreements. [Schedule 1, item 1: Chapter 3, Part 3-
2, Division 2, sections 73, 74, 75 and 76]
860. The express supplier obligations relating to permitted calling
hours, disclosing purpose and identity, and ceasing to negotiate on
request do not apply to telemarketing as these areas are regulated
under the Telecommunications (Do Not Call Register) (Telemarketing
and Research Calls) Industry Standard 2007 (Telecommunications
Industry Standard). All other express supplier obligations in the
unsolicited selling provisions apply to telemarketing to the extent
that they are not inconsistent with and do not duplicate the
requirements of the Telemarketing Industry Standard, as these areas
are not covered by the Telemarketing Industry Standard. [Schedule
1, item 1: Chapter 3, Part 3-2, Division 2, sections 73, 74 and 75]
Permitted hours for negotiating an unsolicited consumer agreement
861. The permitted hours for dealers approaching a person face-to-face
are:
. Monday to Friday - from 9am to 6pm; and
. Saturday - from 9am to 5pm. [Schedule 1, item 1: Chapter
3, Part 3-2, Division 2, paragraphs 73(1)(b) and (c)]
862. These are default calling hours only and may be varied by State and
Territory legislation applying the ACL. Schedule 2, item 1:
Division 2, subsection 131C(2)]
863. Dealers are prohibited from approaching a person face-to-face at any
time on a Sunday or a public holiday. [Schedule 1, item 1: Chapter
3, Part 3-2, Division 2, paragraph 73(1)(a)]
864. If a person wishes a dealer to approach them outside of these times,
the person will need to give the dealer (or a person acting on the
dealer's behalf) prior consent. [Schedule 1, item 1: Chapter 3,
Part 3-2, Division 2, subsection 73(2)]
865. Consent given in accordance with this provision will only exempt the
dealer from the provisions relating to permitted visiting hours, not
from the unsolicited selling provisions generally. A dealer will
need to obtain consent within the permitted visiting hours to be
able to visit a person outside the permitted visiting hours.
Disclosing purpose and identity
866. A dealer who approaches a person face-to-face must, prior to
commencing negotiations:
. clearly advise the person of their purpose of approaching
the person and that the dealer must leave immediately on
request; and
. provide information about their identity that will be
specified in the regulations. [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 2, section 74]
Ceasing to negotiate on request
867. A dealer who approaches a person face-to-face at any premises must
leave immediately if so requested by the occupier, any person acting
with the occupier's authority, or the prospective consumer. This
provision is intended to eliminate any margin for dealers to delay
their departure for reasons they may later argue were reasonable.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
subsection 75(1)]
868. If such a request is made by the prospective consumer, that consumer
must not be contacted for a similar purpose for at least 30 days
after the request was made by:
. the dealer (if the dealer is the also the supplier of the
goods and services); or
. the dealer, the supplier and any other person acting on
the supplier's behalf (if the dealer is not the supplier
of the goods and services). [Schedule 1, item 1: Chapter
3, Part 3-2, Division 2, subsection 75(2) and paragraph
75(3)(a)]
869. If the dealer is employed by more than one supplier, the prohibition
against contacting that consumer only applies in relation to that
supplier. The dealer will still be permitted to contact that
consumer in relation to a different supplier. [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 2, paragraph 73(3)(b)]
Informing of termination period etc
870. A termination period refers to a single specified timeframe
immediately after a consumer has entered into a contract or
agreement, which gives the consumer an opportunity to reverse their
decision, cancel the contract and legally withdraw from it. A
consumer's right to terminate on their decision to enter into a
contract is generally distinct from a consumer's right to terminate
the contract outside the termination period.
871. Paragraphs 82(3)(a) and (b) of the ACL provide for a termination
period (as the term is usually used) of 10 business days. For the
purposes of the unsolicited selling provisions generally, the
definition of termination period includes the periods outside the
10 day termination period within which a consumer is entitled to
terminate the agreement in various circumstances. [Schedule 1, item
1: Chapter 1, section 2] [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 2, section 82]
872. A dealer must comply with a number of obligations prior to making an
agreement with a person. These obligations relate to informing the
person of their termination rights and the way in which that
information is given. A dealer must give the person information
about:
. the person's right to terminate the agreement during the
termination periods;
. the way in which the person can exercise that right; and
. other matters specified in the regulations. [Schedule 1,
item 1: Chapter 3, Part 3-2, Division 2, subsection 76(a)]
873. How this information must be given depends on how the agreement is
made. If the agreement is made in person, the information must be
given in writing. If the agreement is made by telephone, the
information must first be given verbally and subsequently in
writing. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
subsections 76(b) and (c)]
874. Both the form and way in which the person is given the information
by the dealer must also comply with any other requirements specified
in the regulations. [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 2, subsections 76(d)]
Liability of suppliers for contraventions by dealers
875. To prevent suppliers who enter into an agency relationship with a
dealer from relying on the existence of a 'middle man' to avoid
liability for certain conduct, the ACL imposes liability upon a
supplier for breaches by a dealer of the express dealer obligations
in sections 73, 74, 75 and 76 of the ACL. [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 2, section 77]
Express supplier disclosure obligations about the making of agreements
Requirement to give document to the consumer
876. A supplier under the agreement must give the consumer either:
. if the agreement was made in person - a copy of the
agreement after the agreement has been signed by the
consumer; or
. if the agreement was made by telephone - a document
evidencing the agreement within 5 business days after the
agreement was made (or a longer period agreed by the
parties). This document can be given personally, by post
or, with the consumer's consent, by email. [Schedule 1,
item 1: Chapter 3, Part 3-2, Division 2, subsections 78(1)
and (2)]
877. For the purpose of determining which document the supplier must give
to the consumer, where a combination of face-to-face and telephone
negotiations took place the agreement is taken to have been made by
telephone. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
subsection 78(3)]
Requirements for a valid agreement
878. The ACL sets out the formal requirements for a valid agreement.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 2, sections 79,
80 and 81]
Requirements for all agreements
879. The document that must be given to the consumer under either
subsection 78(1) or (2) must comply with all of the following
requirements:
. Terms of the agreement - these must be set out in full,
including the total consideration to be paid (or how it is
to be calculated) and any postal or delivery charges.
. Cooling off notice - the front page of the agreement must
include a notice that conspicuously and prominently:
informs the consumer of their right to terminate the
agreement under the termination periods; and sets out
other information specified in the regulations. This
notice must comply with any requirements specified in the
regulations.
. Termination notice - the agreement must also include a
notice that the consumer can use to terminate the
agreement. This notice must also comply with any
requirements specified in the regulations.
. Supplier information - the agreement must conspicuously
and prominently set out in full the supplier's name;
business address (not being a post box) or residential
address; and, if it has one, email address, fax number and
registration number (ABN or ACN).
. Clarity requirements - the agreement must be printed
clearly or typewritten, and transparent.
. Amendments - any amendments to the agreement, which may be
handwritten, must be signed by both parties to the
agreement. [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 2, sections 79 and 81]
Additional requirements for agreements made in person
880. If an agreement was made in person, the agreement given to the
consumer must comply with all of the following, additional,
requirements:
. Consumer signature - the agreement must be signed by the
consumer.
. Agreements signed by a person on the supplier's behalf
-the agreement must set out in full that person's name,
business address (not being a post box) or residential
address, and email address if it has one. [Schedule 1,
item 1: Chapter 3, Part 3-2, Division 2, section 80]
Express consumer rights and obligations
Right to terminate the agreement
881. The ACL provides for a consumer to terminate the agreement during
whichever is the longest of four separate periods of time by giving
the supplier notice indicating an intention to terminate the
agreement. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
subsection 82(1)]
882. The consumer has the right to terminate the agreement (in other
words, to cool off on their decision to enter into the agreement)
during 10 business days. [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 2, paragraphs 82(3)(a) and (b)]
883. The day on which the 10 day period commences depends on how the
agreement was made:
. If the agreement was made in person, the 10 day period
starts on the first business day after the day on which
the agreement was made.
. If the agreement was made by telephone, the 10 day period
starts on the first business day after the day on which
the consumer was given the agreement document. [Schedule
1, item 1: Chapter 3, Part 3-2, Division 2, paragraphs
82(3)(a) and (b)]
884. The consumer has the right to terminate the agreement within
3 months if one or more of the provisions relating to permitted
visiting hours, disclosing purpose and identity, and leaving
premises on request, were contravened. [Schedule 1, item 1: Chapter
3, Part 3-2, Division 2, paragraph 82(3)(c)]
885. The grounds for termination in paragraph 82(3)(c) are intended to
deter dealers and suppliers from not complying with the obligations
in sections 73, 74 and 75.
886. The consumer has the right to terminate the agreement within
6 months if one or more of the provisions that relate to informing
the consumer of their termination rights; specify formal
requirements for valid agreements; and prohibit a supplier from
certain conduct during the 10 day termination period, were
contravened. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
paragraph 82(3)(d)]
887. The grounds for termination in paragraph 82(3)(d) are intended to
compensate consumers for the effective loss of their 10 day
termination right in the event that any of these obligations are
contravened.
888. The day on which the 3 month and 6 month periods commence is the
same as for the 10 day termination period under paragraphs 82(3)(a)
and (b). [Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
paragraphs 82(3)(c) and (d)]
889. The consumer can terminate the agreement within a period stated by
the agreement. [Schedule 1, item 1: Chapter 3, Part 3-2, Division
2, paragraph 82(3)(e)]
Method of terminating an agreement
890. The consumer can terminate the agreement in each of the four time
periods outlined above by giving notice of termination to the
supplier either:
. verbally;
. by using the termination notice that the consumer must be
given as part of the agreement or the agreement document
(under paragraph 79(c)); or
. otherwise in writing, regardless of its form and content.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
subsections 82(1) and (6)]
891. The methods by which the consumer can give the supplier written
notice of termination are intended to be broad and include personal
delivery and delivery by post, fax or email to the address or number
referred to in the termination notice that the consumer must be
given as part of the agreement or the agreement document (under
paragraph 79(c)). [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 2, subsection 82(4)]
892. To preserve the consumer's 10 day termination period, where the
consumer sends the notice of termination by post, the notice is
deemed to have been given to the supplier at the time of posting.
In the absence of this provision, section 29 of the Acts
Interpretation Act 1891 (Cth) provides that such service is deemed
to have been effected at the time at which the letter would be
delivered in the ordinary course of post. [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 2, subsection 82(5)]
893. A consumer can exercise their right to terminate the agreement even
though the agreement itself was made legally, although in
circumstances where unlawful conduct has occurred. [Schedule 1,
item 1: Chapter 3, Part 3-2, Division 2, subsection 82(2)]
The effect of terminating the agreement
894. If a consumer terminates the agreement by giving the supplier notice
of termination in accordance with section 82, the agreement is
deemed to have been rescinded by mutual consent and any related
contract or instrument is void. [Schedule 1, item 1: Chapter 3,
Part 3-2, Division 2, subsection 83(1)]
895. The ACL defines related contract or instrument, which in the context
of an unsolicited consumer agreement is likely to relate to the
financing of the goods or services supplied under the agreement.
The term includes any related contract of guarantee or indemnity;
any related instrument that creates a mortgage or charge in favour
of the supplier or the dealer; and any related or collateral
contract or instrument. [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 2, subsection 83(2)]
896. A tied continuing credit contract and tied loan contract is
excluded from the definition of related contract or instrument
because the National Consumer Credit Protection Act 2009 (Cth)
contains provisions that govern the effect on such contracts in
circumstances where the related sale contract is terminated.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
subsection 83(2)]
897. The agreement is terminated even if the supplier has not received
the notice of termination, or the consumer has used or consumed the
goods and services. [Schedule 1, item 1: Chapter 3, Part 3-2,
Division 2, subsection 83(3)]
898. If the supplier does not receive the notice of termination, a
consumer will need to prove, according to the relevant standard of
proof, that he or she had exercised their right to terminate the
agreement by sending written notice of termination. The consumer
may introduce any evidence to support their contention that they had
sent the notice.
Obligations and rights of consumers on termination
899. The ACL sets out additional rights and obligations of consumers upon
the termination of an agreement, relating to the entitlement of a
supplier and consumer to the goods or services up to the termination
date. The intention of these provisions is to minimise the
potential for consumers to game the unsolicited selling provisions
and ensure that consumers pay for the goods and services that he or
she use prior to terminating the agreement. [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 2, section 85]
900. If the agreement relates to goods and is terminated by the consumer
for any reason, the consumer must return to the supplier the goods,
or portion of goods remaining, within a reasonable time or inform
the supplier where the goods can be collected from. [Schedule 1,
item 1: Chapter 3, Part 3-2, Division 2, subsection 85(1)]
901. If the consumer notifies the supplier of a place where the goods may
be collected and the supplier does not collect the goods within
30 days, the goods become the property of the consumer. [Schedule
1, item 1: Chapter 3, Part 3-2, Division 2,, subsection 85(2)]
902. If the agreement relates to goods and is terminated outside the
10 day termination period, and the consumer has not taken reasonable
care of those goods, the consumer is liable to compensate the
supplier for the damage caused, or loss of value, to the goods. The
compensation is recoverable in a court of competent jurisdiction.
If the damage or depreciation resulted from either the consumer
using the goods normally or circumstances beyond the consumer's
control, the consumer is not liable. [Schedule 1, item 1: Chapter
3, Part 3-2, Division 2, subsection 85(3), (4) and (5)]
903. If the agreement relates to services and is terminated outside the
10 day termination period by the consumer, the consumer is liable
for the value of the service supplied prior to the termination and
after the end of that period. [Schedule 1, item 1: Chapter 3, Part
3-2, Division 2, subsection 85(6)]
Express supplier obligations about post-contractual behaviour
Prohibitions during the 10 day cooling-off period
904. After an agreement has been made, a supplier is prohibited from
supplying goods or services to the consumer, or requiring or
accepting any payment or any other consideration for goods or
services to be supplied, during the 10 day termination period in
relation to the agreement. [Schedule 1, item 1: Chapter 3, Part 3-
2, Division 2, section 86(1)]
905. The day on which the 10 day period commences is the same as for the
10 day termination period under paragraphs 82(3)(a) and (b).
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
subsections 86(1)(d) and (e)]
906. To preserve the consumer's 10 day termination right, the prohibition
on requiring or accepting 'any other consideration' is intended to
include accepting trade-in goods, as this conduct is likely to make
it less practical for the consumer to exercise this right for
logistical reasons. If an agreement was made for the supply of
goods that involved a trade-in, the supplier and consumer will need
to arrange for the delivery and the trade-in of the goods to take
place outside the 10 day termination period.
907. If goods or services are supplied to the consumer during the 10 day
termination period, the consumer's rights in respect of those goods
or services, which are governed by sections 41 and 42 of the ACL,
respectively, are the same as if the goods or services were
unsolicited. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
subsection 86(2) and (3)]
Repayment of payments received prior to and after termination
908. If the agreement is terminated for any reason, the supplier must
return or refund to the consumer:
. any consideration (or the value thereof) given to the
supplier under the agreement or a related contract or
instrument; and
. any payment made by the consumer or a person acting on the
consumer's behalf to the supplier after the termination;
and that purports to be made under the agreement or a
related contract or instrument. [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 2, sections 84 and 87]
Prohibition on certain actions
909. A person is prohibited from taking certain actions against a
consumer who has terminated the agreement for any reason, including:
. bringing legal proceedings, or taking any other action,
against the consumer; and
. for the purpose of attempting to recover an amount
allegedly payable by that consumer, placing the consumer's
name on a list of defaulters or debtors - if this is done,
a person responsible for keeping such a list may be
required to remove the consumer's name from the list.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
section 88]
Anti-avoidance provisions
910. Provisions in an agreement that attempt to change the operation of
the unsolicited selling provisions or to change the law of the
agreement are deemed void. [Schedule 1, item 1: Chapter 3, Part 3-
2, Division 2, subsection 89(1)]
911. The supplier under the agreement must ensure that the agreement does
not contain, and must not attempt to enforce or rely on, such a
provision. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 2,
subsections 89(2) and (3)]
Waiver of rights
912. A consumer can not waive any of his or her rights under the
unsolicited selling provisions and a supplier is prohibited from
attempting to induce a consumer to doing so. [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 2, section 90]
Miscellaneous
913. If the rights of a consumer or a supplier under a contract for the
supply of goods and services are transferred or pass to another
person, the unsolicited selling regime applies to that person as if
that person were the original consumer or supplier. The regime
also applies to contracts for the supply of goods and services to
third parties. [Schedule 1, item 1: Chapter 3, Part 3-2, Division
2, sections 91 and 92]
914. A supplier cannot enforce the agreement if one of the dealer or
supplier obligations of the unsolicited selling provisions has been
contravened. This provision does not prevent any action being taken
by anyone else in relation to the contravention. [Schedule 1, item
1: Chapter 3, Part 3-2, Division 2, section 93]
915. The ACL contains a broad regulation-making power to exempt certain
kinds of circumstances, agreements or conduct of businesses from the
scope of the unsolicited selling regime or certain provisions of the
regime. This regulation-making power does not apply to the
permitted calling hours provisions. [Schedule 1, item 1: Chapter 3,
Part 3-2, Division 2, section 94]
916. Sections 736, 992A and 992AA of the Corporations Act 2001 (Cth)
prohibit the hawking of securities, certain financial products and
managed investment products. The ACL excludes the unsolicited
selling of these financial services and products from the operation
of the unsolicited selling provisions. [Schedule 1, item 1: Chapter
3, Part 3-2, Division 2, section 95]
Criminal offences
917. Sections 73 to 76, 78 to 81, 84, 86 to 95 of the ACL, which set out
the express obligations in relation to unsolicited consumer
agreements, have associated criminal offences in sections 170 to 186
of the ACL. The maximum fine payable for a contravention of
sections 170 to 186 of the ACL is:
. $50,000 for a body corporate; and
. $10,000 for any other person.
[Schedule 1, item 1: Chapter 4, Part 4-1, sections 170-186]
918. The offences in sections 170 to186 of the ACL are ones of strict
liability so that it is not necessary to consider the intent of the
person committing the offences. The strict liability nature of
these offences reflects the potential for widespread detriment, both
financially for individual consumers and for its effect on the
market and consumer confidence more generally, that can be caused by
a person that breaches these provisions, whether or not they
intended to engage in the contravention.
919. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement and remedies
920. A person contravening sections 73 to 76, 78 to 81, 84, 86 to 95 of
the ACL, which set out the express obligations in relation to
unsolicited consumer agreements, is liable to pay a civil pecuniary
penalty of up to:
. $50,000 for a body corporate;
. $10,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
921. The following enforcement powers and remedies apply to section 75 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
922. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
923. The ACCC may issue an infringement notice for a contravention of
sections 73 to 76, 78 to 81, 84, 86 to 95 of the ACL, which set out
the express obligations in relation to unsolicited consumer
agreements. The amount of the penalty specified in the infringement
notice is [Schedule 3, item 1: Part XI, Division 5]:
. 60 penalty units for a body corporate; and
. 12 penalty units for any other person.
Application and transitional provisions
924. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
925. Chapter 3, Part 3-2, Division 2 applies to all relevant conduct
occurring in trade or commerce on or after 1 January 2011.
926. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
927. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
928. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
929. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Chapter 9
Lay-by sales
Outline of chapter
930. The Australian Consumer Law (ACL) includes fundamental rules that
apply to lay-by sales transactions.
Context of amendments
931. The ACT's Lay-by Sales Agreement Act 1953, Part 5B of the NSW FT Act
and Part 5 of the Victorian FT Act regulate the operation of lay-by
agreements in those jurisdictions. The ACT's provisions are based
on the repealed Lay-by Sales Act 1943 (NSW), which regulated lay-by
sales in NSW before the provisions were moved to their current
location in the FT Act.
932. The ACT, NSW and Victorian approaches all generally provide for:
. specific requirements on what should be included in a lay-
by agreement, and how the information should be presented;
. situations where a consumer can cancel a lay-by agreement;
. situations where a supplier can cancel a lay-by agreement;
. the effect of cancellation by either party;
. cancellation charges and what costs those should cover;
. limits on remedies for suppliers;
. a specific exclusion on the right of a supplier to
contract out of the requirements for a lay-by agreement;
and
. a prohibition on a supplier demanding early payment from a
consumer.
933. In other jurisdictions, lay-by sales are not specifically regulated,
but are subject to more general consumer protections. All State and
Territory offices of fair trading currently provide specific
guidance to consumers concerning lay-by agreements.
934. On 4 December 2009, the Ministerial Council on Consumer Affairs
(MCCA) agreed that the ACL will include provisions relating to the
formation of lay-by agreements. The ACL provisions draw on the the
ACT, NSW and Victorian approaches, but are expressed in principles-
based form, in keeping with the remainder of the ACL.
935. Lay-by agreements will also be covered by the unfair contract terms
provisions in Part 2-3 of the ACL, to the extent that they are
standard form consumer contracts.
Summary of new law
936. A lay-by agreement is an agreement between a supplier and a consumer
for the supply of consumer goods after payment in three or more
instalments.
937. The ACL sets out five key terms or characteristics that are to be
included in lay-by agreements:
. A lay-by agreement must be in writing and be transparent.
. A consumer may terminate a lay-by agreement at any time
prior to the delivery of the goods to the consumer.
. A supplier may only terminate a lay-by agreement under
specified circumstances before final payment is received.
. In the event of cancellation by either party, the consumer
is entitled to a full refund of amounts paid.
. In the event of cancellation by the consumer, the consumer
may be required to pay a cancellation charge reflecting
the business's reasonable costs.
Comparison of key features of new law and current law
|New law |Current law |
|A lay-by agreement must |There is no equivalent |
|be in writing and be |provision in the TP Act. |
|transparent, and a copy | |
|of such an agreement must|A requirement that lay-by|
|be given to the consumer.|agreements are to be in |
| |writing is found in: |
| |Section 60F NSW FT Act |
| |Subsection 83(1) Vic. FT|
| |Act |
| |Section 5 Lay-by Sales |
| |Agreement Act 1953 (ACT) |
| |A requirement that |
| |consumer documents, |
| |including lay-by |
| |agreements, are to be |
| |clear and legible is |
| |found in section 162 Vic.|
| |FTA |
|A consumer may terminate |There is no equivalent |
|a lay-by agreement at any|provision in the TP Act. |
|time before the relevant | |
|goods are delivered to |Some elements of this |
|the consumer. |provision exist in: |
| |Section 60G NSW FT Act |
| |Section 85 Vic. FT Act |
| |Section 16 Lay-by Sales |
| |Agreement Act 1953 (ACT) |
|Upon termination of a |There is no equivalent |
|lay-by agreement by a |provision in the TP Act. |
|consumer, the agreement |Some elements of this |
|may require the consumer |provision exist in: |
|to pay a reasonable |Sections 60F and 60L NSW |
|termination charge to the|FT Act |
|supplier. |Sections 83 and 90 Vic. |
| |FT Act |
| |Sections 16 and 17 Lay-by|
| |Sales Agreement Act 1953 |
| |(ACT) |
|A supplier may terminate |There is no equivalent |
|a lay-by agreement only |provision in the TP Act. |
|if: |Some elements of this |
|a consumer breaches the |provision exist in: |
|agreement; |Section 60H NSW FT Act |
|the supplier stops |Sections 86, 87 and 88 |
|trading; or |Vic. FT Act |
|the goods are no longer |Section 15 Lay-by Sales |
|available. |Agreement Act 1953 (ACT) |
|New law |Current law |
|Upon termination of a |There is no equivalent |
|lay-by agreement by |provision in the TP Act. |
|either party, the |Some elements of this |
|supplier must refund any |provision exist in: |
|money paid by the |Section 60I NSW FT Act |
|consumer, less any |Section 89 Vic. FT Act |
|applicable termination |Section 17 Lay-by Sales |
|charge. |Agreement Act 1953 (ACT) |
Detailed explanation of new law
Lay-by agreements must be in writing, etc
938. A lay-by agreement is a defined term in the ACL, and such an
agreement is one which satisfies the following conditions:
. The consumer goods will not be delivered to the consumer
until the total price of the goods have been paid; and
. the price of the consumer goods is to be paid by three or
more instalments, with any deposit paid by the consumer to
count as one instalment, unless both the consumer and
supplier agree that an agreement involving only two
instalments is a lay-by agreement. [Schedule 1, item 1:
Chapter 3, Part 3-2, Division 3, subsections 96(3) and
(4)]
939. A lay-by agreement must be in writing and be transparent. A copy of
such an agreement must be given to the consumer to whom the goods
are, or are to be, supplied. [Schedule 1, item 1: Chapter 3, Part 3-
2, Division 3, subsections 96(1) and (2)]
940. A lay-by agreement is transparent if it is expressed in reasonably
plain language, legible and presented clearly. [Chapter 1, section
2]
Termination of a lay-by agreement by consumers
941. A consumer may terminate a lay-by agreement at any time prior to the
goods being delivered to them. [Schedule 1, item 1: Chapter 3, Part
3-2, Division 3, subsection 97(1)]
942. There are many reasons that a consumer may have for terminating a
lay-by agreement, but the merits of those reasons are not relevant
for the purposes of these provisions. The detriment this causes to
suppliers is offset by the termination charge that they can charge a
consumer for terminating the agreement.
Termination of a lay-by agreement by suppliers
943. There are specific circumstances under which a supplier can
terminate a lay-by agreement. These circumstances include:
. the consumer breaches a term of the agreement;
. the supplier stops engaging in trade or commerce, due to,
for example, the supplier closing down his business; and
. the consumer goods are no longer available for sale.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 3, section 98]
944. A supplier may terminate a lay-by agreement due to a breach of the
terms and conditions of the agreement by the consumer. This could
include a situation where the consumer fails to make a scheduled
payment on time.
945. A supplier may wish to terminate a lay-by agreement because its
business is closing, or is being closed, down, whether it be through
bankruptcy, retirement or the supplier's desire to move into another
area of business.
946. In the case where the supplier terminates a lay-by agreement because
the consumer goods are no longer available, this can only occur
where the goods became unavailable due to circumstances outside of
the supplier's control, rather than a decision by the supplier to
withdraw those goods from sale.
Effect of termination
947. If a lay-by agreement is terminated, the supplier must refund all
monies paid by the consumer, except for amounts required to pay for
a termination charge where applicable. If the monies already paid
by the consumer are insufficient to cover the termination charge,
the supplier can recover the outstanding amount from the consumer as
a debt. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 3,
subsections 99(1) and (2)]
948. A supplier is not entitled to damages or any other remedy for the
termination of a lay-by agreement except as provided by section 97.
[Schedule 1, item 1: Chapter 3, Part 3-2, Division 3, subsection
99(3)]
Termination charge
949. A lay-by agreement may require a consumer who terminates the
agreement to pay a termination charge. This charge must not be more
than the reasonable costs incurred by the supplier in relation to
the lay-by agreement, such as storage and administration costs, and
the loss in value of the goods between the time when the lay-by
agreement was entered into and when it was terminated. [Schedule 1,
item 1: Chapter 3, Part 3-2, Division 3, subsection 97(3)]
950. The determination of the reasonableness of a termination charge is a
subjective assessment. Such a determination could, for example,
include a consideration of whether it is directly related to actual
costs incurred by the supplier in managing the lay-by agreement and
the associated goods.
951. A termination charge is only payable by a consumer if the consumer
terminates the lay-by agreement. Such a charge is not payable if
the consumer terminates the agreement due to a breach by the
supplier. [Schedule 1, item 1: Chapter 3, Part 3-2, Division 3,
subsection 97(2)]
Criminal offences
952. Sections 96 to 99 of the ACL, which set out the express obligations
in relation to lay-by sales agreements, have associated criminal
offences in 188(1), 189(1), 189(3), 190(1) or 191(1) of the ACL.
The maximum fine payable for a contravention of sections 188 to 191
of the ACL is:
. $30,000 for a body corporate; and
. $6,000 for any other person.
[Schedule 1, item 1: Chapter 4, Part 4-2, Division 3,
subsections 188(1), 189(1), 189(3), 190(1) and 191(1)]
953. The offences in sections 188 to 191 of the ACL are ones of strict
liability so that it is not necessary to consider the intent of the
person committing the offences. The strict liability nature of
these offences reflects the potential for widespread detriment, both
financially for individual consumers and for its effect on the
market and consumer confidence more generally, that can be caused by
a person that breaches these provisions, whether or not he, she or
it intended to engage in the contravention.
954. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement and remedies
955. A person contravening sections 96 to 99 of the ACL, which set out
the express obligations in relation to lay-by sales agreements, is
liable to pay a civil pecuniary penalty of up to:
. $30,000 for a body corporate;
. $6,000 for other persons.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, section 224]
956. The following enforcement powers and remedies apply to section 96 to
99 of the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
957. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
958. The ACCC may issue an infringement notice for a contravention of
sections 96 to 99 of the ACL, which set out the express obligations
in relation to lay-by sales agreements. The amount of the penalty
specified in the infringement notice is:
. 55 penalty units for a body corporate; and
. 11 penalty units for any other person.
[Schedule 2, item 1: Part XI, Division 5]
Application and transitional provisions
959. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
960. Chapter 3, Part 3-2, Division 3 applies to all relevant conduct
occurring in trade or commerce on or after 1 January 2011.
961. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
962. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
963. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
964. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Do not remove section break.
Outline of chapter
965. The ACL contains provisions that form the basis for a national law
on consumer safety for consumer goods and product related services.
966. Under the national consumer safety law, the following types of
safety orders and requirements apply to suppliers of consumer goods
or product related services:
. standards for the performance, design, manufacture or
packaging, as appropriate, of consumer goods or product
related services;
. bans relating to the supply of consumer goods or product
related services;
. voluntary or mandatory recalls of consumer goods; and
. mandatory reporting of voluntary recalls and products
associated with serious injuries or deaths.
Context of amendments
967. In May 2008, at the request of the Council of Australian Governments
(COAG), the Ministerial Council on Consumer Affairs (MCCA) developed
a model for product safety reform, which in part responded to the
Productivity Commission's (PC) 2006 Review of the Australian
Consumer Product Safety System (2006 Review). MCCA agreed in
principle to implement the majority of the PC's recommendations as
part of the reform process.
968. In July 2008, COAG, through the Business Regulation and Competition
Working Group (BRCWG), endorsed the model agreed by MCCA for product
safety reform. The reforms enable consumer product safety to be
regulated in a nationally consistent manner. The amendments include
a single national law, based on the TP Act, to regulate consumer
product safety in Australia, with the Commonwealth taking lead role,
supported by joint enforcement by the Australian Competition and
Consumer Commission (ACCC) and State and Territory regulators.
969. Following public consultations, in December 2009, MCCA agreed to
further specific product safety measures to be incorporated into the
ACL, to enable governments to act proactively on consumer safety.
970. Currently, consumer product safety in Australia is regulated by the
Commonwealth, States and Territories. The TP Act provides for a
post-market approach to consumer product safety regulation in
Australia. Under this approach, suppliers are generally free to
supply goods into the market without first obtaining approval from a
regulatory agency to do so. However, the Government reserves the
power, under the TP Act, to require that goods are to be withdrawn
from the market if they are discovered to pose a safety hazard. The
Government also has to the power to require goods to comply with
mandatory standards or to ban the supply of certain goods per se.
971. Through their fair trading legislation (FT Acts), the States and
Territories all have similar regulatory regimes that apply in their
respective jurisdictions in respect of consumer product safety.
972. The TP Act and FT Acts product safety provisions apply generally to
all goods, although with respect to certain products, such as
therapeutic goods, industry-specific regulation may also applies,
and will continue to apply following commencement of the ACL.
973. The product safety provisions of the TP Act have not been
comprehensively updated since their introduction in 1986. The PC
noted in its 2006 Review of the Australian Consumer Product Safety
System that there is considerable scope for improving the existing
product safety regulatory system to make it more efficient,
effective and responsive. MCCA agreed to implement specific
recommendations made by the PC as part of the national consumer
safety regime under the ACL, by:
. incorporating into the threshold test for making new
safety bans and recalls, the concept of reasonably
foreseeable use (including misuse) of goods;
. extending consumer product safety provisions to those
services which are related to the supply, maintenance or
installation of consumer goods;
. empowering governments to directly recall goods where no
supplier can be found to undertake the recall;
. introducing a mandatory requirement for suppliers to
report incidents where their products have been associated
with a death, serious injury or illness; and
. implementing a number of non-legislative arrangements to
support the administration and enforcement of the national
consumer safety framework (such as a national 'one-stop
shop' website on consumer safety).
Summary of new law
974. The ACL makes administrative powers available to the responsible
Commonwealth and State and Territory Ministers, where appropriate,
to remove consumer goods or product related services from the
market. These administrative powers may only be exercised where a
Minister believes that the goods or services in question pose a risk
of injury to any person, either through their normal use or a
reasonably foreseeable misuse.
975. These administrative powers include the power to:
. make standards for particular consumer goods or product
related services;
. ban the supply of particular consumer goods or product
related services;
. require a supplier to recall particular consumer goods;
and
. issue warning notices to the public about consumer goods
or product related services;
976. The ACL provides for civil and criminal remedies and penalties for
persons who supply consumer goods or product related services in
contravention of requirements imposed by the exercise of an
administrative power. The ACL also provides for additional
procedural requirements (such as suppliers notifying persons outside
of Australia or recalls), which must be complied with.
977. The ACL further requires suppliers to report to the ACCC or
appropriate regulator where the supplier:
. is undertaking a voluntary recall; or
. becomes aware that consumer goods or product related
services that they supply have been associated with a
death, serious injury or serious illness.
Comparison of key features of new law and current law
|New law |Current law |
|The Commonwealth Minister|The Commonwealth |
|can prescribe safety |Minister can prescribe |
|standards in respect of |safety standard in |
|consumer goods or product|respect of goods under |
|related services. |sections 65C and 65E of |
| |the TP Act. |
| |A similar power exists |
| |in all State and |
| |Territory FT Acts. |
|The Commonwealth Minister|Subsection 65C(5) of the|
|or a responsible State or|TP Act allows the |
|Territory Minister may |Commonwealth Minister to|
|impose an interim ban, |impose an interim ban on|
|which lasts for 60 days, |goods. The interim ban |
|on consumer goods or |may last for up to 18 |
|product related services.|months. |
| |State and Territory FT |
|An interim ban imposed by|Acts allow the |
|the Commonwealth Minister|responsible State and |
|applies in all |Territory Ministers to |
|jurisdictions. An |issue similar interim |
|interim ban imposed by a |bans. The duration of |
|State or Territory |interim bans vary |
|Minister applies in the |between jurisdictions. |
|jurisdiction in which it | |
|was made. | |
|The Commonwealth Minister|Subsection 65C(7) of the|
|may impose a permanent |TP Act allows the |
|ban on consumer goods or |Commonwealth Minister to|
|product related services.|impose a permanent ban |
| |on specified goods. |
|A permanent ban applies |A similar power exists |
|in all jurisdictions and |in all State and |
|remains in force until |Territory FT Acts. |
|revoked. | |
|The Commonwealth Minister|Section 65F of the TP |
|or a responsible State or|Act allows the |
|Territory Minister may |Commonwealth Minister to|
|require a supplier to |require suppliers to |
|recall particular |recall particular goods.|
|consumer goods. | |
|Suppliers must also |Suppliers must also |
|comply with notification |comply with notification|
|requirements where the |requirements where those|
|goods have been exported.|goods have been |
| |exported. |
| |A similar power exists |
| |in most State and |
| |Territory FT Acts. |
|Suppliers must notify the|Section 65R of the TP |
|Commonwealth Minister if |Act requires suppliers |
|they undertake a |who undertake a |
|voluntary recall of goods|voluntary recall to |
|they have supplied. |notify the Commonwealth |
| |Minister. |
| |A similar power exists |
| |in some State and |
| |Territory FT Acts. |
|New law |Current law |
|The Commonwealth Minister|Section 65B of the TP |
|or a responsible State or|Act allows the |
|Territory Minister can |Commonwealth Minister to|
|publish a safety warning |publish safety warning |
|notice about particular |notices about particular|
|consumer goods or product|goods. |
|related services where |A similar power exists |
|their reasonable |in some State and |
|foreseeable use or misuse|Territory FT Acts. |
|poses a safety risk. | |
|Suppliers must report to |No equivalent |
|the Commonwealth |Commonwealth law or |
|incidents where consumer |State or Territory law. |
|goods or product related | |
|services have been | |
|associated with a death, | |
|serious injury or | |
|illness. | |
Detailed explanation of new law
978. The consumer safety provisions of the ACL provide the legislative
basis for a single national law on consumer safety for goods and
services, based on Part V, Division 1A of the TP Act and equivalent
provisions in State and Territory FT Acts.
979. The national consumer safety law under the ACL applies in all
jurisdictions and is generic in nature, applying to all consumer
goods and product related services. Commonwealth and State and
Territory industry-specific consumer laws will continue to apply in
addition to the generic goods and services regime in the ACL.
Safety standards
980. The ACL empowers the Commonwealth Minister to prescribe safety
standards for consumer goods and product related services.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, subsection
104(1)]
981. A new safety standard can be prescribed through one of two ways:
. by making a new safety standard; or
. by declaring an earlier standard to be a new safety
standard.
Making new safety standards
982. The ACL empowers the Commonwealth Minister to make a safety standard
in respect of consumer goods and/or product related services.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, subsection
104(1)]
983. Consumer goods are defined as goods that are intended, or are of a
kind likely, to be used for personal, domestic or household
purposes. This includes goods which are a subject of a recall and
have become fixtures since being supplied. [Schedule 1, item 1:
Chapter 1, section 2]
984. Product related services are defined as services that relate to the
installation, maintenance, repair, cleaning, assembly or delivery of
'consumer goods' of a particular kind. This is not an exhaustive
definition of 'product related service' but an inclusive one, and
includes other types of services where they relate to the supply of
consumer goods of a particular kind. [Schedule 1, item 1: Chapter
1, section 2] A 'service' is not a 'product related service' if it
is not related, connected or associated in some way to the supply of
a 'consumer good'.
985. A safety standard must be in writing and must be published on the
internet. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 1,
subsections 104 (1) and (2)]
986. Publication on the internet provides an effective and timely means
for standards to be disclosed nationally to the public.
987. As part of the non-legislative reforms to product safety
administration being implemented by MCCA, the ACCC is currently
developing a 'one-stop shop' website on consumer safety. The
website will provide amongst other things, details of all safety
standards that are in force from time to time. The website will
allow for a single and central location for members of the public to
find details of a safety standard for particular goods and services.
988. Safety standards are legislative instruments for the purposes of the
LI Act.
Grounds for making safety standards
989. The Commonwealth Minister does not need to be satisfied of any
particular criteria before making a safety standard. However, a
standard may consist of such requirements as are reasonably
necessary to prevent or reduce the risk of injury to any person.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, subsections
104(2) and 104(3)]
Content of safety standards
990. Safety standards may only consist of requirements relating to the
matters set out in section 104 of the ACL. Different matters are
specified in relation to consumer goods and product related
services.
991. In relation to goods, safety standards may specify matters relating
to:
. the performance, composition, contents, methods of
manufacture, processing, design, construction, finishing
or packaging of particular consumer goods;
. the testing of particular consumer goods during or after
its manufacture or processing; and/or
. the form and content of markings, warnings or instructions
to accompany particular consumer goods. [Schedule 1, item
1: Chapter 3, Part 3-3, Division 1, subsection 104(2)]
992. In relation to product related services, safety standards may
specify matters relating to:
. the manner in which particular product related services
are supplied;
. the skills or qualifications of those who supply
particular product related services;
. the materials to be used when supplying particular product
related services;
. the testing of particular product related services; and/or
. the form and content of warnings, instructions or other
information relating to particular product related
services. [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 1, subsection 104(3)]
Declaring safety standards
993. The Commonwealth Minister may prescribe an existing standard that
has been prepared by Standards Australia Limited or a prescribed
association to be a safety standard for the purposes of the ACL.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, paragraph 105]
994. The Government does not propose to prescribe any associations from
commencement of the ACL. This declaration power exists currently in
the TP Act and provides a mechanism for the Minister to draw on
approaches to setting standards that may develop over time through
other expert organisations. A number of existing TP Act safety
standards are declared standards developed by Standards Australia
Limited.
995. The Commonwealth Minister, when making a declared safety standard,
may make additions to or variations to an earlier standard prepared
or approved by Standards Australia or a prescribed body. The nature
of any addition or variation must be specified in writing.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, paragraph
105(1)(b)]
996. However, the Commonwealth Minister cannot make a declared safety
standard if any part of it is inconsistent with a safety standard
that it has previously made, and which is still in force, for the
same kinds of consumer goods or product related services. [Schedule
1, item 1: Chapter 3, Part 3-3, Division 1, subsection 105(2)]
997. Written notice of a declared safety standard is a legislative
instrument for the purposes of the LI Act.
Compliance with safety standards
998. A person must not, in trade or commerce, supply or offer to supply
consumer goods or product related services that do not comply with
an applicable safety standard that is in force for goods or services
of that kind [Schedule 1, item 1: Chapter 3, Part 3-3, Division 1,
sections 106 and 107].
999. In relation to consumer goods, a person also must not possess,
manufacture or be in control of the goods for the purpose of
supplying the goods. [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 1, subsections 106(3) and (4)]
Exported goods
1000. A supplier is allowed to export consumer goods of a particular kind
without first having to comply with a safety standard in force for
the goods, where the supplier has obtained Commonwealth approval.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, subsection
106(4)]
1001. The supplier is required to apply in writing to the Commonwealth
Minister for approval to export the particular goods in question.
Approval from the Minister must also be in writing. [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 1, subsection 106(5)]
1002. In particular circumstances, a safety standard may contain
requirements which are either inappropriate or irrelevant to the
overseas market (such as a requirement that a warning be included
with the goods in English). Alternatively, overseas markets may be
subject to different domestic regulatory requirements and to impose
additional or inconsistent requirements under a safety standard may
not be appropriate.
1003. Where Commonwealth approval to export is granted, details of the
approval is required to be tabled by the Commonwealth Minister in
both Houses of Parliament within seven sitting days of granting
approval. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 1,
subsection 106(6)]
Loss or damage deemed to be suffered
1004. A person is deemed to have suffered a loss or damage because
consumer goods of product related services have been supplied in
contravention of a safety standard, where: [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 1, subsections 106(7) and 107(3)]:
. the person suffered a loss or damage because of:
- a defect or dangerous characteristic in the goods,
including a defect of characteristic that result from
the supply of product related services;
- a reasonably foreseeable use (including a misuse) of the
goods, including one that results from the supply of
product related services; or
- the person was not provided with particular information
about the goods as required by the safety standard; and
. the person would not have suffered the loss or damage if
the goods had complied with the safety standard.
1005. A reasonably foreseeable use of a good includes using the goods for
its primary, normal or intended purpose, using the goods for its
unintended purpose, or misusing the goods. Use (or misuse) of the
goods can be by the person who suffered the loss or damage in
question, or by another person.
1006. Where a person is deemed to have suffered a loss or damage because
of the supply of particular consumer goods contrary to a safety
standard, the person can seek to recover compensation for the amount
of their loss or damage. For instance, the person may commence a
defective goods action against the manufacturer to recover
compensation (see Chapter 12 of this Explanatory Memorandum).
1007. This deeming provision assists those who have suffered a loss or
damage as a result of non-compliance with the requirements of a
relevant safety standard to recover for their suffering.
Nominating a safety standard
1008. Where a safety standard is in force for consumer goods or product
related services of a particular kind and the standard contains more
than one set of requirements which suppliers can follow for the
purpose of complying with the standard, then suppliers are required
to nominate which set of requirements it intends to follow.
However, a supplier is only required to nominate a set of
requirements once it has received a written request from an
inspector to do so. The supplier's nomination must be in writing
and be provided to the inspector within the time frame specified in
the written request. [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 1, subsection 108]
Bans on consumer goods and product related services
1009. The ACL empowers governments to ban the supply of consumer goods and
product related services where they pose a safety risk of injury to
any person. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 2]
1010. Two types of bans can be made - interim bans and permanent bans.
Interim bans can be made by any responsible Minister, while
permanent bans can be made only by the Commonwealth Minister.
Interim bans
1011. Responsible Ministers are empowered to impose interim bans on the
supply of particular consumer goods and product related services.
1012. Responsible Minister is defined to mean the Commonwealth Minister, a
State Minister responsible for administering the application law in
that State, and a Territory Minister responsible for administering
the application law in that Territory. [Schedule 1, item 1: Chapter
1, section 3]
Interim bans on consumer goods
1013. A responsible Minister can make an interim ban on the supply of
consumer goods of a particular kind where it appears that goods of
that kind will or may cause injury to any person. An interim ban
can also be imposed if it appears a reasonably foreseeable use
(including a misuse) of the goods will or may cause injury to any
person. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 1,
paragraph 109(1)(a)]
1014. A reasonably foreseeable use of a good includes using the good for
its primary, normal or intended purpose, using the good for its
unintended purpose, or misusing the good.
1015. Interim bans can only be made with respect to consumer goods of a
particular kind, and not more broadly to 'goods' or to 'consumer
goods' in general. Interim bans are required to be in writing and
published on the internet. [Schedule 1, item 1: Chapter 3, Part 3-
3, Division 1, subsection 109(1)]
1016. Commonwealth interim bans are legislative instruments for the
purposes of the LI Act.
1017. An interim ban may also be made with respect to the supply of
particular consumer goods by a responsible Minister (the first
responsible Minister) if another responsible Minister (the second
responsible Minister) has imposed an interim ban on goods of the
same kind, or on goods which includes those same kinds of goods.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, paragraph
109(1)(b)]
1018. The interim ban imposed by the second responsible Minister must
still be in force at the time the first responsible Minister is
imposing an interim ban in respect of those same kinds of goods.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, paragraph
109(1)(b)]
1019. The interim ban imposed by the second responsible Minister can be
from the same or from a different jurisdiction to the first
responsible Minister.
Interim bans on product related services
1020. A responsible Minister can impose an interim ban on the supply of
product related services of a particular kind if it appears to the
Minister that particular consumer goods will or may cause injury to
any person as a result of the services being supplied. An interim
ban can also be imposed where it appears to the Minister that a
reasonably foreseeable use (including misuse) of particular consumer
goods will or may cause injury to any person as a result of the
services being supplied. [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 1, paragraph 109(2)(a)]
1021. A reasonably foreseeable use of a consumer good includes using the
good for its primary, normal or intended purpose, using the good for
its unintended purpose, or misusing the good.
1022. An interim ban on product related services must be with respect to
product related services that are of a particular kind, and not more
broadly to 'services' or to 'product related services' in general.
Interim bans are also required to be in writing and published on the
internet. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 1,
subsection 109(2)]
1023. Commonwealth interim bans are legislative instruments for the
purposes of the LI Act.
1024. A responsible Minister (the first responsible Minister) can make an
interim ban on the supply of particular product related services
where another responsible Minister (the second responsible Minister)
has imposed an interim ban on services of that kind or on services
which include that same kind of services. [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 1, paragraph 109(2)(b)]
1025. The interim ban imposed by the second responsible Minister must
still be in force at the time the first responsible has imposed an
interim ban with respect to the same kind of services. [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 1, paragraph 109(2)(b)]
1026. The interim ban made by the second responsible Minister can be from
the same or from a different jurisdiction to the first responsible
Minister.
Application of interim bans
1027. A Commonwealth interim ban in force applies in all States and
Territories to ban the supply of particular kinds of consumer goods
or product related services. [Schedule 1, item 1: Chapter 3, Part 3-
3, Division 1, subsection 110(1)]
1028. A State interim ban in force applies only in that State, to ban the
supply of particular kinds of consumer goods or product related
services, and does not apply in other jurisdictions. [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 1, subsection 110(2)]
1029. A Territory interim ban in force applies only in that Territory, to
ban the supply of particular kinds of consumer goods or product
related services, and does not apply in other jurisdictions.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, subsection
110(3)]
Ban period for interim bans
1030. An interim ban lasts for a period starting from the day after the
day the ban was published on the internet (the start day), and ends
60 days after the start day (the end day). [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 1, subsection 111(1)]
Extensions
1031. Before the end day of an interim ban, the responsible Minister of
the jurisdiction where the interim ban originates from, may extend
the ban for a period of up to 30 days. [Schedule 1, item 1: Chapter
3, Part 3-3, Division 1, subsection 111(2)]
1032. The extension must be in writing and published on the internet.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, subsection
111(2)]
1033. Extensions by a Commonwealth Minister are legislative instruments
for the purposes of the LI Act.
1034. Further extensions
1035. Where an interim ban has been extended by a State or Territory
Minister (an extended ban), a responsible Minister from that State
or Territory can request the Commonwealth Minister to grant a
further extension on the ban. [Schedule 1, item 1: Chapter 3, Part
3-3, Division 1, subsection 111(3)]
1036. The request for a further extension must be in writing from the
relevant State or Territory Minister, to the Commonwealth Minister,
and at the time of the request the extended ban must not have ended.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, subsection
111(3)]
1037. The Commonwealth Minister may further extend an extended ban for a
period of up to 30 days. Further extensions are to be in writing
and be published on the internet. [Schedule 1, item 1: Chapter 3,
Part 3-3, Division 1, subsection 111(4)]
1038. Further extensions are legislative instruments for the purposes of
the LI Act.
1039. Upon receiving a request for a further extension and the
Commonwealth Minister has not decided whether to grant the extension
before the extended Commonwealth ban period has ended, the
Commonwealth Minister is deemed to have decided to grant a further
extension. The extended ban is extended for a period of 30 days.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, subsection
111(5)]
1040. A Commonwealth Minister can decide to further extend an extended ban
for a period of up to 30 days, provided the extended ban period has
not ended. A further extension must be published on the internet.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, subsection
111(6)]
1041. That further extension is a legislative instrument for the purposes
of the LI Act.
Interaction of multiple interim bans
1042. A Commonwealth interim ban in force with respect to particular kinds
of consumer goods will override a State or Territory interim ban in
force on those same kinds of goods or on goods which include those
kinds of goods. [Schedule 1, item 1: Chapter 3, Part 3-3, Division
1, subsection 112(1)]
1043. The State or Territory interim ban will cease to be in force
immediately before the Commonwealth interim ban comes into force.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, subsection
112(1)]
1044. A State or Territory interim ban will only be overridden and cease
to be in force to the extent that it relates to goods which are the
subject of the Commonwealth interim ban. [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 1, subsection 112(1)]
1045. Similarly, a Commonwealth interim ban on particular kinds of product
related services will override a State or Territory interim ban on
services of the same kind or on services which include those kinds
of services. The State or Territory interim ban will cease to be in
force to the extent that it relates to services which are the
subject of the Commonwealth interim ban, and it will end immediately
before the Commonwealth ban comes into force. [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 1, subsection 112(2)]
Revoking an interim ban
1046. An interim ban can be revoked at any time by a responsible Minister
of the jurisdiction from which the ban originated. [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 1, subsection 113]
1047. The revocation must be in writing and published on the internet.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 1, paragraph
113(a)]
1048. Commonwealth revocation notices are legislative instruments for the
purposes of the LI Act.
1049. A revocation takes effect so that the interim ban ceases to be in
force from the date specified in the revocation notice. [Schedule
1, item 1: Chapter 3, Part 3-3, Division 1, paragraph 113(b)]
Permanent bans
1050. The ACL empowers the Commonwealth Minister to impose a permanent ban
on the supply of consumer goods and product related services.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 2, section 114]
1051. Permanent bans made must be in writing and published on the
internet. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 2,
subsections 114(1) & (2)]
1052. Permanent bans are also legislative instruments for the purposes of
the LI Act.
Permanent bans on consumer goods
1053. The Commonwealth Minister can impose a permanent ban on the supply
of particular kinds of consumer goods. [Schedule 1, item 1: Chapter
3, Part 3-3, Division 2, subsection 114(1)]
1054. A permanent ban on particular kinds of consumer goods can only be
made where any of the following circumstances exist [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 2, subsection 114(1)]:
. there is an interim ban in force (in any jurisdiction) for
those goods or for goods which includes those kinds of
goods;
. it appears goods of that kind will or may cause injury to
any person; or
. it appears that a reasonably foreseeable use (including a
misuse) of goods of that kind will or may cause injury to
any person.
Permanent bans on product related services
1055. The Commonwealth may impose a permanent ban on the supply of
particular kinds of product related services. [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 2, subsection 114(2)]
1056. A permanent ban on particular kinds of product related services can
only be made where any of the following circumstances exist
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 2, subsection
114(2)]:
. there is an interim ban in force (in any jurisdiction) for
those services or for services which include those kinds
of services;
. it appears that as a result of supplying those services,
particular consumer goods will or may cause injury to any
person; or
. it appears that as a result of supplying those services, a
reasonably foreseeable use (including a misuse) of
particular consumer goods will or may cause injury to any
person.
Application of permanent bans
1057. A permanent ban in force applies nationally in all jurisdictions, to
ban the supply of particular kinds of consumer goods or product
related services. [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 2, section 115]
1058. A permanent ban comes into force from the day specified in the
permanent ban notice. [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 2, subsection 116]
Revoking a permanent ban
1059. A Commonwealth Minister can revoke a permanent ban at any time. The
revocation must be in writing and published on the internet.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 2, paragraph
117(a)]
1060. A revoked permanent ban ceases to be in force (to ban the supply of
particular consumer goods or product related services) from the day
specified in the permanent ban notice. [Schedule 1, item 1: Chapter
3, Part 3-3, Division 2, paragraph 117(b)]
Supplying consumer goods etc. covered by a ban
1061. The ACL prohibits the supply of particular kinds of consumer goods
where there is an interim ban or permanent ban in force for goods of
that kind. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 2,
subsection 118(1)]
1062. Suppliers are prohibited, with respect to particular kinds of
consumer goods, from engaging in any of the following activities
where an interim ban or a permanent ban is in force for those goods:
. supplying the goods to a jurisdiction where the ban
applies [Schedule 1, item 1: Chapter 3, Part 3-3, Division
2, subsection 118(1)];
. offering to supply the goods to a jurisdiction where the
ban applies [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 2, subsection 118(2)]; and/or
. possessing, manufacturing or being in control of the goods
for the purpose of supplying the goods to a jurisdiction
where the ban applies. [Schedule 1, item 1: Chapter 3,
Part 3-3, Division 2, subsection 118(3)]
1063. A permanent ban or an interim ban issued by the Commonwealth
Minsiter applies nationally in all jurisdictions, while an interim
ban issued by a State or Territory Minister applies only in the
jurisdiction from which it originated. [Schedule 1, item 1: Chapter
3, Part 3-3, Division 2, sections 110 and 115]
Exported goods
1064. A supplier is permitted to export consumer goods of a particular
kind without having to comply with an interim ban or permanent ban
in force for such goods, if the supplier has first obtained approval
from the Commonwealth. [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 2, subsection 118(4)]
1065. The supplier must apply in writing to the Commonwealth Minister for
approval to export the goods in question. Approval from the
Minister must also be in writing. [Schedule 1, item 1: Chapter 3,
Part 3-3, Division 2, subsection 118(5)]
1066. Where export approval is granted, details of the approval must be
tabled by the Commonwealth Minister in both Houses of the Australian
Parliament within seven sitting days of the approval being granted.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 2, subsection
118(6)]
1067. In certain circumstances, a ban on the supply of particular goods
may not be relevant where the goods are intended for the overseas
market but any safety risks posed by the goods are localised.
Alternatively, overseas markets may be subject to different domestic
regulatory requirements.
Loss or damage deemed to be suffered
1068. A person is deemed to have suffered a loss or damage because
particular kinds of consumer goods have been supplied contrary to an
interim ban or permanent ban in force for goods of that kind, if
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 2, subsection
118(7)]:
. the goods were supplied despite an interim ban or
permanent ban existing for those goods (and no export
approval has been granted by the Commonwealth); and
. the person suffered a loss or damage because of:
- a defect or dangerous characteristic in the goods; or
- a reasonably foreseeable use (including a misuse) of
those goods.
1069. A reasonably foreseeable use of a good includes using the goods for
its primary, normal or intended purpose, using the goods for an
unintended purpose, or misusing the goods. Use (or misuse) of the
goods can be by the person who suffered the loss or damage or by a
different person.
Supplying etc. product related services covered by a ban
1070. The ACL prohibits the supply of, or offering to supply, particular
kinds of product related services in the jurisdiction which an
interim ban or permanent ban is in force with respect to those kinds
of services. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 2,
subsections 119(1) and (2)]
1071. A permanent ban applies nationally in all jurisdictions, while an
interim ban applies only in the jurisdiction from which it
originated. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 2,
sections 110 and 115]
Loss or damage deemed to be suffered
1072. A person is deemed to have suffered a loss or damage because of the
supply of particular kinds of product related services contrary to
an interim ban or permanent ban in force for those services, if
. the services were supplied despite an interim ban or
permanent ban existing with respect to services of that
kind; and
. the person suffered a loss or damage because of:
- a defect or dangerous characteristic in consumer goods
as a result of those services being supplied; or
- a reasonably foreseeable use (including a misuse) of
consumer goods as a result of those services being
supplied.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 2, subsection
119(2)]:
Mutual recognition arrangements
Trans-Tasman temporary exemptions
1073. Mutual recognition arrangements exist between Australia and New
Zealand with respect to the supply of goods, under the Trans-Tasman
Mutual Recognition Act 1997 (TTMR Act).
1074. Where a Commonwealth, State or Territory interim ban or a
Commonwealth permanent ban is in force for consumer goods of a
particular kind, a temporary exemption applies with respect to those
kinds of goods under section 46 of the TTMR Act. [Schedule 1, item
1: Chapter 3, Part 3-3, Division 2, section 120]
Domestic temporary exemptions
1075. Where a State or Territory interim ban is imposed on consumer goods
of a particular kind, a temporary exemption applies in Australia
with respect to those kinds of goods, under the Mutual Recognition
Act 1982 (MR Act). [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 2, section 121]
1076. Broadly, the MR Act operates so that particular goods which can be
lawfully supplied in one Australian jurisdiction are mutually
recognised in other jurisdictions and can be supplied in other
jurisdictions without having to meet any additional requirements.
However, in certain circumstances, such as for health or safety
reasons, certain goods can be temporarily exempted from the mutual
recognition arrangements so that despite those goods being lawfully
supplied in one jurisdiction, they cannot be supplied in another
jurisdiction without first meeting additional requirements. A
temporary exemption lasts for 12 months.
1077. Under the ACL, an interim ban in one jurisdiction on consumer goods
of a particular kind, automatically invokes a temporary exemption
for those same kinds of goods under section 15 of the MR Act. The
maximum duration of the interim ban is up to 120 days. [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 2, subsection 121(2)]
Safety Recalls
1078. The ACL empowers Commonwealth, State and Territory ministers to
recall consumer goods which pose a risk of injury to any person.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3]
Compulsory recalls
1079. A responsible Minister can issue a compulsory recall notice for
particular consumer goods. The recall notice must relate to
consumer goods of a particular kind, and not more broadly to 'goods'
or to 'consumer goods' in general. [Schedule 1, item 1: Chapter 3,
Part 3-3, Division 3, section 122]
1080. A recall notice can be issued for particular consumer goods where
any of the following circumstances exist:
. it appears goods of that kind will or may cause injury to
any person;
. it appears that a reasonable foreseeable use (including a
misuse) of goods of that kind will or may cause injury to
any person;
. a safety standard in force for goods of that kind has not
been complied with;
. there is an interim or permanent ban in force for goods of
that kind.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, paragraph
122(1)(b)]
1081. It must also appear to the responsible Minister that no supplier of
the goods in question (such as a retailer, dealer, distributor,
importer, exporter, manufacturer) has taken satisfactory action to
prevent the goods from causing injury to any person. [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 3, paragraph 122(1)(c)]
1082. However, the responsible Minister does not need to know the identity
of any of the suppliers. [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 3, subsection 122(2)]
1083. A reasonably foreseeable use of a good includes using the goods for
its primary, normal or intended purpose, using the goods for an
unintended purpose, or misusing the goods. Use (or misuse) of the
goods can be by the person who suffered the loss or damage in
question, or by a different person.
1084. A recall notice can be issued for consumer goods despite the goods
becoming fixtures since the time they were supplied. [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 3, subsection 122(3)]
1085. Recall notices must be in writing and published on the internet.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, subsection
122(1)]
1086. Commonwealth recall notices are legislative instruments for the
purposes of the LI Act.
Contents of a recall notice
1087. A recall notice for consumer goods can require one or more suppliers
(or a regulator where no supplier is known to the responsible
Minister who issues the notice) to carry out certain actions.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, subsection
123(1)]
1088. Such actions which a recall notice can require a supplier(s) or a
regulator to take, are [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 3, subsection 123(1)]:
. to recall (remove) particular kinds of consumer goods from
the market;
. to disclose to the public, or to a specified class of
persons, any of the following information:
- any defect or dangerous characteristic in the goods, as
identified in the recall notice;
- the circumstances in which a reasonably foreseeable use
(including a misuse) of the goods is dangerous, as
identified in the recall notice; and/or
- the procedures for disposing the goods, as identified in
the recall notice; and/or
. where the identity of any supplier of the goods is known
to the relevant Minister, the recall notice can require a
supplier(s) to inform the public, or a specified class of
persons, that it will undertake to do any of the following
which it considers is appropriate:
- to repair the goods (if no dangerous characteristic has
been identified in the goods);
- to replace the goods; and/or
- to refund the price of the goods to the person whom the
goods were supplied to (irrespective of whether the
goods were supplied by the supplier or by another
person).
1089. A recall notice can only require a supplier to repair, refund or
replace consumer goods, and not a regulator. [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 3, subsection 123(1)(c)]
1090. A recall notice can specify the manner in which action(s) which the
notice requires to be taken and the time frame for taking such
action(s), are to be taken. [Schedule 1, item 1: Chapter 3, Part 3-
3, Division 3, subsection 123(2)]
1091. A recall notice can require a regulator to retain, destroy or
dispose of recalled consumer goods. [Schedule 1, item 1: Chapter 3,
Part 3-3, Division 3, subsection 123(3)]
1092. Where a supplier undertakes to refund recalled goods, the recall
notice may permit the refund amount to be reduced by the supplier if
more than 12 months has passed since the goods were acquired from
that supplier. The refund can be reduced by an amount calculated in
the manner specified in the recall notice. This is to take into
account use of the goods since they were supplied. The person who
acquired the goods does not have to be the same person to whom the
refund is provided to. [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 3, subsection 123(4)]
Obligations of a supplier in relation to a recall notice
1093. Where a supplier undertakes to repair recalled goods, the goods must
be repaired so that any identified defect in the goods is remedied
and any safety standard in force for such goods is complied with.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, subsection
124(2)]
1094. Where a supplier undertakes to replace recalled goods, the goods
must be replaced with similar goods which do not contain any defect
or dangerous characteristic that have been identified in the recall
notice, and those similar goods must comply with any safety standard
in force for the replaced goods. [Schedule 1, item 1: Chapter 3,
Part 3-3, Division 3, subsection 124(3)]
1095. Any costs, including transportation costs, associated with repairing
or replacing recalled goods are to be paid by the supplier.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, subsection
124(4)]
Notification by persons who supply consumer goods outside of
Australia if there is a compulsory recall
1096. A supplier is required to notify each overseas person whom the
supplier has supplied a recalled consumer good to, about the recall.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, subsection
125(1)]
1097. The notification must be in writing and be given as soon as
practicable after the recalled good was supplied to the person.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, subsections
125(1) & (3)]
1098. A notification provided to a person overseas must contain the
following information:
. the consumer goods which have been recalled;
. the nature of any defect or dangerous characteristic in
the recalled goods;
. any circumstances where reasonably foreseeable use or
misuse of the recalled goods is dangerous;
. the nature of any non-compliance with a safety standard in
force for the recalled goods; and
. whether any interim or permanent ban is in force for the
recalled goods.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, subsection
125(2)]
1099. Where a supplier is required to notify a person overseas about a
recall, a copy of the notification must be given to the responsible
Minister who issued the relevant recall notice, within 10 days of
sending the notification to the person outside of Australia.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, subsection
125(4)]
Interaction of multiple recall notices
1100. A State or Territory recall notice in force for consumer goods of a
particular kind will be overridden by a Commonwealth recall notice
in force for goods of the same kind or for goods which include those
kinds of goods. [Schedule 1, item 1: Chapter 3, Part 3-3, Division
3, section 126]
1101. The State or Territory recall notice will cease to be in force
immediately before the Commonwealth recall notice is issued.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, section 126]
1102. A State or Territory recall notice will only be overridden and cease
to be in force to the extent that it relates to goods which are the
subject of the Commonwealth notice. [Schedule 1, item 1: Chapter 3,
Part 3-3, Division 3, section 126]
Compliance with recall notices
1103. Suppliers who are required to undertake one or more actions under a
recall notice in force must comply with such notice. [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 3, subsections 127(1) and (2)]
1104. Suppliers are prohibited from supplying particular kinds of consumer
goods where [Schedule 1, item 1: Chapter 3, Part 3-3, Division 3,
subsection 127(3)]:
. there is a recall notice is in force for goods of that
kind; or
. goods of that kind contain a defect or dangerous
characteristic that has been identified in a recall
notice.
1105. Suppliers are only prohibited from engaging in these activities in
trade or commerce and not, for instance, in a personal or private
capacity. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 3,
subsection 127(3)]
1106. A person is deemed to have suffered a loss or damage as a result of
a contravention of a recall notice, because [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 3, subsection 127(4)]:
. the recalled goods contains a defect or dangerous
characteristic;
. of a reasonably foreseeable use (including a misuse) of
the recalled goods; or
. the person was not provided with particular information
about the recalled goods as required under the recall
notice.
1107. A reasonably foreseeable use of a good includes using the goods for
its primary, normal or intended purpose, using the goods for its
unintended purpose, or misusing the goods. Use (or misuse) of the
goods can be by the person who suffered the loss or damage in
question, or by another person.
Voluntary recalls
1108. The ACL requires a supplier who has voluntarily undertaken to recall
consumer goods, to notify the Commonwealth Minister of the voluntary
recall. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 3,
Subdivision B]
1109. A supplier who has voluntarily recalled particular kinds of consumer
goods is required to notify the Commonwealth Minister about the
recall within two days of undertaking the recall. [Schedule 1, item
1: Chapter 3, Part 3-3, Division 3, subsection 128(2)] The
Commonwealth Minister may publish a copy of the notice on the
internet. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 3,
subsection 128(3)]
1110. A supplier is only required to notify the Commonwealth Minister
about a voluntarily recall if the recall was undertaken for any of
the following reasons:
. the goods will or may cause injury to any person;
. a reasonably foreseeable use (including a misuse) of the
goods will or may cause injury to any person;
. the goods do not comply with a safety standard in force
for goods of that kind;
. an interim ban or permanent ban is in force for goods of
that kind.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, subsection
128(1)]
The voluntarily recalled goods can include consumer goods that have
become fixtures since being supplied. [Schedule 1, item 1: Chapter
3, Part 3-3, Division 3, subsection 128(1)]
Exported goods
1111. Suppliers of goods which have been voluntarily recalled must notify
every person outside of Australia to whom the goods were supplied
to, about the recall.
1112. The notice must be given to each overseas person as soon as
practicable of the goods being supplied to them. [Schedule 1, item
1: Chapter 3, Part 3-3, Division 3, subsection 128(5)].
1113. Within 10 days of the notice being given to an overseas person, the
supplier is required to provide a copy of the notice to the
Commonwealth Minister. [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 3, subsection 128(6)]
Content of notices
1114. Notices about voluntarily recalled goods from a supplier to the
Commonwealth Minister and to a person overseas, must contain the
following information:
. the voluntarily recalled consumer goods;
. the nature of any defect or dangerous characteristic in
the voluntarily recalled goods;
. the circumstances where a reasonable foreseeable use or
misuse of the voluntarily recalled goods is dangerous;
. the nature of any non-compliance or likely non-compliance
with a safety standard in force for the voluntarily
recalled goods; and
. whether there is an interim or permanent ban in force on
the voluntarily recalled goods.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 3, subsections
128(4) & (7)]
Safety Warning Notices
1115. The ACL empowers Commonwealth, State and Territory ministers to
publish warning notices about particular consumer goods or product
related services that are a safety risk.
Safety warning notices for consumer goods or product related
services
1116. Responsible Ministers can publish safety warning notices for
consumer goods or product related services of a particular kind.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 4, section 129]
1117. Safety warning notices must be in writing and published on the
internet. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 4,
subsections 129(1) and (2)]
Warning notices for consumer goods
1118. A responsible Minister can publish a safety warning notice about
consumer goods of a particular kind. The notice can contain any of
the following information:
. a statement that consumer goods of the kind specified in
the notice are being investigated to determine whether:
- those goods will or may cause injury to any person; or
- a reasonably foreseeable use (including a misuse) of the
goods will or may cause injury to any person; and/or
. a warning of the possible risks with using consumer goods
of the kind specified in the notice.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 4, subsection
129(1)]
Warning notices for product related services
1119. Similarly, a responsible Minister can publish a safety warning
notice about product related services of a particular kind. The
notice can contain any of the following information:
. a statement that product related services of the kind
specified in the notice is being investigated to determine
whether, as a result of the services being supplied:
- particular kinds of consumer goods will or may cause
injury; or
- a reasonable foreseeable use (including a misuse) of
particular consumer goods will or may cause injury;
and/or
. a warning of the possible risks with supplying product
related services of the kind specified in the notice.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 4, subsection
129(2)]
Results of an investigation
Announcement of results
1120. Where a safety warning notice states that consumer goods or product
related services of a particular kind are being investigated, and
the investigation has been completed, the responsible Minister who
published the warning notice must announce the results of the
investigation if the following conditions exist [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 4, subsection 130(1)]:
. no urgent interim ban or recall notice (under section 132J
of the CC Act) has been issued with respect to those kinds
of consumer goods or product related services;
. no proposed safety ban has been imposed with respect to
those kinds of consumer goods or product related services;
and
. no proposed recall notice has been issued with respect to
those kinds of consumer goods.
1121. A proposed safety ban or recall notice can be imposed by a
responsible Minister where the Minister proposes to make a ban or
order a recall with respect to particular kinds of consumer goods or
product related services. [Schedule 2, item 1: Division 3, sections
132 and 132A]
1122. Where a responsible Minister is required to announce the results of
an investigation, the results must be announced as soon as
practicable after the investigation is completed and published on
the internet. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 4,
subsection 130(1)]
1123. Together with announcing the results of an investigation, the
responsible Minister may publish any action which the Minister
proposes to take with respect to the particular consumer goods or
product related services which are the subject of the safety warning
notice. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 4,
subsection 130(2)]
Consumer goods or product related services associated with death, serious
injury or illness
1124. The ACL contains a reporting requirement for suppliers of consumer
goods or product related services that have been associated with the
death, serious injury or illness of any person. [Schedule 1, item
1: Chapter 3, Part 3-3, Division 5]
Suppliers to report consumer goods associated with the death or
serious injury or illness of any person
1125. A supplier of consumer goods of a particular kind is required to
notify the Commonwealth Minister when it becomes aware that goods of
that kind have been associated with the death, serious injury or
illness of any person. [Schedule 1, item 1: Chapter 3, Part 3-3,
Division 5, subsection 131(1)]
1126. Broadly, there are three triggers to the reporting requirement for
suppliers:
. the goods in question are consumer goods which are of a
particular kind;
. the goods in question have been associated with the death,
serious injury or illness of any person; and
. a supplier of those kinds of goods has become aware of the
incident.
Serious injury or illness
1127. A trigger for the reporting requirement is that the particular
consumer goods in question have been associated with a death,
serious injury or illness.
1128. Serious injury or illness is defined to mean an acute physical
injury or illness requiring medical or surgical treatment by or
under the supervision of a qualified doctor or nurse. The medical
or surgical treatment can be provided in a hospital or clinic, or in
such similar place like a regional or rural clinic where in the
circumstances hospitalisation may not always be possible. [Schedule
1, item 1: Chapter 1, section 1]
1129. The injury or illness in question must be acute in nature arising
through sudden onset rather than after gradual development over
time. The injury or illness must also be serious rather than minor
in nature. Lastly, the injury or illness must not be a disease,
which is defined to include an ailment, disorder or morbid condition
which arises through sudden onset or gradual development. [Schedule
1, item 1: Chapter 1, section 2]
1130. For the purposes of the reporting requirement, a serious injury or
illness can include:
. an external physical injury, such as a serious burn, deep
cut, broken bone, choking or serious fracture;
. an internal injury, such as internal bleeding;
. an illness, such as poisoning;
Associated with a death, serious injury or illness
1131. Suppliers are only required to report incidences to the Commonwealth
Minister where consumer goods have been associated with the death,
serious injury or illness of any person.
1132. The various circumstances whereby a good can be associated with a
death, serious injury or illness, includes:
. the good was being used either before or at the time of
the accident occurring, whereby the goods could have been
used for its primary, normal or intended purpose, for an
unintended purpose or being misused; [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 5, subsection131(3)]
. the good was in the vicinity or close proximity of the
occurrence of an accident, irrespective of whether the
good was in fact being used (or misused) at the time of
the accident;
. the good was a cause or a possible cause (and not
necessarily the sole cause) of an accident;
. the good contributed to or possibly contributed to an
accident;
. the good was somehow related to, or involved with, an
accident.
1133. However, where it is clear that the consumer goods were not
associated with the death, serious injury or illness, then the
supplier is not required to report the incident to the Commonwealth
Minister. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 5,
paragraph 131(2)(a)] In other words, where it is certain that the
goods were not related, involved, a cause or possible cause, a
contributor or possible contributor to the accident.
1134. A supplier is also not required to comply with the reporting
requirement where it is very unlikely that the consumer good was
associated with the death, serious injury or illness. [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 5, paragraph 131 (2)(b)]
1135. In other words, where it is highly unlikely that the goods was
related, involved, a cause or possible cause, a contributor or
possible contributor to the accident.
1136. Consumer behaviour, operator error, external influences and
environmental factors, such as alcohol, weather conditions or other
people's behaviour, are common contributing factors to product
related injuries.
1137. However, if it is possible that the consumer goods could somehow be
associated with a death, serious injury or illness, and it is not
clear that the goods were not associated with the accident - then
supplier should report the incident to the Commonwealth Minister.
Supplier becomes aware
1138. The reporting requirement is triggered when a supplier of the
consumer goods in question has become aware that the goods was
associated with a death, serious injury or illness. [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 5, paragraph 131(1)(b)]
1139. A supplier 'becomes aware' of information upon receiving information
from any source. This includes receiving information from a
consumer, a re-supplier of the goods, a repairer, insurer, industry
organisation or consumer organisation [Schedule 1, item 1: Chapter
3, Part 3-3, Division 5, subsection 131(4)]. It also includes
receiving the relevant information through any means, like being
told, hearing or reading about the information.
Circumstances for non-reporting
1140. The reporting requirement does not apply, even where the triggers
for reporting exist, where the supplier is already required to
report the death, serious injury or illness in question under a
Commonwealth, State or Territory law specified in the regulations.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 5, paragraph
131(2)(c)]
1141. The reporting requirement also does not apply, despite the triggers
for reporting existing, where the supplier is already required to
report about the death, serious injury or illness under an industry
code specified in the regulations. [Schedule 1, item 1: Chapter 3,
Part 3-3, Division 5, paragraph 131(2)(d)]
Necessary information to report
1142. Where all of the above triggers for the reporting requirement exist
and the circumstances for non-reporting do not apply, the supplier
is required to report the following information to the Commonwealth
Minister [Schedule 1, item 1: Chapter 3, Part 3-3, Division 5,
paragraph 131(5)]:
. the consumer goods in question; and
. the following details, to the extent that they are known
by the supplier at the time of reporting:
- when and the amount the goods were manufactured,
supplied or imported in Australia or exported from
Australia;
- the circumstances surrounding how the death, serious
injury or illness in question occurred;
- the nature of any serious injury or illness suffered;
- any action the supplier has taken or intends to take in
relation to the goods.
1143. There is no additional requirement for a supplier to have to
substantiate information it has become aware of prior to making a
report. There is also no additional requirement for suppliers to
monitor the safety of the consumer goods in question or to conduct
any follow up investigation on the information reported.
Suppliers to report
1144. All participants in the supply chain of a consumer good which has
been associated with a death, serious injury or illness, are
required to comply with the reporting requirement upon becoming
aware of the accident. This includes a retailer, dealer,
distributor, repairer, importer, manufacturer and/or exporter of the
consumer good in question.
1145. Subjecting all participants in the supply chain to the reporting
requirement assists to ensure that information about potentially
unsafe goods is being communicated to regulators to help prevent
similar accidents from occurring in the future. To help avoid
similar accidents from arising it is important that adequate
information about accidents is communicated to regulators even if it
may involve the same information being reported more than once from
different sources. This is particularly important where, for
instance, the original supplier of an unsafe good has ceased
operation and does not report the necessary information.
1146. Information reported to the Commonwealth Minister under the
reporting requirement will be shared amongst Australian regulators,
on a confidential basis and in accordance with privacy requirements,
to ensure there are national coordinated efforts amongst regulators
to protect consumer safety. Multiple reporting and the duplication
of information is a relatively minor compliance cost associated with
ensuring timely information about unsafe (as well as potentially
unsafe) goods are passed onto regulators.
1147. However, accidents which are already required to be reported to a
regulator under a specific regulation or industry code, does not
have to also be reported by suppliers under the reporting
requirement in the consumer safety provisions of the ACL. [Schedule
1, item 1: Chapter 3, Part 3-3, Division 5, subsections 131(1) and
(2)]
Time to report
1148. Where the reporting requirement applies, a supplier is required to
report the necessary information to the Commonwealth Minister in
writing and within two days of becoming aware that the consumer
goods in question have been associated with a death, serious injury
or illness. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 5,
subsection 131(1)
1149. Where the reporting requirement applies, a supplier is only required
to report the necessary information to the Commonwealth Minister
upon becoming aware the consumer goods in question have been
associated with a death, serious injury or illness. The supplier is
not required to report each and every time of becoming aware of the
same incident, even if the information comes from a different source
each time.
Non-admission of liability
1150. Reporting information under the reporting requirement does not
constitute as an admission by the supplier of any liability in
relation to the consumer goods or to a death, serious injury or
illness. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 5,
subsection 131(6)]
Suppliers to report product related services associated with the
death or serious injury or illness of any person
1151. A supplier of product related services of a particular kind who
becomes aware that consumer goods which those services relate to,
has been associated with a death, serious injury or illness of any
person, is required to report this information to the Commonwealth
Minister. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 5,
section 132]
1152. The operation of the reporting requirement for product related
services is essentially the same as the requirement which applies to
consumer goods, as described above. [Schedule 1, item 1: Chapter 3,
Part 3-3, Division 5, section 131]
Product related services of a particular kind
1153. The reporting requirement only applies with respect to product
related services that are of a particular kind, and not more broadly
to 'services' or to 'consumer services'. In addition, the product
related service must be related to the particular kind of consumer
goods which have been associated with a death, serious injury or
illness.
Serious injury or illness
1154. The reporting requirement for suppliers of product related services
is only triggered where the services in question are related to
particular consumer goods which have been associated with a death,
serious injury or illness.
1155. The reporting requirement applies irrespective of whether the goods
which the services relate to, were being used before or at the time
of the accident. [Schedule 1, item 1: Chapter 3, Part 3-3, Division
5, subsection 132(3)]
1156. However, the reporting requirement does not apply under any of the
following circumstances:
. where it is clear (that is certain) that the goods which
the services relate to, were not associated with the
death, serious injury or illness; [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 5, paragraph 132(2)(a)]
. where it is very unlikely (that is highly unlikely) that
the goods which the services relate to, were associated
with the death, serious injury or illness; [Schedule 1,
item 1: Chapter 3, Part 3-3, Division 5, paragraph
132(2)(b)]
. where the supplier is already required to report the
death, serious injury or illness under a Commonwealth,
State or Territory law specified in the regulations.
[Schedule 1, item 1: Chapter 3, Part 3-3, Division 5,
paragraph 132(2)(c)]; or
. where the supplier is already required to report the
death, serious injury or illness under an industry code
specified in the regulations. [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 5, paragraph 132(2)(d)]
Supplier becomes aware
1157. The reporting requirement is triggered once the supplier of a
product related service becomes aware that consumer goods which the
service relates to has been associated with a death, serious injury
or illness. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 5,
subsection 132(1)]
Necessary information to report
1158. Where the reporting requirement is triggered for a product related
service, and the circumstances for non-reporting do not apply, the
following information must be reported to the Commonwealth Minister:
. the particular product related service in question, as
well as the particular consumer good which the service
relates to; and
. the following details, to the extent they are known by the
supplier at the time of reporting:
- when the service in question was supplied;
- the circumstances as to how the death, serious injury or
illness occurred;
- the nature of any serious injury or illness suffered;
- any action which the supplier has taken or is intending
to take in relation to the service Schedule 2, item 1:
Chapter 3, Part 3-3, Division 5, subsection 131(5).
Suppliers required to report
1159. Similar to the reporting requirement for consumer goods, all
participants in the supply chain for the particular product related
services in question, are required to comply with the reporting
requirement once all the triggers exist. [Schedule 1, item 1:
Chapter 3, Part 3-3, Division 5, subsection 132(4)]
Time to report
1160. Where the reporting requirement applies, the supplier of a product
related service is required to report the necessary information to
the Commonwealth Minister within two days of becoming aware that a
consumer good which the service relates to, has been associated with
a death, serious injury or illness. The report must also be in
writing. [Schedule 1, item 1: Chapter 3, Part 3-3, Division 5,
subsection 132(1)]
Non-admission of liability
1161. The reporting of information under the reporting requirement does
not constitute as an admission by the supplier of any liability in
relation to the product related services in question, the consumer
goods in question which the services relates to, or to the death,
serious injury or illness. [Schedule 1, item 1: Chapter 3, Part 3-
3, Division 5, subsection 132(5)]
Liability under an insurance contract
1162. The liability of an insurer under a contract of insurance between
the insurer and a supplier is not affected because the supplier has
provided information relating to consumer goods it has supplied to a
responsible Minister, a regulator, a person appointed or engaged
under the Public Service Act 1999 (Cth) or an equivalent Act of a
state or territory or an officer of an authority of the Commonwealth
or of a state or territory. [Schedule 1, item 1: Chapter 3, Part 3-
3, Division 5, paragraph 133(b)]
1163. The insurance contact must relate to the recall of consumer goods
supplied by the supplier or to the supplier's liability with respect
to a possible defect in the goods. [Schedule 1, item 1: Chapter 3,
Part 3-3, Division 5, paragraph 133(a)]
Penalties and remedies
Criminal offence
1164. Contraventions of requirements imposed by provisions in Part 3-3 of
the ACL have an associated criminal offence in Part 4-3 of the ACL.
The maximum fine payable for a contravention of sections 194, 195,
197, 198 and 199 of the ACL is:
. $1.1 million for a body corporate; and
. $220,000 for any other person.
[Schedule 1, item 1: Chapter 4, Part 4-3, sections 194, 195 197,
198 and 199]
1165. The maximum fine payable for a contravention of section 196 of the
ACL is:
. $22,000 for a body corporate; and
. $4,400 for any other person.
[Schedule 1, item 1: Chapter 4, Part 4-3, section 196]
1166. The maximum fine payable for a contravention of sections 200, 201
and 202 of the ACL is:
. $16,650 for a body corporate; and
. $3,300 for any other person.
[Schedule 1, item 1: Chapter 4, Part 4-3, sections 200, 201 and
202]
1167. The offences listed in Part 4-3 are of strict liability so that it
is not necessary to consider the intent of the person committing the
offence. The strict liability nature of these offences reflects the
potential for widespread detriment, both financially for individual
consumers and for its effect on the market and consumer confidence
more generally, that can be caused by a person that breaches this
provision, whether or not it intended to engage in the
contravention.
1168. Part 4-6 of the ACL provides defences applicable to criminal
proceedings of:
. an honest and reasonable mistake of fact; [Schedule 1,
item 1: Chapter 4, Part 4-6, section 207]
. where the contravention was caused by the act or default
of another person or an accident or cause beyond the
person's control, and where the person took reasonable
precautions and exercised due diligence to avoid the
contravention; and [Schedule 1, item 1: Chapter 4, Part 4-
6, section 208]
. where an advertiser publishes an advertisement in the
ordinary course of business and does not know and had no
reason to suspect the advertisement amounted to a
contravention. [Schedule 1, item 1: Chapter 4, Part 4-6,
section 209]
Enforcement powers, penalties and remedies
1169. Civil pecuniary penalties do not apply with respect to Part 3-3 of
the ACL.
1170. The following enforcement powers and remedies apply to Part 3-3 of
the ACL:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
1171. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
1172. The ACCC may not issue an infringement notice for a contravention of
Part 3-3 of the ACL.
Application and transitional provisions
1173. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1174. Chapter 3, Part 3-3 applies to all relevant conduct occurring in
trade or commerce on or after 1 January 2011.
1175. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1176. Commonwealth safety standards which were in force at the time of the
commencement of the ACL, are saved and continue to apply after the
ACL commences. The standards are treated as having been made by the
Commonwealth Minister under the ACL upon commencement of the ACL.
[Schedule 7, item 4]
1177. Commonwealth interim bans and permanent bans in force at the time
the ACL commences are saved and continue to apply after the ACL
commences. The bans are treated as having been made by the
Commonwealth Minister under the ACL upon commencement of the ACL.
[Schedule 7, items 2 and 3]
1178. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1179. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1180. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Do not remove section break.
Chapter 11
Information standards
Outline of chapter
1181. The Australian Consumer Law (ACL) empowers the Commonwealth Minister
to prescribe information standards for goods and services.
Information standards may require:
. certain information be provided and/or to be provided in a
certain manner or form;
. certain information not be provided and/or to not be
provided in a certain manner or form; or
. certain information to have an assigned meaning.
Context of amendments
1182. Following public consultations on the ACL, in December 2009 the
Ministerial Council on Consumer Affairs (MCCA) announced that the
ACL will include a power for information standards to be made for
goods and services.
1183. Information standards provide a legislative basis for the
responsible Minister to require suppliers or specified products to
provide information related to those products. Information
standards are used where the Government considers the
characteristics of a good or service are such that the mandated
provision of information will facilitate effective trade in that
good or service.
1184. A power to prescribe information standards was inserted into the TP
Act in 1986. Under the TP Act, the Commonwealth Minister can
prescribe information standards with respect to goods. That power
does not extend to prescribing information standards for services.
1185. State and Territory consumer protection laws currently contain
similar powers and in some jurisdictions these powers relate to both
goods and services. Some services are also subject to industry-
specific regulation.
1186. There are currently around 25 different information standards in
Australia - 23 which relate to goods (such as fibre content
labelling and footwear) and two which relate to services (employment
placement services and funeral services). The two standards which
relate to services were prescribed in NSW under industry-specific
provisions of their fair trading law.
1187. MCCA has agreed that the ACL will include an information standards
making power that is broad enough to accommodate the range of
matters covered by information standards which exist under State and
Territory consumer protection laws, including matters which relate
to services.
1188. Prior to commencement of the ACL, MCCA will consider which existing
State and Territory information standards will continue to apply
under the ACL.
Summary of new law
1189. The ACL empowers the Commonwealth Minister to prescribe information
requirements when supplying particular goods or services by making
information standards and prohibiting, in certain circumstances, the
supply of goods or services that do not comply with a relevant
standard which is in force.
1190. The Commonwealth Minister can prescribe information requirements for
goods or services through one of two ways:
. by making a new information standard; or
. by declaring a standard made by Standards Australia or
another prescribed organisation a new information
standard.
1191. Suppliers are prohibited from supplying particular kinds of goods or
services that fail to comply with information requirements in an
information standard for goods or services of that kind.
Comparison of key features of new law and current law
|New law |Current law |
|The Commonwealth Minister |Section 65D of the TP |
|can make information |Act provides that the |
|standards for goods and/or|Commonwealth Minister |
|services. |can prescribe |
| |information standards |
| |relating to goods. |
| |State and Territory FT |
| |Acts have similar |
| |provisions. |
|An information standard |Section 65D of the TP |
|can contain requirements |Act provides that an |
|for specified information |information standard |
|to be provided about goods|can require information|
|or services, the form or |to be disclosed about |
|manner which such |goods (such as |
|information is to be |performance, contents, |
|provided, that specified |packaging), and the |
|information must not be |form and manner which |
|provided, that specified |such information is to |
|information must not be |be disclosed, to the |
|provided in a certain |extent that such |
|manner or form, or to |information is |
|assign a certain meaning |reasonably necessary to|
|to information. |give persons using the |
| |goods information about|
| |the quantity, quality, |
| |nature or value of the |
| |goods. |
| |State and Territory FT |
| |Acts have similar |
| |provisions. |
|The Commonwealth Minister |Section 65E of the TP |
|can declare that a |Act provides that the |
|particular standard (or |Commonwealth Minister |
|part of a standard, with |may declare that a |
|additions or variations) |particular standard (or|
|prepared or approved by |part of a standard, |
|Standards Australia |with additions or |
|International Limited (or |variations) prepared or|
|a prescribed association),|approved by Standards |
|is an information standard|Australia International|
|for goods or services. |limited (or a |
| |prescribed |
| |association), is an |
| |information standard |
| |for goods. |
| |State and Territory FT |
| |Acts have similar |
| |provisions. |
|Suppliers must not supply |Section 65D provides |
|goods or services that |that suppliers must not|
|fail to comply with an |supply goods which do |
|information standard in |not comply with an |
|force for such goods or |information standard in|
|services. |force for such goods. |
| | |
| |State and Territory FT |
| |Acts have similar |
| |provisions. |
Detailed explanation of new law
1192. The ACL contains a general power for the Commonwealth Minister to
prescribe information standards which set out information
requirements for goods and/or services. The Commonwealth Minister
can:
- require certain information to be provided or to be
provided in a certain manner or form;
- require certain information to not be provided or not be
provided in a certain manner or form; or
- assign a meaning to certain information.
Power to make information standards
1193. The Commonwealth Minister is empowered to make information standards
for goods and services. [Schedule 1, item 1: Chapter 3, Part 3-4,
section 134]
1194. Information standards can be made with respect to goods or services
which are of a particular kind.
1195. An information standard can relate to goods of a particular kind,
services of a particular kind or to both goods and services that are
of a particular kind. [Schedule 1, item 1: Chapter 3, Part 3-4,
subsection 134(1)]
1196. An information standard can be made in relation to any subject
matter, and not just with respect to consumer health or safety
matters. Separately, the Commonwealth Minister may prescribe safety
standards, including warnings and instructions, with respect to
certain types of goods and services (see Chapter 10 of this
Explanatory Memorandum).
1197. Information standards that are made by the Commonwealth under the
ACL apply nationally in all jurisdictions.
1198. New information standards made are to be published on the internet.
[Schedule 1, item 1: Chapter 3, Part 3-4, subsection 134(1)] This
allows for a single and central location for stakeholders (such as
suppliers, consumers and enforcement agencies) to find details of an
information standard for particular goods and services. Publication
on the internet also provides an effective and timely means for
information standards to be disclosed nationally to the public.
Requirements under an information standard
1199. An information standard for goods or services of a particular kind,
may [Schedule 1, item 1: Chapter 3, Part 3-4, subsection 134(1)]:
. provide for the content of information about goods or
services of that kind;
. require the provision of specified information about goods
or services of that kind;
. set out the manner or form in which the specified
information about the goods or services is to be provided;
. not allow for the provision of specified information about
goods or services of that kind;
. provide the manner in which the specified information
about the goods or services must not be provided; and/or
. assign a meaning to specified information about goods or
services of that kind.
Power to declare information standards
1200. Apart from the power to make new information standards, the
Commonwealth Minister is also empowered to declare an earlier
standard as an information standard under the ACL. [Schedule 1,
item 1: Chapter 3, Part 3-4, section 135]
1201. The Commonwealth Minister can declare a particular standard, or part
of a particular standard, that has been prepared or approved by
Standards Australia International Limited or by another prescribed
association, is an information standard (a declared information
standard). [Schedule 1, item 1: Chapter 3, Part 3-4, paragraph
135(1)(a)]
1202. In declaring an information standard, the Commonwealth Minister can
make additions or variations to the earlier prepared or approved
standard (or to part of it). [Schedule 1, item 1: Chapter 3, Part 3-
4, paragraph 135(1)(b)]
1203. A declared standard must specify the particular kind of goods or
services to which it relates. The standard must also specify the
particular earlier standard (or part of it), with any additions or
variations to it, which is being adopted. [Schedule 1, item 1:
Chapter 3, Part 3-4, subsection 135(1)]
1204. A declared standard cannot be made if it is inconsistent with an
existing information standard in force and made by the Commonwealth
relating to the same kind of goods or services. [Schedule 1, item
1: Chapter 3, Part 3-4, subsection 135(2)]
1205. A declared information standard applies nationally in all
jurisdictions.
1206. A declared information standard must be published on the internet.
[Schedule 1, item 1: Chapter 3, Part 3-4, subsection 135(1)]
Declared information standards are also legislative instruments for
the purposes of the Legislative Instruments Act 2003 (LI Act).
Compliance with information standards
1207. The ACL prohibits the supply of goods or services that do not comply
with the requirements of an information standard in force for those
goods or services. [Schedule 1, item 1: Chapter 3, Part 3-4,
section 136 and 137]
1208. Suppliers are prohibited from engaging in any of the following
activities with respect to goods or services of a particular kind,
without first complying with an information standard in force for
goods or services of that kind:
. supplying those goods or services; [Schedule 1, item 1:
Chapter 3, Part 3-4, subsections 136(1) and 137(1)]
. offering to supply those goods or services; [Schedule 1,
item 1: Chapter 3, Part 3-4, subsections 136(2) and
137(2)] and/or
. possessing, manufacturing or being in control of such
goods for the purpose of supplying them. [Schedule 1,
item 1: Chapter 3, Part 3-4, subsection 136(2)]
A supplier is only prohibited from engaging in any of the above
activities in trade or commerce and not, for instance, in a
personal or private capacity. [Schedule 1, item 1: Chapter 3, Part
3-4, subsections 136(1), (2) and (2) and 137(1) and (2)]
Exported goods
1209. A supplier can supply goods without having to first comply with an
information standard in force for goods of that kind, if the goods
are intended to be used outside of Australia. [Schedule 1, item 1:
Chapter 3, Part 3-4, subsection 136(5)]
1210. There is a presumption that a good is intended to be used outside of
Australia if a statement has been applied to the good indicating
either that the good is for export only, or that the good is
intended to be used outside of Australia. [Schedule 1, item 1:
Chapter 3, Part 3-4, subsection 136(6)]
1211. The ways in which a statement can be applied to a good include the
statement being woven, impressed, worked into, affixed or annexed to
the good, or being applied to the covering, label, reel or thing
which accompanies the good. [Schedule 1, item 1: Chapter 3, Part 3-
4, subsection 136(7)]
1212. Covering is defined to include a stopper, class, bottle, vessel,
box, capsule, case, frame or wrapper. [Schedule 1, item 1: Chapter
1, section 2]
1213. In certain circumstances, an information standard may impose
information requirements which are not relevant to overseas markets,
such as language requirements. Alternatively, overseas markets may
be subject to different domestic regulatory requirements, and to
impose additional or inconsistent information requirements may not
be appropriate.
Loss or damage suffered
1214. A person is deemed to have suffered a loss or damage because of a
contravention of an information standard, where [Schedule 1, item
1: Chapter 3, Part 3-4, subsections 136(8) and 137(3)]:
. a good or service has been supplied in contravention of an
information standard in force for goods or services of
that kind; and
. the loss or damage would not have been suffered had the
information standard been complied with.
Penalties and remedies
1215. The following enforcement powers, remedies and penalties apply to
the information standards provisions of the ACL under sections 136
and 137:
. undertakings; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 1]
. substantiation notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2]
. public warning notices; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 3]
. injunctions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 2]
. damages; [Schedule 1, item 1: Chapter 5, Part 5-2
,Division 3]
. compensatory orders; [Schedule 1, item 1: Chapter 5, Part
5-2, Division 4, Subdivision A]
. redress for non-parties; and [Schedule 1, item 1: Chapter
5, Part 5-2, Division 4, Subdivision B]
. non-punitive orders. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 5, section 246]
1216. For further information on these powers, remedies and penalties
generally see Chapters 14 and 15.
1217. The ACCC may not issue an infringement notice for a contravention of
Part 3-4 of the ACL.
Application and transitional provisions
1218. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1219. Chapter 3, Part 3-4 of the ACL will commence on 1 January 2011 and
apply to conduct on or after that date.
1220. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1221. The information standard provisions in the Bill commence from the
date the ACL commences, and apply to goods and services supplied
from that date.
1222. Commonwealth information standards in force at the time the ACL
commences are saved and continue to apply nationally. Saved
information standards are treated as having been made by the
Commonwealth under the ACL from commencement of the ACL. [Schedule
7, item 5]
1223. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1224. Regulations made for the purposes of section 87AB of the TP Act that
were in force immediately before the commencement of section 137 of
the CC Act have effect, after the commencement of this item, as if
they had been made for the purposes of section 137 of the CC Act as
amended by this Bill. [Schedule 7, item 11]
1225. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1226. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
1227. Chapter 12
Liability of manufacturers for goods with safety defects
Outline of chapter
1228. The Australian Consumer Law (ACL) contains a statutory liability
regime for manufacturers of goods with a safety defect. The
manufacturers' liability provisions in the Bill continue the
operation of the current Part VA of the TP Act. However the
drafting of the provisions has been amended to reflect the drafting
style used for other provisions of the ACL.
1229. The ACL imposes liability on a manufacturer of a safety defective
good, and provides for an action to be brought against the
manufacturer, where:
. loss or damage has been suffered because of injuries
sustained from the safety defect;
. loss or damage has been suffered because another good has
been destroyed or damaged as a result of the safety
defect; or
. loss or damage has been suffered because a land, building
or fixture has been destroyed or damaged as a result of
the safety defect.
Context of amendments
1230. The ACL imposes liability on manufacturers of safety defective goods
and allows an action to be brought against such manufacturer to
recover for the amount of the loss or damage suffered as a result of
supplying the goods.
1231. Currently, Part VA of the TP Act provides a statutory liability
regime against manufacturers and importers of defective goods. The
TP Act provides a means for those who suffered a loss or damage as a
result of the supply of a defective good, to recover damages or
other redress for their loss.
Summary of new law
1232. The ACL imposes liability on manufacturers to compensate for loss or
damage suffered as a result of supplying defective goods. Liability
is imposed on, and an action can be brought against, the
manufacturer in any of the following situations:
. an individual has suffered loss or damage because of
injuries arising from the safety defect;
. a person has suffered loss or damage because another
person has been injured as a result of the safety defect;
. a person has suffered loss or damage because another good
has been destroyed or damaged as a result of the safety
defect;
. a person has suffered loss or damage because a land,
building or fixture has been destroyed or damaged as a
result of the safety defect.
1233. The ACL provides a number of defences to manufacturers against a
defective goods action under certain circumstances.
1234. The amount of loss or damage which the manufacturer is liable for
may also be reduced as a result of contributory actions or omissions
on the part of the plaintiff.
1235. Further, an action to recover for the loss or damage suffered could
be brought against one or more supplier of the defective good where
the manufacturer cannot be identified.
1236. Regulators may also bring a defective goods action on behalf of a
person.
1237. The manufacturers' liability provisions of the ACL serve a distinct
although complementary purpose to the consumer safety provisions.
1238. While the manufacturers' liability provisions are designed to
respond to loss or damage that arise from safety defective goods,
the consumer safety provisions are designed to reduce the likelihood
of a loss or damage arising in the first place by trying to prevent
unsafe goods from entering or remaining in the market.
Comparison of key features of new law and current law
|New law |Current law |
|Manufacturers are liable |Section 75AD of the TP |
|to compensate injured |Act provides that |
|individuals for loss or |manufacturers are liable|
|damage suffered as a |to compensate injured |
|result of supplying goods|individuals for loss or |
|which contain a safety |damage suffered as a |
|defect. |result of safety defects|
| |in goods manufactured by|
| |it. |
|Manufacturers are liable |Section 75AE of the TP |
|to compensate a person |Act provides that |
|for loss or damage |manufacturers are liable|
|suffered because of |to compensate persons |
|injuries to another |for loss or damage |
|individual as a result of|suffered because of |
|supplying goods which |injuries to other |
|contain a safety defect. |individuals as a result |
| |of safety defects in |
| |goods manufactured by |
| |it. |
|Manufacturers are liable |Section 75AF of the TP |
|to compensate a person |Act provides that |
|for loss or damage |manufacturers are liable|
|suffered because other |to compensate persons |
|goods have been destroyed|for loss or damage |
|or damaged as a result of|suffered because other |
|supplying goods which |goods have been damaged |
|contain a safety defect. |or destroyed as a result|
| |of safety defects in |
| |goods manufactured by |
| |it. |
|Manufacturers are liable |Section 75AG of the TP |
|to compensate a person |Act provides that |
|for loss or damage |manufacturers are liable|
|suffered because a land, |to compensate persons |
|building or fixture has |for loss or damage |
|been destroyed or damaged|suffered because land, |
|as a result of supplying |buildings or fixtures |
|goods which contain a |have been damaged or |
|safety defect. |destroyed as a result of|
| |safety defects in goods |
| |manufactured by it. |
|Statutory defences are |Section 75AK of the TP |
|available to |Act provides statutory |
|manufacturers in safety |defences that are |
|defective goods actions. |available to |
| |manufacturers in |
| |defective goods actions.|
Detailed explanation of new law
1239. The manufacturers' liability provisions of the ACL provide a
statutory regime for manufacturers' liability to compensate for loss
or damage suffered as a result of supplying goods which safety
defects, by allowing those who have suffered loss or damage because
of a defect, to bring an action against the manufacturer
responsible.
Manufacturers' liability in safety defective goods actions
1240. The ACL imposes a statutory liability on a manufacturer of goods
which contain a safety defect and allows a person who suffered a
loss or damage because of the defect to bring an action against the
manufacturer to recover for the amount of the loss or damage.
[Schedule 1, item 1: Chapter 3, Part 3-5, Division 1]
1241. An action can be brought by a person against a manufacturer of a
safety defective good, to recover for the amount of loss or damage
suffered as a result of the good containing a safety defect, in any
of the following circumstances [Schedule 1, item 1: Chapter 3, Part
3-5, Division 1]:
. where the individual suffered the loss or damage because
of injuries arising from the safety defect;
. where the person suffered the loss or damage because
another individual has sustained an injury or has died as
a result of the safety defect;
. where the person suffered the loss or damage because a
different good has been destroyed or damaged as a result
of the safety defect; and/or
. where the person suffered the loss or damage because a
land, building or fixture has been destroyed or damaged as
a result of the safety defect.
'Safety defect'
1242. A good has a safety defect if the safety of the good is not such as
persons generally are entitled to expect of a good of that kind.
[Schedule 1, item 1: Chapter 1, subsection 9(1)] The manufacturers'
liability provisions apply to 'goods' in general and not limited to
'consumer goods' only.
1243. To determine whether a particular good has a safety defect, all
relevant circumstances must be considered. This includes the
following matters [Schedule 1, item 1: Chapter 1, subsection 9(2)]:
. how the good was marketed;
. what purpose the good has been marketed for;
. the packaging of the good;
. the use of any mark in relation to the good;
. any instructions or warnings for doing or not doing
anything in relation to the good (for instance,
instructions or warnings as to how the good should be used
or not used);
. what might reasonably be expected to be done with the good
(including using the good for its unintended purpose or
misusing the good); and
. the time the good was supplied by the manufacturer (to the
market, including to the person who suffered the loss,
damage or injury).
1244. After the supply of a good, an inference cannot be drawn that the
good has a safety defect by the fact a safer good has been later
supplied by the manufacturer. [Schedule 1, item 1: Chapter 1,
subsection 9(3)]
1245. Similarly, a good does not have a safety defect only because it had
complied with a Commonwealth mandatory standard for goods of that
kind, and the standard was not the safest possible standard in light
of the latest scientific or technical knowledge existing at the time
the good was supplied by the manufacturer. [Schedule 1, item 1:
Chapter 1, subsection 9]
1246. Mandatory standard is defined to mean a standard that has been made
under a Commonwealth, State or Territory law, which must be complied
with at the time the good is supplied by the manufacturer, and where
non-compliance could result in an offence or liability. [Schedule
1, item 1: Chapter 1, section 2]
'Manufacturer'
1247. A manufacturer of a safety defective good is defined in section 7 of
the ACL. [Schedule 1, item 1: Chapter 1, section 7]:
Liability for injuring an individual
1248. The manufacturer of a good which has a safety defect is liable to
compensate an individual who has suffered an injury because of the
safety defect. [Schedule 1, item 1: Chapter 3, Part 3-5, Division
1, subsection 138(1)] However, the manufacturer is only liable if
it supplied the good in trade or commerce and not, for instance, in
a private or personal capacity. [Schedule 1, item 1: Chapter 3,
Part 3-5, Division 1, paragraph 138(1)(a)]
1249. The injured individual can recover for the amount of loss or damage
suffered by bringing an action against the manufacturer. [Schedule
1, item 1: Chapter 3, Part 3-5, Division 1, subsection 138(2)] It
does not affect the ability of the person to bring a recovery action
that the safety defective good had not been directly supplied to or
acquired by them.
1250. Where the individual has died as a result of an injury sustained
from the safety defect in the good, a State or Territory law on
liability in respect of death to individuals applies as if ther
action were an action under that law on liability and the safect
defect were the manufacturer's wrongful act, neglect or default.
[Schedule 1, item 1: Chapter 3, Part 3-5, Division 1, subsection
138(3)]:
. an action to recover damages for injuries was brought
under the relevant State or Territory law; and
. the safety defect was a wrongful act, neglect or default
of the manufacturer.
Liability for injuring another individual
1251. The manufacturer of a good which contains a safety defect is liable
to compensate a person who has suffered loss or damage as a result
of another individual being injured because of the safety defect.
[Schedule 1, item 1: Chapter 3, Part 3-5, Division 1, subsection 139
(1)] The manufacturer must have supplied the goods in trade or
commerce and not, for instance, in a private or personal capacity.
[Schedule 1, item 1: Chapter 3, Part 3-5, Division 1, paragraph
139(1)(a)]
1252. The person suffering the loss or damage can recover for the amount
of their loss or damage by bringing an action against the
manufacturer. [Schedule 1, item 1: Chapter 3, Part 3-5, Division 1,
subsection 139(2)] It does not affect the ability of the person to
bring a recovery action if the safety defective good had not been
directly supplied to or acquired by them.
1253. Further, a manufacturer's liability is not affected by the death of
an injured individual from injuries sustained as a result of a
safety defective good being supplied. [Schedule 1, item 1: Chapter
3, Part 3-5, Division 1, subparagraph 139(1)(d)(ii)]
1254. However, the loss or damage must not have arisen because of a
business or professional relationship between the person suffering
the loss or damage, and the individual who has been injured as a
result of the safety defective good. [Schedule 1, item 1: Chapter
3, Part 3-5, Division 1, subparagraph 139(1)(e)]
Liability for damaging or destroying other goods
1255. The manufacturer of a good which has a safety defect is liable to
compensate a person who has suffered loss or damage as a result of
another good being damaged or destroyed because of the safety
defect. [Schedule 1, item 1: Chapter 3, Part 3-5, Division 1,
subparagraph 140(1)] The manufacturer must have supplied the good
in trade or commerce and not, for instance, in a private or personal
capacity. [Schedule 1, item 1: Chapter 3, Part 3-5, Division 1,
paragraph 140(1)(a)]
1256. The person suffering the loss or damage can recover for the amount
of their loss or damage by bringing an action against the
manufacturer. [Schedule 1, item 1: Chapter 3, Part 3-5, Division 1,
subsection 140(2)] It does not affect the ability of the person to
bring a recovery action if the safety defective good had not been
directly supplied to or acquired by them.
1257. However, the good which has been damaged or destroyed because of a
safety defect, must be one that is ordinarily acquired for personal,
domestic or household use or consumption, and not, for instance, one
that is ordinarily acquired for a business or commercial purpose.
[Schedule 1, item 1: Chapter 3, Part 3-5, Division 1, paragraph
140(1)(c)]
1258. Further, the person suffering the loss or damage must have used or
consumed the destroyed or damaged good (or intended to do so) for
personal, domestic or household purposes. [Schedule 1, item 1:
Chapter 3, Part 3-5, Division 1, paragraph 140(1)(d)]
Liability for damaging or destroying land, buildings or fixtures
1259. The manufacturer of a good that has a safety defect is liable to
compensate a person who suffered loss or damage as a result of a
land, building or fixture being destroyed or damaged because of the
safety defect. [Schedule 1, item 1: Chapter 3, Part 3-5, Division
1, subsection 141(1)] The manufacturer must have supplied the good
in trade or commerce and not, for instance, in a private or personal
capacity. [Schedule 1, item 1: Chapter 3, Part 3-5, Division 1,
paragraph 141(1)(a)]
1260. The person suffering the loss or damage can recover for the amount
of their loss or damage by bringing an action against the
manufacturer. [Schedule 1, item 1: Chapter 3, Part 3-5, Division 1,
subsection 141(2)] It does not affect the ability of the person to
bring a recovery action if the safety defective good had not been
directly supplied to or acquired by them.
1261. The damaged or destroyed land, building or fixture must have been
ordinarily acquired for private use and not, for instance, acquired
for a professional, business or commercial purpose. [Schedule 1,
item 1: Chapter 3, Part 3-5, Division 1, paragraph 141(1)(d)]
1262. The person suffering the loss or damage must have used (or intended
to use) the land, building or fixture for a private purpose and not,
for instance, a professional, business or commercial purpose.
[Schedule 1, item 1: Chapter 3, Part 3-5, Division 1, paragraph
141(1)(e)]
Defences to safety defective goods actions
1263. There are four types of defences available to manufacturers in
safety defective goods actions. [Schedule 1, item 1: Chapter 3,
Part 3-5, Division 1, section 142] Each of these are outlined
below.
No safety defect exists
1264. It is a defence to a safety defective goods action if the
manufacturer can establish that the good alleged to have caused the
loss or damage in question, did not contain a safety defect at the
time they were supplied by the actual manufacturer. [Schedule 1,
item 1: Chapter 3, Part 3-5, Division 1, paragraph 142(a)]
1265. An actual manufacturer of a good is a person who was involved in the
actual manufacture of the goods, such as growing, extracting,
producing, processing or assembling the good. It does not include a
person who holds themselves out (or is held out) to be the
manufacturer of the good nor does it include an importer of the
good, where the person has not been actually involved in
manufacturing the good (for instance, not involved in growing,
extracting, producing, processing or assembling the good).
1266. Where the good alleged to have caused the loss or damage suffered is
electricity, it is a defence if the manufacturer can establish that
no safety defect existed at the time the electricity was generated
(being a time before the electricity was transmitted or
distributed). [Schedule 1, item 1: Chapter 3, Part 3-5, Division 1,
subparagraph 142(a)(i)]
Compliance with a mandatory standard
1267. It is a defence to a safety defective goods action where the
manufacturer can establish that the good alleged to have caused the
loss or damage in question, was only defective after complying with
a 'mandatory standard' in force for goods of that kind at the time
the good was supplied, such as a safety standard or information
standard. [Schedule 1, item 1: Chapter 3, Part 3-5, Division 1,
paragraph 148(1)(b)]
1268. Where a manufacturer intends to rely on this defence, it must give
the Commonwealth as soon as possible, the following information:
[Schedule 1, item 1: Chapter 3, Part 3-5, Division 1, subsection
148(1)]
. notice about the safety defective goods action being
brought against them;
. notice about the defence it is proposing to rely on; and
. a copy of the defence it is proposing to rely on.
1269. The giving of the above notices makes the Commonwealth a defendant
in the safety defective goods action. [Schedule 1, item 1: Chapter
3, Part 3-5, Division 1, subsection 148(2)] Accordingly, if, but
for this defence, the action is successful, then it is the
Commonwealth (and not the manufacturer) who is liable to pay for the
amount of loss or damage suffered as a result of the safety defect.
In addition, the court may make cost orders against the Commonwealth
where it is considered just to do so. [Schedule 1, item 1: Chapter
3, Part 3-5, Division 1, subsection 148(3)]
Scientific or technical knowledge
1270. It is a defence to a safety defective goods action if the
manufacturer can establish that the good alleged to have caused the
loss or damage in question, could not be discovered given the state
of scientific or technical knowledge existing at the time the good
was supplied by them. [Schedule 1, item 1: Chapter 3, Part 3-5,
Division 1, paragraph 142(c)]
1271. The time to assess whether the state of scientific and technical
knowledge was such as to enable the safety defect to be discovered,
is the time when the relevant good in question was supplied by the
manufacturer. This may not necessarily be the first time that goods
of that kind were supplied by that manufacturer. Further, the good
in question does not have to be directly supplied to or acquired by
the person who suffered the loss or damage.
The good was comprised in another good
1272. It is a defence to a safety defective goods action where the
manufacturer can establish that the good alleged to have caused the
loss or damage in question was comprised in another good, and the
safety defect only existed because of: [Schedule 1, item 1: Chapter
3, Part 3-5, Division 1, paragraph 142(d)]
. the design of that other good;
. a marking on or which accompanied that other good; or
. an instruction or warning given by the manufacturer of
that other good.
1273. A good can be 'comprised in' another good if, for instance, it is
part of, an ingredient of or component of, another good.
Bringing a safety defective goods actions
Time for commencing an action
1274. A safety defective goods action is required to be commenced within
three years from the time when the person bringing the action (the
plaintiff) was aware, or should have become aware, of the following
matters [Schedule 1, item 1: Chapter 3, Part 3-5, Division 1,
subsection 143(1)]:
. the loss or damage alleged to have been suffered;
. the safety defect in the good in question; and
. the identity of the manufacturer of the good in question.
1275. The plaintiff includes the person who suffered the loss or damage in
question or the individual who sustained injuries as a result of the
safety defect.
1276. However, a safety defective goods action must be brought within 10
years of the particular good in question which is alleged to have a
safety defect, being supplied by its manufacturer. [Schedule 1,
item 1: Chapter 3, Part 3-5, Division 1, subsection 143(2)] The 10
year time limit starts from the time when the particular good in
question was supplied by the manufacturer, and not when goods of
that kind were first supplied. It does not matter to whom the good
in question had been supplied to or acquired by.
Joint and several liability
1277. Where two or more persons (the defendants) are liable in a safety
defective goods action with respect to the same loss or damage, then
a court can find [Schedule 1, item 1: Chapter 3, Part 3-5, Division
1, section 144] :
. all defendants to be jointly liable for the loss or damage
(that is all defendants to share in compensating for the
amount of the loss or damage); or
. only one or a few of the defendants, and not all of the
defendants, are severally liable for the loss or damage
(that is one of the defendants or a few of the defendants
are required to compensate for the entire loss or damage).
Survival of actions
1278. A State or Territory law about the survival of causes of actions
vested in persons who die, applies to safety defective goods
actions. [Schedule 1, item 1: Chapter 3, Part 3-5, Division 1,
section 145]
No action can be brought
1279. A safety defective goods action cannot be brought if the amount of
the loss or damage could be or has been recovered under a
Commonwealth, State or Territory law either relating to workers'
compensation or giving effect to an international agreement.
[[Schedule 1, item 1: Chapter 3, Part 3-5, Division 1, section 146]
Unidentified manufacturer
1280. A person (the plaintiff) wishing to bring a safety defective goods
action but does not know who the manufacturer of the alleged safety
defective good was, can request one or more suppliers of the good
who is known to the plaintiff (like a distributor or importer) to
provide details identifying the manufacturer of the good. The
plaintiff can also request a supplier to provide details that
identifies the supplier. [Schedule 1, item 1: Chapter 3, Part 3-5,
Division 1, subsection 147(1)]
1281. The plaintiff is required to put their request in writing to each
supplier. [Schedule 1, item 1: Chapter 3, Part 3-5, Division 1,
subsection 147(1)]
1282. A plaintiff can only request information which goes towards
identifying the manufacturer of the good in question, or which
identifies the supplier to whom the request has been given; the
plaintiff cannot request information unrelated to identifying the
manufacturer or the supplier. Upon receiving a written request, the
supplier is only required to provide information which helps to
identify the manufacturer of the good in question or which relates
to the supplier's identity.
1283. The ability to request identifying information about a manufacturer
or supplier of safety defective goods, could assist those who have
suffered loss or damage as a result of safety defects, to recover
compensation from the manufacturer of such good in situations where
the manufacturer's identity is unknown.
1284. If a supplier does not provide the requested information and within
30 days of the request being made, and the identify of the
manufacturer of the good in question is still unknown to the
plaintiff - then that supplier will be deemed to be the manufacturer
for the purposes of bringing a safety defective goods action.
[Schedule 1, item 1: Chapter 3, Part 3-5, Division 1, subsection
147(2)] However, a supplier will not be deemed to be the
manufacturer of the good where the plaintiff is proposing to rely on
the defence that the state of scientific or technical knowledge
could not enable the safety defect to be discovered.
1285. This deeming provision provides an incentive to encourage suppliers
to respond, and in a timely manner, to request for identifying
information for the purposes of bringing a safety defective goods
action.
Representative actions
1286. A regulator can apply to bring a safety defective goods action (a
representative action) against a manufacturer of a good alleged to
contain a safety defect, on behalf of a person who has suffered loss
or damage in relation to the action. [Schedule 1, item 1: Chapter
3, Part 3-5, Division 1, subsection 149(1)]
1287. An application to bring a representative action can only be made
after written consent has been obtained from each person whom the
action is being brought on behalf of. [Schedule 1, item 1: Chapter
3, Part 3-5, Division 1, subsection 149(2)]
No exclusions or modifications
1288. A term of a contract which has any of the following effects, or
purports to do so, is void and cannot apply: [Schedule 1, item 1:
Chapter 3, Part 3-5, Division 1, subsection 150(1)]:
. to exclude, restrict or modify the application of any of
the manufacturers' liability provision of the ACL;
. to exclude, restrict or modify the exercise of a right
conferred by any of the manufacturers' liability provision
of the ACL; or
. to exclude, restrict or modify any liability under any of
the manufacturers' liability provision of the ACL.
1289. A contract term does not exclude, restrict or modify a
manufacturers' liability provision unless it expressly states so, or
the term operates so that it is inconsistent with a provision.
[Schedule 1, item 1: Chapter 3, Part 3-5, Division 1, subsection
150(2)]
Application and transitional provisions
1290. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1291. Chapter 3, Part 3-5 applies to all relevant conduct occurring in
trade or commerce on or after 1 January 2011.
1292. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1293. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1294. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1295. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
1296. Chapter 13
Offences
Outline of chapter
1297. Certain contraventions of the Australian Consumer Law (ACL) attract
criminal penalties.
1298. Chapter 4 of the ACL sets out the criminal elements of these
offences as well as provides for specific and general defences in
prosecutions against these provisions.
Context of amendments
1299. Prior to 2001, section 79 of the TP Act provided that contraventions
of the consumer protection provisions in Part V of that Act were
criminal offences.
1300. In 2001, the Treasury Legislation Amendment (Application of Criminal
Code) Act (No.1) 2001 inserted Part VC into the TP Act. The
provisions of Part VC mirrored certain consumer protection
provisions in Divisions 1 and 1A of Part V of the TP Act. This
approach was adopted to make the offence provisions within Part VC
consistent with the criminal liability regime in the Criminal Code
Act 1995.
1301. The Intergovernmental Agreement for the Australian Consumer Law
(IGA) provides that the relevant criminal offence provisions of Part
VC of the TP Act will be incorporated into the ACL. In addition,
the State and Territory fair trading legislation, on which some
provisions of the ACL are based, provide for criminal prosecution
for breaches of those provisions.
1302. It is the Government's intention that criminal prosecutions should
be available for serious breaches of certain provisions of the ACL.
Summary of new law
1303. Chapter 4 of the ACL creates a framework of defences and procedural
requirements for criminal prosecution of contraventions of certain
provisions of the ACL. Chapter 4 also includes mirror
contraventions of certain provisions of the ACL for the purposes of
facilitating criminal prosecutions.
Comparison of key features of new law and current law
|New law |Current law |
|Chapter 4 of the ACL |Part VC of the TP Act |
|provides for offences |provides for offences |
|that replicate most, but |that replicate most, but |
|not all, of the conduct |not all, of the conduct |
|obligations in Chapter 3 |obligations under |
|of the ACL. |Division 1 of Part V of |
| |the TP Act. |
| |The State and Territory |
| |FT Acts generally provide|
| |for criminal offences, |
| |but do not separate |
| |conduct obligations from |
| |criminal offences. |
|Section 160 of the ACL |Section 75AZR of the TP |
|provides an exemption for|Act provides an exemption|
|prescribed information |for prescribed |
|providers in respect of |information provides in |
|certain types of false or|respect of certain types |
|misleading |of false or misleading |
|representations or |representations or |
|conduct. |conduct. |
|Section 207 of the ACL |Subsection 85(1) of the |
|provides for a defence to|TP Act provides a defence|
|a criminal prosecution of|of reasonable mistake of |
|reasonable mistake of |fact. |
|fact. |The FT Acts generally |
| |also provide for defences|
| |of reasonable mistake of |
| |fact. |
|Section 208 of the ACL |Section 85(1) of the TP |
|provides a defence to a |Act provides a defence if|
|criminal prosecution if a|a contravention is due to|
|contravention is due to |an act or default of |
|an act or default of |another person or some |
|another person or some |other cause beyond the |
|other cause beyond the |defendant's control. |
|defendant's control. |The FT Acts generally |
| |also provide for defences|
| |if a contravention is due|
| |to an act or default of |
| |another person or some |
| |other cause beyond the |
| |defendant's control. |
|Section 209 of the ACL |Subsection 85(3) of the |
|provides a defence to a |TP Act provides a defence|
|criminal prosecution for |for publication of |
|publication of |advertisements by a |
|advertisements by a |person whose business it |
|person whose business it |is to publish or arrange |
|is to publish or arrange |the publication of |
|the publication of |advertisements. |
|advertisements if the |The FT Acts generally |
|person did not know, and |provide for a similar |
|had no reason to suspect,|defence. |
|that a contravention | |
|would result from the | |
|publication. | |
|New law |Current law |
|Section 210 of the ACL |Section 85(4) of the TP |
|provides a defence to |Act provides a defence to|
|prohibitions on the |prohibitions on the |
|supply of goods that do |supply of goods that do |
|not comply with safety |not comply with safety |
|standards and information|standards and information|
|standards, in certain |standards, in certain |
|circumstances, if goods |circumstances, if goods |
|were acquired by the |were acquired by the |
|defendant for the purpose|defendant for the purpose|
|of re-supply. |of re-supply. |
|Section 211 of the ACL |The TP Act does not |
|provides a defence to |provide for a similar |
|prohibitions on the |defence, as safety |
|supply of services that |standards and information|
|do not comply with safety|standards do not apply to|
|standards and information|services. |
|standards, in certain | |
|circumstances, if goods | |
|were acquired by the | |
|defendant for the purpose| |
|of re-supply. | |
|Section 213 of the ACL |Section 79(6) of the TP |
|provides that |Act provides that |
|prosecutions must be |prosecutions must be |
|commenced within 3 years |commenced within 3 years |
|of the commission of an |of the commission of an |
|offence. |offence against a |
| |provision of Part VC of |
| |Act. |
|Section 214 of the ACL |Section 79B of the TP Act|
|provides that |provides that |
|compensation for victims |compensation to victims |
|of contraventions of the |is to receive preference |
|ACL must be given |over pecuniary penalties |
|preference over the |or fines. |
|imposition of a fine | |
|under Chapter 4 of the | |
|ACL. | |
|Section 215 of the ACL |Section 76(3) of the TP |
|provides that a court |Act provides that a |
|must not apply multiple |person is not liable for |
|fines in respect of the |more than one pecuniary |
|same conduct that exceed |penalty in respect of the|
|the maximum penalty for |same conduct. |
|an offence. Section 216 | |
|has similar effect to | |
|section, but applies when| |
|fines are applied in | |
|separate proceedings. | |
|Section 217 of the ACL |Section 79(4) of the TP |
|provides that a court may|Act provides that a court|
|grant an injunction or |may grant an injunction |
|make a non-punitive or |or make a non-punitive or|
|adverse publicity order |adverse publicity order |
|in the same proceedings |in proceedings against a |
|as those for a |person for contravening a|
|contravention of a |provision of Part VC. |
|Chapter 4. | |
Detailed explanation of new law
1304. In this Explanatory Memorandum the individual offences are
determined in accordance with the provisions with which they are
associated.
Offences relating to unfair practices
1305. Part 4-1 of the ACL provides for criminal offences which take,
essentially the same form as certain prohibitions in Chapter 3, Part
3-1 of the ACL. The substantive operation of those provisions is
discussed where the substantive prohibitions are discussed in
Chapter 5 in this explanatory memorandum. Criminal offences are
provided in respect of contraventions of the following provisions:
. False or misleading representations about goods or
services [Schedule 1, item 1: Chapter 4, Part 4-1,
Division 1, section 151];
. False or misleading representations about the sale of land
[Schedule 1, item 1: Chapter 4, Part 4-1, Division 1,
section 152];
. Misleading conduct relating to employment [Schedule 1,
item 1: Chapter 4, Part 4-1, Division 1, section 153];
. Offering rebates, gifts or prizes [Schedule 1, item 1:
Chapter 4, Part 4-1, Division 1, section 154];
. Misleading conduct as to the nature of goods [Schedule 1,
item 1: Chapter 4, Part 4-1, Division 1, section 155];
. Certain misleading conduct in relation to services
[Schedule 1, item 1: Chapter 4, Part 4-1, Division 1,
section 156];
. Bait advertising [Schedule 1, item 1: Chapter 4, Part 4-1,
Division 1, section 157];
. Wrongly accepting payment [Schedule 1, item 1: Chapter 4,
Part 4-1, Division 1, section 158];
. Misleading representations about certain business
activities [Schedule 1, item 1: Chapter 4, Part 4-1,
Division 1, section 159];
. Unsolicited cards [Schedule 1, item 1: Chapter 4, Part 4-
1, Division 2, section 161];
. Assertion of a right to payment for unsolicited goods or
services [Schedule 1, item 1: Chapter 4, Part 4-1,
Division 2, section 162];
. Assertion of a right to payment for unauthorised entries
or advertisements [Schedule 1, item 1: Chapter 4, Part 4-
1, Division 2, section 163];
. Participation in pyramid schemes [Schedule 1, item 1:
Chapter 4, Part 4-1, Division 2, section 164];
. Multiple pricing [Schedule 1, item 1: Chapter 4, Part 4-1,
Division 2, section 165];
. Single price to be specified in certain circumstances
[Schedule 1, item 1: Chapter 4, Part 4-1, Division 2,
section 166];
. Referral selling [Schedule 1, item 1: Chapter 4, Part 4-1,
Division 2, section 167]; and
. Harassment and coercion [Schedule 1, item 1: Chapter 4,
Part 4-1, Division 2, section 168].
Defences relating to false or misleading representations
1306. A person has a defence against criminal prosecution for a
contravention of the false or misleading representation offences
(sections 151, 152, 155, 156, and 159) if he or she publishes it in
the course of carrying on a business as an information provider
[Schedule 1, item 1: Chapter 4, Part 4-1, Division 1, paragraph
160(1)(a)]. This defence also expressly applies to the Australian
Broadcasting Corporation, the Special Broadcasting Service
Corporation or the holder of a licence granted under the
Broadcasting Services Act 1992 [Schedule 1, item 1: paragraph
160(1)(b)].
1307. Information provider is a defined term in the ACL, and includes
media organisations such as radio and television stations (including
the Australian Broadcasting Corporation and the Special Broadcasting
Service Corporation), as well as publishers of newspapers and
magazines. This definition operates in the same way as the one in
the current section 75AZR of the TP Act. [Chapter 2, Part 2-1,
subsections 20(5) and (6)]
1308. This exemption does not apply to:
. advertisements;
. a publication in connection with the supply (or promotion
of the supply) of goods or services by the information
provider; or
. a publication in connection with the sale or grant (or
promotion of the sale or grant) of an interest in land by
the information provider. [Schedule 1, item 1:
subsections 160(2) to (4)]
1309. These exceptions operate in the same way as those currently outlined
in paragraphs 75AZR of the TP Act.
Offences relating to consumer transactions
1310. Part 4-2 of the ACL provides for criminal offences which take,
essentially the same form as certain prohibitions in Chapter 3, Part
3-2 of the ACL. The substantive operation of those provisions is
discussed where the substantive prohibitions are discussed in
Chapter 5 in this explanatory memorandum. Criminal offences are
provided in respect of contraventions of the following provisions:
. Display notices under the consumer guarantees regime in
Part 3-2, Division 1 of the ACL [Schedule 1, item 1:
Chapter 4, Part 4-2, Division 1, section 169];
. Permitted hours for negotiating unsolicited selling
agreements [Schedule 1, item 1: Chapter 4, Part 4-2,
Division 2, section 170];
. Disclosing purpose and identity when making unsolicited
approaches to consumers [Schedule 1, item 1: Chapter 4,
Part 4-2, Division 2, section 172];
. Ceasing to negotiate an unsolicited consumer agreement on
request [Schedule 1, item 1: Chapter 4, Part 4-2, Division
2, section 173];
. Informing a person of their right to terminate an
unsolicited consumer agreement [Schedule 1, item 1:
Chapter 4, Part 4-2, Division 2, section 174];
. Providing certain documents when negotiating an
unsolicited consumer agreement [Schedule 1, item 1:
Chapter 4, Part 4-2, Division 2, section 175];
. Requirements for the content of an unsolicited consumer
agreement [Schedule 1, item 1: Chapter 4, Part 4-2,
Division 2, section 176];
. Additional requirements for unsolicited consumer
agreements not negotiated by telephone [Schedule 1, item
1: Chapter 4, Part 4-2, Division 2, section 177];
. Requirements for amendments of unsolicited consumer
agreements [Schedule 1, item 1: Chapter 4, Part 4-2,
Division 2, section 178];
. Obligation of suppliers on termination of an unsolicited
consumer agreement [Schedule 1, item 1: Chapter 4, Part 4-
2, Division 2, section 179];
. Prohibition on supplying goods or services under an
unsolicited consumer agreement within the first 10 days
[Schedule 1, item 1: Chapter 4, Part 4-2, Division 2,
section 180];
. Repayment of payments received after termination of an
unsolicited consumer agreement [Schedule 1, item 1:
Chapter 4, Part 4-2, Division 2, section 181];
. Prohibition on recovering amounts after termination of an
unsolicited consumer agreement [Schedule 1, item 1:
Chapter 4, Part 4-2, Division 2, section 182];
. Voiding of certain provisions of unsolicited consumer
agreements [Schedule 1, item 1: Chapter 4, Part 4-2,
Division 2, section 183];
. Waiver of rights [Schedule 1, item 1: Chapter 4, Part 4-2,
Division 2, section 184];
. Lay-by agreements must be in writing [Schedule 1, item 1:
Chapter 4, Part 4-2, Division 3, section 188];
. Termination charges [Schedule 1, item 1: Chapter 4, Part 4-
2, Division 3, section 189];
. Termination of lay-by agreements by suppliers [Schedule 1,
item 1: Chapter 4, Part 4-2, Division 3, section 190];
. Refund of amounts paid under a lay-by agreement [Schedule
1, item 1: Chapter 4, Part 4-2, Division 3, section 191];
. Prescribed requirements for warranties against defects
[Schedule 1, item 1: Chapter 4, Part 4-2, Division 4,
section 192]; and
. Compliance by repairers with prescribed requirements for
warranties against defects [Schedule 1, item 1: Chapter 4,
Part 4-2, Division 4, section 193].
Application of provisions on unsolicited selling agreements
1311. In the event that the rights under a contract for the supply of
goods or services that has arisen from an unsolicited selling
agreement are assigned or otherwise transfer from one person to
another, Part 4-2 , Division 2 of the ACL applies to that other
person as if he or she was the original person. [Schedule 1, item
1: Chapter 4, Part 4-2, Division 2, section 184]
1312. Part 4-2, Division 2 also applies in relation to a contract for the
supply of goods or services to a consumer on the order of another
person, as if that other person was the original consumer.
[Schedule 1, item 1: Chapter 4, Part 4-2, Division 2, section 185]
Conduct to which the unsolicited selling provisions do not apply
1313. Regulations may exempt particular types of unsolicited selling
agreements, business activities or circumstances form the operation
of the unsolicited selling provisions of the ACL. However, the
regulations may not exempt any agreements, activities or
circumstances, from the permitted calling hours requirement in
section 73 of the ACL. [Schedule 1, item 1: Chapter 4, Part 4-2,
Division 2, section 186]
1314. The unsolicited selling provisions of the ACL do not apply to
conduct or agreements that are governed by the anti-hawking
provisions of the Corporations Act. [Schedule 1, item 1: Chapter 4,
Part 4-2, Division 2, section 187]
Offences relating to the safety of consumer goods and product related
services
1315. Part 4-3 of the ACL provides for criminal offences which take,
essentially the same form as certain prohibitions in Chapter 3, Part
3-3 of the ACL. The substantive operation of those provisions is
discussed where the substantive prohibitions are discussed in
Chapter 10 in this explanatory memorandum. Criminal offences are
provided in respect of contraventions of the following provisions:
. Supplying consumer goods that do not comply with safety
standards [Schedule 1, item 1: Chapter 4, Part 4-3,
Division 1, section 194];
. Supplying product related services that do not comply with
safety standards [Schedule 1, item 1: Chapter 4, Part 4-3,
Division 1, section 195];
. Requirement to nominate a safety standard [Schedule 1,
item 1: Chapter 4, Part 4-3, Division 1, section 196];
. Supplying consumer goods covered by a ban [Schedule 1,
item 1: Chapter 4, Part 4-3, Division 2, section 196];
. Supplying product related services covered by a ban
[Schedule 1, item 1: Chapter 4, Part 4-3, Division 2,
section 198];
. Compliance with recall orders [Schedule 1, item 1: Chapter
4, Part 4-3, Division 3, section 199];
. Notification of persons outside Australia if there is a
compulsory recall [Schedule 1, item 1: Chapter 4, Part 4-
3, Division 3, section 200];
. Notification requirements for a voluntary recall of
consumer goods [Schedule 1, item 1: Chapter 4, Part 4-3,
Division 3, section 201]; and
. Suppliers to report consumer goods associated with the
death or serious injury or illness of any person [Schedule
1, item 1: Chapter 4, Part 4-3, Division 4, section 202].
Offences relating to information standards
1316. Part 4-4 of the ACL provides for criminal offences which take,
essentially the same form as certain prohibitions in Chapter 3, Part
3-4 of the ACL. The substantive operation of those provisions is
discussed where the substantive prohibitions are discussed in
Chapter 11 in this explanatory memorandum. Criminal offences are
provided in respect of contraventions of the following provisions:
. Supplying goods that do not comply with information
standards [Schedule 1, item 1: Chapter 4, Part 4-4,
section 203];
. Supplying services that do not comply with information
standards [Schedule 1, item 1: Chapter 4, Part 4-4,
section 204];
Offences relating to enforcement
1317. Part 4-5 of the ACL provides for criminal offences which take,
essentially the same form as certain prohibitions in Chapter 5, Part
5-1 of the ACL. The substantive operation of those provisions is
discussed where the substantive prohibitions are discussed in
Chapter 14 in this explanatory memorandum. Criminal offences are
provided in respect of contraventions of the following provisions:
. Compliance with substantiation notices [Schedule 1, item
1: Chapter 4, Part 4-5, section 205]; and
. Providing false or misleading information in response to a
substantiation notice [Schedule 1, item 1: Chapter 4, Part
4-5, section 206].
Defences
1318. Part 4-6 of the ACL provides for general defences that apply to
criminal prosecutions under the ACL.
Reasonable mistake of fact
1319. Section 207 of the ACL provides that it is a defence in a
prosecution for a contravention of Chapter 4 of the ACL if the
defendant proves that the contravention was caused by a reasonable
mistake of fact, including a mistake of fact caused by reasonable
reliance on information provided by another person.
1. - reasonable mistake of fact
The case of Adams v ETA Foods (1967)[17] is an example of
successful reliance on the defence of reasonable mistake of
fact. ETA sold pies and represented that they were 'beef
pies'. The pies contained a significant proportion of meat
that was not beef. ETA had purchased the meat from a
reputable supplier and had examined and tested the meat
after it was delivered, but did not ascertain that
substitution had taken place. ETA successfully relied on a
defence of reasonable mistake of fact.
Act or default of another person
1320. Subsection 208(1) of the ACL provides a defence to a prosecution for
a contravention of a provision within Chapter 4 if the defendant
proves that:
. the contravention was due to the act of default of another
person, to an accident or to some other cause beyond the
defendant's control; and
. the defendant took reasonable precautions and exercised
due diligence to avoid the contravention.
1321. Section 208(2) provides that the defence in section 208(1) does not
apply to excuse conduct if the 'other person' was an employee or
agent of the defendant or a director of a defendant that is a body
corporate. [Schedule 1, item 1: Chapter 4, Part 4-6, section 208]
Publication of advertisements in the ordinary course of business
1322. A person cannot be convicted of an offence against the ACL merely
because the person, in the ordinary course of their business
publishes an advertisement on behalf of another person [Schedule 1,
item 1: Chapter 4, Part 4-6, subsections 209(a) and 209(b)].
1323. This defence prevents media providers, including television, radio,
and print media, from liability for contraventions of the ACL
committed within advertisements published through those media on
behalf of other persons. This defence can only be relied upon if
the person did not know, or had no reason to suspect that
publication of the advertisement will amount to a contravention of
the ACL. [Schedule 1, item 1: Chapter 4, Part 4-6, subsection
209(c)]
Supply goods or services in for the purposes of resupply
1324. It is a defence for a person in proceedings concerning the supply of
goods or services in contravention of a product safety standard
(sections 194 and 195 of the ACL) or an information standard
(sections 203 and 204) if the defendant can prove that:
. the goods or services were acquired by the defendant for
the purpose of resupply [Schedule 1, item 1: Chapter 4,
Part 4-6, paragraphs 210(1)(a) and 211(1)(a)]; and
. the goods or services were acquired from a person who
carried on a business in Australia of supplying such goods
and is not an agent of a person outside Australia[Schedule
1, item 1: Chapter 4, Part 4-6, paragraphs 210(1)(b) and
211(1)(b)].
1325. A defendant may only rely on this defence if:
. he or she did not know and could not have reasonably
known, with the exercise of due diligence, that the goods
or services did not comply with an applicable safety or
information standard[Schedule 1, item 1: Chapter 4, Part 4-
6, subparagraphs 210(1)(c)(i) and 210(1)(d)(i); or
. he or she relied in good faith on a representation by the
person they acquired the goods or services from that no
safety or information standard applied to the goods or
services [Schedule 1, item 1: Chapter 4, Part 4-6,
paragraphs 210(1)(c)(ii) and 210(1)(d)(ii)].
1326. A suppler of goods or services may acquire goods or subcontract for
the supply of services with another supplier, in good faith
understanding that either no safety or information standards exist
for those goods or services, or that if such requirements do exist,
they have been complied with. It may not be possible for a supplier
to determine categorically that goods acquired from others or
services supplied by others comply. However a supplier must still
make their own efforts to ensure that goods or services supplied by
them, irrespective of where they are acquired from, comply with any
safety or information standards.
1327. The defences in sections 210 and 211 can only be relied upon with
leave from the court and if the defendant has identified the person
from whom the defendant acquired the goods or services. [Schedule
1, item 1: Chapter 4, Part 4-6, subsections 210(2) and 211(2)]
Miscellaneous procedural requirements
1328. Part 4-7 provides some general rules for the conduct of criminal
prosecutions under the ACL, including:
. time limits for commencement of prosecutions;
. relative prioritization of penalties and compensation;
. penalties for multiple convictions; and
. granting of injunctions and other orders.
Time limits for prosecution
1329. Under the ACL, criminal prosecutions must be commenced within 3
years of the commission of the offence [Schedule 1, item 1: Chapter
4, Part 4-7, section 212].
Preference must be given to compensation for victims
1330. If a court considers that it is appropriate to order a person
convicted of an offence against the ACL to both pay a fine and to
pay compensation to a victim of the offence, and the person does not
have the financial resources to pay both, preference must be given
to the payment of compensation [Schedule 1, item 1: Chapter 4, Part
4-7, section 213].
Penalties for multiple contraventions
1331. A court is not to impose aggregate penalties on a person that
exceed the maximum fine for an offence in respect of multiple
contraventions that are similar in nature and occurred at about the
same time [Schedule 1, item 1: Chapter 4, Part 4-7, section 214].
Penalties for previous contraventions
1332. A court is not to impose aggregate penalties on a person that
exceed the maximum fine for an offence in respect of previous
contraventions that are similar in nature. [Schedule 1, item 1:
Chapter 4, Part 4-7, section 215].
Granting of injunctions and other orders
1333. In addition to imposing fines up to the maximum levels set out in
Chapter 4 of the ACL, a court may grant injunctions or other orders,
including non-punitive and adverse publicity orders in respect of
contraventions of the ACL. [Schedule 1, item 1: Chapter 4, Part 4-
7, section 216]
Application and transitional provisions
1334. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1335. Chapter 4 of the ACL applies to all relevant conduct occurring in
trade or commerce on or after 1 January 2011.
1336. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1337. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1338. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1339. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Do not remove section break.
Outline of chapter
1340. The ACL provides for regulators taking enforcement action in respect
of contraventions or apprehended contraventions of the Act.
1341. Enforcement powers available to regulators under the ACL include:
. enforceable undertakings;
. substantiation notices; and
. public warning notices.
Context of amendments
1342. In 2008, the PC's Review of Australia's Consumer Policy Framework
noted that the TP Act and the FT Acts provided a range of
enforcement tools for regulators to deter, punish and provide
recompense to consumers for illegal conduct. The PC observed that
some tools were not available to all regulators and that this can
restrict their ability to adopt regulatory responses that are
tailored to the severity of breaches of the relevant laws.
1343. The PC also noted that the existing powers of the ACCC to gather
information about claims or representations made in promoting the
supply of goods or services were too limited. Some State and
Territory regulators had the power to issue substantiation notices,
but this power was not available to the ACCC under the TP Act.
Accordingly, the PC recommended that a new, national consumer law
should make provision for all regulators having the power to issue
substantiation notices to require suppliers to provide information
capable of supporting claims or representations made about goods or
services.
1344. The PC considered the 'naming and shaming powers' in the TP Acts and
indicated that failure to include them in a national consumer law
could undermine the consensus for a national consumer law. On that
basis, the PC recommended that MCCA consider their inclusion in the
ACL.
1345. On 15 August 2009, MCCA agreed that the ACL should include
substantiation notices as well as public warning notices to allow
regulators to warn the public about potentially detrimental conduct.
Summary of new law
1346. The ACL provides regulators with uniform and comprehensive powers to
enforce the provisions of the Act. By providing a uniform set of
enforcement tools, the ACL ensures that regulators can take a multi-
layered approach to enforcement by tailoring regulatory responses to
the severity of breaches of the law. It also ensures that suppliers
face the same incentives to comply with the law irrespective of
where they reside.
Undertakings
1347. Section 218 of the ACL allows a regulator to accept court-
enforceable undertakings in connection with a matter in relation to
which the regulator has a power or function under the ACL. An
undertaking is a binding agreement between a person and the
regulator. The only limit on the content of an undertaking that is
provided for in the ACL is that it must relate to a matter in
relation to which the regulator has power under the ACL.
1348. Section 218 replaces section 87B of the TP Act.
Substantiation notices
1349. Substantiation notices were introduced into the TP Act by the Trade
Practices Amendment (Australian Consumer Law) Bill 2009 (the first
ACL Bill).
1350. The power to issue a substantiation notice provides the regulator
with a preliminary investigative tool to seek information about
claims or representations that may assist them in determining
whether to take action for a suspected breach of consumer protection
provisions of the ACL.
1351. A regulator may issue a substantiation notice under section 219 of
the ACL in relation to a claim or representation promoting or
apparently intended to promote:
. the supply, or possible supply, of goods or services by
the person or another person;
. a sale or grant, or possible sale or grant, of an interest
in land by the person or another person; or
. employment that is, or may, be offered by the person or
another person.
1352. The substantiation notice will require the person to provide, within
21 days of the notice being issued, information or documents which
could be capable of substantiating the representations or their
ability to supply, both generally and in relation to specific
matters.
1353. The regulator may seek particular information of a type that it
specifies, so long as the information requested is relevant to the
substantiation of the claim or representation or the person's
ability to supply goods or services.
Public warning notices
1354. Public warning notices were introduced into the TP Act by the Trade
Practices Amendment (Australian Consumer Law) Bill 2009 (the first
ACL Bill).
1355. Public warning notices allow enforcement agencies to inform the
public about persons engaged in business practices that may amount
to a contravention of the ACL. Such notices are intended to stop or
reduce the detriment caused by those business practices. They
provide regulators with an enforcement tool that can be used in a
preventative manner to avoid persons being adversely affected by
conduct that may breach the ACL.
1356. A regulator may issue a warning notice where:
. it has reasonable grounds to believe a person's conduct
may have breached Chapter 2, 3, or 4 of the ACL; or
. a person refuses or fails to respond to a substantiation
notice.
1357. The power to issue a warning notice is limited to circumstances in
which the regulator is satisfied that:
. one or more persons has suffered, or is likely to suffer,
detriment as a result of the conduct; and
. it is in the public interest to issue a public warning
notice.
Comparison of key features of new law and current law
Undertakings
|New law |Current law |
|A regulator can accept |The ACCC can accept |
|court-enforceable |court-enforceable |
|undertakings in |undertakings in |
|connection with a matter |connection with a matter |
|that the regulator has a |that the regulator has a |
|power or function under |power or function under |
|the ACL. |the TP Act. |
Substantiation notices
|New law |Current law |
|The provisions in Part |Section 154 of the TP Act|
|5-1 Division 2 of the |provides for the ACCC |
|Bill will allow a |compelling persons to |
|regulator to issue a |provide it with |
|notice requiring a person|information, documents |
|to provide information or|and evidence. |
|documents which may be |Section 154 is limited by|
|capable of substantiating|the fact that the ACCC |
|particular claims or |must have a 'reason to |
|representations, or their|believe' that a person is|
|ability to supply goods |capable of providing |
|or services. |information, documents or|
| |evidence 'relating to a |
| |matter' that may |
| |constitute a |
| |contravention of the TP |
| |Act. |
| |Most of the State and |
| |Territory FT Acts include|
| |provision for the |
| |issuance of |
| |substantiation notices. |
Public warning notices
|New law |Current law |
|Section 230 of the ACL |Section 86C and 86D of |
|allows a regulator to |the TP Act provides the |
|issue public warning |ACCC with the ability to |
|notices relating to |ask a court to order the |
|consumer protection in |publication of corrective|
|certain circumstances. |advertising in a way |
|Regulators are not |specified in the orders. |
|required to make an |The availability of such |
|application to a court or|orders is limited to |
|prove that a |circumstances in which a |
|contravention of the ACL |person has contravened a |
|has occurred to issue |provision of the TP Act. |
|such a notice. |A number of the State and|
| |Territory FT Acts provide|
| |for ministerial or |
| |administrative discretion|
| |to issue public warning |
| |notices. |
Detailed explanation of new law
Regulator
1358. A regulator is:
. for the purposes of the applied ACL as a law of the
Commonwealth, the ACCC; and
. for the purposes of the applied ACL as a law of each State
and Territory, the body designated by the application law
of each State or Territory [Schedule 1, item 1: Chapter 1,
section 2] .
Undertakings
1359. Section 218 of the ACL provides regulators with the power to accept
undertakings in connection with a matter with which they have a
power or function under the ACL. The undertakings are court-
enforceable. [Schedule 1, item 1: Chapter 5, Part 5-1, Division 1,
section 218]
1360. The undertaking can be varied or withdrawn by the person making the
undertaking, but only with the consent of the regulator that
accepted it. [Schedule 1, item 1: Chapter 5, Part 5-1, Division 1,
subsection 218(2)]
1361. Where a regulator considers that the person has breached any of the
terms of the undertaking, it may apply to the court for an order:
. directing the person to comply with the term of the
undertaking;
. directing the person to pay the Commonwealth or a State or
Territory an amount up to the amount of any financial
benefit reasonably attributable to the breach of the term
of the undertaking; and
. any other orders. [Schedule 1, item 1: Chapter 5, Part 5-
1, Division 1, subsections 218(3)-(4)]
Substantiation Notices
Regulator may require claims to be substantiated
1362. A substantiation notice may be issued by the regulator if a person
makes claims or representations promoting or apparently intended to
promote certain things. [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 2, subsection 219(1)]
1363. The regulator may issue a substantiation notice in relation to:
. the supply, or possible supply, of goods or services by a
person or another person; [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2, paragraph 219(1)(a)]
. a sale or grant, or possible sale or grant, of an interest
in land by a person or another person; and [Schedule 1,
item 1: Chapter 5, Part 5-1, Division 2, section
219(1)(b)]
. employment this is to be, or may be, offered by a person
or another person. [Schedule 1, item 1: Chapter 5, Part 5-
1, Division 2, paragraph 219(1)(c)]
1364. A substantiation notice can require the person that is issued the
notice to do certain things, namely:
. give information or produce documents to the regulator
which could be capable of substantiating or supporting the
claims or representations; [Schedule 1, item 1: Chapter
5, Part 5-1, Division 2, paragraph 219(2)(a)]
. give information or produce documents to the regulator
that could be capable of substantiating the quantities in
which and the period for which the person will be able to
make the supply to which the claims or representations
relate (whether or not the claims or representations
relate to those quantities or that period) [Schedule 1,
item 1: Chapter 5, Part 5-1, Division 2, paragraph
219(2)(b)]; and
. give information or produce documents of a kind the
regulator specifies. [Schedule 1, item 1: Chapter 5, Part
5-1, Division 2, paragraph 219(2)(c)]
1365. A person must comply with the substantiation notice within 21 days
of the notice being given to the person by the regulator. [Schedule
1, item 1: Chapter 5, Part 5-1, Division 2, section 219]
1366. In order to comply with a substantiation notice, the person to whom
it is issued does not need to substantiate the claim to the
satisfaction of the regulator or a court.
1367. If the regulator specifies in the substantiation notice that
particular information or documents are to be provided, then it must
be satisfied that those documents provided are relevant to
substantiating:
. the claims or representations; or
. the quantity in which, or the period for which, the
corporation is or will be able to make such a supply.
[Schedule 1, item 1: Chapter 5, Part 5-1, Division 2,
subsection 219(3)]
1368. The substantiation notice must include certain information, namely:
. the name of the person to whom it is given;
. a specification of the claim or representations to which
it relates; and
. an explanation of the effect of those provisions of the
ACL that relate to:
- extending periods for complying with substantiation
notices (section 219);
- compliance with substantiation notices (section 220);
and
- the consequences of providing false or misleading
information (section 221).
[Schedule 1, item 1: Chapter 5,, Part 5-1, Division 2, subsection
219(4)]
1369. The notice issued may relate to more than one claim or
representation. [Schedule 1, item 1: Chapter 5, Part 5-1, Division
2, subsection 219(5)]
1370. Certain persons are exempt from substantiation notices on the basis
that they publish that information on behalf of another person in a
commercial context. Specifically, a person does not have to comply
with a substantiation notice if they:
. are an information provider; [Schedule 1, item 1: Chapter
5, Part 5-1, Division 2, paragraph 219(6)(a)]
. made the claim or representation by publishing it on
behalf of another person in the course of carrying on a
business of providing information; and [Schedule 1, item
1: Chapter 5, Part 5-1, Division 2, paragraph 219(6)(b)]
. does not have a commercial relationship with the other
person other than for the purpose of: publishing claims or
representations promoting, or apparently intended to
promote, the other person's business or other activities;
or the other person supplying goods or services, or
selling or granting interests in land. [Schedule 1, item
1: Chapter 5: Part 5-1, Division 2, paragraph 219(6)(c)]
Extending periods for complying with substantiation notices
1371. A person who has been given a substantiation notice may, at any time
within 21 days after the notice was given to the person, apply in
writing to the regulator for an extension of the period for
complying with the notice. The regulator may, by written notice
given to the person, extend the period within which the person must
comply with the notice. [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 2, section 220]
Compliance with substantiation notices
1372. A person who is given a substantiation notice must comply with it
within the substantiation notice compliance period for the notice,
which is defined as 21 days; or, if the period for complying with
the notice has been extended under section 220, the period so
extended. [Schedule 1, item 1: Chapter 5, Part 5-1, Division 2,
subsections 221(1) & (2)]
1373. Failure to comply with a substantiation notice (that is, not
providing any information which may be capable of substantiating the
claims or as specifically requested by the regulator) may result in
an infringement notice being issued or liability for a civil
pecuniary penalty.
1374. A person may refuse or fail to give particular information or
produce a particular document in compliance with a substantiation
notice on the ground that the information or production of the
document might tend to incriminate the individual or to expose the
individual to a penalty. [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 2, subsection 221(3)]
False or misleading information etc.
1375. A person must not, in compliance or purported compliance with a
substantiation notice, give to the regulator false or misleading
information; or produce to the regulator documents that contain
false or misleading information. [Schedule 1, item 1: Chapter 5,
Part 5-1, Division 2, subsection 222(1)]
1376. This section does not apply to:
. information that the person could not have known was false
or misleading; or
. the production to the regulator of a document containing
false or misleading information if the document is
accompanied by a statement of the person that the
information is false or misleading. [Schedule 1, item 1:
Chapter 5, Part 5-1, Division 2, subsection 222(2)]
Enforcement and remedies
1377. A person contravening section 221(2) of the ACL is liable to pay a
civil pecuniary penalty of up to [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 1, section 224]:
. $16,500 for a body corporate; and
. $3,300 for other persons.
1378. A person contravening section 222(2) of the ACL is liable to pay a
civil pecuniary penalty of up to [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 1, section 224]:
. $27,500 for a body corporate;
. $5,500 for other persons.
1379. The ACCC may issue an infringement notice for a contravention of
section 221(1) of the ACL. The amount of the penalty specified in
the infringement notice is [Schedule 2, item 1: Part XI, Division
5]:
. 30 penalty units for a body corporate other than a listed
corporation; and
. 6 penalty units for any other person.
1380. The ACCC may issue an infringement notice for a contravention of
section 222(1) of the ACL. The amount of the penalty specified in
the infringement notice is [Schedule 2, item 1: Part XI, Division
5]:
. 50 penalty units for a body corporate other than a listed
corporation; and
. 10 penalty units for any other person.
Public warning notices
1381. The regulator may issue a public warning notice in writing about the
conduct of a corporation where:
. the regulator has reasonable grounds to suspect a person's
conduct may be in contravention of a provision in Chapter
2, 3, or 4 of the ACL [Schedule 1, item 1: Chapter 5, Part
5-1, Division 3, paragraph 223(1)(a)]; and
. the regulator is satisfied that one or more persons has
suffered, or is likely to suffer detriment as a result of
the conduct; [Schedule 1, item 1: Chapter 5, Part 5-1,
Division 3, paragraph 223(1)(b)] and
. the regulator is satisfied that it is in the public
interest to issue a public warning notice. [Schedule 2,
Item 1: Part 5-1, Division 3, paragraph 223(1)(c)]
1382. The ACL specifically provides that a regulator may issue a public
warning notice if a person refuses or fails to respond to a
substantiation notice and the regulator is satisfied that it is in
the public interest to issue a public warning notice. [Schedule 2,
Item 1: Part 5-1, Division 3, subsection 223(2)]
1383. The determination of whether the regulator is satisfied that there
is, or is likely to be, detriment to one or more persons as a result
of the conduct, and that it is in the public interest to issue a
public warning notice, is a matter within the discretion of the
regulator, in accordance with the proper exercise of their
functions.
1384. A public warning notice issued in relation to either a contravention
or a substantiation notice matter is not a legislative instrument
within the meaning of section 5 of the LI Act, and is not exempted
from the operation of that Act. [Schedule 2, Item 1: Part XI,
paragraph 131E(2)(f)].
Application and transitional provisions
1385. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1386. Chapter 5, Part 5-1 of the ACL applies to all relevant conduct
occurring in trade or commerce on or after 1 January 2011.
1387. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1388. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1389. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1390. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Chapter 15
Remedies
Outline of chapter
1391. Part 5-2 of the Australian Consumer Law (ACL) contains provisions
for civil pecuniary penalties, injunctions, damages, compensation
orders, other remedies and defences applicable to court proceedings
for breaches of the ACL.
Context of amendments
1392. In 2008, the Productivity Commission's Review of Australia's
Consumer Policy Framework recommended that a new, national consumer
law should allow for civil pecuniary penalties, banning orders and
redress for non-party consumers.
1393. On 15 August 2009, MCCA agreed that the ACL will include civil
pecuniary penalties, banning orders and redress for non-party
consumers.
1394. Many of these are to be included in the Trade Practices Act 1974
(TP Act) and the Australian Securities and Investments Commission
Act 2001 (ASIC Act) by the Trade Practices Amendment (Australian
Consumer Law) Bill 2009 (first ACL Bill).
Summary of new law
1395. The penalty and remedy provisions in the ACL will provide regulators
with various court-based options for pursuing breaches of the law.
The range of remedies from injunctions, through to remedial orders
and penalties provides a variety of options to allow proportionate
enforcement of the ACL.
Civil pecuniary penalties
1396. Civil pecuniary penalties will be introduced into the TP Act in
respect of the consumer protection provisions in the first ACL Bill.
1397. Civil pecuniary penalties enable a targeted and proportionate
regulatory response, in addition to increasing the deterrent effect
of consumer law provisions. Civil pecuniary penalties allow
regulators to seek penalties and redress for consumers
simultaneously. This was not possible previously, as criminal
sanctions and civil remedies cannot be sought in the same
proceedings.
1398. The ACL provides for similar penalties applying to contraventions of
provisions that are similar to repealed sections of the TP Act. The
consumer protection provisions of the TP Act were typically subject
to civil pecuniary penalties with a maximum penalty of $1.1 million
for bodies corporate and $220,000 for persons other than bodies
corporate.
1399. In relation to product safety in Chapter 3 of the ACL, civil
pecuniary penalties for provisions replacing existing TP Act
provisions are set at a maximum of $1.1 million for bodies corporate
and $220,000 for persons other than bodies corporate for
prohibitions. Penalties of $16,500 for bodies corporate and $3,300
for persons other than bodies corporate apply to disclosure
requirements. This reflects the general level of penalties and
fines that applied under the TP Act.
1400. The civil pecuniary penalties for consumer protection provisions in
the ACL that are based on best practice from the FT Acts have been
set at the highest penalty that a State or Territory applied for an
equivalent contravention. In some instances outliers were ignored
when a particular State or Territory applied a much higher penalty
to a contravention than other jurisdictions. Penalties for persons
other than bodies corporate are one-fifth of the amount for bodies
corporate.
1401. Civil pecuniary penalties apply to:
. a contravention of the unconscionable conduct provisions
in Part 2-2;
. a contravention of the consumer protection provisions
relating to unfair practices in Part 3-1;
. a contravention of the display notices provision in
section 66(2);
. a contravention of certain provisions relating to consumer
transactions in Part 3-2 (except Division 1);
. a contravention of certain product safety provisions in
Part 3-3;
. a contravention of certain information standards
provisions in Part 3-4; and
. failure to respond to a substantiation notice or providing
false or misleading information in response to a
substantiation notice in sections 221 and 222.
Injunctions
1402. Division 2 of Part 5-2 provides the injunctive powers in relation to
contraventions of the ACL, including injunctions, consent
injunctions and interim injunctions. It also provides for variation
and discharge of injunctions. Division 2 of Part 5-2 replaces the
injunctive powers in section 80 of the TP Act.
Damages
1403. Division 3 of Part 5-2 allows a person to seek recovery of the
amount of loss or damage caused by another person's contravention of
the consumer protection provisions in Chapters 2 or 3 of the ACL.
It also allows such recovery of loss or damage from a person
involved in a contravention.
1404. The damages provision in the ACL replace section 82 of the TP Act
and existing jurisprudence should continue to apply.
1405. Limitations relating to death or personal injury or the regimes
dealing with proportionate liability or structured settlements for
tobacco-related injury or death continue to apply and are included
in Part XI of the TP Act and other relevant State and Territory
legislation.
Compensation orders
1406. Sections 238 and 239 of the ACL provide a broad power for the court
to make remedial orders such as variation of contracts, refunds of
money or return of property or the payment of compensation for
breaches of the consumer protection provisions.
Orders for non-party consumers
1407. Order for non-party consumers will be included in the TP Act and
ASIC Act by the first ACL Bill.
1408. Section 239 of the ACL allows regulators to seek orders that will
provide redress, in whole or in part, for loss or damage to non-
party consumers arising out of a contravention of certain consumer
protection provisions of the ACL or for consumers who are
disadvantaged by a term in a consumer contract which has been
declared to be an unfair term under section 249.
1409. The non-party consumer is only bound by such an order if he or she
chooses to accept the order. If a non-party consumer does accept
the redress he or she can not make further claims or take further
action in relation to that loss or damage.
1410. The types of redress available include: declaring a contract or
arrangement void in whole or in part; varying a contract or
arrangement; an order refusing to enforce provisions of a contract
or arrangement; an order to refund monies or return property; an
order to repair goods or supply services at the respondent's
expense; or an order varying or terminating an instrument creating
or transferring an interest in land.
Non-punitive orders
1411. Section 246 allows a court, on application of a regulator, to make a
non-punitive order where a person has contravened the Act. A non-
punitive order includes:
. a service order related to the conduct for community
benefit;
. an order to ensure conduct does not occur for a period;
. an order requiring the disclosure of information; or
. an order requiring an advertisement to be published.
1412. The non-punitive order provisions in the ACL replace section 86C of
the TP Act and existing jurisprudence will continue to apply.
Punitive orders - adverse publicity
1413. Section 247 allows the court, on application of a regulator, to make
an adverse publicity order, which is a punitive order, where a
person has contravened a consumer protection provision.
1414. The adverse publicity provisions in the ACL replace section 86D of
the TP Act and existing jurisprudence will continue to apply.
Disqualification orders
1415. Section 248 provides for a regulator applying to the court seeking
an order disqualifying a person from managing corporations, in
relation to a contravention of:
. an unconscionable conduct provision in Part 2-2;
. the consumer protection provisions relating to unfair
practices in Part 3-1;
. provisions relating to unsolicited consumer agreements in
Division 2 of Part 3-2.
. certain product safety provisions in Part 3-3;
. certain product information standards provisions in Part 3-
4; and
. the offence provisions in Chapter 4.
Abrogation of penalty privilege
1416. Section 1349 of the Corporations Act was enacted by the Corporations
Amendment (Insolvency) Act 2007 to remove or abrogate the common law
privilege against exposure to penalties when complying with a
statutory requirement or a requirement in a proceeding. This
abrogation has also been included in section 249 of the ACL to
ensure that regulators' regulatory functions under the ACL are not
frustrated by a person claiming this privilege.
Defences
1417. Division 6 of Part 5-2 provides defences to contraventions of
consumer protection provisions in certain circumstances relating to
the publication of advertisements or the supply of certain goods or
product related services that were not compliant with a safety or
information standard outside Australia. The defence provisions in
the ACL replace section 85 of the TP Act and existing jurisprudence
will continue to apply.
Comparison of key features of new law and current law
Civil pecuniary penalties
|New law |Current law |
|Section 224 of the ACL |Section 76E of the TP Act|
|applies civil pecuniary |applies civil pecuniary |
|penalties to |penalties to |
|contraventions of various|contraventions of various|
|consumer protection |consumer protection |
|provisions. Only a |provisions. Only a |
|regulator can take action|regulator can take action|
|for a pecuniary penalty |for a pecuniary penalty |
|and it must be taken |and it must be within 6 |
|within 6 years of the |years of the alleged |
|alleged contravention |contravention (section |
|(section 228). |77). |
|Section 224 of the ACL |Section 76E of the TP Act|
|provides for attempted |provides for attempted |
|contraventions and |contraventions and |
|accessorial liability of |accessorial liability of |
|persons involved in |persons involved in |
|contraventions. |contraventions. |
|Section 225 of the ACL |Section 76F of the TP Act|
|applies statutory bars to|applies statutory bars to|
|civil pecuniary penalty |civil pecuniary penalty |
|proceedings in relation |proceedings in relation |
|to conduct that is also |to conduct that is also |
|subject to criminal |subject to criminal |
|penalties. |penalties. |
|Section 226 of the ACL |Section 85(7) of the TP |
|provides that a penalty |Act provides that a |
|does not have to be |penalty does not have to |
|applied by the court if |be applied by the court |
|the person acted honestly|if the person acted |
|and reasonably. |honestly and reasonably. |
|Section 227 of the ACL |Section 79B of the TP Act|
|requires that the court |requires that the court |
|gives preference to |gives preference to |
|compensation for victims |compensation for victims |
|over pecuniary penalties.|over pecuniary penalties.|
|Sections 229-231 of the |Sections 77A-77C of the |
|ACL provide that a body |TP Act provide that a |
|corporate must not |body corporate must not |
|indemnify a person from a|indemnify a person from a|
|civil pecuniary penalty |civil pecuniary penalty |
|or the legal costs |or the legal costs |
|associated with defending|associated with defending|
|the proceedings. |the proceedings. |
Injunctions
|New law |Current law |
|A regulator can apply to |The ACCC can apply to the|
|the court for |court for injunctions, |
|injunctions, consent |consent injunctions and |
|injunctions and interim |interim injunctions under|
|injunctions under |section 80 for breaches |
|sections 232-234 for |of the TP Act. |
|breaches of the ACL. | |
Damages
|New law |Current law |
|Section 236 of the ACL |A person to seek recovery|
|provides for a person |of the amount of loss or |
|seeking to recover the |damage caused by another |
|amount of loss or damage |person's contravention |
|caused by another |(or involvement in a |
|person's contravention |contravention) of a |
|(or involvement in a |provision in Parts IVA or|
|contravention) of a |V of the TP Act. |
|provision in Chapters 2 | |
|or 3 of the ACL. | |
Compensation orders
|New law |Current law |
|Sections 238 and 239 |Section 87 of the TP Act |
|allow the court to make |allows the court to make |
|remedial orders such as |remedial orders such as |
|variation of contracts, |variation of contracts, |
|refunds of money or |refunds of money or |
|return of property or the|return of property or the|
|payment of compensation |payment of compensation |
|for breaches of the |for breaches of the |
|consumer protection |consumer protection |
|provisions. |provisions. |
Orders for non-party consumers
|New law |Current law |
|Sections 239-242 of the |Section 87AAA of the TP |
|ACL will allow a court to|Act allows a court to |
|make certain types of |make certain types of |
|orders to redress, in |orders to redress, in |
|whole or in part, loss or|whole or in part, loss or|
|damage suffered by a |damage suffered by a |
|person that is not party |person that is not party |
|to the proceedings. |to the proceedings. |
Non-punitive orders
|New law |Current law |
|Section 246 allows a |Section 86C of the TP Act|
|court, on application of |allows a court, on |
|a regulator, to make |application of the ACCC, |
|certain non-punitive |to make certain |
|orders. |non-punitive orders. |
Punitive orders - Adverse publicity
|New law |Current law |
|Section 247 of the ACL |Section 86D of the TP Act|
|provides for regulators |provides for regulators |
|seeking orders requiring |seeking orders requiring |
|a person to disclose |a person to disclose |
|information that they |information that they |
|have in their possession,|have in their possession,|
|or have access to, or to |or have access to, ot to |
|publish an advertisement |publish an advertisement |
|after contravening a |after contravening |
|provision of the ACL. |certain provisions of the|
| |TP Act. |
Disqualification orders
|New law |Current law |
|Section 248 of the ACL |Subsection 86E(1B) of the|
|will allow a court to |TP Act allows a court to |
|disqualify a person from |disqualify a person from |
|managing corporations if |managing corporations in |
|it is satisfied that that|relation to |
|the person has attempted |contraventions, or |
|to contravene, or has |involvement in |
|been involved in a |contraventions, of |
|contravention of certain |various consumer |
|provisions of the ACL. |protection-related |
| |provisions of the TP Act.|
Defences
|New law |Current law |
|Divison 6 of the ACL |Section 85(3) of the TP |
|provides defences to |Act provided the same |
|contraventions of |defence in relation to |
|consumer protection |the publication of |
|provisions in certain |advertisements. |
|circumstances relating to|Subsections 85(4) and (5)|
|the publication of |of the TP Act provided |
|advertisements or the |the same defence in |
|supply of certain goods |relation to the supply of|
|or product related |certain goods or product |
|services that were not |related services that |
|compliant with a safety |were not compliant with a|
|or information standard |safety or information |
|outside Australia. |standard outside |
| |Australia. |
Detailed explanation of new law
Civil pecuniary penalties
Details of civil pecuniary penalty provisions
1418. A court may order a person to pay a pecuniary penalty for a
contravention of any of the following provisions:
. an unconscionable conduct provision in Part 2-2;
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subparagraph 224(1)(a)(i)]
. a consumer protection provision relating to unfair
practices in Part 3-1; [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 1, subparagraph 224(1)(a)(ii)]
. a requirement to display a notice relating to the supply
of goods or services under section 66(2); [Schedule 1,
item 1: Chapter 5, Part 5-2, Division 1, subparagraph
224(1)(a)(iii)]
. a provision relating to unsolicited consumer agreements in
Division 2 of Part 3-2; [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 1, subparagraph 224(1)(a)(iv)]
. a provision dealing with lay-by agreements; [Schedule 1,
item 1: Chapter 5, Part 5-2, Division 1, subparagraph
224(1)(a)(v)]
. a contravention of certain provisions dealing with proof
of transactions and itemised bills; [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 1, subparagraph
224(1)(a)(vi)]
. a contravention of certain provisions dealing with
prescribed requirements for warranties and repairs;
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subparagraph 224(1)(a)(vii)]
. a contravention of certain provisions dealing with safety
of consumer goods and product related services; [Schedule
1, item 1: Chapter 5, Part 5-2, Division 1, subparagraph
224(1)(a)(viii)]
. a contravention of certain information standards
provisions; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 1, subparagraph 224(1)(a)(ix)] and
. failure to respond to a substantiation notice in section
or providing false or misleading information in response
to a substantiation notice in sections 220 or 221;
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subparagraph 224(1)(a)(x)]
1419. Liability to pay a civil pecuniary penalty is extended to an attempt
to contravene the above provisions, as well as to any person
involved in a contravention. Each act done or omission made by a
person potentially attracts a pecuniary penalty. [Schedule 1, item
1: Chapter 5, Part 5-2, Division 1, subparagraph 224(1)(b)-(f)]
1420. In circumstances where a single act or omission contravenes two or
more provisions, pecuniary penalty proceedings may be brought in
relation to any one of those provisions, but a person is liable to
pay only one pecuniary penalty. [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 1, subsection 224(4)]
1421. There are a number of non-exhaustive factors that a court must
consider in determining the amount of the pecuniary penalty,
including:
. the nature and extent of the act or omission and of any
loss or damage suffered as a result of the act or
omission;
. the circumstances in which the act or omission took place;
and
. whether the person has previously been found by the court
in proceedings in relation to consumer protection
provision of the ACL or the TP Act to have engaged in any
similar conduct. [Schedule 1, item 1: Chapter 5, Part 5-
2, Division 1, subsection 224(2)]
Maximum civil pecuniary penalties
1422. The table in subsection 224(3) provides the maximum civil pecuniary
penalties applicable to contraventions of the ACL. [Schedule 1,
item 1: Chapter 5, Part 5-2, Division 1, subsection 224(3)]
General consumer protections
1423. The maximum pecuniary penalty payable for a contravention of an
unconscionable conduct provision in Part 2-2, or a consumer
protection provision relating to unfair practices in Part 3-1 (other
than subsection 47(1) is:
. for bodies corporate - $1.1 million; and
. for persons other than bodies corporate - $220,000.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Items 1 and 2]
1424. The maximum pecuniary penalty payable for a contravention of the
multiple pricing provision in section 47(1) is:
. for bodies corporate - $5,000; and
. for persons other than bodies corporate - $1,000.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 3]
1425. The maximum civil pecuniary penalty for bodies corporate reflects
the penalty for a similar contravention of the NSW FT Act (section
40), which is currently a maximum of $5,500. The Northern
Territory also has an equivalent offence (section 22 NT FT Act)
which has a maximum penalty of $26,000 currently - however, that
amount is a maximum applied across the NT FTA.
Consumer Guarantees
1426. Consumer guarantees provide rights that accompany the purchase of
goods or services. A failure to comply with a guarantee generally
gives rise to specific remedies provided for in Part 5-4 of the ACL.
A failure to comply with a guarantee is generally not treated as a
contravention of the ACL.
1427. A new contravention has been included in the ACL for failure to
display a notice relating to consumer guarantees. This
contravention does not exist in State and Territory laws. The
maximum civil pecuniary penalties for failing to display a notice in
the required form are:
. for bodies corporate - $30,000; and
. for persons other than bodies corporate - $6,000.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 4]
1428. As this is a requirement that does not presently exist in the TP Act
or the FT Acts, the maximum penalties have been set by reference to
offences for conduct that is likely to cause comparable damage to
consumers, such as failing to comply with disclosure and other
requirements relating to lay-by agreements.
Unsolicited consumer agreements
1429. The maximum pecuniary penalty payable for a contravention of the
unsolicited consumer agreements provisions in Division 2 of Part 3-2
is:
. for bodies corporate - $50,000; and
. for persons other than bodies corporate - $10,000.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 5]
1430. The maximum civil pecuniary penalty for bodies corporate has been
drawn from the range of fines available for similar regimes in the
States and Territories. The maximum amounts in those regimes are:
. Victoria - $28.036.80;
. NSW - $11,000;
. Queensland - $50,000;
. South Australia - $5,000;
. Western Australia - $1,000; and
. the Northern Territory - $130,000.
Lay-by sales
1431. The maximum pecuniary penalty payable for a contravention of the lay-
by sales in Division 3 of Part 3-2 is:
. for bodies corporate - $30,000; and
. for persons other than bodies corporate - $6,000.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 6]
1432. The maximum civil pecuniary penalty for bodies corporate has been
drawn from the range of fines available for similar regimes in NSW,
Victoria and the ACT. Currently Victoria has a maximum fine of
$14,018.40, the ACT has $27,500 and NSW has $110,000. However, the
NSW penalty is applied across a range of a consumer protection
provisions rather than applying only to lay-by sales.
Proof of transactions and itemised bills
1433. The maximum civil pecuniary penalty payable for a contravention of
the proof of transactions and itemised bills provisions in sections
100(1), 100(3), 101(3) and 101(4) is:
. for bodies corporate - $15,000; and
. for persons other than bodies corporate - $3,000.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 7]
1434. The maximum civil pecuniary penalty for bodies corporate is based on
the maximum penalty for a contravention of a similar provision of
the Vic FT Act, which currently has a maximum fine of $14,018.40.
Prescribed requirements for warranties and repairs
1435. The maximum civil pecuniary penalty payable for a contravention of
prescribed requirements for warranties and repairs made under
sections 102(2) and 103(2) is:
. for bodies corporate - $50,000; and
. for persons other than bodies corporate - $10,000.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 8]
1436. The maximum civil pecuniary penalty for bodies corporate is based on
the current maximum penalty for a corporation in relation to
prescribed warranty under the Qld FT Act of $50,000.
Safety of consumer goods and product related services
1437. The maximum pecuniary penalty payable for a contravention of the
product or product related services safety standard or interim or
permanent ban provisions in sections 106(1)-(3), 106(5), 107(1)-(2),
118(1)-(3), 118(5), or 119(1)-(2) is:
. for bodies corporate - $1.1 million; and
. for persons other than bodies corporate - $220,000.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 9]
1438. The maximum pecuniary penalty payable relating to notifications of
recalls as required by a compulsory recall notice in section 125(4)
is:
. for bodies corporate - $16,500; and
. for persons other than bodies corporate - $3,300.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 10]
1439. The maximum pecuniary penalty payable for non-compliance with a
recall notice for consumer goods in section 127(1) or (3) is:
. for bodies corporate - $1.1 million; and
. for persons other than bodies corporate - $220,000.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 11]
1440. The maximum pecuniary penalty payable for notification of voluntary
recalls and reporting of consumer goods or product related services
associated with death or serious injury in sections 128(2) or (6),
131(1) or 132(1) is:
. for bodies corporate - $16,500; and
. for persons other than bodies corporate - $3,300.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 12]
Information standards
1441. The maximum pecuniary penalty payable for non-compliance with an
information standard in sections 136(1)-(3), 137(1) and (2) is:
. for bodies corporate - $1.1 million; and
. for persons other than bodies corporate - $220,000.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 13]
Substantiation notices
1442. The maximum civil pecuniary penalty payable for failure to respond
to a substantiation notice in section 221 is:
. for bodies corporate - $16,500; and
. for persons other than bodies corporate - $3,300.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 14]
1443. The maximum civil pecuniary penalty payable for providing false or
misleading information in response to a substantiation notice in
section 222 is:
. for bodies corporate - $27,500; and
. for persons other than bodies corporate - $5,500.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1,
subsection 224(3), Item 15]
Parallel criminal and civil prohibitions
1444. Section 4C of the Crimes Act 1904 provides some protection against
double jeopardy where an act or omission constitutes an offence
under two or more laws of the Commonwealth or under both a law of
the Commonwealth and at common law. However, this protection does
not extend to liability for civil penalties. To address concerns
regarding parallel criminal and civil schemes, most Federal
legislation containing such schemes provides for statutory bars to
proceedings and such bars are included in the ACL, based on section
76F of the TP Act.
1445. Section 258 provides that where substantially the same conduct is a
civil contravention and an offence, the court will be prevented from
making a pecuniary penalty if the person has already been convicted
of an offence. [Schedule 1, item 1: Chapter 5, Part 5-2, Division
1, subsection 225(1)]
1446. Further, proceedings for a pecuniary penalty order against a person
for a contravention of the ACL is stayed if criminal proceedings are
started or have already been started for an offence, and the offence
is constituted by conduct that is substantially the same as the
conduct alleged to constitute the contravention. The pecuniary
penalty proceedings will be able to be resumed if the person is not
convicted of the offence. [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 1, subsection 225(2)]
1447. Criminal proceedings may be started against a person for conduct
that is substantially the same as a consumer protection
contravention regardless of whether a pecuniary penalty order has
been made against the person in respect of the contravention.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 1, subsection
225(3)]
1448. Evidence of information given or of documents produced will not be
admissible in criminal proceedings against the individual if the
individual gave the evidence or produced the documents in
proceedings for a pecuniary penalty order against the individual for
a contravention and the conduct constituting the criminal and
consumer protection pecuniary penalty contravention is substantially
the same. This does not apply to a criminal proceeding in respect
of the falsity of the evidence given by the individual in the
proceedings for the pecuniary penalty order. [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 1, subsection 225(4)]
1449. Criminal proceedings may be undertaken after civil proceedings to
ensure that civil remedies do not preclude later criminal penalties
from being imposed, and it is usual to stay the civil proceedings
until the criminal proceedings are completed after which time, if
the defendant is convicted of the criminal offence, the civil
proceedings are terminated. Part 9.4B of the Corporations Act
contains equivalent provisions.
Other provisions relating to civil pecuniary penalties
1450. The court may relieve a person either wholly or partly from
liability to pay a pecuniary penalty under section 257 for a
contravention of the ACL if it appears that the person has acted
honestly and reasonably in the circumstances. This replicates
section 85(7) of the TP Act. [Schedule 1, item 1: Chapter 5, Part 5-
2, Division 1, section 226]
1451. The court must also give preference to compensation for affected
parties over imposing a penalty. [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 1, section 227]
1452. Regulators may take action seeking a civil pecuniary penalty for 6
years from the date of the alleged contravention, replicating
section 77 of the TP Act. [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 1, section 228]
1453. A body corporate must not indemnify a person from a liability to pay
a civil pecuniary penalty. Such indemnification is subject to a
penalty of $2,750. [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 1, section 229]
1454. Anything that purports to indemnify a person in contravention of
section 263 is void. However, section 263 does not authorise
anything that would otherwise be unlawful. This section replicates
section 77B of the TP Act. [Schedule 1, item 1: Chapter 5, Part 5-
2, Division 1, section 230]
1455. An individual convicted of unlawfully indemnifying a person, or
inciting a person to do so, under Part 11.4 of the Criminal Code can
be convicted of an offence with a penalty of $550, replicating
section 77C of the TP Act. [Schedule 1, item 1: Chapter 5, Part 5-
2, Division 1, section 231]
Injunctions
1456. Section 232 confers a wide power on the court to grant an injunction
in whatever terms it considers appropriate if it is satisfied that a
person has engaged in, or is proposing to engage in, conduct that
would amount to a contravention (or involvement in a contravention)
of Chapters 2, 3 or 4 of the ACL. [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 2, section 232]
1457. Injunctions are also available for applying or relying on (or
purporting to apply or rely on) a declared unfair contract term
under section 288, even though such use of an unfair term is not a
'contravention' of the ACL as such. [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 2, subsection 232(3)]
1458. Injunctions are available either on application by private parties
or a regulator. [Schedule 1, item 1: Chapter 5, Part 5-2, Division
2, subsection 232(2)]
1459. The court's ability to grant an injunction is very broad and can be
exercised:
. In relation to restraining injunctions:
- whether or not it appears that the person will engage in
the conduct again (or continue to engage in the
conduct);
- whether or not the person has previously engaged in such
conduct; and
- whether or not there is imminent danger of substantial
damage to another person if the conduct is engaged in.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 2,
subsection 232(4)]
. In relation to performance injunctions:
- whether or not it appears that the person intends to
refuse or fail again (or continue to fail or refuse) to
do the act or thing;
- whether or not the person has previously refused or
failed to do the act or thing; and
- whether or not there is imminent danger of substantial
damage to another person if the person refuses or fails
to do the act or thing. [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 2, subsection 232(7)]
1460. In relation to performance injunctions, an indicative list of types
of performance injunctions has been added to assist lower courts and
tribunals in the exercise of their functions under the ACL. This
list, not included in section 80 of the TP Act, is not exhaustive
and does not limit the scope of the injunctive power in any way at
all. [Schedule 1, item 1: Chapter 5, Part 5-2, Division 2,
subsection 232(6)]
Consent injunctions
1461. Where an application for an injunction has been made under section
232, section 233 allows a court to grant an injunction where all
parties consent without the requirements in section 232(1) that a
court be satisfied that the person has engaged or is proposing to
engage in conduct contravening (or being involved in a
contravention) of the ACL. This allows court cases to be settled by
agreement in a timely manner if the possibility arises. This power
is similar to that in section 80(1AA) of the TP Act. [Schedule 1,
item 1: Chapter 5, Part 5-2, Division 2, section 233]
Interim injunctions
1462. Recognising that proceedings can be lengthy and that, for example,
conduct may need to be restrained in the meantime, a court has the
power to issue an interim injunction during a proceeding in which an
application for an injunction is made under section 232. [Schedule
1, item 1: Chapter 5, Part 5-2, Division 2, section 234]
1463. A person applying for an interim injunction may be required to
undertake to pay such compensation to an adversely affected party as
the court sees fit. Section 234(2) provides a specific exemption to
such a requirement for a regulator or the responsible Minister.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 2, subsection
234(2)]
1464. A court may vary or discharge an injunction that it has granted
under Division 2 of Part 5-1. [Schedule 1, item 1: Chapter 5, Part
5-2, Division 2, section 235]
Damages
1465. Where a person contravenes a provision of Chapter 2 or 3 and another
person suffers loss or damage because of that conduct, the other
person may recover the amount of loss or damage against the person
or any person involved in the contravention. [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 2, section 236]
1466. Actions for damages must be commenced within 6 years after the day
on which the cause of action accrued (when the loss or damage
occurred). [Schedule 1, item 1: Chapter 5, Part 5-2, Division 3,
subsection 236(2)]
Compensation orders
Compensation for parties to a proceeding
1467. Section 237 allows any person who has suffered loss or damage (or a
regulator on their behalf) to seek compensatory orders after a
finding of a contravention, whether by way of motion during
proceedings after such a finding, or as a separate, subsequent
proceeding.
1468. If a court finds that the conduct of a person was in contravention
of the ACL or their conduct that constitutes applying or relying on,
or purporting to apply or rely on, a term of a consumer contract
that has been declared under section 249 to be an unfair term - the
court may make such order or orders as it thinks appropriate against
the person who engaged in the conduct, or a person involved in that
conduct on application of:
. a person who has suffered or is likely to suffer loss or
damage as a result; or
. a regulator on behalf of one or more persons who have
suffered or is likely to suffer loss or damage as a
result. [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 4, subsection 237(1)]
1469. If a court finds, in a proceeding under the ACL, that a person who
is a party to the proceeding has suffered, or is likely to suffer,
loss or damage because of the conduct of another person in
contravention of the ACL or their conduct that constitutes applying
or relying on, or purporting to apply or rely on, a term of a
consumer contract that has been declared under section 249 to be an
unfair term - the court may make such order or orders as it thinks
appropriate against the person who engaged in the conduct, or a
person involved in that conduct. [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 4, subsection 238(1)]
1470. Under both sections 237 and 238, the order made must be one that the
court considers will compensate the injured person in whole or in
part for the loss or damage or prevent or reduce the loss or damage.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 4, subsections
238(2)]
1471. In relation to section 238, actions must be commenced within 6 years
of the date the cause of action relating to the conduct accrued.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 4, subsections
238(3)]
Kinds of orders that may be made
1472. Section 243 sets out a non-exhaustive list of orders of redress that
can be made, but does not limit the types of orders that can be made
under section 237 or 238. [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 4, section 243]
1473. The kinds of orders that can be made against a person (the
respondent) to redress loss or damage suffered by a person (the
'injured person') include the following:
. an order declaring the whole or any part of a contract
made between the respondent and the injured person, or a
collateral arrangement relating to such a contract to be
void; and, if the court thinks fit-to have been void from
the beginning or void at all times on and after such date
as is specified in the order (which may be a date that is
before the date on which the order is made); [Schedule 1,
item 1: Chapter 5, Part 5-2, Division 4, paragraph 243(a)]
. an order varying such a contract or arrangement in such
manner as is specified in the order; and, if the court
thinks fit-declaring the contract or arrangement to have
had effect as so varied on and after such date as is
specified in the order (which may be a date that is before
the date on which the order is made); [Schedule 1, item
1: Chapter 5, Part 5-2, Division 4, paragraph 243(b)]
. an order refusing to enforce any or all of the provisions
of such a contract or arrangement; [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 4, paragraph 243(c)]
. an order directing the respondent to refund money or
return property to the injured person; [Schedule 1, item
1: Chapter 5, Part 5-2, Division 4, paragraph 243(d)]
. an order directing the respondent to pay the injured
person the amount of loss or damage; [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 4, paragraph 243(e)]
. an order directing the respondent, at his or her own
expense, to repair, or provide parts for, goods that had
been supplied under the contract or arrangement to the
injured person; [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 4, paragraph 243(f)]
. an order directing the respondent, at his or her own
expense, to supply specified services to the injured
person; and [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 4, paragraph 243(g)]
. an order, in relation to an instrument creating or
transferring an interest in land (within the meaning of
section 1), directing the respondent to execute an
instrument that: varies, or has the effect of varying, the
first mentioned instrument; or terminates or otherwise
affects, or has the effect of terminating or otherwise
affecting, the operation or effect of the first mentioned
instrument. [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 4, paragraph 243(h)]
Other provisions relating to compensatory orders
1474. In a proceeding for:
. recovery of a civil pecuniary penalty;
. an injunction;
. non-punitive orders;
. adverse publicity orders; or
. a disqualification order:
a person has been found to have contravened a provision (or been
involved in a contravention) of Chapter 2, 3 or 4 - a finding of
fact made in those proceedings is prima facie evidence of that fact
in a proceeding for compensation orders under subsection 271(1),
and can be proved by production of a document under the seal of the
court that made the finding. [Schedule 2, Item 1: Part XI,
Division 7, section 137H]
1475. A court can make an order under Part 5-2, Division 4, Subdivision A
or B of the ACL whether or not the court has granted an injunction
under Division 4 of Part 5-2 or has made an order under sections 236
(actions for damages), 246 (non-punitive orders), 247 (adverse
publicity orders) or 248 (disqualification orders). [Schedule 1,
item 1: Chapter 5, Part 5-2, Division 4, section 244)]
1476. The powers relating to compensatory orders and orders for non-party
redress do not limit the generality of the injunctive powers under
the ACL. [Schedule 1, item 1: Chapter 5, Part 5-2, Division 4,
section 245]
Reduced compensation in safety defective goods actions
1477. The amount of loss or damage recoverable in a safety defective goods
action brought under the manufacturers' liability regime may be
reduced by contributory acts or omissions of the person suffering
the loss or damage in question. [Schedule 2, item 1: Part XI,
Division 7, section 137A]
Loss or damage suffered because of injuries
1478. The amount of loss or damage recoverable as a result of an injury to
an individual under a safety defective goods action is reduced if an
act or omission of the injured individual contributed to (but not
necessarily the sole cause of) the loss or damage in question. The
amount recoverable is also reduced if another person who the injured
individual is responsible for, had contributed to that loss or
damage. [Schedule 2, Item 1: Part XI, Division 7, subsection
137A(1)]
1479. The amount which the loss or damage is reduced by will depend on
what the court considers is fit, having regard to the injured
individual's share in the responsibility for the loss or damage.
This could result in the amount which is recoverable being reduced
to zero (that is, no compensation can be recovered). [Schedule 2,
Item 1: Part XI, Division 7, subsection 137A(2)]
1480. The amount of loss or damage recoverable as a result of damage or
destruction to goods (other than to goods containing a safety
defect), land, buildings or fixtures under a safety defective goods
action, is reduced if an act or omission of the person suffering the
loss or damage in question (the first person) had contributed to
(but need not be the sole cause of) such loss or damage. The amount
recoverable is also reduced if another person (the second person)
for who the first person is responsible had contributed to that loss
or damage. [Schedule 2, Item 1: Part XI, Division 7, subsection
137A(2)]
1481. The amount by which the loss or damage is reduced will depend on
what the court considers is fit after having regard to the first
person's share in the responsibility for the loss or damage. This
could mean the amount recoverable is reduced to zero. [Schedule 2,
Item 1: Part XI, Division 7, subsection 137A(2)
Orders for non-party consumers
1482. Enforcement proceedings are defined as proceedings for an offence
against Chapter 4 or a proceeding instituted under Chapter 5 of the
ACL (except sections 238 and 239). [Schedule 1, item 1: Chapter 1,
section 2]
1483. Non-party consumers are those persons who have not been party to an
enforcement proceeding in relation to the particular conduct or to
an enforcement proceeding in relation to the particular declared
unfair term of a consumer contract. [Schedule 1, item 1: Chapter 1,
section 2]
1484. Where a person:
. engages in conduct in contravention of the prohibition on
misleading and deceptive conduct or an unconscionable
conduct provision in Chapter 2;
. engages in conduct in contravention of a specific consumer
protection provision relating to unfair practices in Part
3-1 or commits an offence against Chapter 4; or
. is a party to a consumer contract and are advantaged by a
term in relation to which the court has made a declaration
under section 249;
and:
. the contravening conduct or declared term caused or is
likely to cause loss or damage to a class of persons and
the class of persons includes non-party consumers,
the court may make such orders to redress the non-party consumers
(other than an award of damages) as it thinks appropriate.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 4, section 239]
1485. The orders that may be made are against the person who engaged in or
was involved in the contravention or alternatively, as the case may
be, the party to a contract who is advantaged by a declared term.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 4, subsection
239(2)]
1486. Such orders may only be made under subsection 273(1) if they will:
. redress, in whole or in part, the related loss or damage
to the non-party consumers; or
. prevent or reduce the loss or damage suffered or likely to
be suffered by the non-party consumers:
in relation to the contravening conduct or declared term.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 4, subsection
239(3)]
1487. An application seeking an order can be made even if enforcement
proceedings have not been instituted. As such, a regulator can take
action for redress for non-parties without previously taking other
action in relation to the contravening conduct or declared term.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 4, subsection
242(1)]
1488. An application seeking an order can be made at any time within six
years after the day on which the cause of action that relates to the
contravening conduct accrues or the declaration relating to a term
in a consumer contract is made. [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 4, subsection 239(4)]
1489. In determining whether to make an order to redress non-party
consumers, the court may have regard to the conduct of the person
(engaging in the contravening conduct or party to a consumer
contract advantaged by the declared term) and of the non-party
consumers since the contravention or declaration was made. This
ensures that the court may consider particularly whether the person
has already provided some redress for the loss or damage to the non-
party consumers. [Schedule 1, item 1: Chapter 5, Part 5-2, Division
4, subsections 240(1) and (2)]
1490. In determining whether to make an order, the court does not need to
make a finding about which specific persons are non-party consumers,
nor the exact loss or damage suffered or likely to be suffered by
such persons. [Schedule 1, item 1: Chapter 5, Part 5-2, Division 4,
subsections 240(3)]
1491. A non-party consumer is bound by an order if he or she accepts the
redress, prevention or reduction of the loss or damage suffered or
likely to be suffered in relation to the contravening conduct or
declared term in accordance with the order. [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 4, subsections 241(1)]
1492. A non-party consumer can only accept one order for redress under
section 272(1) and the non-party consumer cannot make any other
claim, action or demand in relation to the loss or damage.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 4, subsections
241(3)]
Kinds of orders that may be made
1493. Section 243 sets out a non-exhaustive list of orders to redress non-
party consumers that can be made but does not limit the types of
orders that can be made under section 239(1). [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 4, section 243]
1494. The kinds of orders that can be made against a person (the
respondent) to redress loss or damage suffered by a non-party
consumer include the following:
. an order declaring the whole or any part of a contract
made between the respondent and a non-party consumer
referred to in that subsection, or a collateral
arrangement relating to such a contract to be void; and,
if the court thinks fit-to have been void from the
beginning or void at all times on and after such date as
is specified in the order (which may be a date that is
before the date on which the order is made); [Schedule 1,
item 1: Chapter 5, Part 5-2, Division 4, subsection
243(a)]
. an order varying such a contract or arrangement in such
manner as is specified in the order; and, if the court
thinks fit-declaring the contract or arrangement to have
had effect as so varied on and after such date as is
specified in the order (which may be a date that is before
the date on which the order is made); [Schedule 1, item
1: Chapter 5, Part 5-2, Division 4, subsection 243(b)]
. an order refusing to enforce any or all of the provisions
of such a contract or arrangement; [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 4, subsection 243(c)]
. an order directing the respondent to refund money or
return property to non-party consumers; [Schedule 1, item
1: Chapter 5, Part 5-2, Division 4, subsection 243(d)]
. an order directing the respondent to pay the injured
person an amount in respect of loss or damage suffered;
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 4,
subsection 243(e)]
. an order directing the respondent, at his or her own
expense, to repair, or provide parts for, goods that had
been supplied under the contract or arrangement to non-
party consumers; [Schedule 1, item 1: Chapter 5, Part 5-
2, Division 4, subsection 243(f)]
. an order directing the respondent, at his or her own
expense, to supply specified services to non-party
consumers; and [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 4, subsection 243(g)]
. an order, in relation to an instrument creating or
transferring an interest in land (within the meaning of
section 1), directing the respondent to execute an
instrument that: varies, or has the effect of varying, the
first mentioned instrument; or terminates or otherwise
affects, or has the effect of terminating or otherwise
affecting, the operation or effect of the first mentioned
instrument. [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 4, subsection 243(h)]
Non-punitive orders
1495. Section 246 allows a court, on application of a regulator, to make a
non-punitive order where a person has contravened the ACL. A non-
punitive order includes:
. a service order related to the conduct for community
benefit;
. an order to ensure conduct does not occur for a period;
. an order requiring the disclosure of information; or
. an order requiring an advertisement to be published.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 5,
subsection 246]
1496. It will be open to the court to make a non-punitive order on
application of a regulator, where a person has engaged in
contravening conduct, that is, has contravened a provision of
Chapters 2, 3 or 4 of the ACL. A court may also make a non-punitive
order where a person has been involved in a contravention of these
provisions. [Schedule 1, item 1: Chapter 5, Part 5-2, Division 5,
subsection 246(1)]
1497. A service order related to the conduct for community benefit is an
order that requires a person who has contravened the ACL to perform
a service for the benefit of the community, or a section of the
community. The order is directed at redressing the harm caused
in the community as a result of the contravention, and at
encouraging future compliance with the ACL. [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 5, subsection 246(2)(a)]
1498. As the order is non-punitive in nature, the service the contravening
party is required to undertake should be reasonably related to the
conduct that contravened the ACL.
1.
A service order related to the conduct for community benefit
could be an order that requires a person who has made false
representations to make available a training video which
explains advertising obligations under the ACL or an order
that requires a person who has engaged in misleading or
deceptive conduct in relation to a particular product to
conduct a community awareness program to address the needs
of consumers when purchasing that product.
1499. An order to ensure conduct does not occur for a period is an order
which is designed to impose control over aspects of the conduct of
the party in contravention of the Act. It is directed at achieving
a change in the organisational or corporate culture to prevent a
repetition of the contravention and to ensure future self-
regulation. An order to ensure conduct does not occur for a period
is aimed at the internal operations, management and environment of
the corporation in addressing the areas of non-compliance. As the
order is non-punitive in nature, it should be directly or reasonably
related to the conduct that contravened the ACL. The period for
such an order may not exceed three years. [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 5, subsection 246(2)(b)]
1500. Examples of an order to ensure conduct does not occur for a period
include:
. an order requiring a corporation to develop a compliance
plan;
. an order requiring the provision of education and training
for employees and managers as to their obligations and
responsibilities under the ACL; and
. an order requiring the corporation to undertake a revision
of their internal operations and control methods to
address the contravention of the ACL.
1501. An order requiring the disclosure of information requires a person
who has contravened to Act to disclose information in relation to
the contravention that he or she may have in their possession, or
may have access to. An order requiring the disclosure of
information is directed at redressing the harm caused by a
contravention of the Act by providing information to business and
consumers. [Schedule 1, item 1: Chapter 5, Part 5-2, Division 5,
subsection 246(2)(c)]
1502. An order requiring an advertisement to be published, or a corrective
advertising order, requires a person who has contravened the Act to
publish an advertisement which addresses the contravention of the
Act. A corrective advertising order is directed at redressing the
harm caused by the contravention. [Schedule 1, item 1: Chapter 5,
Part 5-2, Division 5, subsection 246(2)(d)]
Adverse publicity orders
1503. Section 247 allows the court, on application of a regulator, to
make an adverse publicity order, which is a punitive order, where a
person has contravened a provision of Part 2-2, Chapter 3 or
sections 221 or 222 or is guilty of an offence under Chapter 4.
[Schedule 1, item 1: Chapter 5, Part 5-2, Division 5, section 247]
1504. An adverse publicity order requires a person to disclose information
that he or she has in their possession, or have access to, and
publish at their own expense, an advertisement. [Schedule 1, item
1: Chapter 5, Part 5-2, Division 5, section 247(2)]
1505. An example of an adverse publicity order is that the corporation is
ordered to publicise the fact that it has breached the ACL, and
details of what it has been ordered to do. The order is punitive in
nature and is aimed at deterring future contraventions and
encouraging compliance.
Disqualification orders
1506. A court may order that a person is disqualified from managing
corporations, for a period the court considers appropriate, for a
contravention, or being involved in a contravention, of the
following provisions:
. an unconscionable conduct provision in Part 2-2;
. a consumer protection provision relating to unfair
practices in Part 3-1;
. a provision relating to consumer transactions in Division
2 of Part 3-2;
. product safety provisions in subsections 104(1)-(4),
105(1) and (2), 116(1)-(4), 117(1)(2), 123(4), 125(1) or
(3), 126(2) or (6), 130(1) or 131(1);
. information standards provisions in subsections 135(1)-(3)
and 136(1) and (2); and
. an offence provision in Chapter 4.
if the court is satisfied that such an order it is
justified. [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 5, section 248]
1507. A disqualification order is not available in relation to the
misleading and deceptive conduct provision in section 16 since that
provision does not purport to create any liability but establishes a
norm of conduct. Other remedies are available for failing to
observe that norm of conduct, including injunctions, publication
orders, damages and remedial orders.
1508. In determining whether a disqualification order is justified, the
court is not limited to considering particular matters, but may have
regard to a person's conduct in relation to the management of a
business or corporation, and any other matters the court considers
appropriate. [Schedule 1, item 1: Chapter 5, Part 5-2, Division 5,
subsection 248(2)]
1509. A person cannot refuse to comply with a requirement in a proceeding
arising out of the ACL or a requirement under the ACL to:
. answer a question or give information;
. produce a document or any other thing; or
. do any other act:
on the ground that doing so may tend to expose the person to a
disqualification order under section 248. [Schedule 1, item 1:
Chapter 5, Part 5-2, Division 5, section 249]
1510. This provision is required to ensure that persons who are capable of
providing assistance to regulators in respect of their
investigations are not capable of frustrating those investigations
by claiming a privilege against exposure to a penalty. Prior to the
High Court decision in Rich and another v Australian Securities and
Investments Commission[18], disqualification orders were considered
to be protective in nature rather than constituting a penalty.
Section 249 is required to reverse the effect of that case such that
a person is not capable of claiming that he or she is entitled to
refuse to do certain things because it may expose them to a
'penalty'.
Corporations Act
1511. A new section 206 EA is inserted into the Corporations Act for the
purposes of disqualifying a person from managing a corporation with
respect to a contravention of the ACL or CC Act, along with
consequential amendments to section 1349 of the Corporations Act,
which deals with the disqualification of persons from managing a
corporation with respect to contraventions of the ASIC Act.
[Schedule 3, items 32-35]
Defences
1512. Section 251 provides that in relation to a proceeding under Part 5-2
of the ACL in relation to a contravention of Part 2-1 or 2-2 or
Chapter 3, if the contravention was committed by the publication of
an advertisement, it is a defence if the defendant proves that:
. he, she or it is in the business of publishing or
arranging the publication of advertisements;
. he, she or it received the advertisement for publication
in the ordinary course of business; and
. he, she or it did not know, and had no reason to suspect,
that publication of the advertisement would amount to a
contravention. [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 6, section 251]
1513. Section 251 ensures that publishers are not liable for breaches in
advertisements they publish as part of their business unless they
have knowledge of, or should have known, that the advertisement
would contravene the ACL. It would be far too onerous to require
publishers to actually verify the content, and potentially seek
legal advice on, the legality of every advertisement they publish.
1514. Section 252 provides that in relation to a proceeding under Part 5-2
of the ACL in relation to a contravention of Part 2-1 or 2-2 or
Chapter 3, if the contravention was committed by the supplying of
consumer goods that:
. did not comply with a safety standard; or
. were supplied by a supplier who did not comply with an
information standard for such goods:
it is a defence if the defendant proves that:
. the goods were acquired for the purpose of resupply;
. the goods were acquired from a person carrying on business
in Australia (other than as an agent of an overseas
supplier); and
. either:
- the defendant did not know and could not with reasonable
diligence have ascertained the non-compliance with the
safety standard or that he or she was not complying with
an information standard; or
- the defendant relied in good faith on a representation
by the person from whom he or she acquired the goods
that there was no safety or information standard for
such goods. [Schedule 1, item 1: Chapter 5, Part 5-2,
Division 6, section 252]
1515. In order to rely on the defence:
. the court must give leave; or
. the defendant has, not later than seven days before the
day on which the hearing of the proceedings commences,
served the person commencing the proceedings a written
notice identifying the person from whom he or she acquired
the consumer goods in question.
1516. Section 254 provides that in relation to a proceeding under Part 5-2
in relation to a contravention of Part 2-1 or 2-2 or Chapter 3 and
the contravention was committed by the supplying of product related
services that:
. did not comply with a safety standard; or
. were supplied by a supplier who did not comply with an
information standard for such product related services:
it is a defence if the respondent proves that:
. the product related services were acquired for the purpose
of resupply;
. the product related services were acquired from a person
carrying on business in Australia (other than as an agent
of an overseas supplier); and
. either:
- the respondent did not know and could not with
reasonable diligence have ascertained the non-compliance
with the safety standard or that he or she was not
complying with an information standard; or
- the respondent relied in good faith on a representation
by the person from whom he or she acquired the product
related services that there was no safety or information
standard for such goods.
In order to rely on the defence:
. the court must give leave; or
. the defendant has, not later than seven days before the
day on which the hearing of the proceedings commences,
served the person commencing the proceedings a written
notice identifying the person from whom they acquired the
product related services in question. [Schedule 1, item
1: Chapter 5, Part 5-2, Division 6, section 254]
1.
For example, if there was a blind cord installation safety
standard and a person purchased new blinds 'installed' from
a retailer of blinds, but the retailer engaged a separate
company to do the installation, the retailer may be able to
avail itself of the defence in appropriate circumstances.
Application and transitional provisions
1517. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1518. Chapter 5, Part 5-2 of the ACL applies to all relevant conduct
occurring in trade or commerce on or after 1 January 2011.
1519. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1520. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1521. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1522. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which he or she did under
the TP Act. [Schedules 5 and 6]
1523. Subsections 87(1A) of the CC Act and 12GM(2) of the ASIC Act (other
orders) are amended to ensure that they do not limit the generality
of sections 87AAA of the CC Act or 12GNB of the ASIC Act,
respectively. [Schedule 2, Part 4, item 17, subsection 87(1A)]
[Schedule 3, Part 5, item 24, subsection 12GM(2)]
1524. Paragraphs 156(1)(d) of the CC Act and 12HB(1)(b) of the ASIC Act
(disclosure of documents by the Commission or ASIC respectively) are
amended to apply to applications under sections 87AAA of the CC Act
or 12GNB of the ASIC Act, respectively. [Schedule 2, Part 4, item
20, paragraph 156(1)(d)] [Schedule 3, Part 5, item 27, paragraph
12HB(1)(b)]
1525. The Bill inserts references to the new disqualification order
provision in relation to provisions in the CC Act requiring the ACCC
to notify ASIC if a disqualification order has been made. [Schedule
2, Part 2, item 9, subsection 86E(3)]
1526. A note in the ASIC Act clarifies that the Corporations Act provides
that a person is disqualified from managing corporations if a
disqualification order has been made. [Schedule 3, Part 3, item 14,
section 12GLD]
1527. A note in the ASIC Act clarifies that the Corporations Act provides
that ASIC is required to keep a register of persons who have been
disqualified from managing corporations. [Schedule 3, Part 3, item
14, section 12GLD]
Consequential amendments to the Corporations Act 2001
1528. Mirroring section 206EA of the Corporations Act in relation to
disqualification orders under the CC Act, a person will be
disqualified from managing corporations if he or she has been
disqualified from doing so under section 12GLD of the ASIC Act.
[Schedule 3, Part 3, item 15, section 206EB]
1529. The introduction of section 206EB requires references to it to be
added to provisions requiring ASIC to keep a register of
disqualified persons. [Schedule 3, Part 3, item 15, paragraph
1273AA(1)(a] [Schedule 3, Part 3, item 17, paragraph 1273AA(2)(ab)]
Do not remove section break.
Outline of chapter
1530. The ACL provides a specific methodology for determining whether
claims about the country of origin of goods are false, misleading or
deceptive.
1531. Claims that meet the criteria set out in Part 5-3 of the ACL cannot
be found to be false, misleading or deceptive in action brought
under the prohibitions in the ACL on misleading or deceptive
conduct, or false or misleading representations.
Context of amendments
1532. Currently, Part V, Division 1AA of the Trade Practices Act 1974 (TP
Act) provides that certain country of origin representations made
about goods do not contravene section 52 (which deals with
misleading or deceptive conduct), subsections 53(a) or 53(eb) or
paragraph 75AZC(1)(a) (which all deal with false or misleading
representations).
1533. Division 1AA of Part V of the TP Act was first inserted in 1998.
Division 1AA was subsequently amended in 2001.
1534. 'Australian made' or 'made in Australia' are examples of unqualified
origin claims. Prior to 1998 the TP Act regulated claims of origin
solely through the general prohibitions on misleading or deceptive
conduct, or false or misleading representations, contained in the
consumer protection provisions in Part V of the TP Act.
1535. Prior to December 1994, an 'essential character test', based on the
judicial interpretation of relevant provisions of the TP Act, was
used to determine whether a product could be labelled as 'made in
Australia' or 'Australian made'. However, in December 1994, the
Federal Court handed down a decision which effectively rejected the
'essential character' test, QDSV Holdings Pty Ltd v Trade Practices
Commission ATPR 41-432 (1995), (the Bush Friends case). The ruling
interpreted the relevant provisions of the TP Act in a restrictive
manner, resulting in many firms, including many Australian Made logo
licensees, being potentially excluded from labelling their products
as Australian made.
1536. These problems were compounded by a subsequent Federal Court
decision, Australian Competition and Consumer Commission v Lovelock
Luke [1987] 1100 FCA (the Email case), which, in deciding that
certain air conditioners could be labelled 'made in Australia',
expressly avoided setting down strict criteria for determining the
validity of origin claims. The Court held that such cases should be
resolved on a case-by-case basis. This represented a considerable
impediment to compliance.
1537. In response to the Bush Friends case and the Email case, the then
Government introduced Part V, Division 1AA of the TP Act in order to
provide clear, objective criteria against which to assess claims
about .
1538. In December 2007, the then Opposition announced an election policy
to introduce a new 'Grown in' defence to the country of origin
provisions of the TP Act. This Bill includes an extension to the
country of origin defences of the TP Act to implement this election
commitment.
1539. In July 2009, in signing the Intergovernmental Agreement for the
Australian Consumer Law (IGA), the Council of Australian Governments
(COAG) agreed that the whole of Part V of the TP Act, including the
country of origin provisions, will be included in the ACL.
Summary of new law
1540. Part 5-3 of the ACL provides a defence against action under section
19 or subsections 29(a) of 29(k) or paragraphs 151(1)(a) or
151(1)(k) of the ACL to allegations that claims about the country of
origin of goods are false, misleading or deceptive.
1541. The ACL apply in respect of claims about:
. goods being 'made in' a specified country;
. goods being the 'produce of' of a specified country;
. goods, or ingredients or components being 'grown in' a
specified country, where no other representation is made
about the country or origin of the goods; and
. claims of origin based on use of a logo prescribed
pursuant to the ACL.
1542. The defences in Part 5-3 can be relied upon provided that the goods
about which a claim is made meet the prescribed criteria set out in
that Part.
Comparison of key features of new law and current law
|New law |Current law |
|A person does not |Section 65AB of the TP |
|contravene sections 19, |Act provides a defence |
|29(1)(a) or (k) or |against contraventions of|
|151(1)(a) or (k) only by |sections 52, 53(a) or |
|making a representation |(eb) or 75AZC(1)(a)(i) of|
|as to the country of |that Act in respect of |
|origin of goods provided |representation as to the |
|that the goods have been |country of origin of |
|substantially transformed|goods provided that the |
|in that country and 50% |goods have been |
|or more the cost of |substantially transformed|
|producing or |in that country and 50% |
|manufacturing the goods |or more the cost of |
|occurred in that country.|producing or |
| |manufacturing the goods |
| |occurred in that country.|
|A person does not |Section 65AC of the TP |
|contravene sections 19, |Act provides a defence |
|29(1)(a) or (k) or |against contraventions of|
|151(1)(a) or (k) only by |sections 52, 53(a) or |
|making a representation |(eb) or 75AZC(1)(a)(i) of|
|that goods are the |that Act in respect of |
|produce of a particular |representations that |
|country provided that the|goods are the produce of |
|country was the country |a particular country |
|of origin of each |provided that the country|
|significant ingredient or|was the country of origin|
|component of the goods |of each significant |
|and all, or virtually all|ingredient or component |
|processes involved in the|of the goods and all, or |
|production or manufacture|virtually all processes |
|of the goods happened in |involved in the |
|that country. |production or manufacture|
| |of the goods happened in |
| |that country. |
|A person does not |Section 65AD of the TP |
|contravene section 19, |Act provides a defence |
|29(1)(a) or (k) or |against contraventions of|
|151(1)(a) or (k) only by |sections 52, 53(a) or |
|making a representation |(eb) or 75AZC(1)(a)(i) of|
|as to the country of |that Act in respect of |
|origin of goods by means |representations as to the|
|of a logo specified in |country of origin of |
|the regulations provided |goods by means of a logo |
|that the goods have been |specified in the |
|substantially transformed|regulations provided that|
|in the country |the goods have been |
|represented by the logo |substantially transformed|
|and the prescribed |in the country |
|percentage of the cost of|represented by the logo |
|producing or |and the prescribed |
|manufacturing the goods |percentage of the cost of|
|happened in that country.|producing or |
| |manufacturing the goods |
| |happened in that country.|
|New law |Current law |
|A person does not |No equivalent |
|contravene section 19, |Commonwealth law. |
|29(1)(a) or (k) or | |
|151(1)(a) or (k) only by | |
|making a representation | |
|that goods were grown in | |
|a particular country | |
|provided that each | |
|significant ingredient or| |
|component of the goods | |
|was grown in that country| |
|and all, or virtually all| |
|processes involved in the| |
|production or manufacture| |
|happened in that country.| |
|A person does not |No equivalent |
|contravene section 19, |Commonwealth law. |
|29(1)(a) or (k) or | |
|151(1)(a) or (k) only by | |
|making a representation | |
|that ingredients or | |
|components of ingredients| |
|were grown in a | |
|particular country | |
|provided that each | |
|ingredient or significant| |
|component that is claimed| |
|to be grown or processed | |
|in that country was grown| |
|or processed only in that| |
|country and 50% or more | |
|of the total weight of | |
|the goods is comprised of| |
|ingredients or components| |
|that were grown or | |
|processed only in that | |
|country. | |
Detailed explanation of new law
1543. Part 5-3 of the ACL provides that certain claims about the country
of origin of goods do not contravene the civil or criminal
provisions of the ACL dealing with misleading or deceptive conduct
or false or misleading representations. [Schedule 1, item 1:
Chapter 5, Part 5-2, section 254]
1544. A person who seeks to rely on these defences bears an evidential
burden in proceedings under the ACL [Schedule 1, item 1: Chapter 5,
Part 5-2, section 258].
1545. Evidential burden is defined as the burden of adducing or pointing
to evidence that suggests a reasonable possibility that the matter
exists or does not exist [Schedule 1, item 1: Chapter 1, section 2].
1546. The defences do not apply to claims about the place or region of
origin of goods that do not refer to a particular country. For
example, the defence does not apply in respect of claims that a
product is 'made in Tasmania' or 'produce of California'. Origin
claims that do not specify a country are still subject to sections
19, 29 and 151 of the ACL.
Representations as to country of origin
1547. The concept of a 'representation' is not defined in the ACL. A
representation of origin includes, but is not limited to, oral or
pictorial representations (and any combination thereof) affixed to a
good or promotional material associated with a good. It does not
include goods where the representation is an integral element of the
good.
1.
A t-shirt with a 'made in Australia' label sewn into it is
carrying a country of origin representation while a T-shirt
with the word 'Australia' emblazoned on it as part of the
design is not making a country of origin representation.
1548. Item 1 in the table at section 255 provides that a representation as
to the country of origin of goods does not contravene the ACL false,
misleading or deceptive conduct provisions provided that:
. the goods have been 'substantially transformed' in that
country; and
. 50 per cent or more of the cost of producing or
manufacturing the goods is attributable to production or
manufacturing processes that occurred in that country
[Schedule 1, item 1: Chapter 5, Part 5-2, subsection
255(1)].
1549. Table item 1 does not apply if the representation takes the
grammatical form of a representation that the goods are 'produce of'
or 'grown in' a particular country. Representations that take
these, or in the case of 'product of', variations of these,
grammatical forms are dealt with in table items 2 and 3 of section
255.
1550. The regulations may prescribe general rules for attributing costs of
production to the country indicated by a country of origin
representation. Such regulations may clarify the working of the
production cost test and can address uncertainty as to how costs are
attributed throughout the production chain. [Schedule 1, item 1:
Chapter 5, Part 5-2, subsection 257(1)]
1551. Use of this regulation making power will be on an equal national
treatment basis, namely that the same rules will be used to allocate
cost of production to Australia business as are used to allocate
costs of production to overseas businesses. Regulations made under
this power will not be able to discriminate between countries or
classes of countries. [Schedule 1, item 1: Chapter 5, Part 5-2,
subsection 257(2)]
Substantial transformation
1552. The ACL provides a definition for substantially transformed. The
test is that a good must undergo a fundamental change, in the
country indicated in the representation, to how it looks, operates
or to its purpose, for a substantial transformation to have
occurred. [Schedule 1, item 1: Chapter 5, Part 5-2, subsection
255(2)]
1.
Examples of substantial transformation include the growing
of wheat from seed, the sewing of cloth into a shirt, or the
moulding of sheet metal into a car panel.
1553. Section 255 provides a regulation making power that can exclude from
the definition of substantial transformation certain manufacturing
or production processes that are not fundamental changes. [Schedule
1, item 1: Chapter 5, Part 5-2, paragraph 255(3)(a)]
1554. Section 255 also provides a regulation making power that can include
examples of types of production or manufacturing processes that are
fundamental changes for the purpose of the substantial
transformation test. [Schedule 1, item 1: Chapter 5, Part 5-2,
paragraph 255(3)(b)]
1555. Regulations made under subsection 255(3) are intended to clarify the
application of the substantial transformation test. Regulations may
be made in relation to particular goods or classes of goods.
Cost of producing or manufacturing goods
1556. Section 256 of the ACL defines the total cost of producing or
manufacturing a good as the sum of the expenditure of material, plus
the sum of expenditure on labour, plus the sum of expenditure on
overheads. [Schedule 1, item 1: Chapter 5, Part 5-2, subsection
256(1)]
1.
For example, a good that contains material costs of $45,
labour costs of $25 and attributable overheads of $15 has a
production cost of $85.
Expenditure on materials
1557. Table item 1 in subsection 256(1) identifies those materials that
can be counted as legitimate production costs. Expenditure on
materials can be counted when a cost is incurred in the purchase of
materials used in the production or manufacture of the good bearing
the country of origin representation. All material costs directly
associated with the production or manufacture of the good bearing
the country of origin representation are included, except where
explicitly disallowed by virtue of a regulation made under
subsection 256(2). [Schedule 1, item 1: Chapter 5, Part 5-2,
subsection 256(1)]
1558. Materials is defined separately in respect of goods that are
unmanufactured raw products and those that are the result of a
manufacturing process. 'Materials' in the context of unmanufactured
raw products are those products themselves. 'Materials' in the
context of manufactured products includes all matter and substances
used or consumed in the manufacture of the goods, other than
overheads. In both cases, the 'inner containers' in which the goods
are packed are counted as materials. [Schedule 1, item 1: Chapter
1, section 2]
1559. An inner container is limited to the retail packaging for sale, and
does not include packaging solely related to the transportation of
the good from the manufacturer or wholesaler to the retail outlet.
[Schedule 1, item 1: Chapter 1, section 2]
1.
The can in tinned tomatoes is included within the definition
of 'inner container' but the cardboard box holding the tins
is not.
1560. The regulations may prescribe that the costs of certain materials
are not to be counted as part of the cost of production for the
purposes of section 256. [Schedule 1, item 1: Chapter 5, Part 5-2,
paragraph 256(2)(a)]
1561. The regulations may also prescribe the manner in which costs
relating to certain materials are to be worked out. [Schedule 1,
item 1: Chapter 5, Part 5-2, paragraph 256(3)(a)]
Expenditure on labour
1562. Table item 2 in subsection 256(1) identifies the types of labour
costs that can be allocated to the production or manufacture of
goods. All labour costs that have been incurred by the manufacturer
that relate to the production or manufacture of the goods to which a
country of origin claim have been made can be included provided
that:
. they can reasonably be allocated to the production or
manufacture of the goods; and
. the regulations do not exclude them. [Schedule 1, item 1:
Chapter 5, Part 5-2, subsection 256(1)]
1563. It is more difficult to allocate labour costs than material costs in
a good, and this provision is intended to prevent the padding-out of
the labour component by the inclusion of costs peripheral to the
manufacturing or production process.
1564. The regulations may prescribe that certain labour costs are not to
be counted as part of the cost of production for the purposes of
section 256. [Schedule 1, item 1: Chapter 5, Part 5-2, paragraph
256(2)(b)]
1565. The regulations may also prescribe the manner in a certain labour
cost is to be worked out. [Schedule 1, item 1: Chapter 5, Part 5-2,
paragraph 256(3)(b)]
Expenditure on overheads
1566. Table item 3 in subsection 256(1) identified the types of overheads
costs that may be counted for the purposes of calculating the costs
or production or manufacture of goods about which country of origin
claims have been made. The calculation of overheads is identical to
the considerations that must be taken into account in respect of
labour costs, that is, all overhead costs that have been incurred by
the manufacturer that relate to the production or manufacture of the
goods to which a country of origin claim have been made can be
included provided that:
. they can reasonably be allocated to the production or
manufacture of the goods; and
. the regulations do not exclude them. [Schedule 1, item 1:
subsection 256(1)]
1567. The regulations may prescribe that certain overhead costs are not to
be counted as part of the cost of production for the purposes of
section 256. [Schedule 1, item 1: Chapter 5, Part 5-2, paragraph
256(2)(c)]
1568. The regulations may also prescribe the manner in which a certain
overhead cost is to be worked out. [Schedule 1, item 1: Chapter 5,
Part 5-2, paragraph 256(3)(c)]
Representations that goods are produce of a particular country
1569. Item 2 in the table at subsection 255(1) provides that
representations that goods are 'produce of' a particular country do
not contravene the ACL false, misleading or deceptive conduct
provisions provided that:
. the specified country was the country or origin of each
significant ingredient or significant component of the
goods; and
. all, or virtually all, processes involved in the
production or manufacture happened in the specified
country. [Schedule 1, item 1: Chapter 5, Part 5-2,
subsection 255(1)]
1570. Table item 2 also applies to all grammatical variations of the word
'produce', including 'product of' and 'produce of'. [Schedule 1,
item 1: Chapter 5, Part 5-2, subsection 255(5)]
1571. The nature of the good is relevant to what is a significant
component. If an ingredient or component is integral to the nature
of the good, that ingredient has to be from the country of the
origin representation to allow it to carry a 'product of' label.
The question of whether a component is a significant component does
not, necessarily go to the percentage content of ingredient or
component, as, on occasion, small percentages of an ingredient can
be critical in establishing the nature or function of the good.
1.
For an apple and cranberry juice bottle to be able to carry
a 'produce of Australia' label, both the apple and the
cranberry juice have to be sourced from Australia. This is
despite the cranberry juice being, on average, about 5 per
cent of the total volume of the product.
If a local source can be found for the apple juice and the
cranberry juice, then it is legitimate to employ a 'product
of Australia' label, even if, say, a preservative was added
to the juice and the preservative was imported. This is
because the preservative does not go to the nature of the
good.
Representations by means of a prescribed logo
1572. Item 3 in the table at subsection 255(1) provides that a
representation as to the country of origin of goods by means of use
of a prescribed logo does not contravene the ACL false, misleading
or deceptive conduct provisions provided that:
. the goods have been substantially transformed in the
country represented by the logo as the country of origin
of the goods; and
. the prescribed percentage of the cost of producing or
manufacturing the goods is attributable to production of
manufacturing processes that happened in that country.
[Schedule 1, item 1: Chapter 5, Part 5-2, subsection
255(1)]
1573. This provision provides a mechanism for the Government to encourage
voluntary industry promotional campaigns through legislative
protection for premium marks. Reflecting the intended premium
nature of the prescribed logo provision, requirements for
prescription are stricter than the general test set out in table
item 1 of subsection 255(1).
1574. In addition to meeting the substantial transformation test, the
Minister may prescribe an industry logo, being either words or
pictures or a combination thereof, the use of which is a
representation of country of origin with a level of cost of
production occurring in that country as prescribed. Logos will only
be prescribed where the percentage of the cost is 51 per cent or
greater. [Schedule 1, item 1: Chapter 5, Part 5-2, subsection
255(6)]
1575. The meaning of 'substantially transformed' and the method of working
out the production costs attributable to a certain country are the
same as those for general country of origin claims.
Representations goods or ingredients were grown in a particular country
1576. Item 4 in the table at subsection 255(1) provides that a
representation that goods are 'grown in' a particular country does
not contravene the ACL false, misleading or deceptive conduct
provisions provided that:
. each significant ingredient or significant component of
the goods was grown in that country; and
. all, or virtually all, processes involved in the
production or manufacture happened in that country.
[Schedule 1, item 1: Chapter 5, Part 5-2, subsection
255(1)]
1577. Item 5 in the table at subsection 255(1) provides that a
representation that ingredients or components of goods are 'grown
in' a particular country does not contravene the ACL false,
misleading or deceptive conduct provisions provided that:
. each ingredient or significant component that is claimed
to be grown in that country was grown only in that
country; and
. each ingredient or significant component that is claimed
to be grown in that country was processed only in that
country; and
. 50 per cent or more of the total weight of the goods is
comprised of ingredients or components that were grown and
processed only in that country. [Schedule 1, item 1:
Chapter 5, Part 5-2, subsection 255(1)]
1578. Despite subsection 255(1), section 255 does not apply to a
representation of a kind referred to in table items 4 or 5 if that
representation is made together with another representation of a
kind referred to in table item 1 or 2. Such representations can
still be made, but will not be subject to the defence provided by
section 255(1). [Schedule 1, item 1: Chapter 5, Part 5-2,
subsection 255(2)]
1579. In addition, in respect of both table items 4 and 5, a person may
only make a representation that a good is 'grown in' a particular
country if the good, or an ingredient or component, also meets the
criteria to satisfy the general test for country of origin
representations set out in table item 1 of section 255, or meets the
criteria to use a 'product of' claim as set out in table item 2.
1580. Grown in relation to goods, ingredients or components, is defined
broadly in the ACL to include agricultural and activities as well as
harvesting of wild plants and animals. [Schedule 1, item 1: Chapter
5, Part 5-2, subsection 255(7)]
1581. Packaging materials are not ingredients or components of goods and
are not to be included in measurements to determine the weight of
goods, ingredients or components [Schedule 1, item 1: Chapter 5,
Part 5-2, subsection 255(8)].
1582. Water used to reconstitute dried or concentrated products to no more
than their natural level of hydration is to be included in
determining the weight of a product, and is deemed to have the same
country of origin as the ingredient or component, regardless of its
actual country of origin [Schedule 1, item 1: Chapter 5, Part 5-2,
subsection 255(9)].
Application and transitional provisions
1583. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1584. Chapter 5, Part 5-3 of the ACL applies to all relevant conduct
occurring in trade or commerce on or after 1 January 2011.
1585. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1586. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1587. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1588. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Do not remove section break.
Outline of chapter
1589. The Bill amends the Trade Practices Act 1974 (TP Act) to complete
the implementation of a single, national consumer law - the
Australian Consumer Law (ACL), which applies as a law of the
Commonwealth and each of the States and Territories.
1590. Part XI of the TP Act will make provision for the application,
administration and amendment of the ACL as a law of the
Commonwealth.
1591. Part XIAA of the TP Act will make provision for the application of
the ACL as a law of the States and Territories.
Context of amendments
1592. The ACL will be a law of the Commonwealth and of each State and
Territory.
1593. In accordance with the Council of Australian Government's (COAG) 2
October 2008 decision, the ACL will be implemented as an application
law, with the Australian Government as the lead legislator.
1594. An application law scheme is necessary as the Australian Parliament
does not have power to legislative generally with respect to fair
trading and consumer protection matters. It has the power to
legislate in respect of 'foreign corporations and trading or
financial corporations formed within the limits of the
Commonwealth', within the meaning of section 51(xx) of the
Australian Constitution and in respect of 'trade and commerce ...
among the States; within the meaning of section 51(i) of the
Australian Constitution.
1595. The use of an application law model will not preclude a State or
Territory from referring all or part of its consumer law powers or
functions to the Australian Government at a later time.
Summary of new law
1596. The Bill amends the TP Act (now renamed the CC Act) to insert a new
Part XI which applies the ACL as a law of the Commonwealth.
1597. Divisions 1 and 2 of Part XI of the CC Act lists the definitions for
the Part and provides that the ACL applies as a law of the
Commonwealth to the conduct of corporations, except in relation to
financial products and the supply, or possible supply, of services
that are financial services. Financial products and services are
dealt with separately under the ASIC Act.
1598. Part XI (Divisions 3 to 8) also applies certain additional
provisions that are either relevant only at the Commonwealth level,
or are not compatible with State and Territory legal systems and are
not able to be included in the ACL. These include certain product
safety enforcement powers, certain provisions relating to remedies
and other miscellaneous provisions.
1599. Part XIAA of the CC Act provides for participating States and
participating Territories (collectively called participating
jurisdictions) to enact an applied Australian Consumer Law (applied
ACL) as part of the law of their respective jurisdictions. A
participating jurisdiction is a party to the Intergovernmental
Agreement for the Australian Consumer Law (IGA) that has applied the
ACL, with or without modification.
1600. Part XIAA facilitates the application of the ACL in participating
jurisdictions by:
. allowing participating jurisdictions to confer functions
or powers, or impose duties, on a Commonwealth entity for
the purposes of an applied ACL;
. conferring original and appellate jurisdiction on the
Federal Court of Australia in relation to a matter arising
under the ACL in a participating Territory's law;
. providing that there is no doubling-up of liabilities with
respect to a contravention of the ACL as set out in the
TP Act, and an applied ACL; and
. confirming that the ACL provisions in the TP Act do not
exclude the operation of an application law of a
participating jurisdiction to the extent that they are
capable of operating concurrently.
Comparison of key features of new law and current law
|New law |Current law |
|Schedule 1 (the applied |Such a provision was |
|ACL) applies as a law of |recently inserted into |
|the Commonwealth to the |the TP Act to have the |
|conduct of corporations. |same effect in relation |
| |to the ACL which |
| |initially only contained |
| |the unfair contract terms|
| |provisions. |
|The applied ACL consists |Such a provision was |
|of: |recently inserted into |
|. Schedule 2; |the TP Act to have the |
|. the remaining |same effect in relation |
|provisions of the CC Act |to the ACL which |
|(except sections 2A, 4KB,|initially only contained |
|5, 6 and 172) so far as |the unfair contract terms|
|they relate to Schedule |provisions. A similar |
|2; and |provision exists in |
|. the regulations under |relation to the |
|the CC Act so far as they|Competition Code (section|
|relate to Schedule 2. |150C of Part XIA of the |
| |TP Act). |
|The Federal Court may |Similar provisions exist |
|exercise jurisdiction |in the TPA in relation to|
|conferred on it by an |the Competition Code in |
|application law of a |sections 150D and 150E. |
|State or Territory. | |
|However, the provisions | |
|in Part XIAA relate to | |
|the CCA only and do not | |
|affect any other laws | |
|relating to cross-vesting| |
|of jurisdiction. | |
|An application law of a |Such a provision was |
|participating State or |recently inserted into |
|Territory may confer |the TP Act to have the |
|functions or powers, or |same effect in relation |
|impose duties, on a |to the ACL which |
|Commonwealth entity for |initially only contained |
|the purposes of the |the unfair contract terms|
|applied ACL, but only to |provisions. A similar |
|the extent that conferral|provision exists in |
|or imposition does not |relation to the |
|contravene the |Competition Code (section|
|constitutional doctrines |150F of Part XIA of the |
|that bind the |TP Act). |
|Commonwealth, or | |
|otherwise exceed the | |
|Commonwealth's | |
|legislative power. | |
|New law |Current law |
|A duty is not taken to be|Such a provision was |
|imposed on a Commonwealth|recently inserted into |
|entity by an application |the TP Act to have the |
|law of a participating |same effect in relation |
|State or Territory if the|to the ACL which |
|legislative power of that|initially only contained |
|State or Territory is |the unfair contract terms|
|sufficient to support the|provisions. A similar |
|duty concerned. However,|provision exists in |
|if the Commonwealth's |relation to the |
|legislative power is |Competition Code |
|sufficient to support the|(sections 150F and 150FA |
|imposition of a duty in |of Part XIA of the |
|circumstances where a |TP Act). |
|State or Territory | |
|legislative power is not,| |
|then the duty is taken to| |
|be imposed by the CC Act | |
|to the extent necessary | |
|to ensure the validity of| |
|the duty. | |
|An application law may |Such a provision was |
|impose a duty on a |recently inserted into |
|Commonwealth entity if |the TP Act to have the |
|the law confers a power |same effect in relation |
|or function on the entity|to the ACL which |
|in circumstances that |initially only contained |
|gives rise to an |the unfair contract terms|
|obligation on the entity |provisions. A similar |
|to perform the function |provision exists in |
|or exercise the power. |relation to the |
| |Competition Code (section|
| |150FB of Part XIA of the |
| |TP Act). |
|An application law of a |Such a provision was |
|participating State or |recently inserted into |
|Territory is capable of |the TP Act to have the |
|operating concurrently |same effect in relation |
|with the CC Act, unless |to the ACL which |
|the application law is |initially only contained |
|directly inconsistent |the unfair contract terms|
|with the provisions of |provisions. A similar |
|the CC Act. |provision exists in |
| |relation to the |
| |Competition Code (section|
| |150G of Part XIA of the |
| |TP Act). |
|A person who commits an |Such a provision was |
|offence against both the |recently inserted into |
|CC Act and an application|the TP Act to have the |
|law and is punished or |same effect in relation |
|liable to pay a pecuniary|to the ACL which |
|penalty under an |initially only contained |
|application law, cannot |the unfair contract terms|
|then be punished or |provisions. A similar |
|subject to a pecuniary |provision exists in |
|penalty under the CC Act.|relation to the |
| |Competition Code (section|
| |150H of Part XIA of the |
| |TP Act). |
Detailed explanation of new law
Part XI
1601. This Chapter does not explain the enforcement powers applicable to
product safety matters.
Definitions
1602. Part XI, Division 1 sets out the relevant definitions relating to
Part XI. [Schedule 2, item 1, section 130]
Application of the Australian Consumer Law as a law of the
Commonwealth
1603. The ACL applies as a law of the Commonwealth to the conduct of
corporations. The ACL applies with respect to all other persons by
virtue of the operation of the applied ACL as a law of the States
and Territories. [Schedule 2, item 1, section 131]
Division does not apply to financial services etc.
1604. The ACL applies to all parts of the economy, except for financial
products and services. Financial products and services are dealt
with separately under the ASIC Act. [Schedule 2, item 1,
section 131A]
Division does not apply to interim bans imposed by State or
Territory Ministers
1605. Despite section @131, which applies the ACL as a law of the
Commonwealth, an interim ban imposed by a State or Territory
Minister does not form part of the Commonwealth-applied ACL.
[Schedule 2, item 1, section @131B]
Saving of laws and other remedies
1606. Section 131C of the CC Act includes a savings provision in respect
of the concurrent operation of other laws and remedies in States and
Territories. While the ACL applies as a law of the Commonwealth, it
is not intended to exclude or limit the concurrent operation of any
law of a State or Territory. [Schedule 2, item 1, section 131C(1)]
1607. A person cannot be convicted under the Commonwealth-applied ACL and
in a State or Territory applied ACL arising from the same act or
omission. [Schedule 2, item 1, section 131C(2)]
1608. The ACL and Part XI are not intended to affect the rights or
remedies a person otherwise has, unless it specifically states the
intention to do so. [Schedule 2, item 1, section 131C(3)]
Effect of Part VIB on Chapter 5 of the Australian Consumer Law
1609. The remedies in Chapter 5 of the ACL, insofar as they relate to
personal injury or death claims, will be subject to the regime set
out in Part VIB of the CC Act. [Schedule 2, item 1, section 131D]
Legislative instruments
1610. The following instruments made by the Commonwealth Minister under
the ACL are legislative instruments for the purposes of the
Legislative Instruments Act 2003:
. a determination under subsection ^66(1) relating to
display notices;
. a notice under subsection ^104(1) or ^105(1) relating to
safety standards;
. a notice under subsection ^109(1) or (2) relating to
interim bans;
. a notice under section ^111 relating to extensions of
interim bans);
. a notice under section ^113 relating to revocation of
interim bans;
. a notice under subsection ^114(1) or (2) relating to
permanent bans;
. a notice under section ^117 relating to the revocation of
permanent bans;
. a notice by the Commonwealth Minister under subsection
^122(1) relating to recall notices; and
. a notice under subsection ^134(1) or ^135(1) relating to
information standards.
1611. The list set out in subsection 131E of the CC Act is merely
declaratory of the law, so as to ensure that it is clear that the
specified documents are to be made by legislative instruments.
[Schedule 2, item 1, subsection @131E(1)]
1612. The following are not legislative instruments under the ACL for the
purposes of the Legislative Instruments Act 2003:
. an approval given under paragraph ^106(5)(b) relating to
approval to export;
. an approval given under paragraph ^118(5)(b) relating to
approval to export;
. a notice under subsection ^128(3) relating to voluntary
recalls;
. a notice under subsection ^129(1) or (2) relating to
safety warning notices;
. a notice under subsection ^130(1) relating to announcement
of results of an investigation; and
. a notice under subsection ^223(1) or (2) relating to
public warning notices.
1613. These are not legislative instruments; however, this provision is
declaratory of law and is not an exemption from the Legislative
Instruments Act 2003. [Schedule 2, item 1, subsection @131E(2)]
1614. No instruments made by a Minister other than the Commonwealth
Minister are legislative instruments for the purposes of that Act.
[Schedule 2, item 1, subsection @131E(3)]
Application of Crimes Act
1615. Section 4AB of the Crimes Act 1914, which provides for the
conversion of penalties expressed in dollar amounts into penalty
units, does not apply to the ACL as it is being drafted in
accordance with the Parliamentary Counsels Committee Protocol on
Drafting National Uniform Legislation, which requires dollar amounts
to be used for application law schemes due to the differing amounts
of penalty units between jurisdictions. [Schedule 2, item 1,
section 131F
Application of the Criminal Code
1616. The Bill clarifies that the corporate responsibility provisions in
Part 2.5 of the Criminal Code Act 1995 do not apply, as corporate
responsibility is provided for specifically in sections @139B and
@139C. [Schedule 2, item 1, sub section @131G(1)]
1617. As offences against Chapter 4 of the ACL are subject to a specific
defence of mistake of fact in section 207 of the ACL, the general
mistake of fact defence in section 9.2 of the Criminal Code Act 1995
does not apply. [Schedule 2, item 1, section 131G(2)]
Part XIAA
1618. The IGA provides that the ACL will be implemented as a law of the
Commonwealth and of each State and Territory by means of an
application law, with the Commonwealth as the lead legislator. The
object of the new Part XIAA of the CC Act is to facilitate the
application of the ACL by participating jurisdictions. [Schedule 2,
item 1, section 140A]
Definitions
1619. Each participating jurisdiction will apply the ACL by means of an
application law. For the purposes of Part XIAA of the CC Act, an
application law is:
. a law of a participating jurisdiction that applies the
applied ACL, either with or without modifications, as a
law of the participating jurisdiction;
. any regulations or other legislative instrument made under
a law of a participating jurisdiction that applies the
ACL; or
. the applied ACL, applying as a law of the participating
jurisdiction, either with or without modifications.
[Schedule 2, item 1, section 140]
1620. The meaning of apply is to apply the ACL by reference:
. as in force from time to time; or
. as in force at a particular time. [Schedule 2, item 1,
section 140]
1621. A Commonwealth entity means an authority of the Commonwealth or an
officer of the Commonwealth. For these purposes, a Commonwealth
authority might relevantly include the ACCC, ASIC or the
Administrative Appeals Tribunal. [Schedule 2, item 1, section 140]
1622. An officer of the Commonwealth includes:
. a Minister of the Australian Government;
. a person who holds an office established by or under an
Act; or an appointment made under an Act; or an
appointment made by the Governor-General or a Minister
(but not under an Act);
. a person who is a member or officer of an authority of the
Commonwealth; and
. a person who is in the service or employment of the
Commonwealth, or of an authority of the Commonwealth; or
employed or engaged under an Act. [Schedule 2, item 1,
section 140]
1623. A participating jurisdiction is a participating State or
participating Territory. A participating jurisdiction:
. is a party to the IGA; and
. applies the applied ACL as a law of the State or
Territory, either with or without modifications.
[Schedule 2, item 1, section 140]
1624. A Territory means the Australian Capital Territory or the Northern
Territory of Australia. [Schedule 2, item 1, section 140]
The applied Australian Consumer Law
1625. An applied Australian Consumer Law is defined, according to the
context, as either the text described in section 140B of Part XI of
the TP Act, or that text, applying as a law of a participating
jurisdiction, with or without modifications (which include
additions, submissions and substitutions).
1626. Section 140B provides that an applied ACL consists of:
. Schedule 2;
. the regulations prescribed under the CC Act to the extent
that they relate to any provision covered by Schedule 2
[Schedule 2, item 1, sections 140 & 140B]
1627. In making regulations which relate to the ACL, the Minister will be
required to follow the ACL amendment process set out in the IGA.
Federal Court may exercise jurisdiction under application laws of
Territories
1628. A participating Territory may confer exclusive jurisdiction (whether
original or appellate) on the Federal Court with respect to a matter
arising under the applied ACL. [Schedule 2, item 1, section 140C]
1629. The Federal Court does not have jurisdiction to determine a matter
arising under the applied ACL of a participating State. This
reflects the decision of the High Court of Australia in Re Wakim; Ex
parte McNally [1999] HCA 27, where the Court found that it was
unconstitutional for State laws to confer jurisdiction on courts
with federal jurisdiction. Accordingly, proceedings under an
applied ACL may be commenced in relevant courts or tribunals of a
participating State, but not in the Federal Court.
Exercise of jurisdiction under cross-vesting provisions
1630. Matters arising under the applied ACL may be subject to the cross-
vesting scheme which applies in respect of Federal, State and
Territory Courts. Part XIAA of the CC Act does not affect the
operation of any other law of the Commonwealth, or any law of a
State or Territory, with respect to the cross-vesting of
jurisdiction. [Schedule 2, item 1, section 140D]
Conferral of functions etc. on Commonwealth entities
1631. For the purposes of the applied ACL, an application law of a
participating jurisdiction may confer functions or powers, or impose
duties on a Commonwealth entity with the consent of the Australian
Government.
1632. An application law is taken to impose a duty on a Commonwealth
entity if the law confers a function or power on the entity in
circumstances that give rise to an obligation on the entity to
perform the function or exercise the power. An application law may
not confer a power or function, or impose a duty, to the extent to
which the conferral or imposition, or the authorisation, contravenes
any constitutional doctrines that bind the Commonwealth, or the
authorisation otherwise exceeds the legislative power of the
Commonwealth. Further, the Commonwealth entity is not permitted to
perform a duty or function, or exercise a power, under an
application law unless the conferral or imposition is in accordance
with the agreement between the Australian Government and the State
or Territory concerned. [Schedule 2, item 1, sections 140E and
140G]
1633. If a duty is imposed on a Commonwealth entity by a participating
jurisdiction, section 140F sets out the method in which the duty may
be imposed. However, this provision is not intended to limit the
operation of section 140E, which permits the Commonwealth to consent
to a conferral of a function or power or imposition of a duty under
an application law. [Schedule 2, item 1, subsections 140F(1) and
(6)]
1634. A participating jurisdiction may only impose a duty on a
Commonwealth entity where that participating State's or Territory's
legislative power is sufficient to support the duty and imposing the
duty would be consistent with the constitutional doctrines
restricting the duties that may be imposed on the Commonwealth
entity. [Schedule 2, item 1, subsection 140F(2)]
1635. In circumstances where the legislative power of the Commonwealth is
sufficient to support the imposition of a duty but the legislative
powers of the participating State or Territory are not, then the
duty is taken to be imposed by the CC Act to the extent necessary to
ensure the validity of the purported imposition of duty. [Schedule
2, item 1, subsection 140F(3)]
1636. In such cases, the Australian Parliament will rely on all of its
constitutional powers to support the imposition of a duty on a
Commonwealth entity by the CC Act. However, a duty is only taken to
be imposed by the CC Act to the extent that the imposing duty is
within the Commonwealth's legislative powers and is consistent with
the Australian Constitution. [Schedule 2, item 1, subsections
140F(4) and (5)]
1637. The Commonwealth-applied ACL is not intended to exclude the
operation of any application law of a participating jurisdiction.
As a result, an application law can operate concurrently with the
Commonwealth-applied ACL, unless it is directly inconsistent with a
provision in the Commonwealth-applied ACL. [Schedule 2, item 1,
section 140H]
No 'doubling-up' of liabilities
1638. If an act or omission is an offence against the Commonwealth-applied
ACL and an offence against an application law of a participating
jurisdiction, and the offender has been punished for an offence
under the applied law, then that offender cannot be punished for a
like offence under the Commonwealth-applied ACL. Similarly, if a
person is ordered to pay a civil pecuniary penalty for a
contravention of a provision under an application law of a
participating jurisdiction, the person is not subject to a pecuniary
penalty under the Commonwealth-applied ACL in respect of the same
conduct. [Schedule 2, item 1, section 140J]
1639. It is expected that the application laws of participating
jurisdictions will provide for the reverse protection for persons
punished for an offence or subject to a civil pecuniary penalty
under the Commonwealth-applied ACL.
References in instruments to the Australian Consumer Law
1640. Section 143 provides that, unless the contrary intention appears or
the context would otherwise require, an instrument to the ACL does
not need to refer specifically to the applied ACL of each
participating jurisdiction. A reference in any instrument to the
ACL is taken to be a reference to:
. the ACL as applied under Division 2 of Part XI; and
. the applied ACL of any or all of the participating
jurisdictions. [Schedule 2, item 1, section 140K]
Application and transitional provisions
1641. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1642. Schedule 2 of the Bill applies to all relevant conduct occurring in
trade or commerce on or after 1 January 2011.
1643. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act.
[Schedule 7, item 6]
1644. The TP Act as in force immediately before the commencement of the
ACL continues to apply to or in relation to any proceedings, under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1645. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1646. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Chapter 18
Commonwealth enforcement and administration
Outline of chapter
1647. Divisions 7 and 8 of Schedule 2 of the ACL Bill contain provisions
relating to the jurisidiction of courts and access to remedies under
the ACL. The provisions of Schedule 2 will be supplemented by
additional provisions contained in the laws of the Commonwealth and
each of the States and Territories, which will facilitate the
application of the ACL as a law of each of those jurisdictions,
respectively.
Context of amendments
1648. Many of the enforcement powers in the ACL had certain limits or
qualifications on those powers when they were in the Trade Practices
Act 1974 (TP Act), including, but not limited to, provisions
relating to occupational liability, liability for recreational
services, and liability for personal injury and death. These have
not been included in the ACL in recognition of the fact that some of
these requirements, which must apply at the Commonwealth level, may
not be able to be applied within differing State and Territory legal
systems.
Summary of new law
1649. Certain prescribed State and Territory laws on professional
standards are not excluded and limit the liability arising from
misleading or deceptive conduct under the ACL.
1650. Certain terms in relation to recreational services that restrict
application of consumer guarantees under the ACL are not void in
certain circumstances under the Commonwealth-applied ACL.
1651. For compensatory orders under the ACL in relation to unconscionable
conduct or declared unfair terms, at the Commonwealth level, the
court is guided that it can consider the actions of the parties
(such as a refund of payments) since the time of the contravening
conduct or declaration of an unfair term.
1652. Failure to take reasonable care can reduce the availability of
damages for economic loss or damage to property under the
Commonwealth-applied ACL.
1653. In proceedings for damages or compensatory orders under the ACL, a
person can rely on a finding of fact in certain previous court
actions for a contravention of the ACL as being prima facie evidence
of that fact.
1654. At the Commonwealth level, the ability to seek damages is limited in
that damages and compensatory orders cannot be sought under sections
236, 238 or 239 of the ACL for personal injury or death (unless it
relates to smoking or use of tobacco products, where the section can
apply with some limitations). Death and personal injury claims are
subject to Part VIB of the CC Act.
1655. In certain proceedings for remedies under the ACL, the regulator or
the Commonwealth Minister may apply for a court order to preserve
assets pending the court's determination of the matter. Non-
compliance with such an order is an offence.
Comparison of key features of new law and current law
|New law |Current law |
|Certain prescribed State |Certain prescribed State |
|and Territory |and Territory |
|professional standards |professional standards |
|laws are not excluded by |laws are not excluded by |
|the Commonwealth-applied |the TP Act in actions for|
|ACL in actions for |contravention of the |
|contravention of the |misleading and deceptive |
|misleading and deceptive |conduct provision. |
|conduct provision. | |
|Certain terms in relation|Certain terms that |
|to recreational services |restrict application of |
|that restrict application|implied conditions and |
|of consumer guarantees |warranties under the TP |
|under the ACL are not |Act are not void in |
|void in certain |certain circumstances. |
|circumstances under the | |
|Commonwealth-applied ACL.| |
|New law |Current law |
|In considering orders for|In considering orders for|
|damages or compensation |damages or compensation |
|under the |under the TP Act in |
|Commonwealth-applied ACL |relation to |
|in relation to |unconscionable conduct or|
|unconscionable conduct or|declared unfair terms, a |
|declared unfair terms, a |court can consider the |
|court can consider the |actions of the parties |
|actions of the parties |since the breach or |
|since the breach or |declaration of a term. |
|declaration of a term. | |
|Failure to take |Failure to take |
|reasonable care can |reasonable care can |
|reduce the availability |reduce the availability |
|of damages for economic |of damages for economic |
|loss or damage to |loss or damage to |
|property under the |property under the TP |
|Commonwealth-applied ACL.|Act. |
|In proceedings for |In proceedings for |
|damages or compensatory |damages or compensatory |
|orders under the |orders under the TP Act, |
|Commonwealth-applied ACL,|a person can rely on a |
|a person can rely on a |finding of fact in |
|finding of fact in |certain previous court |
|certain previous court |actions for a |
|actions for a |contravention of the TP |
|contravention of the ACL |Act as being prima facie |
|as being prima facie |evidence of that fact. |
|evidence of that fact. | |
|Restrictions apply to |Restrictions apply to |
|applications for damages |applications for damages |
|and compensatory orders |and compensatory orders |
|where the loss or damage |where the loss or damage |
|relates to personal |relates to personal |
|injury or death under the|injury or death under the|
|Commonwealth-applied ACL.|TP Act. |
|In certain proceedings |In certain proceedings |
|under the |under the TP Act the ACCC|
|Commonwealth-applied ACL |or the Commonwealth |
|the ACCC or the |Minister may apply for a |
|Commonwealth Minister may|court order to preserve |
|apply for a court order |assets pending the |
|to preserve assets |court's determination of |
|pending the court's |the matter. |
|determination of the | |
|matter. | |
Detailed explanation of new law
Limits on occupational liability
1656. State and Territory laws on professional standards that were
prescribed by the regulations and in force at the time of a
contravention are not excluded and limit the liability arising from
misleading or deceptive conduct under the ACL. [Schedule 2, item 1:
section 137(1) & (2)]
1657. Definitions of 'professional standards law' and 'occupational
liability' provide the scope of the provision, broadly, to
situations where there are laws which provide for schemes limiting
liability in situations where a person does something in the course
of a profession, trade or occupation and the person is a member of a
relevant professional body or association. [Schedule 2, item 1:
section 137(3)-(5)]
Damages and reasonable care
1658. Where a claim for damages for economic loss or damage to property
is made in relation to a contravention of the prohibition on
misleading and deceptive conduct in section 19, and the loss or
damage was partly the fault of the alleged contravener and partly
due to the claimant's failure to take reasonable care, the amount he
or she may recover is reduced to the extent the court thinks fair
having regard to the claimant's share of responsibility. This only
applies if the alleged contravener did not intentionally or
fraudulently cause the loss or damage. This provision is based on
section 82(1B) of the TP Act. [Schedule 2, item 1: section 137B]
Personal injury and death
1659. Actions for damages and compensatory orders under sections 236, 238
or 239 cannot recover amounts that relate to personal injury and
death to the extent that they relate to misleading and deceptive
conduct (Part 2-1) or unfair practices (Part 3-1) where they do not
relate to smoking or use of tobacco products. This provision is
based on subsections 82(1AAA) and (1AAB) of the TP Act. [Schedule
2, item 1: sections 137C(1) & 137E(1)]
1660. If that personal injury or death relates to smoking or use of
tobacco products, the structured settlement regime in Divisions 2
and 7 Part VIB of the CC Act applies to orders under sections 236,
238 or 239. This provision is based on subsections 87(1AA), (1AB)
and (1AC) of the TP Act. [Schedule 2, item 1: sections 137C(2) &
137E(2) & (3)]
1661. Part VIB of the CC Act deals with claims for damages or compensation
for death or personal injury.
Compensation orders
1662. In determining whether to make an order for compensation under
sections 238 or 239 (compensatory orders) in relation to
unconscionable conduct (Part 2-2) or a declared unfair term (section
249), a court may have regard to the conduct of the parties (but not
the ACCC, if it is a party) since the conduct or declaration of an
unfair term. This draws the court's attention to the fact that, for
instance, the supplier that breached the ACL may have already
refunded money to the consumer. [Schedule 2, item 1: section 137D]
Court may make orders for the purpose of preserving money or other property
held by a person
1663. On application by the Commonwealth Minister or the ACCC in
proceedings for an application for:
. an offence against Chapter 4;
. an injunction under section 232 in relation to a
contravention of Chapter 2, 3 or 4 or a declared unfair
term;
. damages under section 236 in relation to a contravention
Part 2-1 or Chapter 3;
. compensatory orders under subsections 238(1) or 239(1) in
relation to a contravention of Chapter 2, 3 or 4 or a
declared unfair term (including where such proceedings may
be taken):
and the court is satisfied that it is necessary or desirable to
preserve money or property if the respondent may be liable under
the ACL to pay money or transfer, sell or refund property; and the
making of the order will not unduly prejudice the rights and
interests of the person, the court may make particular orders.
[Schedule 2, item 1: subsections 137K(1) & (2)]
1664. The types of orders that may be made are:
. an order prohibiting, either wholly or conditionally, an
indebted person from repaying the respondent or another
person at the respondent's direction or request;
. an order prohibiting, either wholly or conditionally, a
person holding money or property for the respondent from
paying the respondent, paying another person or
transferring property at the respondent's direction or
request, or otherwise disposing of the property;
. an order prohibiting, either wholly or conditionally, the
transfer of money or taking, sending or transfer of
property, of the respondent or an associate of the
respondent to a place outside the State or Territory where
it is located; and
. for natural persons only - an order appointing a receiver
or trustee of the property, or part of the property, of
the respondent with such powers as are specified in the
order. [Schedule 2, item 1: subsection 137K(3)]
1665. The orders are restricted to 30 days for ex parte orders (without
the respondent present) or are otherwise in force for the period
specified in the order or, if proceedings in relation to which the
order is made are concluded before the end of the specified period,
until that time of conclusion. [Schedule 2, item 1:section 137K(4)]
1666. Other powers of the court are not affected by this provision and
it operates subject to the Bankruptcy Act 1956. These provisions
are based on section 87A of the TP Act. [Schedule 2, item 1:
section 137K (5)]
1667. A contravention, refusal or failure to comply with such an order is
an offence subject to a maximum fine of 900 penalty units (currently
$99,000) for a body corporate or 180 penalty units (currently
$19,800) for a person that is not a body corporate. [Schedule 2,
item 1: section 137L]
Findings in proceedings to be evidence
1668. In proceedings for damages (section 236) or compensatory orders
(sections 238 and 239) under the Commonwealth-applied ACL, a person
can rely on a finding of fact in certain previous court actions for
a contravention of the ACL as being prima facie evidence of that
fact. This section is based on section 83 of the TP Act. [Schedule
2, item 1: section 137M(1)]
1669. The proceedings to which this applies are proceedings for civil
pecuniary penalties (section 228), injunctions (section 232), non-
punitive orders (section 246), adverse publicity orders (section
247), disqualification orders (section 248) or an offence against
Chapter 4, where the person has been found to have contravened or
been involved in a contravention of Chapter 2, 3 or 4. [Schedule 2,
item 1: section 137M(2)]
Jurisdiction and the Federal Court and transfer of proceedings
1670. Division 8 of Part XI provides the jurisdictional and transfer of
matters arrangements for the Commonwealth-applied ACL. These
provisions reflect section 86 of the TP Act.
1671. The Federal Court has jurisdiction over any civil matter under the
Commonwealth-applied ACL. This jurisdiction is exclusive except
insofar as it is conferred upon the Federal Magistrates Court, the
several courts of the States and Territories and the High Court.
[Schedule 2, item 1: section 138]
1672. The Federal Magistrates Court has jurisdiction over civil matters
(other than those instituted by the Minister) arising under the
general the ACL. However, in relation to manufacturers' liability
(Part 3-5) or in relation to orders for damages (section 236) it
only has jurisdiction to award amounts for loss or damage up to
$750,000 or another amount specified in the regulations. [Schedule
2, item 1: section 138A]
1673. The courts of the States and Territories has jurisdiction over civil
matters arising under the ACL. [Schedule 2, item 1: section 138B]
1674. The Federal Court may, in a proceeding instituted by a person other
than the Minister or the ACCC, transfer matters for determination to
a State or Territory court that has jurisdiction to hear a matter
under the Commonwealth-applied ACL. This section reflects section
86A(1)-(3). [Schedule 2, item 1: section 138C]
1675. A State or Territory court hearing a matter under Part XI of the
CC Act or the Commonwealth-applied ACL must transfer the matter to
the Federal Court if the Federal Court directs it to do so.
Further, it can transfer a matter to a court with appropriate
jurisdiction in another State or Territory. This section reflects
section 86A(4)-(6). [Schedule 2, item 1: section 138D]
1676. The Federal Court can transfer matters to the Family Court for
determination. The Family Court can then hear and determine matters
not ordinarily within its jurisdiction, make orders that the Federal
Court could make. In effect, following such a transfer the matter
is heard in the Family Court but it is taken to be as if the matter
were before the Federal Court. [Schedule 2, item 1: section 138E]
Other miscellaneous provisions
Intervention by the ACCC
1677. The ACCC may, with leave of the court, become a party to any
proceeding taken under the ACL. [Schedule 2, item 1: section 139]
Exception relating to the supply of recreational services
1678. A term in a contract is not void under section 64 of the ACL if it
excludes the application or a right or liability under the consumer
guarantees in Subdivision B of Division 1 of Part 3-2 of the ACL
and:
. it relates to recreational services; and
. is limited to liability concerning death, personal or
mental injury, a disease or something that is harmful or
disadvantageous to an individual or the community.
[Schedule 2, item 1: section 139A(1) & (3)]
1679. Recreational services are services that consist of a sporting
activity or similar leisure time pursuit, or any other activity that
involves a significant degree of physical exertion or risk that is
undertaken as recreation, enjoyment or leisure. [Schedule 2, item
1: section 139A(2)]
1680. This exception does not extend to exclude liability for reckless
conduct by the supplier, which is where it is aware or should have
been aware that the a significant risk that the conduct could result
in personal injury to the other person and it engages in the conduct
without adequate justification. [Schedule 2, item 1:
section 139A(4) & (5)]
Conduct of directors, employees, servants and agents
1681. Where a person is employed to carry out the acts of another, the
state of mind of directors, employees or agents is deemed to be that
of the body corporate and, similarly, conduct engaged in by such
persons is also taken to have been engaged in by the relevant body
corporate. Similar rules apply to servants or agents of persons
other than a body corporate. This helps to ensure that a body
corporate or person cannot use employees as a shield from liability
under the ACL. This reflects section 84 of the CC Act. [Schedule
2, item 1: sections 139B & 139C]
Enforcement and recovery of certain fines
1682. Sections 139D and 139E provide a regime for the recovery and
enforcement of fines that are not paid following conviction under
the ACL or Part XI. This covers payment by instalments and,
potentially, rates of reduction of debt based on imprisonment under
State and Territory laws relating to defaulting on payment.
[Schedule 2, item 1: section 139D & 139E]
1683. If Part XI of the CC Act results in an acquisition of property (as
in section 51(xxxi) of the Australian Constitution) the Commonwealth
is liable to pay a reasonable amount of compensation to the person
and the person has a right to have that amount determined by the
court. [Schedule 2, item 1:section 139F]
1684. Section 139G provides the general regulation-making power for
matters required or permitted to be prescribed under the ACL or
necessary or convenient to be prescribed to give effect to the ACL.
[Schedule 2, item 1:section 139G]
Application and transitional provisions
1685. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1686. Divisions 7 and 8 of Schedule 2 of the Bill applies to all relevant
conduct occurring in trade or commerce on or after 1 January 2011.
1687. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1688. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1689. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1690. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Do not remove section break.
1691.
Outline of chapter
1692. Divisons 4 and 6 of Schdule 2 of the The Trade Practices Amendment
(Australian Consumer Law) Bill 2010 (the Bill) amend the Trade
Practices Act 1974 (TP Act) to create enhanced investigation and
enforcement tools relating to consumer product safety.
1693. Division 3 of Schedule 2 also provides a framework for industry
consultation on proposed product safety regulatory actions, such as
the issue of bans, standards or recalls.
Context of amendments
1694. Currently the TP Act provides for a post-market approach to consumer
product safety regulation in Australia. Under this approach,
suppliers are generally free to supply goods into the market without
first obtaining approval from a regulatory agency to do so.
However, the Government reserves the power, under the TP Act, to
require that goods are to be withdrawn from the market if they are
discovered to pose a safety hazard. The Government also has to the
power to require goods to comply with mandatory standards or to ban
the supply of certain goods per se.
1695. Through their fair trading legislation, the States and Territories
all have similar regulatory regimes that apply in their respective
jurisdictions in respect of consumer product safety.
1696. This generic regime is supplemented by Commonwealth and State and
Territory industry-specific regulation where particular products,
such as electrical goods, chemicals, or drugs, pose higher risks to
consumer or public safety.
1697. In July 2008, the Council of Australian Governments (COAG) agreed to
create a single national generic consumer product safety law, which
is to be enforced jointly by the Australian Competition and Consumer
Commission (ACCC) and State and Territory fair trading agencies. In
October 2008, COAG further agreed that this national product safety
law will be part of the Australian Consumer Law (ACL).
Enforcement of consumer product safety
1698. Currently, the Commonwealth and States and Territories have their
own jurisdiction-specific product safety investigation and
enforcement provisions. The Commonwealth's powers, which can be
exercised by the ACCC, are set out in Division 1A of Part V of the
TP Act.
1699. The ACCC's product safety investigation and enforcement role differs
from its other TP Act compliance functions in key ways:
. market surveillance activities are directed at identifying
potential product safety hazards (which may not be
contraventions of the TP Act), in addition to detecting
breaches of the TP Act; and
. the responsible Commonwealth Minister can respond to
product safety hazards detected by the ACCC through the
exercise of administrative functions (such as banning
goods or ordering a product recall).
1700. The removal of unacceptable product safety hazards from the
Australian market as soon as possible once they are identified is a
critical focus of the ACCC's market surveillance and enforcement
activities.
Enhancing the Commonwealth product safety enforcement role
1701. The model for a national product safety law agreed by COAG requires
the ACCC to take a stronger role in the day-to-day administration
and enforcement of the product safety law. For example, under the
ACL, only the Commonwealth Minister will be able to make permanent
product safety bans and mandatory standards.
1702. In addition to the legislative changes contained in this Bill, the
ACCC is currently implementing, in partnership with State and
Territory agencies, significant reforms to its own administrative
arrangements for product safety, including:
. the development of a clearing-house of consumer product
injury and incident data; and
. a one-stop shop website containing all relevant product
safety requirements and general information for Australian
suppliers and consumers.
1703. The Intergovernmental Agreement for the Australian Consumer Law
(IGA) provides that, with the agreement of the Commonwealth, any
State or Territory may confer its powers in relation to enforcement
and administration of the ACL on the Commonwealth.
1704. Generally, the State and Territory product safety regulators have
greater access to investigation and enforcement approaches that does
the ACCC. Given the greater role the ACCC will take in national
product safety matters under the ACL, strengthening the ACCC's
investigatory and enforcement powers will allow the ACCC to work
more effectively in a coordinated manner with State and Territory
agencies.
Conference requirements for Commonwealth safety bans and recalls
1705. The exercise of administrative functions such as the banning of
consumer products or ordering the recall of a product, are
regulatory actions that impact significantly on suppliers involved.
1706. The TP Act currently imposes requirements on the responsible
Commonwealth Minister, through the ACCC, to consult with affected
suppliers before exercising certain administrative functions under
the ACL. These consultation arrangements are referred to in the TP
Act as a conference process.
1707. It is the Government's intention that the current conference
arrangements in the TP Act will be retained as a law of the
Commonwealth to support the Commonwealth's administration of product
bans and compulsory recalls under the ACL. To accommodate the
substantial restructuring of the consumer protection provisions of
the TP Act under the ACL, the existing conference provisions will be
renumbered re-drafted to reflect the drafting approach taken in the
ACL.
1708. More general Commonwealth administrative review laws, such as the
Administrative Decisions (Judicial Review) Act 1977 will also
continue to apply to decisions made by a responsible Commonwealth
Minister under the product safety provisions of the ACL.
Summary of new law
Product safety market surveillance and enforcement
1709. The Bill amends the TP Act to include an enhanced suite of product
safety market surveillance and enforcement provisions. An inspector
of the ACCC, or the responsible Minister where appropriate, will be
able to:
. enter premises to which the public has access in order to
inspect, take photographs of, or purchase any consumer
goods or product related services;
. require a person who supplies consumer goods or product
related services in trade or commerce, to provide the ACCC
or the Minister with information, documents or evidence
about those goods or services;
. enter premises under a search warrant, or without a
warrant in cases where the occupier has consented or there
is an immediate danger to life or public safety, and
exercise search-related powers, including:
- if entry is under a warrant, the power to seize goods or
equipment relating to consumer goods or product related
services;
- inspect, handle and measure goods;
- take samples of consumer goods;
- inspect, handle and make copies of documents relating to
consumer goods or product related services;
- make still or moving image recordings of any consumer
goods or equipment or premises related to consumer goods
or product related services;
- ask questions or seek the production of documents;
- if entry is under a warrant, issue embargo notices to
prevent the movement or supply of consumer goods or
product related services; and
- in circumstances where an embargo notice has been
issued, secure consumer goods or equipment used to
supply product related services.
1710. The TP Act is also amended to allow a court to issue an order
allowing an inspector of the ACCC to destroy or otherwise dispose of
consumer goods that do not comply with a safety standard, ban or
recall.
1711. The product safety investigation and enforcement powers can only be
exercised where an inspector of the ACCC or the responsible
Minister, as appropriate:
. believes that consumer goods or product related services
(or a reasonably foreseeable misuse) will or may cause
injury to any person; or
. for the purposes of ascertaining whether consumer goods or
product related services are of a kind that will or may
cause injury to any person.
Conference requirements for Commonwealth safety bans and recalls
1712. The Bill amends the conference process provisions of the TP Act to
reflect the drafting style used in the ACL. However the substantive
effect of those provisions is not amended.
1713. Pursuant to the conference process, before imposing an interim ban
or permanent ban on consumer goods or product related services, or
prior to issuing a compulsory recall notice for consumer goods, the
Commonwealth Minister must:
. publish a proposed ban or recall notice on the internet;
and
. invite any person who supplies or proposes to supply the
goods or services in question to notify the ACCC if he or
she wishes the ACCC to hold a conference in relation to
the proposed imposition of the ban or recall
1714. The ACCC must hold a conference if a person requests that the ACCC
does so in response to a proposed ban or recall notice.
1715. The responsible Commonwealth Minister must be informed of the
outcome of a conference and must take the recommendations of the
conference into account in deciding whether to proceed with a
proposed ban or recall notice.
1716. A conference may be held after the imposition of an interim ban if
the Minister considers that the ban must be imposed without delay if
there is an imminent risk of death, serious illness or injury.
Comparison of key features of new law and current law
|New law |Current law |
|An inspector of the ACCC |No equivalent |
|may enter premises to |Commonwealth law. |
|which the public has | |
|access in order to | |
|inspect, take photographs| |
|of, or purchase any | |
|consumer goods or product| |
|related services for the | |
|purpose of ascertaining | |
|whether consumer goods or| |
|product related services | |
|will or may cause injury | |
|to any person. | |
|The responsible Minister |No equivalent |
|or an inspector of the |Commonwealth law. |
|ACCC may require a person| |
|who supplies consumer | |
|goods or product related | |
|services in trade or | |
|commerce, to provide | |
|information, documents or| |
|evidence about consumer | |
|goods or product related | |
|services, if the Minister| |
|or on inspector of the | |
|ACCC has reason to | |
|believe the consumer | |
|goods or product related | |
|services will or may | |
|cause injury to any | |
|person. | |
|An inspector of the ACCC |Subsection 65Q(2) of the |
|may enter premises under |TP Act allows an |
|a search-warrant and |authorised officer to |
|exercise search-related |enter premises under a |
|powers, including |search-warrant and |
|inspecting goods or |exercise search-related |
|product related services |powers, including |
|taking samples, |inspecting goods, taking |
|inspecting documents or |samples, inspecting |
|inspecting equipment used|documents or inspecting |
|in the manufacturing, |equipment used in the |
|processing or storage of |manufacturing, processing|
|goods or product related |or storage of goods. |
|services. | |
|When exercising |No equivalent |
|search-related powers an |Commonwealth law. |
|inspector of the ACCC may| |
|embargo or secure | |
|consumer goods or product| |
|related services to | |
|prevent their supply or | |
|movement. | |
|When exercising |No equivalent |
|search-related powers an |Commonwealth law. |
|inspector of the ACCC may| |
|make still or moving | |
|image recordings of any | |
|consumer goods or | |
|equipment or premises | |
|related to consumer goods| |
|or product related | |
|services. | |
|New law |Current law |
|An inspector of the ACCC |Subsection 65Q(3) of the |
|may enter premises and |TP Act allows an |
|exercise search-related |authorised officer to |
|powers in circumstances |enter premises and |
|where the exercise of |exercise search-related |
|those powers is required |powers in circumstances |
|without delay in order to|where the exercise of |
|protect life or public |those powers is required |
|safety. |without delay in order to|
| |protect life or public |
| |safety. |
|An inspector of the ACCC |No equivalent |
|may apply to a court to |Commonwealth law. |
|order the destruction or | |
|other disposal of | |
|consumer goods that do | |
|not comply with a safety | |
|standard, ban or recall | |
|notice. | |
|The Commonwealth Minister|These provisions continue|
|must take into account |the operation of current |
|the findings of a |sections 65J-65P of the |
|supplier consultation |TP Act. |
|('conference process') | |
|before making a ban or | |
|recall, or where an | |
|interim ban has been | |
|imposed by the | |
|Commonwealth Minister due| |
|to imminent danger, after| |
|the imposition of the | |
|interim ban. | |
Detailed explanation of new law
Product safety market surveillance and enforcement
1717. Product safety market surveillance and enforcement powers may only
be exercised by the responsible Commonwealth Minister or an
inspector appointed by the Chairperson of the ACCC.
1718. The responsible Commonwealth Minister is the Minister responsible
for the administration of the consumer product safety provisions of
the CC Act. Currently, the responsible Minister is the Minister for
Competition Policy and Consumer Affairs.
1719. The Chairperson of the ACCC has discretion to appoint any member of
the staff assisting the Commission as an 'inspector' provided that:
. the appointment is in writing [Schedule 2, Part XI,
subsection 133(1)]; and
. the Chairperson is satisfied that the person has suitable
qualifications and experience to exercise properly the
powers of an inspector [Schedule 2, Part XI, subsection
133(2)].
1720. The Chairperson is the Chairperson of the ACCC, established under
section 6A of the TP Act. Staff assisting the Commission are
persons employed under the Public Service Act 1999, in accordance
with section 27 of the TP Act.
1721. An inspector appointed by the Chairperson must comply with any
directions given by the Chairperson [Schedule 2, Part XI, subsection
133(3)]. Written directions given by the Chairperson are not
legislative instruments within the meaning of section 5 of the
Legislative Instruments Act 2003, and are not exempted from the
operation of that Act [Schedule 2, Part XI, subsection 133(4)].
1722. An inspector appointed under section 133 must carry an identity card
at all times while exercising powers as an inspector [Schedule 2,
Part XI, subsection 133A(6)]. The Chairperson must issue an
identity card in a prescribed form to any person appointed as an
inspector [Schedule 2, Part XI, subsection 133A(1)]. An identity
card is a form of photographic ID to minimise the risk of fraud or
inappropriate conduct in relation to the functions of inspectors.
1723. Upon ceasing to be an inspector, a person must return the identity
card to the Chairperson, unless the card has been lost or destroyed.
A person that claims their identity card has been lost or destroyed
bears an evidential burden. [Schedule 2, Part XI, subsection
133A(4) and 133A(5)]
Market surveillance powers that may be exercised without a warrant
1724. The Bill amends the TP Act to provide for two additional market
surveillance powers to be employed by the ACCC, or where
appropriate, the responsible Minister. These powers are designed to
facilitate general market surveillance activities of the ACCC,
consistent with its role in identifying and removing product safety
hazards in a timely way.
Entry to premises open to the public
1725. An inspector may enter premises from which a person, in trade or
commerce, is supplying consumer goods or product related services
for the purpose of ascertaining whether:
. any of the consumer goods or product related services will
or may cause injury to any person; or
. a reasonably foreseeable misuse of those goods or product
related services will or may cause injury to any person.
[Schedule 2, Part XI, Division 4, subsection 133B(1)]
1726. Consumer goods are defined in the ACL as goods that are intended to
be used, or are of a kind likely to be used, for personal, domestic
or household use or consumption, and includes any such goods that
have become fixtures since the time they were supplied if:
. a recall notice for the goods has been issued; or
. a person has voluntarily recalled the goods [Schedule 1,
item 1, Chapter 1, section 2].
1727. Product related services are defined in the ACL as a service for or
relating to:
. the installation of consumer goods of a particular kind;
or
. the maintenance, repair or cleaning of consumer goods of a
particular kind; or
. the assembly of consumer goods of a particular kind; or
. the delivery of consumer goods of a particular kind
and includes any other services that relates to the supply
of consumer goods of that kind [Schedule 1, item 1, Chapter
1, section 2].
1728. An inspector does not require a warrant to enter premises that are
open to the public. An inspector has the right to remain on the
premises so long as the public has access to those premises.
However, the inspector may not enter or remain on those premises
under section 133B if they are closed to the public.
Conduct while on premises
1729. While on public premises, an inspector may:
. take photographs of any consumer goods or equipment used
in the manufacturing, processing or storage of consumer
goods or product related services or take photographs of
premises where product related services are supplied;
. inspect any consumer goods or equipment related to those
consumer goods or product related services;
. purchase any consumer goods or product related services.
[Schedule 2, Part XI, Division 4, subsections 133B(2) and
133C(2)]
1730. If an inspector purchases any of the goods or product related
services he or she would generally do so at the price offered to
other purchases of those goods or services at that time.
Power to obtain information and documents
1731. The responsible Minister or an inspector may give a 'disclosure
notice' to a person who, in trade or commerce, supplies consumer
goods or product related services seeking information, documents or
evidence relating to those consumer goods or product related
services. [Schedule 2, item 2, Part XI, Division 4, section 133D]
1732. A disclosure notice is a written notice requiring the person to give
information to the inspector or responsible Minister, produce
documents or appear before the inspector or responsible Minister at
a reasonable time to give information or produce documents [Schedule
2, item 2, Part XI, Division 4, subsection 133D(3)].
Grounds for issuing a disclosure notice
1733. Before a the responsible Minister or an inspector may issue a
disclosure notice he or she must:
. reason to believe that consumer goods or product related
services of a particular kind (or a reasonably foreseeable
misuse of consumer goods or product related services of a
particular kind) will or may cause injury to any person;
and
. the person to who the disclosure notice is issued is
capable of giving information, producing documents or
giving evidence in relation to those consumer goods or
product related services. [Schedule 2, Part XI, Division
4, subsection 133D]
Compliance with disclosure notices
1734. A person commits an offence if he or she refuses or fail to comply
with a disclosure notice or he or she knowingly gives information,
evidence or a document to an inspector or the responsible Minister
that is false or misleading in any material particular [Schedule 2,
item 2, Part XI, Division 4, subsection 133F(1) and section 133G].
1735. A person does not commit an offence if he or she complies with a
notice to the extent that he or she is capable of complying with it.
However, a defendant bears an evidential burden if he or she claims
that he or she could not comply fully with a disclosure notice.
[Schedule 2, Part XI, Division 4, subsection 133F(2)]
1736. Non compliance with a disclosure notice is a strict liability
offence [Schedule 2, Part XI, Division 4, subsection 133F(2)]. The
strict liability nature of this offence reflects the potential for
widespread detriment, both in terms of potential safety risks for
individual consumers and for its effect on the market and consumer
confidence more generally, that can be caused by a person that
breaches this provision, whether or not he or she intended to engage
in the contravention.
1737. A person is not excused from complying with a disclosure notice on
the ground that the information or evidence, or production of a
document, might tend to incriminate the person or expose the person
to a penalty. However, in the case of an individual, the giving of
information or evidence of production of a document pursuant to a
disclosure notice is not admissible as evidence against the
individual in proceedings instituted by the individual or in any
criminal proceedings against the individual other than for an
offence against sections 133F or 133G (which relate to .
1738. The abrogation of privilege against self-incrimination is necessary
in the context of this product safety investigatory power for two
reasons:
. Disclosure notices may be issued where a Minister or
inspector believes that goods or services pose a danger to
any person and for this reason timely gathering of
information about the extent and nature of any risks is
critical. While it may be technically feasible for the
regulator to obtain information by other means that do not
impinge of the right against self incrimination, these may
take a longer time. The first priority in product safety
enforcement actions is the removal of goods or services
from the marketplace. Prosecution and resulting penalties
for those involved in the supply of goods is generally a
secondary consideration.
. The ACCC will not always have specific information about
the activities of particular suppliers when undertaking
early investigations - the ACCC may receive information
about product safety hazards, such as reports of faulty
goods in overseas markets, which will form the basis of
its market surveillance activities. The receipt of such
information may place the ACCC in the position where it
needs to seek information from suppliers of similar goods
in order to ascertain whether the same problem exists in
Australia.
Court orders for the disposal of consumer goods
1739. An inspector may apply to a court for an order to destroy or
otherwise dispose of consumer goods which do not comply with a
requirement of the Australian Consumer Law (ACL). [Schedule 2, item
1, Part XI, Division 4, subdivision D, section 133H]
1740. This power provides a certain means of removing consumer goods from
the community in situations where a consumer good does not comply
with a safety requirement of the law and the court is satisfied that
the consumer good cannot be made safe.
1741. Before making an application to a court for an order under section
133H an inspector must take reasonable steps to discover who has an
interest in the consumer goods and to the extent it is practicable
to do so, notify each person of their intention to make an
application for the destruction of the consumer goods. Any person
so notified is entitled to be heard in relation to the application.
[Schedule 2, item 1, Part XI, Division 4, Subdivision D, subsections
133H(3) and 133H(4)]
Grounds for making a order
1742. A court may make an order under section 133H if it is satisfied that
a person possesses or has control of consumer goods of a particular
kind and the goods fail to comply with:
. a mandatory safety standard that is in force for consumer
goods of that kind and the cause of the non-compliance
cannot be remedied;
. a permanent ban on consumer goods of that kind is in
force; or
. a recall notice for consumer goods of that kind is in
force and a defect or dangerous characteristic of such a
consumer good identified in the recall notice cannot be
remedied. [Schedule 2, item 1, Part XI, Division 4,
Subdivision D, subsection 133H(1)]
Terms of an order
1743. A court may make an order allowing one or more inspectors to:
. enter premises of the person specified in the order;
. search the premises for consumer goods of the kind
specified in the order;
. seize any such consumer goods found on the premises;
. destroy or otherwise dispose of any such consumer goods
that are seized. [Schedule 2, item 1, Part XI, Division
4, Subdivision D, subsection 133H(2)]
1744. A person from whom consumer goods are seized under an order made
under section 133H or the owner of those goods if the person form
whom the goods were seized is not entitled to possess them, is
liable to pay the Commonwealth the reasonable costs incurred in
seizing, destroying or otherwise disposing of the goods. [Schedule
2, item 1, Part XI, Division 4, Subdivision D, section 133J]
Search and entry under a warrant
1745. The Bill amends the TP Act to allow an inspector to enter premises:
. under a warrant;
. with the consent of the occupier of the premises; or
. without a warrant or consent in circumstances in which
entry is required without delay in order to protect life
or public safety. [Schedule 2, item 1, Part XI, Division
6, Subdivision A, subsection 135(3)]
1746. Where an inspector enters premises with the consent of the occupier,
the inspector must, if requested by the occupier, show the occupier
their identity card.
1747. The inspector must also inform the occupier that the occupier may
refuse consent and the occupier may revoke their consent at any
time. If the occupier revokes their consent, the inspector and any
person assisting the inspector must leave the premises. [Schedule
2, item 1, Part XI, Division 6, Subdivision B, section 135H]
1748. These provisions are based on the current section 65Q of the TP Act,
with some modifications to the drafting style and some additions to
the search-related activities that may be undertaken while on a
premises.
Grounds for entering and searching premises
1749. An inspector may enter premises and conduct search-related powers if
an inspector has reason to believe that:
. consumer goods (either themselves or as a result of the
supply of product related services) of a particular kind
will or may cause injury to any person; or
. a reasonably foreseeable misuse of consumer goods (either
themselves or as a result of the supply of product related
services) or a particular kind will or may cause injury to
any person
and the inspector enters premises for the purposes of
ascertaining whether this is the case. [Schedule 2, item 1,
Part XI, Division 6, Subdivision A, subsections 135(1) and
135(2)]
Search-related powers
1750. If an inspector lawfully enters premises under section 135, the
inspector may:
. if entry is under a warrant, seize goods or equipment
relating to consumer goods or product related services
[Schedule 2, item 1, Part XI, Division 6, Subdivision A,
paragraphs 135A(1)(a) and 135A(2)(b)];
. inspect, handle and measure consumer goods or equipment
relating to consumer goods or product related services
[Schedule 2, item 1, Part XI, Division 6, Subdivision A,
paragraph 135A(1)(b), 135A(1)(e) and 135A(2)(b)];
. take samples of consumer goods [Schedule 2, item 1, Part
XI, Division 6, Subdivision A, paragraph 135A(1)(c)];
. inspect, handle and make copies of documents relating to
consumer goods or product related services [Schedule 2,
item 1, Part XI, Division 6, Subdivision A, paragraphs
135A(1)(d) and 135A(2)(a)];
. make still or moving image recordings of any consumer
goods or equipment or premises related to consumer goods
or product related services [Schedule 2, item 1, Part XI,
Division 6, Subdivision A, paragraphs 135A(1)(f) and
135A(2)(c)];
. ask questions or seek the production of documents
[Schedule 2, item 1, Part XI, Division 6, Subdivision A,
sections 135B and 135C];
. if entry is under a warrant, issue embargo notices to
prevent the movement or supply of consumer goods or
product related services [Schedule 2, item 1, Part XI,
Division 6, Subdivision E, section 135S]; and
. in circumstances where an embargo notice has been issued,
secure consumer goods or equipment used to supply product
related services [Schedule 2, item 1, Part XI, Division 6,
Subdivision E, sections 135V and 135W].
Asking questions or seeking production of documents
1751. When an inspector enter premises lawfully in accordance with section
135, the inspector may ask the occupier to:
. answer any questions relating to the reasons for the
inspector entering the premises that are put by the
inspector; and
. produce any document relating to the reasons for the
inspector entering the premises that is requested by the
inspector. [Schedule 2, item 1, Part XI, Division 6,
Subdivision A, section 135B]
1752. Where an inspector has entered the premises under a search warrant,
the occupier commits an offence if he or she fails to comply with a
request by an inspector to answer any questions or produce any
documents. However, a person is not required to comply with such a
request if the inspector is lawfully on their premises without a
warrant, in accordance with subsections 135(3)(a) or (c). [Schedule
2, item 1, Part XI, Division 6, Subdivision A, subsection 135C(1)]
1753. A person is not excused from answering a question or producing a
document on the ground that the answer, or the production of a
document, might tend to incriminate the person or expose the person
to a penalty. [Schedule 2, item 1, Part XI, Division 6, Subdivision
A, subsection 135C(2)]
1754. However, in the case of an individual, the answer to a question or a
document produced are not admissible in evidence against the
individual in any criminal proceeding other than proceedings:
. for an offence against this section;
. proceedings for an offence based on the answer or document
being false or misleading; or
. an offence based on the obstruction of public officials.
[Schedule 2, item 1, Part XI, Division 6, Subdivision A,
subsection 135C(3)]
1755. Failure to comply with a request under subsection 135B(2) is an
offence of strict liability. The strict liability nature of this
offence reflects the potential for widespread detriment, both in
terms of potential safety risks for individual consumers and for its
effect on the market and consumer confidence more generally, that
can be caused by a person that breaches this provision, whether or
not he or she intended to engage in the contravention.
Seizure of goods or equipment
1756. If an inspector seizes consumer goods or equipment relating to
consumer goods or product related services under section 135A, the
inspector must provide a receipt for those goods or equipment
[Schedule 2, item 1, Part XI, Division 6, Subdivision C, subsections
135M(1) and 135M(2)]. A single receipt may cover 2 or more kinds of
consumer goods and/or equipment that been seized [Schedule 2, item
1, Part XI, Division 6, Subdivision C, subsection 135M(3)].
1757. An inspector must take reasonable steps to return any consumer goods
or equipment related to consumer goods or product related services
to the person from whom they were seized (or the owner if that
person is not entitled to posses it) if the reason for the seizure
no longer exists of after no more than 60 days, whichever happens
first. [Schedule 2, item 1, Part XI, Division 6, Subdivision C,
subsections 135N(1), 135N(4) and 135N(5)].
1758. An inspector is not required to take reasonable steps to return
seized consumer goods or equipment if:
. the ownership of the goods or equipment is in dispute; or
. the goods or equipment are forfeited or forfeitable to the
Commonwealth; or
. the return of the consumer goods or equipment could cause
an imminent risk of death, serious illness or serious
injury; or
. the inspector is otherwise authorised by law to retain,
destroy, dispose of or otherwise deal with the consumer
goods or equipment. [Schedule 2, item 1, Part XI,
Division 6, Subdivision C, subsections 135N(2) and
135N(3)]
1759. An inspector may apply to a judge of the Federal Court for an order
to extend the period that seized consumer goods or equipment may be
held for up to a further 60 days. A judge must be satisfied that it
is necessary in all the circumstances for the inspector to continue
to retain the consumer goods or equipment before granting an
extension of up to 60 days [Schedule 2, item 1, Part XI, Division 6,
Subdivision C, subsections 135P(1) and 135P(2)]. Before applying
for an extension, the inspector must take reasonable steps to
discover who has an interest in the retention of the consumer goods
and equipment and, if it is practicable to do so, notify each person
who the inspector believes has such an interest of the proposed
application [Schedule 2, item 1, Part XI, Division 6, Subdivision C,
subsection 135P(3)].
1760. A person from whom consumer goods or equipment are seized under a
search warrant or the owner of those goods or equipment if the
person from whom the goods were seized is not entitled to possess
them, is liable to pay the Commonwealth the reasonable costs
incurred in seizing the goods. [Schedule 2, item 1, Part XI,
Division 6, Subdivision C, section 135Q]
1761. An inspector is not required to return seized consumer goods or
equipment if despite, making reasonable efforts, the inspector
cannot locate the person to return the seized goods to, or the
person refuses to take possession of the consumer goods or
equipment. In this event, a court may, on the application of the
inspector, make an order authorising the inspector to destroy or
otherwise dispose of the consumer goods or equipment [Schedule 2,
item 1, Part XI, Division 6, Subdivision D, subsection 135R(1)].
1762. If a person refuses to accept possession of consumer goods or
equipment, the inspector must notify that person of their intension
to make an application for disposal or destruction of the consumer
goods or equipment. If an order is made, that person is liable to
pay the Commonwealth the reasonable costs incurred by the inspector
in destroying or disposing of the consumer goods or equipment.
[Schedule 2, item 1, Part XI, Division 6, Subdivision D, subsections
135R(2), 135R(3) and 135R(4)]
Embargo and securing of goods
1763. An embargo is a temporary mechanism to prevent the continued supply
or movement of consumer goods or product related services that may
pose a danger to the community. Consumer goods or equipment used to
supply product related services, may also be secured by an inspector
remaining with the goods, or by locking the goods or equipment up or
other wise, for up to 24 hours, where there is a high risk of non-
compliance with an embargo notice.
1764. An inspector who enters premises under a search warrant may give an
embargo notice to the occupier of the premises [Schedule 2, item 1,
Part XI, Division 6, Subdivision E, subsection 135S(1)].
1765. An embargo notice must:
. be in writing;
. specify the consumer goods or product related services to
which the notice relates;
. prevent the supply of those specified consumer goods or
product related services or, the case of consumer goods,
the movement, transfer, alteration, destruction or other
interference with specified consumer goods; and
. explain the effect of an order to secure consumer goods or
product related services. [Schedule 2, item 1, Part XI,
Division 6, Subdivision E, subsection 135S(3)]
1766. An inspector may issue an embargo notice by causing a copy of the
notice to be served on the occupier of the premises, or if the
occupier cannot be located after all reasonable steps have been
taken to do so, by causing a copy of the notice to be given to be
served on a person on the premises who is believed to be in regular
contact with the occupier, or causing a copy of the notice to be
affixed to the premises or thing on the premises, in a prominent
position. [Schedule 2, item 1, Part XI, Division 6, Subdivision E,
subsection 135S(2)]
1767. If an inspector has issued an embargo notice in respect of consumer
goods or product related services and the inspector who gives the
notice believes on reasonable grounds that it is necessary to secure
the consumer goods or equipment in order to ensure that the notice
is complied with, the inspector may do anything that the inspector
thinks is necessary to secure those consumer goods or equipment.
[Schedule 2, item 1, Part XI, Division 6, Subdivision E, sections
135V and 135W]
1768. The primary objective of an embargo notice is to prevent the supply
of consumer goods that are potentially hazardous. Despite anything
in any other law, a contract for the supply of consumer goods or
product related services that is prohibited by an embargo notice is
void [Schedule 2, item 1, Part XI, Division 6, Subdivision E,
subsection 135S(4)]. Further, if consumer goods are supplied in
contravention of an embargo notice:
. the supplier must immediately return or refund to the
person who acquired the goods any consideration that that
person paid; and
. if the goods have been removed from the premises in which
they were subject to the embargo notice, the person who
acquired the goods must return the goods to the premises
or notify the supplier of the place where he, she or it
can collect the goods (and the supplier must collect them
and return them to the premises). [Schedule 2, item 1,
Part XI, Division 6, Subdivision E, subsection 135S(5)]
1769. An inspector cannot issue embargo notices for longer than:
. 28 days; or
. 24 hours, where the inspector secures consumer goods or
equipment under section 135V or 135W. [Schedule 2, item
1, Part XI, Division 6, Subdivision E, subsection 135T(1)]
1770. On application of an inspector, made before the initial embargo
period ends, the Federal Court may extend an embargo notice for a
specified period [Schedule 2, item 1, Part XI, Division 6,
Subdivision E, subsections 135T(2) and 135T(5)]. An inspector must
notify the occupier of the premises to which the embargo notice
relates before making such an application and the occupier is
entitled to be heard in relation to the application [Schedule 2,
item 1, Part XI, Division 6, Subdivision E, subsections 135T(3) and
135T(4)].
1771. An inspector may not issue embargo notices in relation to the same
consumer goods or product related services within 5 days of the
previous embargo notice ending. [Schedule 2, item 1, Part XI,
Division 6, Subdivision E, section 135U]
1772. A person commits an offence if that person, in the knowledge that an
embargo notice has been given, does or causes another person to do
an act or thing, or omits or causes another person to omit, to do an
act, contrary to the embargo notice [Schedule 2, item 1, Part XI,
Division 6, Subdivision E, subsections 135Y(1) and 135Y(2)]. A
person does not commit an offence if he or she has the consent of
the Commonwealth Minister or Chairperson of the ACCC or an inspector
to do, or not do the act or thing, or an act was done for the
purpose of protecting or preserving the consumer goods or equipment
[Schedule 2, item 1, Part XI, Division 6, Subdivision E, subsection
135Y(3)].
1773. Non-compliance with an embargo notice is a strict liability offence
[Schedule 2, item 1, Part XI, Division 6, Subdivision E, subsection
135Y(4)]. The strict liability nature of this offence reflects the
potential for widespread detriment, both in terms of potential
safety risks for individual consumers and for its effect on the
market and consumer confidence more generally, that can be caused by
a person that breaches this provision, whether or not he or she
intended to engage in the contravention.
1774. The owner of consumer goods or another person who has an interest in
the goods may, in writing, request consent to supply the goods or to
move, transfer, alter, destroy or otherwise interfere with the
goods. [Schedule 2, item 1, Part XI, Division 6, Subdivision E,
subsection 135X(1)]
1775. A person who would be the supplier of product related services or
another person whose interests would be affected if the services
were not supplied, may request consent to supply product related
services that are subject to an embargo notice. [Schedule 2, item
1, Part XI, Division 6, Subdivision E, subsection 135X(2)]
1776. The responsible Commonwealth Minister or, the Chairperson of the
ACCC or an inspector may grant consent in writing [Schedule 2, item
1, Part XI, Division 6, Subdivision E, subsection 135X(3)]. A
written grant of consent is not a legislative instrument within the
meaning of section 5 of the LI Act and is not exempted from the
operation of that Act [Schedule 2, item 1, Part XI, Division 6,
Subdivision E, subsection 135X(4)].
Procedural requirements
1777. Before entering a premises under section 135 an inspector must
announce that he or she is authorised to enter the premises, shown
his or her identity card and allow any person at the premises an
opportunity to allow entry [Schedule 2, item 1, Part XI, Division 6,
Subdivision A, subsection 135F(1)]. However an inspector does not
have to do any of these things if he or she believes on reasonable
grounds that immediate entry to the premises is required to ensure
the safety of any person or to ensure the effective execution of the
warrant is not frustrated [Schedule 2, item 1, Part XI, Division 6,
Subdivision A, subsection 135F(2)]. If any person who is or appears
to represent the occupier of the premises is present the inspector
must as soon as practicable after entering the premises show his or
her identity card to the occupier or other person [Schedule 2, item
1, Part XI, Division 6, Subdivision A, subsection 135F(3)].
1778. An inspector executing a search warrant in relation to premises must
be in possession of that warrant (or a copy of that warrant) or, if
the warrant was issued by telephone of fax the form of that warrant
(or a copy of that form) [Schedule 2, item 1, Part XI, Division 6,
Subdivision A, section 135G]. If the occupier of the premises or
another person who apparently represents the occupier of the
premises is present at the premises, an inspector must as soon as
practicable, make a copy of the warrant available to the occupier or
other person (or a copy of the form of warrant, if the warrant was
issued by telephone or fax) [Schedule 2, item 1, Part XI, Division
6, Subdivision B, section 135J].
1779. Inspectors may be assisted by anther person in entering premises
under section 135. However, the person assisting the inspector may
only enter the premises and undertake search-related powers in
accordance with a direction given to the person by the inspector.
Any power exercised by the person assisting the inspector is taken
to have been exercised by the inspector. [Schedule 2, item 1, Part
XI, Division 6, Subdivision A, section 135D]
1780. An inspector executing a search warrant may use such force against
persons and things as is necessary and reasonable in the
circumstances. [Schedule 2, item 1, Part XI, Division 6,
Subdivision A, section 135E]
Issue of search warrants
1781. An inspector may apply to a judge of the Federal Court for a warrant
[Schedule 2, item 1, Part XI, Division 6, Subdivision F, subsection
135Z(1)].
1782. A judge may issue an warrant only if:
. an affidavit has been given to the judge setting out the
grounds on which the issue of the warrant is being sought;
and
. the judge has been given such further information (if any)
as the judge requires concerning the grounds on which the
issue of the warrant is being sought; and
. the judge is satisfied that there are reasonable grounds
for issuing the warrant. [Schedule 2, item 1, Part XI,
Division 6, Subdivision F, subsection 135Z(2)]
1783. An application may be made by telephone, fax or other electronic
means if the inspector believes on reasonable grounds that the delay
that would occur if an application were made in person would
frustrate the effective execution of the warrant [Schedule 2, item
1, Part XI, Division 6, Subdivision F, subsection 136(1)]. Where an
application is made by electronic means, the judge may require
communication by voice to the extent that it is practicable in the
circumstances [Schedule 2, item 1, Part XI, Division 6, Subdivision
F, subsection 136(2)].
1784. Before applying for a warrant by electronic means, an inspector must
prepare an affidavit (of the kind required when applying for a
warrant in person under section 135Z). However, if it is necessary
to do so, the inspector may apply for the warrant before the
affidavit has been sworn. [Schedule 2, item 1, Part XI, Division 6,
Subdivision F, subsections 136(3) and 136(4)]
1785. If the judge agrees to issue a warrant under section 136, the judge
must complete and sign the same warrant that the judge may issue
under section 135Z if the application had been made in person under
that section [Schedule 2, item 1, Part XI, Division 6, Subdivision
F, subsection 136(5)]. If the judge completes and signs the
warrant:
. the judge must inform the inspector by electronic means of
the terms of the warrant and the day and time on which the
warrant was signed [Schedule 2, item 1, Part XI, Division
6, Subdivision F, subsection 136(6)];
. the inspector must then complete a form of warrant in the
same terms as the warrant completed and signed by the
judge, stating the name of the judge and the day and time
at the which the warrant was signed [Schedule 2, item 1,
Part XI, Division 6, Subdivision F, subsection 136(7)];
. the inspector must, not later than the earlier of the day
after the day on which the warrant ceased to be in force
or the day of execution of the warrant, send to the judge
the form of warrant completed by the inspector and the
sworn affidavit [Schedule 2, item 1, Part XI, Division 6,
Subdivision F, subsection 136(8)]; and
. the judge must attach to these documents the warrant
signed by the judge [Schedule 2, item 1, Part XI, Division
6, Subdivision F, subsection 136(9)].
1786. A form of warrant completed under subsection 136(7) is authority for
the same powers as are authorised by the warrant signed by the judge
[Schedule 2, item 1, Part XI, Division 6, Subdivision F, subsection
136(10)]. However, if it is material in any proceedings for a court
to be satisfied that an exercise of a power was authorised by
section 136 and the warrant signed by the judge authorising the
exercise of the power is not produced in evidence, the court must
assume that the exercise of the power was not authorised by such a
warrant [Schedule 2, item 1, Part XI, Division 6, Subdivision F,
subsection 136(11)].
1787. A warrant must:
. specify the purpose for which the warrant is issued;
. describe the premises to which the warrant relates;
. state that the warrant is issued under section 135Z of the
CC Act;
. name one or more inspectors;
. authorise the names inspectors to enter the premises and
exercise search-related powers in relation to the
premises;
. state whether the entry is authorised to be made at any
time of the day or night; and
. specify a day (which must not be more than 7 days after
the day the warrant is issued) on which the warrant ceases
to be in force. [Schedule 2, item 1, Part XI, Division 6,
Subdivision F, subsection 135Z(3)]
1788. A power conferred on a judge by Division 4 of Part XI of the CC Act
is conferred in a personal capacity and not as a member of a court
[Schedule 2, item 1, Part XI, Division 6, Subdivision G, subsection
136B(1)]. A judge is not compelled to accept a power conferred
under this Division [Schedule 2, item 1, Part XI, Division 6,
Subdivision G, subsection 136B(2)]. However, a judge exercising
such a power has the same protection and immunity as if he or she
were exercising the power as the court of which the judge is a
member, or as a member of the court of which the judge is a member
[Schedule 2, item 1, Part XI, Division 6, Subdivision G, subsection
136B(3)].
Occupier's rights and responsibilities
1789. An inspector must inform an occupier or other person who apparently
represents the occupier of the premises of their rights and
responsibilities in relation to the execution of a search warrant.
[Schedule 2, item 1, Part XI, Division 6, Subdivision B, section
135J]
1790. An occupier or other person who apparently represents the occupier
has a right to be present and observe the execution of a search
warrant [Schedule 2, item 1, Part XI, Division 6, Subdivision C,
subsection 135K(1)]. However, the occupier or other person forfeits
that right if he or she impedes the execution of the warrant
[Schedule 2, item 1, Part XI, Division 6, Subdivision C, subsection
135K(2)]. Inspectors and persons assisting inspectors may execute
the search warrant in two or more areas of the premises at the same
time [Schedule 2, item 1, Part XI, Division 6, Subdivision C,
subsection 135K(3)].
1791. An occupier or a person apparently representing the occupier of a
premises must provide an inspector and any person who is assisting
the inspector with all reasonable facilities or assistance for the
effective exercise of their powers[Schedule 2, item 1, Part XI,
Division 6, Subdivision C, subsection 135L(1)]. Failure to provide
all reasonable facilities and assistance is a strict liability
offence [Schedule 2, item 1, Part XI, Division 6, Subdivision C,
subsection 135L(2)]. Section 135L replaces the obligation imposed
currently by subsection 65Q(10) of the TP Act, which is also a
strict liability offence.
Offences by an inspector
1792. An inspector commits an offence if the inspector:
. states in a document that purports to be a form of warrant
under section 136 the name of a judge unlees that judge
signed the warrant;
. states on a form of warrant under that section a matter
that, to the inspector's knowledge, departs in a material
particular from the terms of the warrant signed by the
judge under that section;
. purports to execute, or presents to another person, a
document that purports to be a form of warrant under
section that the knows has not been approved by a judge or
departs in a material particular from the terms of a
warrant signed by judge; or
. gives to a judge a form of warrant under that section that
is not the form of warrant that the inspector purported to
execute. [Schedule 2, item 1, Part XI, Division 6,
Subdivision F, section 136A)]
Conference requirements for Commonwealth safety bans and recalls
1793. Before imposing a new safety ban on consumer goods or product
related services, or issuing a compulsory recall notice on consumer
goods, the Commonwealth is required to comply with certain
procedural requirements. [Schedule 2, item 1, Part XI, Division 3]
Such requirements include the Commonwealth, through the Competition
and Consumer Commission (the ACCC):
. publishing a copy of the draft proposed ban or recall
notice; and
. inviting affected, or potentially affected, suppliers to
request a conference to be held in relation to the
proposed ban or recall.
Conference requirements for proposed bans and recall notices
1794. The Commonwealth Minister is required to observe conference
requirements before imposing an interim ban or permanent ban, or
issuing a compulsory recall notice, for consumer goods and product
related services.
Conference requirements for proposed bans
1795. A proposed ban notice must be published by the Commonwealth Minister
where the Minister proposes to impose an interim ban or permanent
ban with respect to particular kinds of consumer goods or product
related services. [Schedule 2, item 1, Part XI, Division 3,
subsection 132(1)]
1796. The proposed ban notice must [Schedule 2, item 1, Part XI, Division
3, subsection 132(3)]:
. be in writing and published on the internet;
. set out a copy of the draft notice for the proposed ban;
. provide a summary of reasons for the proposed ban; and
. invite suppliers of, or those who propose to supply, those
kinds of goods or services to notify the Commission if he
or she wishes a conference to be held in relation to the
proposed ban.
1797. A supplier who wishes for a conference to be held must notify the
Commission in writing and within the time period specified in the
proposed ban notice. [Schedule 2, item 1, Part XI, Division 3,
paragraph 132(3)(e)] The time period in the notice must be at least
10 days and cannot commence before the publication of the notice.
[Schedule 2, item 1, Part XI, Division 3, subsection 132(4)]
1798. The Commission is required to notify the Commonwealth Minister in
writing if no conference has been requested. [Schedule 2, item 1,
Part XI, Division 3, section 132B] The notification is not a
legislative instrument within the meaning of section 5 of the LI
Act, and is not exempted from the operation of that Act. [Schedule
2, item 1, Part XI, Division 3, subsection 132B(2)]
1799. However, these conference requirements do not apply where the
Commonwealth has certified that an interim ban can be imposed
without delay. [Schedule 2, item 1, Part XI, Division 3, subsection
132(2)]
1800. Proposed ban notices are not legislative instruments within the
meaning of the LI Act. [Schedule 2, item 1, Part XI, Division 3,
subsection 132(5)]
Conference requirements for proposed recalls
1801. A proposed recall notice must be published by the Commonwealth
Minister where the Minister proposes to issue a compulsory recall
notice for particular kinds of consumer goods. [Schedule 2, item 1,
Part XI, Division 3, subsection 132A(1)]
1802. The proposed recall notice must [Schedule 2, item 1, Part XI,
Division 3, subsection 132A(3)]:
. be in writing and published on the internet;
. set out a copy of the draft notice for the proposed
recall;
. provide a summary of reasons for the proposed recall; and
. invite suppliers of, or those who propose to supply, those
kinds of goods to notify the Commission if he or she
wishes for a conference to be held in relation to the
proposed recall.
1803. A supplier who wishes for a conference to be held must notify the
Commission in writing and within the time period specified in the
proposed recall notice. [Schedule 2, item 1, Part XI, Division 3,
paragraph 132A(3)(e)] The time period in the notice must be at
least 10 days and cannot commence before the publication of the
notice. [Schedule 2, item 1, Part XI, Division 3, subsection
132A(4)]
1804. The Commission is required to notify the Commonwealth Minister in
writing if no conference has been requested. [Schedule 2, item 1,
Part XI, Division 3, subsection 132B(1)] The notification is not a
legislative instrument within the meaning of the LI Act. [Schedule
2, item 1, Part XI, Division 3, subsection 132B(2)]
1805. The conference requirements do not apply where the Commonwealth
certifies that a compulsory recall notice can be issued without
delay. [Schedule 2, item 1, Part XI, Division 3, subsection
132A(2)]
1806. Proposed recall notices are not legislative instruments within the
meaning of section 5 of the LI Act, and are not exempted from the
operation of that Act. [Schedule 2, item 1, Part XI, Division 3,
subsection 132(5)]
Notifying about conferences
1807. Where one or more person has notified the Commission that he or she
wish for a conference to be held in relation to a proposed ban or
recall notice, the Commission must nominate a day, time and place
for the conference. [Schedule 2, item 1, Part XI, Division 3,
subsection 132C(1)]
1808. The Commission is also required to notify in writing, the
Commonwealth Minister and each person who requested a conference,
the conference date, time and venue. [Schedule 2, item 1, Part XI,
Division 3, subsection 132C(1)] The notification is not a
legislative instrument within the meaning of section 5 of the LI
Act, and is not exempted from the operation of that Act. [Schedule
2, item 1, Part XI, Division 3, subsection 132C(3)]
1809. The conference day nominated must be within 5 and 14 days after the
time period which a person is required to notify the Commission if
he or she wished for a conference to be held. [Schedule 2, item 1,
Part XI, Division 3, subsection 132C(2)]
Recommendations after conferences
1810. As soon as practicable following the conclusion of a conference the
Commission is required to provide a written recommendation to the
Commonwealth Minister in relation to a proposed ban or recall
notice. [Schedule 2, item 1, Part XI, Division 3, section 132D]
1811. The Commission can recommend [Schedule 2, item 1, Part XI, Division
3, paragraphs 132D(1)(a) & 132D (2)(a)]:
. that the proposed ban or recall be imposed in the same
terms as the draft ban or recall notice;
. that the proposed ban or recall be modified from the terms
in the draft ban or recall notice; or
. not impose the proposed ban or recall.
1812. A copy of the Commission's recommendation must be given to each
person who was present or represented at the conference. [Schedule
2, item 1, Part XI, Division 3, paragraphs 132D(1)(b) & 132D(2)(b)]
1813. The Commonwealth Minister must consider the Commission's
recommendation, and where the Minister decides not to act in
accordance with the recommendation, then the reasons for so deciding
must be published on the internet. [Schedule 2, item 1, Part XI,
Division 3, subsection 132D(3)]
Conference requirements after issuing interim bans and recall
notices
1814. The Commonwealth is not required to comply with the above conference
requirements prior to issuing an interim ban or recall notice, where
it appears to the Commonwealth Minister that any delay in issuing an
interim ban or recall notice would pose an imminent risk of injury
to any person. However, in such circumstances, a conference process
must be initiated after the interim ban or recall has been made.
1815. Interim bans or recalls without delay
1816. The Commonwealth Minister may certify, by publishing a notice on the
internet that an interim ban or a recall notice can be issued
without delay where it appears that consumer goods or product
related services of a particular kind create an imminent risk of
death, serious illness or serious injury to any person. [Schedule
2, item 1, Part XI, Division 3, subsections 132J(1) and 132J(2)]
The certification is not a legislative instrument within the meaning
of section 5 of the LIA, and is not exempted from the operation of
that Act. [Schedule 2, item 1, Part XI, Division 3, subsection
132J(4)]
1817. Where the Commonwealth Minister makes such a certification and an
action has been taken with respect to the conference process for the
ban or recall (such as the publication of a proposed ban or recall
notice or notification about conference date and time) - but the
Commission has not yet made a recommendation in relation to that ban
or recall - the Minister can then issue the ban or recall notice
without having regard to the conference process. [Schedule 2, item
1, Part XI, Division 3, subsection 132J(3)]
1818. The certification is not a legislative instrument within the meaning
of section 5 of the LI Act, and is not exempted from the operation
of that Act. [Schedule 2, item 1, Part XI, Division 3, subsection
132J(4)]
Conferences after imposing interim bans
1819. The Commonwealth Minister is not required to observe the conference
requirements prior to imposing an interim ban on consumer goods or
product related services of a particular kind, if the Minister has
certified that the interim ban is required to be issued without
delay. [Schedule 2, item 1, Part XI, Division 3, subsection
132E(1)]
Opportunity for a conference
1820. The Commonwealth Minister is required to invite affected suppliers,
or potentially affected suppliers, of the consumer goods or product
related services which are the subject of an interim ban, to notify
the Commission if he or she wishes a conference to be held in
relation to the ban. [Schedule 2, item 1, Part XI, Division 3,
subsection 132E(2)]
1821. The invitation is to be published on the internet and is not a
legislative instrument within the meaning of section 5 of the LI
Act, and is not exempted from the operation of that Act. [Schedule
2, item 1, Part XI, Division 3, subsections 132E(1) and 132E(4)]
1822. A person who wishes a conference to be held must notify the
Commission in writing and within the time specified in the
invitation. [Schedule 2, item 1, Part XI, Division 3, subsection
132E(2)] The time period in the invitation must be at least 10 days
and cannot commence before the publication of the invitation.
[Schedule 2, item 1, Part XI, Division 3, subsection 132E(3)]
Notifying about a conference
1823. Where the ACCC has been notified that one or more persons requests a
conference, the Commission must then nominate a day, time and place
for a conference. Written notice of the conference date, time and
venue must be provided to the Commonwealth Minister and to each
person who so notified the Commission. [Schedule 2, item 1, Part
XI, Division 3, subsection 132F(1)] The notification is not a
legislative instrument within the meaning of section 5 of the LIA,
and is not exempted from the operation of that Act. [Schedule 2,
item 1, Part XI, Division 3, subsection 132F(4)]
1824. The date for holding a conference must be between five and 14 days
after the time period for notifying the ACCC if a conference was
wished to be held. [Schedule 2, item 1, Part XI, Division 3,
subsection 132F(2)]
Recommendations after conferences
1825. As soon as practicable following the conclusion of a conference on
an interim ban, the ACCC must provide a written recommendation to
the Commonwealth Minister. The recommendation can be for the
interim ban to remain in force, be varied or revoked. [Schedule 2,
item 1, Part XI, Division 3, subsection 132G(1)]
1826. The Commission must provide a copy of the recommendation to all
those who were present or represented at the conference. [Schedule
2, item 1, Part XI, Division 3, subsection 132G(1)]
1827. The Commonwealth Minister is required to consider the Commission's
recommendation. Where the Minister decides to act otherwise than in
accordance with the recommendation, then reasons for so deciding
must be published on the internet. [Schedule 2, item 1, Part XI,
Division 3, subsection 132G(2)]
Conferences after issuing recall notices
1828. Unlike interim bans, the Commonwealth Minister is not required to
invite affected (or potentially affected suppliers) to request for a
conference in relation to a recall notice, where the Minister has
certified for the recall notice to be issued without delay.
1829. The Commonwealth Minister may certify (in writing and published on
the internet) for a recall notice in relation to consumer goods of a
particular kind to be imposed without delay, where it appears that
goods of that kind create an imminent risk of death, serious illness
or serious injury to any person. [Schedule 2, item 1, Part XI,
Division 3, subsection 132J(1)]
1830. Where the Commonwealth Minister has certified for a recall without
delay and an action has been taken with respect to the conference
process for the recall (like the publication of a proposed recall
notice or notification about conference date and time) - but the
Commission has not yet made a recommendation in relation to the
recall - the Minister can then issue the recall notice without
having regard to the conference process. [Schedule 2, item 1, Part
XI, Division 3, subsection 132J(3)]
1831. The certification is not a legislative instrument within the meaning
of section 5 of the LI Act, and is not exempted from the operation
of that Act. [Schedule 2, item 1, Part XI, Division 3, subsection
132J(4)]
Conducting conferences
1832. At conferences, the Commission must be present or be represented by
one or more members of the Commission who have been nominated by the
Chairperson. [Schedule 2, item 1, Part XI, Division 3, subsection
132H(3)] The following persons may also be present or represented
at conferences [Schedule 2, item 1, Part XI, Division 3, subsection
132H(1)]:
. the Commonwealth Minister or any person(s) nominated by
the Minister;
. each person who notified the Commission that they wish for
a conference to be held in relation to a proposed ban
notice, proposed recall notice or an interim ban
(certified for issue without delay); and
. any other person whose presence at the conference is
considered by the Commission to be appropriate.
1833. The Commission is required to set out the procedure for conducting
conferences. [Schedule 2, item 1, Part XI, Division 3, paragraph
132H(1)(e)] The Commission must also keep records of conference
proceedings. [Schedule 2, item 1, Part XI, Division 3, subsection
132H(2)]
1834. The Commission must ensure (as far as practicable) that all those
who are entitled to be present or represented at a conference, are
provided with a reasonable opportunity to present their case at the
conference. This includes a reasonable opportunity to inspect, and
to make submissions in relation to, documents which the Commission
proposes to consider when making a recommendation (where the
document does not contain details about secret formulas or secret
processes). [Schedule 2, item 1, Part XI, Division 3, subsection
132H(3)]
Notification requirements
1835. The Commonwealth Minister is required to send a copy of the
following notices to those whom the Minister knows supplies consumer
goods or product related services which the notice relates to
[Schedule 2, item 1, Part XI, Division 3, subsection 132K(1)]:
. proposed ban notice;
. proposed recall notice;
. notice inviting persons to notify the Commission if they
wish for a conference to be held in relation to an interim
ban; or
. notice certifying an interim ban or compulsory recall to
be issued without delay.
1836. Copies must be sent at least within two days of the notice being
published or issued [Schedule 2, item 1, Part XI, Division 3,
subsection 132K(2)]. However, a failure to provide a copy of a
notice does not invalidate that notice. [Schedule 2, item 1, Part
XI, Division 3, subsection 132K (3)]
Application and transitional provisions
1837. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1838. Chapter 2, Part 2-1 applies to all relevant conduct occurring in
trade or commerce on or after 1 January 2011.
1839. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1840. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1841. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1842. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Chapter 20
Liability of suppliers and credit providers
Outline of chapter
1843. Part 5-5 of the ACL makes suppliers of goods and services and a
person providing certain types of connected finance jointly liable
for certain breaches of contract in relation to either the contract
of sale or the linked credit contract.
Context of amendments
1844. The repealed section 73 of the TP Act provided for joint liability
of suppliers and linked credit providers. This provision provided
consumers with additional protection when they bought goods or
services and also received credit from a party linked to the
supplier. Joint liability meant that a consumer could seek a remedy
from either the lender or the supplier of goods or services in the
event of a contractual dispute.
1845. This provision had particular application to circumstances whereby
either a supplier or a linked credit provider became insolvent. In
those circumstances, a section 73 of the TP Act provided the
consumer with the option of pursuing action against the party that
remained solvent.
1846. Part 5-5 of the ACL replaces the repealed section 73 of the TP Act
so that consumers retain the ability to pursue actions against
suppliers and linked credit providers jointly in appropriate
circumstances.
1847. Consumers also sometimes experience issues when dealing with
suppliers and linked credit providers who default on their
obligations to consumers under contracts. Without specific
legislative intervention, consumers will usually remain liable to a
credit provider in the event that a contract for the supply of goods
and services is terminated.
1848. To deal with this situation, section 135 of the Schedule 1 to the
National Consumer Credit Protection Act 2009 (the National Credit
Code) provides that a consumer is entitled to terminate tied credit
contract when a contract for the supply of goods or services is
rescinded or discharged.
1849. To allow such issues to be dealt with expeditiously in a single
proceeding, the ACL provides that, if a consumer is entitled to
terminate a linked credit contract under section 135 of the National
Credit Code, he or she is entitled to recover the same amount in the
proceedings as if action were taken under section 135.
Summary of new law
1850. Section 278 of the ACL provides that suppliers and linked credit
providers are jointly and severally liable to a consumer who is a
party to a linked credit contract in relation to the sale of goods
or services for the amount of loss or damage suffered as a result of
a:
. misrepresentation in relation to the contract;
. breach of the contract;
. failure of consideration in relation to the contract;
. failure to comply with a consumer guarantee for the goods
or services; or
. breach of an implied warranty for financial services.
1851. Where a linked credit provider and a supplier are jointly liable an
action must be taken jointly in a court of competent jurisdiction,
unless the supplier is dissolved or winding up proceedings have
commenced, the court believes an order against them may have no
chance of obtaining remedies from a judgement or the court has
declared that the requirement does not apply in the proceedings at
hand.
1852. There are a number of specific exceptions where a linked credit
provider will not be liable to the consumer, such as where the
consumer approached the credit provider independently without
influence by the supplier, or where in certain lease arrangements
the credit provider had no reason to suspect that there was likely
to be a problem with the supplier.
1853. The amount of liability a linked credit provider has to a consumer
is limited to the amount financed under the credit contract plus the
amount of interest awarded by the court and costs of proceedings.
Other rules are provided dealing with counter-claims and offsets,
awards of interest, liability of suppliers to credit providers and
effects of termination.
1854. A definition of non-linked credit providers is provided to ensure
that this Part does not apply to credit providers that were not
sufficiently involved in the transaction so as to justify joint and
several liability with the supplier.
Comparison of key features of new law and current law
|New law |Current law |
|Part 5-5 sets out a |Section 73 of the TP Act |
|regime which provides |sets out a regime which |
|joint and several |provides joint and |
|liability for actions |several liability for |
|against suppliers and |actions against suppliers|
|linked credit providers |and linked credit |
|in certain circumstances.|providers in certain |
| |circumstances. |
|The Part provides rights | |
|that arise from | |
|termination that would | |
|arise if action was taken| |
|under section 135 of the | |
|National Credit Code. | |
Detailed explanation of new law
1855. A number of definitions relevant to Part 5-5 are set out in Chapter
1 of the ACL, these are:
. a continuing credit contract means a credit agreement for
providing credit:
- in relation to payment for goods or services (including
by way of payment to another person for supplies from
time to time) or for cash supplied from time to time;
and
- where there is an agreement, arrangement, understanding
or course of dealing relating to the provision of
credit; and
- where the amounts owing from time to time are calculated
on the amounts payable and paid by way of entry into
accounts kept for the purpose of the agreement or
dealing.
Any amount paid to a third party for provision of goods,
services or cash to a consumer is taken to be credit
provided for the purposes of those purchases as if it was
not through a third party. [Schedule 1, item 1:
section 14]
. a credit provider is a person providing or proposing to
provide credit in relation to the acquisition of goods or
services; [Schedule 1, item 1: section 2]
. joint liability proceedings are proceedings relating to
the joint and several liability of a linked credit
provider and a supplier of goods or services under section
278; [Schedule 1, item 1: section 2]
. the definition of linked credit provider is an inclusive
definition and means a credit provider:
- that has a contract, arrangement or understanding with
the supplier relating to the supply of goods or services
to, or the business of, the supplier; or, the provision
to persons to whom goods or services are supplied by the
supplier of credit in respect of payment for those goods
or services;
- to which a supplier regularly refers credit seekers;
- that makes its application forms available from the
supplier; or
- that has an arrangement whereby its credit forms may be
signed at the supplier's premises; [Schedule 1, item 1,
section 2]
. loan contract - this definition provides basic features of
a loan arrangement. This is limited to contracts made in
the course of business, thus excluding personal loans
between individuals unconnected with a business.
[Schedule 1, item 1: section 2]
. the definition of a tied continuing credit contract builds
on the definition of continuing credit contract (see
above) by providing that it is 'tied' to the supply when
it is credit in respect of a payment for consumer goods or
services where the credit provider is a 'linked credit
provider' (see above). [Schedule 1, item 1: section 2]
. the definition of a tied loan contract builds on the
definition of loan contract (see above) by providing that
it is 'tied' to the supply when the credit provider knows,
or should have known, that the loan was partly or wholly
for use as a payment for consumer goods or services where
the credit provider is a 'linked credit provider' (see
above); [Schedule 1, item 1: section 2]
1856. Section 322 of the ACL provides that suppliers and linked credit
providers are jointly and severally liable to a consumer who is a
party to a linked credit contract in relation to the sale of goods
or services for the amount of loss or damage suffered as a result
of:
. a misrepresentation in relation to the sale contract or a
linked credit contract;
. a breach of the sale contract or a linked credit contract;
. a failure of consideration in relation to the sale
contract or a linked credit contract;
. a failure to comply with a consumer guarantee under
Division 1 of Part 3-2 of the ACL for the goods or
services; or
. a breach of an implied warranty for financial services
under section 12ED of the Australian Securities and
Investments Commission Act 2001 (ASIC Act). [Schedule 1,
item 1: subsection 278(1)]
1857. Joint and several liability means that both or all parties the
subject of a claim are liable for up to the full amount claimed
until that amount is recovered. Joint and several liability does
not consider apportionment of blame and has the effect of ensuring
that a claimant can recover the money in the first instance without
the need to consider apportionment of blame for conduct by parties
to a contract.
1858. A linked credit contract is a contract for the provision of credit
(with a linked credit provider) in relation to the supply by sale,
lease, hire or hire purchase of goods where the linked credit
provider provides goods to the consumer, or, where goods or services
are supplied directly from the supplier to the consumer. [Schedule
1, item 1: subsection 278(2)]
1859. If a linked credit provider and jointly and severally liable under
this Part the consumer may recover the amount of any loss or damage
and that amount may be recovered, against the supplier and linked
credit provider jointly. [Schedule 1, item 1: section 279]
1860. In joint liability proceedings, a linked credit provider is not
liable to a consumer where the consumer approached the credit
provider and the approach was not induced by the supplier. This
allows linked credit providers to be excused from liability under
section 279 where their credit contract with the consumer was not
connected to the supplier, that is, it was not caused by an action
such as a referral by the supplier. [Schedule 1, item 1: subsection
280(1)]
1861. In joint liability proceedings, a linked credit provider is not
liable to a consumer where in relation to:
. goods that are provided by the linked credit provider as a
lease, hire or hire purchase; or
. a contract of sale in relation to which a tied loan
contract applies: and,
the linked credit provider was satisfied before becoming a linked
credit provider that the reputation and financial standing and
business conduct of the supplier was good; the linked credit
provider had no cause to suspect that the consumer might be
entitled to recover for a breach, or that the supplier might not be
able to meet their liabilities. [Schedule 1, item 1: subsections
280(2)-(3)]
1862. In joint liability proceedings, a linked credit provider is not
liable to a consumer where, in relation to a tied continuing credit
contract, the credit provider, before becoming aware of the contract
of sale or proposals for making such a contract, and having regard
to:
. the nature and volume of the business of the credit
provider; and
. such other matters relevant to the case,
had no cause to suspect that the person entering into such a
contract with the supplier might be entitled to make a claim as a
result of:
. a misrepresentation in relation to the sale contract or a
linked credit contract;
. a breach of the sale contract or a linked credit contract;
. a failure of consideration in relation to the sale
contract or a linked credit contract;
. a failure to comply with a consumer guarantee under
Division 1 of Part 3-2 of the ACL for the goods or
services; or
. a breach of an implied warranty for financial services
under section 12ED of the ASIC Act. [Schedule 1, item 1:
subsections 280(4)-(6)]
1863. The amount of liability a linked credit provider has to a consumer
is limited to the amount financed under the credit contract plus the
amount of interest awarded by the court and costs of proceedings.
[Schedule 1, item 1: section 281]
1864. If a linked credit provider claims against a consumer, the consumer
cannot make a counter claim unless he or she also claims in those
proceedings against the supplier. Any claim by the credit provider
can be offset against the credit provider's liability that arises
under the Part. [Schedule 1, item 1: section 282]
1865. Prior to a judgement being enforced by or a right being conferred on
the consumer as against the linked credit provider, a written demand
must have been unsatisfied for at least 30 days. If that condition
has been met the amount enforceable is only the amount financed plus
interest and costs, less any amount already satisfied by the
supplier already. If a consumer recovers under joint liability
against the linked credit provider for something that is the fault
of the supplier, the linked credit provider can pursue the supplier
for loss or damage as though it were a consumer. [Schedule 1, item
1: section 283]
1866. A consumer has an automatic right to an award of interest (on all or
part of the amount in question) where a judgement is made against a
linked credit provider or supplier in joint liability proceedings,
unless the respondents show good cause that interest should not be
awarded. Payments made to the court by the supplier or linked
credit provider may be relevant to good cause not to award interest.
[Schedule 1, item 1: subsections 284(1) & (4)]
1867. The period for interest to be calculated is from the date of the
time the consumer became entitled until the judgement. The interest
rate to be used is the lowest of any rates the consumer is subject
to under the credit contract or 8 per cent (or another amount
prescribed by regulations), whichever is higher. [Schedule 1, item
1: subsection 284(2)]
1868. If a supplier and credit provider are liable to a consumer under
section 279, the supplier is liable to the credit provider for the
amount of loss suffered by the credit provider (up to the amount of
the credit contract plus interest and costs) if the breach was in
relation to the sale contract or related to a consumer guarantee
under the ACL. Conversely, a credit provider is liable to the
supplier (up to the amount of the sale contract plus costs) for the
amount of loss suffered in relation to the credit contract or that
relates to a warranty under section 12ED of the ASIC Act. [Schedule
1, item 1: section 285]
1869. If a consumer terminates a contract, and he or she otherwise has (or
had) a right to terminate a linked credit contract under section 135
of the NCC, the consumer may recover the amount (that he or she is
entitled to recover under that section and which has not already
been recovered) including crediting or repayments of interest
charged, under the ACL. This provision allows certain State and
Territory courts and tribunals to make orders for recovery of
amounts from credit providers under linked credit contracts when
jurisdiction would otherwise not be available under the National
Credit Code. [Schedule 1, item 1: section 286]
1870. Division 2 of Part 5-5 provides that liability under this Part does
not extend to transactions that have a non-linked credit contract.
That is, if a credit provider and supplier are not sufficiently
connected the joint and several liability will not automatically
apply under section 279. [Schedule 1, item 1: section 287(1)]
1871. A non-linked credit contract is a contract for:
. the supply by sale, lease, hire or hire-purchase of goods
where the credit provider does not take possession of the
goods, had no part in the negotiation of the sale contract
and the credit provider is not a 'linked credit provider'
(see above); or
. the supply of services where the credit provider is not a
linked credit provider. [Schedule 1, item 1:
section 287(2)]
Application and transitional provisions
1872. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1873. Chapter 2, Part 2-1 applies to all relevant conduct occurring in
trade or commerce on or after 1 January 2011.
1874. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1875. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1876. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1877. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Do not remove section break.
Outline of chapter
1878. The ACL Bill will insert an infringement notice regime to apply to
breaches of many of the provisions of the Australian Consumer Law
(ACL).
1879. These provisions will only apply to the Commonwealth ACL and will be
located in Part XI of the Competition and Consumer Act 2010
(CC Act).
1880. The provisions on infringement notices are not included in the ACL
because of issues to do with the way in which the ACL must interact
with existing laws of some States concerning infringement notices.
For this reason, those States may choose to use their existing
infringement notice provisions for the purposes of the ACL, and
other jurisdictions may wish to apply a regime similar to that in
Part XI of the CC Act for their own purposes.
Context of amendments
Infringement notices
1881. Infringement notices were recently introduced into the TP Act in the
Trade Practices Amendment (Australian Consumer Law) Bill 2009 (first
ACL Bill).
1882. Infringement notices supplement criminal sanctions and civil
penalties, as well as the other enforcement powers proposed in the
Bill.
1883. The capacity to issue an infringement notice is not intended to
amount to the imposition of a financial penalty by the regulator.
It is intended, instead, to provide a mechanism through which a
person that in the opinion of the regulator has contravened certain
provisions of the ACL may forestall an application to the courts by
the regulator for the imposition of a criminal sanction or civil
penalty.
1884. Infringement notices will allow the regulator to take action against
minor breaches of unfair practices and other conduct more
efficiently and effectively than through court action alone, and
provide the potential for a speedier resolution of matters than is
possible through the courts (although this would depend on the
complexity of each matter).
Summary of new law
1885. The ACCC can issue a person with an infringement notice containing a
financial penalty for suspected contraventions of the following
provisions of the ACL:
. the unconscionable conduct provisions in Part 2-2;
. provisions relating to unfair practices in Part 3-1
(except subsections 32(1), 35(1), 36(1)-(3), sections
40 and 43);
. the requirement to display prescribed notices relating
to consumer guarantees in section 66(2);
. provisions relating to unsolicited consumer agreements
in Part 3-2, Division 2;
. provisions relating to lay-by sales in Part 3-2,
Division 3 and the requirements for proofs of
transactions and itemised Bills in Part 3-2, Division
4;
. certain product safety provisions in Part 3-3;
. information standards provisions in Part 3-4; and
. failure to respond to a substantiation notice or
providing false or misleading information in response
to a substantiation notice in sections 221 and 222.
1886. Infringement notices will not be able to be issued for alleged
contraventions of subsections 32(1), 35(1), 36(1)-(3), section 40 or
43 as those provisions include reference to the state of mind or
knowledge of the person, a decision on which should be left to the
court to determine.
1887. Infringement notices will also not be available for breaches of the
provisions on misleading and deceptive conduct (Part 2-1) or unfair
contract terms (Part 2-3) as those provisions are not subject to
civil pecuniary penalties.
1888. Compliance with an infringement notice requires payment of the
financial penalty within a certain period of time to avoid legal
liability in respect of the alleged contravention.
1889. For infringement notices relating to those contraventions that have
a corresponding maximum civil pecuniary penalty of $1.1 million for
bodies corporate and $220,000 for persons other than bodies
corporate, the infringement notice amounts are:
. 600 penalty units (presently $66,000) for listed
corporations;
. 60 penalty units (presently $6,600) for bodies corporate
that are not listed corporations; and
. 12 penalty units (presently $1,320) for persons other than
bodies corporate.
1890. The higher amount applicable for publicly listed companies is
included to ensure that infringement notices are an effective
enforcement measure against large entities.
1891. The infringement notice amounts of 60 and 12 penalty units, which
apply with respect to bodies corporate other than listed
corporations and persons other than bodies corporate, are in line
with the general limit suggested by the Attorney-General's A Guide
to Framing Commonwealth Offences, Civil Penalties and Enforcement
Powers.
1892. For infringement notices relating to those contraventions of the
unsolicited consumer agreements regime and the prescribed
requirements for warranties and repairs (in Divisions 2 and 4 of
Part 3-2 respectively) that have a corresponding maximum civil
pecuniary penalty of $50,000 for bodies corporate and $10,000 for
persons other than bodies corporate, the infringement notice amounts
are:
. 60 penalty units (presently $6,600) for bodies corporate;
and
. 12 penalty units (presently $1,320) for persons other than
bodies corporate.
These amounts are in line with the general limit suggested by the
Attorney-General's A Guide to Framing Commonwealth Offences, Civil
Penalties and Enforcement Powers.
1893. For infringement notices relating to those contraventions that have
a corresponding maximum civil pecuniary penalty equal to or less
than $30,000 for bodies corporate and $6,000 for individuals, the
infringement notice amount is 20 per cent the amount of the maximum
civil pecuniary penalty.
1894. These penalties are substantially less than the maximum civil
pecuniary penalties proposed for contraventions of these provisions,
which reflects their intended application to minor infringements of
the law.
1895. Compliance with an infringement notice is not taken as an admission
of liability or a contravention of the ACL. Furthermore, if a
person complies, he or she is not subject to further civil or
criminal proceedings in relation to the alleged contravention.
1896. An infringement notice does not give rise to an enforceable
requirement to pay the financial penalty. If a person does not
comply with the infringement notice within the period of time
specified, the regulator cannot enforce the infringement notice.
1897. Instead, the regulator may bring civil or criminal proceedings
against the person in relation to the same alleged contravention,
but not for failure to pay the penalty in the infringement notice.
1898. The regulator will have the power both to issue and revoke an
infringement notice, as well as the ability to extend the compliance
period.
Comparison of key features of new law and current law
|New law |Current law |
|Part XI of the CC Act |The first ACL Bill will |
|provides a mechanism for |insert Part VIC of the TP|
|a regulator to issue a |Act provides the same |
|person with an |power to the ACCC. |
|infringement notice | |
|containing a financial | |
|penalty for suspected | |
|contraventions of various| |
|consumer | |
|protection-related | |
|provisions of the ACL. | |
Detailed explanation of new law
Definitions
1899. An infringement notice compliance period is 28 days beginning on the
day after the day the notice is issued. [Schedule 2, item 1: Part
XI, Division 5, section 134F]
1900. An infringement notice means an infringement notice issued under
section 134A and 134CA of the CC Act. [Schedule 2, item 1: Part XI,
Division 1, section 130]
1901. An infringement notice provision refers to [Schedule 2, item 1: Part
XI, Division 5, subsection 134A(2)]:
. the unconscionable conduct provisions in Part 2-2;
. provisions relating to unfair practices in Part 3-1
(except subsections 32(1), 35(1), 36(1)-(3), sections
40 and 43);
. the requirement to display prescribed notices relating
to consumer guarantees in section 66(2);
. provisions relating to unsolicited consumer agreements
in Part 3-2, Division 2 ;
. provisions relating to lay-by sales in Part 3-2,
Division 3 and the requirements for proofs of
transactions and itemised Bills in Part 3-2, Division
4;
. certain product safety provisions in Part 3-3;
. information standards provisions in Part 3-4; and
. failure to respond to a substantiation notice or
providing false or misleading information in response
to a substantiation notice in sections 221 and 222.
1902. Infringement notices will not be able to be issued for alleged
contraventions of subsections 32(1), 35(1), 36(1)-(3), section 40 or
43 as those provisions include reference to the state of mind or
knowledge of the person, a decision on which should be left to the
court to determine.
1903. Infringement notices will also not be available for breaches of the
provisions on misleading and deceptive conduct (Part 2-1) or unfair
contract terms (Part 2-3) as those provisions are not subject to
civil pecuniary penalties.
1904. The ACCC has the power to issue a person with an infringement notice
containing a financial penalty for suspected contraventions of
infringement notice provisions of the ACL. [Schedule 2, item 1:
Part XI, Division 5, section 134A]
1905. The liability of a person to court proceedings is unaffected if an
infringement notice is either not issued or withdrawn. [Schedule 2,
item 1: Part XI, Division 5, section 134D]
1906. If a person fails to comply with the infringement notice there is no
penalty for non-compliance. However if the regulator commences
court proceedings, a court can impose a higher penalty than the
infringement notice penalty in respect of the conduct giving rise to
the original alleged breach. [Schedule 2, item 1: Part XI, Division
5, section 134D]
Issue of an infringement notice
1907. The ACCC can issue an infringement notice to a person where it has
reasonable grounds to believe has contravened an infringement notice
provision. [Schedule 2, item 1: Part XI, Division 5, subsection
134A(1)]
1908. An infringement notice can only be issued once for the same alleged
contravention. It has no effect if it either is issued more than
12 months after the contravention allegedly occurred or relates to
more than one alleged contravention. [Schedule 2, item 1: Part XI,
Division 5, subsections 134A (3) and (4)]
Matters to be included in an infringement notice
1909. The infringement notice must include various matters, including a
number of formal and administrative requirements. [Schedule 2, item
1: Part XI, Division 5, section 134B]
1910. The infringement notice must:
. be identified by a unique number;
. state the day on which is was issued;
. state the name and address to whom it is issued;
. identify the ACCC;
. state how the ACCC may be contacted;
. inform the person of the details of the alleged
contravention;
. inform the person of the maximum pecuniary penalty that a
court may impose (if the regulator commences proceedings
against the person following the person's decision not to
comply with the infringement notice);
. specify the penalty payable;
. state that the penalty is payable within the compliance
period;
. state that the penalty is payable to the ACCC on behalf of
the Commonwealth;
. explain how the payment of the penalty is to be made; and
. explain the consequences for the person if he or she
complies or fail to comply with the infringement notice,
and of the regulator withdrawing the infringement notice.
Penalties specified in the infringement notice
1911. The penalties payable under an infringement notice are set out in
section 134C of the CC Act. The penalties payable are described at
the place in this explanatory memorandum where the relevant
contravention is explained. [Schedule 2, item 1: Part XI, Division
5, section 134D]
1912. A penalty unit is $110 at the time of writing, as deifned in
section 4AA of the Crimes Act 1914.
Effect of compliance with an infringement notice
1913. A person complies with an infringement notice if he or she correctly
pays the penalty specified in the infringement notice within the
infringement notice compliance period, and the infringement notice
is not withdrawn. [Schedule 2, item 1: Part XI, Division 5, section
134D]
1914. If a person complies with an infringement notice:
. the person is not taken by the same conduct to have
contravened the ACL for any other purpose; and
. new or existing civil or criminal proceedings in
relation to the alleged contravention cannot be
commenced or continued by the issuing jurisdiction.
[Schedule 2, item 1: Part XI, Division 5, subsections
134D]
1915. Compliance with an infringement notice brings the process for
enforcing the alleged contravention to an end after its
administrative phase. This reflects the intention behind the
infringement notice mechanism of providing a process through which
the entity may forestall court proceedings by the ACCC in relation
to the alleged contravention.
1916. While the ACCC cannot take further action in respect of the alleged
contravention, this does not prevent private parties from doing so.
Effect of failure to comply with an infringement notice
1917. If a person does not comply with an infringement notice - that is,
if he or she does not correctly pay the penalty specified in the
infringement notice within the infringement notice compliance period
and the infringement notice is not withdrawn - the ACCC or the
Commonwealth may bring civil or criminal proceedings against the
person not for failing to pay, but in relation to the alleged
contravention to which the notice relates. [Schedule 2, item 1:
Part XI, Division 5, section 134D]
1918. The limitation on the size of the financial penalty specified in the
infringement notice and restrictions preventing the regulator from
taking other action in relation to conduct dealt with using this
mechanism are intended to ensure that it is not used for more
serious contraventions as an alternative to existing court
processes. However, if a person fails to comply with an
infringement notice and a court subsequently determines that a
contravention has occurred, the court can impose a significantly
higher pecuniary penalty.
1919. To avoid doubt, while the infringement notice mechanism applies to
suspected contraventions of certain civil pecuniary penalty
provisions of the ACL, a person that fails to comply with an
infringement notice may still be pursued by the ACCC or the
Commonwealth in relation to a civil or criminal breach arising from
the same alleged contravention.
Compliance period for infringement notice
1920. The infringement notice compliance period is initially 28 days.
However, the regulator may extend the infringement notice compliance
period once for a further period of 28 days. [Schedule 2, item 1:
Part XI, Division 5, section 134F]
1921. The ACCC must give notice of an extension of an infringement notice
compliance period to the person issued with the infringement notice;
however, failure to do so does not make the extension invalid.
[Schedule 2, item 1: Part XI, Division 5, subsections 134F(4)-(5)]
Withdrawal of an infringement notice
1922. The recipient of an infringement notice may make written
representations to the regulator seeking its withdrawal. [Schedule
2, item 1: Part XI, Division 5, subsection 134G(1)]
1923. Evidence given to the ACCC in making such representations is not
admissible as evidence in a proceeding other than proceedings based
on the evidence or information given being false or misleading.
[Schedule 2, item 1: Part XI, Division 5, subsection 134G(2)]
1924. The ACCC may withdraw an infringement notice if it considers it
appropriate, by written notice to the person. [Schedule 2, item 1:
Part XI, Division 5, subsection 134G(3)]
1925. The ACCC may withdraw the notice whether or not the person has
sought a withdrawal. [Schedule 2, item 1: Part XI, Division 5,
subsection 134G(4)]
1926. The withdrawal notice must include various matters. In addition to
the formal and administrative requirements, the withdrawal notice
must inform the person that he or she is liable to civil or criminal
proceedings in relation to the alleged contravention. [Schedule 2,
item 1: Part XI, Division 5, subsection 134G(5)]
1927. The ACCC may withdraw the infringement notice with the intention of
not pursuing the alleged contravention, in which case the regulator
would not commence proceedings against the entity. Alternatively,
the rationale behind the withdrawal may be that the regulator
considers that the alleged contravention is more serious than the
regulator initially believed, and warrants civil or criminal
proceedings.
1928. If the ACCC wishes to withdraw an infringement notice, then a
withdrawal notice must be issued within the infringement notice
compliance period for the infringement notice. [Schedule 2, item 1:
Part XI, Division 5, subsection 134G(6)]
1929. If the ACCC withdraws the notice following payment of the penalty,
the regulator must refund the penalty paid by the person. [Schedule
2, item 1: Part XI, Division 5, subsection 134G(7)]
Application and transitional provisions
1930. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1931. Chapter 2, Part 2-1 will apply to all relevant conduct occurring in
trade or commerce on or after 1 January 2011.
1932. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1933. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1934. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1935. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Chapter 22
Amendments to Part IVB of the TP Act
Outline of chapter
1936. The ACL Bill amends the TP Act to provide for additional enforcement
and remedies in respect of contraventions and suspected
contraventions of mandatory or voluntary industry codes that are
made under Part IVB of the TP Act.
Context of amendments
1937. Part IVB of the TP Act allows the Minister to prescribe industry
codes of conduct (industry codes). Part IVB was inserted into the
TP Act in 1998.
1938. Currently, there are four mandatory industry codes prescribed under
Part IVB:
. the Franchising Code of Conduct;
. the Horticulture Code of Conduct;
. the Oilcode; and
. the Unit Pricing Code.
1939. There are no voluntary industry codes.
1940. Industry codes are defined in Part IVB as codes that regulate the
conduct of participants in an industry towards other participants in
the industry or towards consumers in the industry.
1941. Codes may be prescribed as mandatory or voluntary. Relevant
participants in an industry must comply with mandatory codes but may
elect to be bound by a voluntary code. However, if an industry
participant elects to be bound by a voluntary code, it is a
contravention of the TP Act not to comply.
1942. Non-compliance with a relevant mandatory or voluntary code attracts
civil remedies under the TP Act, including injunctions (section 80),
actions for damages (section 82), non-punitive orders (section 86C)
and other orders (section 87). There are no criminal sanctions for
non-compliance with an applicable industry code.
1943. In its July 2008 Report of the ACCC inquiry into the competitiveness
of retail prices for standard groceries, the Australian Competition
and Consumer Commission (ACCC) recommended that its enforcement
powers in respect of industry codes be enhanced to include civil
pecuniary penalties, infringement notices and powers facilitate the
conduct of random record audits.
1944. In December 2008, the Parliamentary Joint Committee on Corporations
and Financial Services (Joint Committee) also recommended in its
report, Opportunity not opportunism: improving conduct in Australian
franchising, that civil pecuniary penalties be available in respect
of breaches industry codes and that the ACCC be given the power to
investigate suspected breaches of industry codes without having to
rely on specific complaints from industry participants.
1945. On 5 November 2009, the Government announced its response to the
Parliamentary Committee's report. The Government agreed to
strengthen enforcement of industry codes by:
. empowering the ACCC undertake random record audits in
respect of documents or other information required to be
held pursuant to an industry code;
. allowing a court to order redress for non-parties in
respect of conduct that has breached a relevant industry
code; and
. empowering the ACCC to issue public warnings where a party
has breached an industry code.
Summary of new law
1946. The Bill amends the TP Act to provide three additional enforcement
and redress measures for contraventions of industry codes:
. public warning notices;
. orders for non-party redress in proceedings for
contraventions of a relevant industry code; and
. a random audit power.
1947. These additional remedies are available to the ACCC or the courts,
as appropriate, in addition to the current suite of enforcement and
redress provisions of the TP Act and are not intended to limit use
of those abilities.
Comparison of key features of new law and current law
|New law |Current law |
|The ACCC can issue public|No equivalent provision |
|warning notices relating |exists in the TP Act. |
|to suspected breaches of | |
|an applicable industry | |
|code. | |
|The ACCC may apply to a |No equivalent provision |
|court to make certain |exists in the TP Act. |
|types of orders to | |
|redress, in whole or in | |
|part, loss or damage | |
|suffered by a person that| |
|is not party to the | |
|proceedings. | |
|A corporation must comply|No equivalent provision |
|with a written request by|exists in the TP Act. |
|the ACCC to provide | |
|information or documents | |
|that the corporation is | |
|required to generate or | |
|publish under an | |
|applicable industry code.| |
Detailed explanation of new law
1948. Access to the remedies and enforcement powers created by Divisions
2, 3 and 4 of Schedule 4 of the Bill have effect subject to the
operation of Part VIB of the TP Act [Schedule 4, item 4, Section
51AEAH].
1949. Part VIB provides a statutory regime for claims for compensation for
death or personal injury arising in proceedings under certain
provisions of the TP Act.
Public warning notices
1950. The ACCC may issue a written notice to the public about the conduct
of a corporation if the ACCC:
. has reasonable grounds to suspect that the conduct may
constitute a contravention of an applicable industry code;
and
. the ACCC is satisfied that one or more persons has
suffered, or is likely to suffer, detriment as a result of
the conduct; and
. the ACCC is satisfied that it is in the public interest to
issue the notice. [Schedule 4, item 4, subsection
51AEAA(1)]
1951. The determination of whether the ACCC is satisfied that that there
is, or is likely to be, detriment to one or more persons as a result
of the conduct, and that it is in the public interest to issue a
public warning notice, is a matter within the discretion of the
ACCC, in accordance with the proper exercise of its functions.
Notice is not a legislative instrument
1952. A public warning notice issued in relation to a suspected
contravention is not a legislative instrument within the meaning of
section 5 of the Legislative Instruments Act 2003 [Schedule 4, item
4, subsection 51AEAA(2)]
Orders for non-party redress
1953. The ACCC can apply to a court with jurisdiction in a relevant matter
for an order that will:
. redress, in whole or in part, the loss or damage suffered
by a non-party in relation to a contravention of an
applicable industry code; or
. prevent, or reduce the loss or damage suffered, or likely
to be suffered, by non-parties in relation to a
contravention of an applicable industry code. [Schedule
4, item 4, subsections 51AEAB(1) and 51AEAB(3)]
1954. An applicable industry code is defined in subsection 51ACA(1) of the
current TP Act [Schedule 4, item 1, subsection 4(1)]. An applicable
industry code in relation to a corporation that is a participant in
an industry means, the prescribed provisions of either a mandatory
industry code relating to that industry, or the prescribed
provisions of any voluntary industry code that binds the
corporation.
1955. An order may be made against either the corporation in its own name
or a person involved in the contravention of an applicable industry
code. [Schedule 4, item 4, subsection 51AEAB(2)]
Grounds for making an order
1956. A court may make an order under this section if three conditions are
satisfied.
. A corporation engaged in conduct in contravention of an
applicable industry code.
. The contravening conduct caused, or is likely to cause, a
class of persons to suffer loss or damage.
. The class includes persons who are not, or have not been,
parties to a proceeding instituted under Part VI of the TP
Act in relation to the contravention of an applicable
industry code. [Schedule 4, item 4, subsection 51AEAB(1)]
1957. An application seeking an order can be made even if enforcement
proceedings have not been instituted. As such, the ACCC can take
action for redress for non-parties without previously taking other
action in relation to contravening conduct. [Schedule 4, item 4,
subsection 51AEAB(4)]
1958. An application seeking an order can be made at any time within six
years after the day on which the cause of action that relates to the
contravening conduct accrues. [Schedule 4, item 4, subsection
51AEAB(5)]
1959. In determining whether to make an order the court may have regard to
the conduct of the person who engaged in the contravening conduct as
well as the conduct of the non-parties since the contravention
occurred [Schedule 4, item 4, subsection 51AEAB(6)]. This ensures
that the court may consider particularly whether the person has
already provided some redress for the loss or damage to the non-
party consumers.
1960. In determining whether to make an order, the court does not need to
determine which specific persons are non-parties, nor the exact loss
or damage suffered, or likely to be suffered by such persons.
[Schedule 4, item 4, subsection 51AEAB(8)]
1961. If a non-party consumer accepts the redress provided under an order
then:
. the non-party is bound by the order; and
. any other order in relation to that loss or damage has no
effect in relation to the non-party consumer; and
. the non-party cannot make any claim, action or demand
against the person involved in the contravention in
relation to that loss or damage. [Schedule 4, item 4,
subsection 51AEAB(9)]
Kinds of orders that can be made
1962. The court may make any order it thinks appropriate, other than an
award of damages [Schedule 4, item 4, subsection 51AEAB(1)].
Section 51AEAC of the TP Act does not limit the types of orders that
can be made [Schedule 4, item 4, section 51AEAC].
1963. The kinds of orders that can be made against a person (the
respondent) to redress loss or damage suffered by a non-party
include the following [Schedule 4, item 4, section 51AEAC]:
. an order declaring the whole or any part of a contract
made between the respondent and a non-party, or a
collateral arrangement relating to such a contract:
- to be void; and
- if the court thinks fit-to have been void ab initio or
void at all times on and after such date as is specified
in the order (which may be a date that is before the
date on which the order is made);
. an order:
- varying such a contract or arrangement in such manner as
is specified in the order; and
- if the court thinks fit-declaring the contract or
arrangement to have had effect as so varied on and after
such date as is specified in the order (which may be a
date that is before the date on which the order is
made);
. an order refusing to enforce any or all of the provisions
of such a contract or arrangement;
. an order directing the respondent to refund money or
return property to a non-party;
. an order directing the respondent, at his or her own
expense, to repair, or provide parts for, goods that have
been supplied under the contract or arrangement to a non-
party;
. an order directing the respondent, at his or her own
expense, to supply specified services to a non-party;
. an order, in relation to an instrument creating or
transferring an interest in land (within the meaning of
section 53A of the TP Act), directing the respondent to
execute an instrument that:
. varies, or has the effect of varying, the first-mentioned
instrument; or
. terminates or otherwise affects, or has the effect of
terminating or otherwise affecting, the operation or
effect of the first-mentioned instrument.
Random audit power
1964. The ACCC may request a corporation that is required to keep, to
generate or to publish information or a document under an applicable
industry code, to provide any such information, document or record
to the ACCC [Schedule 4, item 4, subsections 51AEAD(1) and (2)].
1965. Such a notice must be in writing and must:
. name the corporation to which it is given; and
. specify the information or document which is being sought
by the ACCC. [Schedule 4, item 4, Subsection 51AEAD(3)]
1966. This investigation power will assist the ACCC in situations where
significant imbalances in bargaining power between industry
participants makes less powerful participants hesitant to report
instances of contraventions of industry codes by more powerful
industry participants to the ACCC, for fear of retaliatory action by
those more powerful participants. This investigation powers allows
the ACCC to monitor compliance with applicable industry codes
without relying on complaints by other industry participants.
1967. To assist a corporation to comply with the notice, a notice must
also:
. specify the provisions of the applicable industry code
which require the corporation to keep, generate or publish
the information or document; and
. explain the corporation's obligations to comply with the
notice and right to apply for an extension of time to
comply, as set out in sections 51AEAE, 51AEAF and 51AEAG.
[Schedule 4, item 4, subsection 51AEAD(3)]
1968. A single notice may require the corporation to provide more than one
piece of information or to more than one document. [Schedule 4,
item 4, subsection 51AEAD(5)]
Compliance with a notice
1969. A corporation that is given a notice must comply with it in within
21 days or such longer time as agreed in writing by the ACCC.
[Schedule 4, item 4: section 51AEAF]
1970. A corporate may apply in writing to the ACCC within 21 days of
receiving a notice under section 51AEAD for an extension of time to
comply [Schedule 4, item 4, subsection 51AEAE(1)]. The ACCC may
extend the time for compliance with the notice by written notice to
the corporation [Schedule 4, item 4, subsection AEAE(2)]. The ACCC
has discretion as to the length of the extension it will grant.
1971. A corporation must not give the ACCC false or misleading information
or documents in purported compliance with a notice. [Schedule 4,
item 4, subsection 51AEAG(1)]
1972. However, a corporation does not contravene subsection 51AEAG(1) if
the corporation provides false or misleading information that the
corporation could not have known was false or misleading or if the
corporation provides a document containing false or misleading
information accompanied by a statement of the corporation that the
information is false or misleading. [Schedule 4, item 4, subsection
51AEAG(2)]
1973. A corporation that fails to comply with a notice, or provides false
or misleading information or documents in response to a notice, is
subject to the existing civil remedy provisions of the TP Act that
apply to contraventions of Part IVB.
Application and transitional provisions
1974. The ACL will commence on the later of 1 January 2011 or the
commencement of Schedule 1 of the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (the first ACL Bill). The first
ACL Bill is currently before the Parliament. [Section 2]
1975. Chapter 2, Part 2-1 applies to all relevant conduct occurring in
trade or commerce on or after 1 January 2011.
1976. Conduct occurring prior to 1 January 2011 will remain subject to the
repealed (and saved, for those purposes) provisions in the TP Act or
the relevant FT Act of a State or Territory. [Schedule 7, item 6]
1977. The TP Act, as in force immediately before the commencement of the
ACL, continues to apply to or in relation to any proceedings under
or in relation to that Act, which were commenced, but not concluded,
before that commencement. [Schedule 7, item 7]
1978. The Governor-General may make regulations prescribing matters of a
transitional, application or saving nature in relation to the
amendments and repeals made by the Schedules to this Act. [Schedule
7, item 12]
Consequential amendments
1979. References to provisions of the TP Act in other CC Act provisions
and provisions of other Acts will be consequentially amended to
refer to provisions of the ACL to ensure that the affected
provisions continue to apply in the way in which they did under the
TP Act. [Schedules 5 and 6]
Do not remove section break.
Introduction
1980. The Regulation Impact Statement (RIS) set out below was prepared for
the consideration of the Ministerial Council on Consumer Affairs at
its 4 December 2009 meeting.
1981. The RIS was considered by the Office of Best Practice Regulation
(OBPR) and passed on 1 December 2009. The RIS was given the OBPR
reference number 10808.
Part A Background
Introduction
1982. On 2 October 2008, COAG agreed to establish a single national
consumer law as part of the National Partnership Agreement to
Deliver a Seamless National Economy (NPA), which will include
reforms based on best practice in existing State and Territory
consumer laws ('the best practice reforms'). This COAG agreement is
based on detailed reform proposals developed by the Ministerial
Council on Consumer Affairs (MCCA) on 15 August 2008, and agreed to
by the Business Regulation and Competition Working Group of COAG
(BRCWG). The proposals to be discussed in this Regulation Impact
Statement (RIS) can be divided into two groups:
. reforms which create a single, simplified national law,
based on State and Territory laws that already exist in
most or all jurisdictions ; and
. reforms which reflect best practice among State and
Territory laws, which currently exist in only one or a few
jurisdictions.
1983. These proposals are based on consumer policy objectives agreed by
MCCA and set out in its communiqué of 15 August 2008.
1984. This Part examines the case for implementing the best practice
reforms. All of the proposals considered in this RIS currently
exist in at least one State or Territory's law and reflect a process
of policy development and discussion between Australian governments
to achieve a single national consumer law.
1985. Under the Intergovernmental Agreement for the Australian Consumer
Law, the Commonwealth and all State and Territory governments must
agree unanimously to the initial text of the ACL.
1986. In undertaking these reforms MCCA has borne the national consumer
policy objective in mind. The objective is to 'improve consumer
wellbeing through consumer empowerment and protection, to foster
effective competition and to enable the confident participation of
consumers in markets in which both consumers and suppliers trade
fairly.'
1987. This objective is supported by six operational objectives:
. to ensure that consumers are sufficiently well-informed to
benefit from and stimulate effective competition;
. to ensure that goods and services are safe and fit for the
purposes for which they were sold;
. to prevent practices that are unfair;
. to meet the needs of those consumers who are most
vulnerable or are at the greatest disadvantage;
. to provide accessible and timely redress where consumer
detriment has occurred; and
. to promote proportionate, risk-based enforcement.
1988. In considering the proposals set out in this RIS, the practical
experience of State and Territory agencies in developing,
administering and enforcing State and Territory consumer laws has
been integral to the analysis of options. Where relevant, previous
consultation on, or reviews of, the existing State and Territory
provisions have been taken into account.
Background to the reform of Australia's consumer policy framework
The current legislative framework
1989. Generic consumer protections for Australian consumers are currently
found in 13 separate laws: the TP Act and the Australian Securities
and Investments Act 2001 (Cth) (ASIC Act), which apply nationally,
and 11 State and Territory laws dealing with fair trading and
consumer protection (FTAs). The Productivity Commission (PC) found
that, in a number of respects, while State and Territory laws are
generally similar to the TP Act, the provisions are not uniform.[19]
1990. While there is a high degree of commonality in Australia's national,
State and Territory generic consumer protection laws, there is
variation between the legislative, policy and enforcement approaches
adopted around Australia. This shift away from consistent laws has
led to the current approach being more costly for consumers and
businesses.
1991. With this in mind, the PC recommended a national generic consumer
law based on the TP Act. The most significant differences between
existing jurisdictional consumer protection laws, which are relevant
in the context of the best practice reforms discussed in this RIS,
are set out below:
. Objects of the TPA and FTAs: There are significant
differences between the objects provisions of the various
Australian consumer laws. Objects provisions can be
significant as an aid to judicial interpretation and
therefore differences can influence judicial outcomes for
consumers seeking to utilise a particular consumer
provision. They can also reflect and inform very
different approaches to issues of policy development and
enforcement.[20]
. Industry specific regulation: The PC recognised
significant differences in industry specific consumer
regulation in the energy, food, credit, tobacco,
electrical products and therapeutic goods industries. The
PC also found some industry specific legislation is overly
prescriptive and unnecessary given the existence of
generic consumer protections. Furthermore, changes to
industry specific regulation occur often, which creates
ongoing complexity and costs to businesses as they attempt
to maintain compliance across jurisdictions.[21]
. Diversity of regulatory approaches: The diversity of
consumer agencies is also reflected in the wide range of
regulatory approaches that they adopt. These reflect a
range of practical considerations, including cost and the
needs of the industry being regulated, but also the
regulatory objectives of the organisation concerned,
informed by the legislation it is responsible for
enforcing.[22] Variable outcomes for consumers occur due
to divergent requirements for businesses, differences in
enforcement intensity and jurisdictional priorities.[23]
1992. The Inter-Governmental Agreement for the Australian Consumer Law
(IGA) requires the Commonwealth to enact changes to the investor
protection provisions of the ASIC Act and, to the extent necessary,
the Corporations Act 2001 (Cth), to ensure that they are consistent
with the Australian Consumer Law (ACL).
1993. The IGA does not require the corporations legislation to be
identical to the ACL legislation. The IGA reflects that financial
products and services will be carved-out of the scope of the ACL as
result of the separate legislative arrangements that exist for in
respect of financial products and services under the Corporations
Agreement 2002. The corporations legislation currently contains
consumer protection provisions that mirror the consumer protection
provisions of the TP Act.
The current enforcement framework
1994. At the national level, the Australian Competition and Consumer
Commission (ACCC) is responsible for enforcing the generic consumer
protections of the TP Act, while the Australian Securities and
Investments Commission (ASIC) monitors and promotes market integrity
and consumer protection in relation to financial products and
services. The TP Act excludes the provision of financial services
from the scope of its provisions.
1995. There are also eight lead consumer agencies that administer and
enforce consumer protection policy in the States and Territories:
NSW Fair Trading, Consumer Affairs Victoria (CAV), Queensland Office
of Fair Trading (OFT), WA Department of Commerce, SA Office of
Consumer and Business Affairs (OCBA), Tasmanian Office of Consumer
Affairs and Fair Trading, ACT Consumer Affairs and Fair Trading and
NT Consumer Affairs.
1996. The division, in terms of jurisdictional and functional
responsibilities, between the different enforcement agencies is not
always straightforward and has been a long-term source of confusion
for consumers and industry alike. In practice, it can result in a
duplication of resources as enforcement agencies try to ascertain
jurisdiction in overlapping cases.[24]
The process so far
1997. In early 2006, the Banks Taskforce, in Rethinking Regulation:
Report of the Taskforce on Reducing Regulatory Burdens on Business,
recommended that COAG should, through MCCA, initiate an independent
review of Australia's consumer policy framework and its
administration.
1998. On 11 December 2006, the PC began its inquiry into Australia's
consumer policy framework. The PC was asked to report on ways to
improve harmonisation and coordination of consumer policy, its
development and administration across jurisdictions in Australia,
avoiding regulatory duplication and inconsistency.
1999. The PC presented its final report to the Government on 30 April
2008, and it was tabled in the Australian Parliament and published
on 8 May 2008. The report included a recommendation that:
the Government implement a new national generic consumer law
to apply in all jurisdictions. This law should be based on
the consumer protection provisions of the TP Act ... [and]
incorporate additional provisions from State and Territory
Fair Trading Acts in those cases where the TP Act is
generally agreed not to be adequate to deal with a
particular generic issue.[25]
2000. On 26 March 2008, COAG agreed that the BRCWG, in consultation with
MCCA, would develop an enhanced consumer policy framework, including
legislative and regulatory structures, drawing on the final report
of the PC.
2001. On 15 August 2008, MCCA developed a series of reform proposals for
enhancing Australia's consumer policy framework, based on the
recommendations in the PC report. These proposals included the
establishment of a single national consumer law which is based on
existing consumer protection provisions of the TP Act and
incorporates 'appropriate amendments reflecting best practice in
State and Territory legislation'.
2002. The proposals agreed by MCCA were endorsed by the BRCWG and agreed
by COAG on 2 October 2008.
Consultation
2003. SCOCA released a draft of this RIS for public consultation on
16 November 2009. Twenty submissions were received in response.
The views expressed in those submissions are reflected, where
appropriate in discussion of the specific proposals in this RIS.
Unless otherwise referenced, all references to specific
organisations or individuals in this RIS relate to submissions
received in response to the consultation draft of this RIS.
2004. SCOCA released An Australian Consumer Law: Fair markets - Confident
consumers on 17 February 2009. The paper provided an overview of
suggested best practice reforms and sought suggestions on areas
where consumer laws could be enhanced by incorporating best practice
elements of State and Territory laws.
2005. SCOCA received 102 submissions from a wide variety of business and
consumer stakeholders. While many of these focused on the proposed
national unfair contract terms law, a significant proportion also
addressed the best practice proposals outlined in the paper. Based
on this consultation, the Australian Government has engaged in a
process of discussion with State and Territory officials on
proposals to be brought forward as part of the ACL.
2006. On 24 June 2009, the Australian Government introduced the Trade
Practices Amendment (Australian Consumer Law) Bill 2009 into the
Australian Parliament. The Bill establishes the framework and the
unfair contract terms provisions of the ACL and introduces new
penalties, enforcement powers and consumer redress provisions into
the TP Act. That Bill is currently before the Parliament.
2007. The Australian Government will introduce into the Australian
Parliament a second Bill in early 2010 that will complete the
implementation of the ACL. This second Bill will include best
practice reforms agreed to by the Commonwealth, States and
Territories as described in this RIS. It will also include a new
national product safety regulatory framework and the remaining ACL
provisions drawn from the current consumer protection and
enforcement provisions of the TP Act.
The problem
2008. As recommended by the PC, the reforms described in this RIS are
intended to modify or augment the existing consumer protection
provisions of the TP Act, based on existing best practice provisions
in State and Territory consumer laws.
2009. The proposals to be discussed below have been divided into two
groups:
. reforms which create a single, simplified national law
(Part B); and
. reforms which reflect best practice among State and
Territory laws (Part C).
2010. In both cases, the proposals are intended to address generic
consumer problems, rather than industry specific concerns.
2011. Each of the reforms covered in this RIS already exist in at least
one State or Territory and, in many cases, more than one. A key
objective of the decision of COAG to create a single national
consumer law was to rationalise, where possible, the generic
consumer laws that exist in Australia and to repeal redundant laws
that merely duplicate the national provisions or do not provide
sufficient additional consumer protection to warrant the associated
regulatory burden.
Assessment of options
2012. The objective of COAG is to achieve the implementation of a single,
national consumer law. However, in doing so, it did not want a
'highest-common-denominator' approach to regulation, based on the
adoption of all existing State and Territory provisions.
Accordingly, a two-stage approach has been taken in the assessment
of these proposals:
. State and Territory governments have nominated those
existing provisions that they consider provide a practical
consumer benefit in their jurisdiction and which they
consider should not be lost to Australian consumers in the
implementation of the ACL; and
. the costs and benefits of each reform proposal have been
assessed according to the impact it will have in all
jurisdictions, including those where that specific
regulation currently does not exist.
2013. In considering and assessing the merits of each proposal for
inclusion in the ACL, the following considerations have been taken
into account:
. the need to maintain current levels of consumer protection
within the context of a generic, national consumer law and
to address community expectations;
. the need, in all cases, to minimise and, where possible,
reduce business compliance costs under a national consumer
law;
. the need to rationalise existing consumer laws as much as
possible; and
. the need to achieve national uniformity through the ACL
and the adoption of the ACL by all States and Territories.
Reforms which create a single, simplified national law on a
specific issue
2014. These reforms relate to those laws that apply in all - or nearly all
- jurisdictions, and will:
. create national consistency and replace a variety of State
and Territory laws, and
. enhance the current level of consumer protection while
minimising business compliance costs.
2015. In this regard, where there are differences between the TP Act and
State and Territory laws, single, simplified national law would
result in business compliance cost savings and reduced consumer
confusion. The impact of this benefit will vary between proposals
in accordance with the significance of the proposal and the extent
of any variation that currently exists.
Reforms which reflect best practice among State and Territory laws
2016. These reforms relate to those laws that apply only in one or some
jurisdictions and take account of market developments or new
regulatory approaches. The application of these reforms as part of
the ACL is necessary to:
. promote the creation of a single, simplified national law
on a specific issue;
. enhance the clarity and effectiveness of that law by
drawing on best practice in existing State and Territory
laws; and
. improve protection for all Australian consumers while
minimising business compliance costs.
How we assess the regulatory impact of reforms
2017. The potential impacts from these reforms are considered in terms of
three general groups: consumers, businesses and governments:
. examples of impacts on consumers are clarity about the
nature and scope of their rights and obligations, changes
in prices or availability of goods or services, access to
legal rights of action, or access to redress;
. examples of impacts on businesses are clarity about the
nature scope of their rights and obligations, changes to
compliance costs or changed opportunities to market
products or otherwise interact with consumers; and
. examples of impacts on governments are changes to the
costs of administering and enforcing regulation.
2018. Reform options are assessed against the status quo. The status quo
may involve no regulation, TP Act provisions only, State or
Territory regulations only, or a mixture of Commonwealth and State
and Territory regulations, as the case may be.
2019. The status quo does not contemplate the COAG agreement that the
default position for consumer protection laws being considered for
inclusion in the ACL is to incorporate the TP Act provisions into
the ACL, and repeal any corresponding State and Territory laws
unless a best practice reform proposal is agreed. Instead, where
there are existing TP Act provisions related to a proposal, the TP
Act provision being adopted wholly in the ACL would always be
considered as an explicit option.
Part B Reforms which create a single, simplified national law
Introduction
2020. A number of best practice reform proposals relate to laws that
already exist in most, if not all, States and Territories, or
already apply to a majority of Australian consumers. For the
purposes of this RIS, these will be called 'national consistency
reforms'.
2021. In recent years, Australia's consumer product and services markets
have increasingly become national in character. For example,
in 2007, around 48 per cent of goods and services (measured by
turnover) were supplied by firms operating nationally.[26]
2022. The trend towards national consumer markets and the existence of
separate consumer protection laws at the national, State and
Territory levels can result in Australian consumers receiving
different levels of protection depending on where they live or where
they make their purchases.
2023. National consistency in consumer laws provides a strong argument for
a national approach as consumers and businesses would only need to
be familiar with a single, national law. It would empower
Australian consumers and businesses to participate in national
markets with greater confidence, and result in compliance cost
savings for businesses as they would only be required to comply with
a single national law, instead of multiple regulatory regimes.
Consumers would also benefit from access to consistent remedies and
legal certainty, regardless of where they reside in Australia.
2024. All of the options considered in this RIS consist of nationally
consistent regulation in all States and Territories through the
applied ACL. The introduction of nationally consistent regulation
would provide significant compliance cost savings for businesses,
which would only have to comply with a single, uniform set of
consumer protection provisions. There would also be benefits for
consumers through familiarity and consistency of legislation,
particularly when purchasing from interstate. Benefits also flow to
consumer agencies through easier cross-border enforcement and the
ability to issue consistent, national guidance.
2025. The case for and against national consistency in existing consumer
laws generally is outlined in more detail below.
|Assessing the case for national consistency |
|Impact |Benefit |Cost |
|group | | |
|Consumers |National consistency in |Potential for a |
| |protections for consumers |reduction in |
| |across product and service |targeted consumer |
| |markets, with greater |protections |
| |confidence for consumers in|applicable to the |
| |accessing those markets. |specific |
| | |circumstances of an |
| | |individual |
| | |jurisdiction. |
| |Business savings due to | |
| |decreased compliance costs | |
| |can potentially be passed | |
| |onto consumers, including | |
| |in the form of lower | |
| |prices. | |
| |Greater clarity due to | |
| |certainty about which | |
| |consumer law applies, and | |
| |allowing for more | |
| |efficiency in markets, as | |
| |there is a greater common | |
| |understanding of the | |
| |'ground rules' for activity| |
| |in the market. | |
| |Improved access to redress | |
| |where a breach of the law | |
| |has occurred, particularly | |
| |where the conduct occurred | |
| |across jurisdictions. | |
|Business |Consistent national |Potential for a |
| |regulation for businesses, |reduction in |
| |reducing complexity and |targeted business |
| |compliance costs, by |regulation |
| |eliminating significant |applicable to the |
| |areas of jurisdictional |specific |
| |variation. This would |circumstances of an |
| |provide savings for |individual |
| |businesses currently |jurisdiction. |
| |operating nationally, which| |
| |can be applied to meet | |
| |business objectives, such | |
| |as expansion and | |
| |innovation. | |
| |Provides greater incentives|Transitional costs |
| |for new entrants due to a |for businesses in |
| |simpler regulatory |understanding and |
| |framework. |complying with the |
| | |new national |
| | |provisions. |
| |Greater clarity and | |
| |certainty in the consumer | |
| |law, allowing for more | |
| |efficiency in markets, as | |
| |there is a greater common | |
| |understanding of the | |
| |'ground rules' for activity| |
| |in the market. | |
|Government|Simpler legislation and |Less ability to |
|s |greater efficiency in |engage in regulation|
| |policy development and |that is targeted to |
| |innovation, reducing the |the individual |
| |need for duplicative |requirements of each|
| |legislative and policy |jurisdiction. |
| |consideration processes. | |
|Assessing the case for national consistency |
|Impact |Benefit |Cost |
|group | | |
| |New regulation is |Transitional and |
| |considered by all |coordination costs |
| |jurisdictions, reducing the|resulting from |
| |likelihood that the |implementation and |
| |national law is overly |administration of |
| |reactive to a very |the new, national |
| |localised problem or |law. |
| |short-term circumstances | |
| |where the costs might | |
| |outweigh the benefits or | |
| |the effects would not | |
| |justify national | |
| |regulation. | |
| |Jurisdictions can | |
| |potentially share and | |
| |allocate more efficiently | |
| |the cost of developing | |
| |policy, and allocate | |
| |administrative resources | |
| |more efficiently, | |
| |potentially providing | |
| |greater resources to | |
| |enforcement and | |
| |conciliation functions. | |
2026. In the light of the benefits and costs listed above, COAG has agreed
to proceed with a nationally consistent consumer law. However, the
actual impacts of implementing best practice reforms as part of that
national law will depend on how those reforms are designed and
implemented. Options for specific best practice proposals are
discussed in the remainder of this RIS.
Proposal 1: Unsolicited selling
Current regulation
What is unsolicited selling?
2027. Unsolicited direct selling (often referred to as door-to-door sales)
and telephone sales occur when a trader approaches a consumer
directly to offer a product or service for sale, and where a
consumer agrees to make a purchase and then enters into an agreement
with the supplier, either at the consumer's home or another place
that is outside of a retail environment (or not the supplier's usual
place of business), or over the phone.
How is unsolicited selling regulated?
2028. All States and Territories have specific laws regulating unsolicited
sales, including door-to-door sales. Victoria, NSW and
South Australia also have specific laws regulating telephone sales.
These jurisdictional regimes diverge on various points, including in
the details of the rights and responsibilities conferred. They also
have their own jurisdiction-specific features, including the extent
of coverage of activities that are not undertaken in trade or
commerce.
2029. While there is national legislation regulating the unsolicited
selling of certain financial services and products, there is no
specific provision dealing with direct or telephone sales in the TP
Act. Under the TP Act, unsolicited consumer transactions completed
via telephone and face-to-face are treated in the same way as
transactions entered into at 'bricks-and-mortar' locations or on the
internet. Conduct related to unsolicited selling is subject to the
prohibitions against unfair practices in the TP Act, including
misleading or deceptive conduct (section 52), false or misleading
representations (section 53), harassment and coercion (section 60)
and unsolicited goods or services (sections 64 and 65).
2030. The Do Not Call Register Act 2006 (Cth) (DNCR Act) and
Telecommunications (Do Not Call Register) (Telemarketing and
Research Calls) Industry Standard 2007 (the Industry Standard)
regulate telemarketing, but not the formation of sales contracts by
telephone. As at May 2009, 3.5 million numbers were listed on the
Do Not Call Register (DNCR). In the year to May 2009, 12,057
complaints were made to the Australian Communications and Media
Authority (ACMA) about breaches of the register or associated
industry code. The proposals considered in this RIS would not apply
to those aspects of telemarketing covered by the DNCR Act or the
Industry Standard.
What is the objective of regulating unsolicited selling practices?
2031. The objective of regulation in this area is to promote the operation
of fair and efficient markets by providing appropriate consumer
protection in situations where the consumer is subject to an added
vulnerability or disadvantage due to the nature of the sales
process. This is achieved by giving consumers additional rights and
protections that are not available in other retail contexts and
providing specific obligations for businesses engaged in these sales
practices. This may be warranted where aggressive selling
techniques (such as high pressure sales) are employed in a non-
retail environment, especially where consumers do not have the
option of walking away from the situation, such as in their own
home, and may feel threatened to agree to an offer simply to put the
situation at an end, or where it is unclear that they are entering
into a contract, as can occur over the phone.
2032. Existing State and Territory regulatory mechanisms are intended to
reduce:
. the impact of information asymmetry between the supplier
and consumer, so that consumers can make informed
decisions;
. the incentives for unfair conduct, by minimising the
potential gains to suppliers from engaging in unscrupulous
practices, including high-pressure sales techniques; and
. the impact of unfair conduct, particularly with respect to
vulnerable and disadvantaged consumers, by providing clear
avenues for redress other than recourse to the courts.
Information asymmetry
2033. Consumer purchasing decisions occur with reference to information
available to the consumer, much of which is provided by the trader.
Provided that this information is truthful, and provided that they
are in a position to evaluate it properly, consumers can use this
information to select products and services which meet their
requirements.
2034. In some situations there is greater likelihood that the decision-
making process will be constrained and that this will result in poor
consumer choices. In the case of unsolicited sales, the consumer is
unlikely to have engaged in a product comparison or sampled the
product prior to the unsolicited approach of the trader.
Consequently, the decision-making context available to the consumer
is largely that which is represented to them by the trader.
Information asymmetry compromises the ability of consumers to make
the best consumption choices in view of their limited purchasing
power.
Incentives for unfair conduct
2035. High-pressure sales techniques, which take advantage of the unequal
market power of the participants in an unsolicited transaction,
exacerbate the problem of information asymmetry. These sales
techniques may involve:
. misleading representations or lack of disclosure of
important information;
. inter-personal pressure exerted by sales people; and
. targeting vulnerable consumer groups, including the
elderly, consumers with poor understanding of English and
the disadvantaged.
2036. The potential for such conduct may increase where it occurs in a non-
public environment, such as a private home, where the consumer may
be at a disadvantage from the outset.
Impact of unfair conduct
2037. An effective consumer regulatory regime requires that consumers have
access to remedies should problems occur, and that businesses'
obligations are made clear where the risk of not specifying these
obligations are potentially significant.
2038. Existing State and Territory unsolicited selling regimes allow for
the provision of self-enforcing remedies, such as statutory cooling-
off periods and the right to rescind contracts where a consumer has
been misled about the identity of a salesperson or their motives for
making contact. Such remedies gives consumers the opportunity to
obtain adequate information about the goods or services being sold,
to access information about the price and quality of similar
products, or to understand the contract they have entered into,
before finalising an agreement with a supplier.
What consumer detriment can result from unsolicited selling
practices?
2039. While direct sales methods may often be convenient for consumers,
they can cause inconvenience and can, in some cases, be perceived as
threatening, particularly where the approach is unsolicited.
2040. Australian consumer agencies frequently receive complaints in
respect of this form of selling. For example:
. over the last two financial years, CAV received 1,056
complaints and enquiries about unsolicited selling;
. over the last three financial years, NSW Fair Trading
received 2,015 complaints and 3,229 enquiries about door-
to-door selling and telephone sales;
. over the last two financial years, the South Australian
OCBA received 872 complaints and enquiries annually about
unsolicited selling generally; and
. the Queensland OFT receives over 125 enquiries per month,
on average, about door-to-door sales.
2041. Industry ombudsman services also receive complaints and enquiries
about unsolicited selling:
. the Energy and Water Ombudsman of Victoria received 1,307
complaints about door-to-door and phone sales in the year
to June 2007;[27] and
. the Energy and Water Ombudsman of NSW reported a
significant increase in complaints about elderly customers
concerning unsolicited selling since January 2006.[28]
2042. It is important to recognise that unsolicited selling-related
complaints in the energy industry represent a small proportion of
the total number of complaints received in that industry. The
Energy Retailers Association of Australia Inc (ERAA) noted in its
submission on the RIS that door-to-door marketing and telemarketing
represent the more efficient and effective approaches to selling
energy and to encouraging consumers to switch retailers in fully
contestable markets.
2043. In 2007 the Consumer Action Law Centre (CALC) and the Financial &
Consumer Rights Council (FCRC) undertook a study of consumer
experiences concerning door-to-door sales practices in the
electricity sector.[29] This qualitative study was based on 28
interviews of consumers in urban, regional and rural Victoria who
had sought financial counselling at a later time. The case studies
noted conduct by the caller in breach of relevant consumer laws
which included:
. misleading and deceptive conduct;
. retailers switching customers without consent, including
marketing to non-account holders;
. unconscionable conduct; and
. harassment.
2044. A similar study was undertaken in 2009 by the FCRC,[30] based on 81
case studies from current and recent clients involving electricity,
gas and water issues. It found door-to-door marketing techniques to
be the largest source of consumer detriment for low income
consumers, including the vulnerable such as newly arrived
immigrants, people with language or literacy difficulties, those
experiencing mental health issues and the disabled. The conduct
included the failure of door-to-door sales representatives to:
. gain informed consent;
. provide copies of the sale contract when requested;
. provide pre-contractual information; and
. inform customers of their cooling off and cancellation
rights.
Previous reviews of unsolicited selling regulation
2045. A 2002 National Competition Policy review of the NSW Door-to-Door
Sales Act 1967 found that some of the most vulnerable groups in
society continue to encounter undesirable direct selling practices.
These were noted to include the elderly (especially older women
living alone), consumers with poor understanding of English and the
disadvantaged. Many direct selling firms were also found to target
particular suburbs or areas, including those with a high percentage
of public housing.[31]
2046. The NSW review also considered that modern telemarketing practices,
given the very similar nature of inter-personal pressure exerted by
sales people at a customer's front door and on the phone, led to a
sufficiently significant and wide-spread incidence of marketplace
detriment to warrant regulation.
2047. A recent CAV paper identified the risk of high pressure sales
resulting in poor choices by consumers being greatest in situations
characteristic of unsolicited selling, including when:
. consumers do not expect to be approached by the trader, or
cannot walk away from the situation;
. traders use moral pressure or try to create an obligation
for reciprocity by, for example, providing free gifts;
. the goods are unique so that exactly the same product
cannot be purchased elsewhere;
. the goods are complex or unfamiliar so that consumers have
more difficulty relying on their own judgement;
. the relationship between the trader and the consumer is
not ongoing because the product is an infrequent purchase
and/or the trader is not local; and
. the consumer is in a situation in which they are
vulnerable or disadvantaged.[32]
Options for Proposal 1
2048. The status quo comprises retaining the existing direct/door-to-door
and telephone sales regimes of the States and Territories, in
addition to the national Do Not Call Register.
2049. Three options are identified for this proposal, all of which include
adopting a single national legislative approach. These options are
to be compared with the status quo, which reflects the current
regulatory arrangements and has no additional associated costs and
benefits. The options are:
. Option A - Prohibit direct and telephone sales through the
ACL.
. Option B - Not include any specific provisions regulating
direct and telephone sales in the ACL and repeal the
existing provisions of State and Territory legislation.
. Option C - Create a single national framework for direct
and telephone sales reflecting existing approaches in
State and Territory legislation and designed to minimise
unnecessary business compliance costs.
Impact analysis
Option A - Prohibition of direct and telephone sales
2050. Option A is a prohibition that would be imposed at a national level
on all forms of unsolicited direct and telephone sales. It would
not be lawful for a business to approach a consumer directly in any
place outside of the business' usual place of business, including by
telephone, unless the consumer has previously requested that they do
so. The DNCR Act and Industry Standard would continue to apply.
2051. The prohibition would apply to sales agreements made face-to-face
and over the telephone, consistent with the scope of current State
and Territory legislation and the DNCR Act.
2052. The scope of existing State and Territory legislation in relation to
what constitutes a unsolicited approach is broadly similar. The
common elements of the jurisdictional laws regulating direct and
telephone sales are contained in the NSW provisions,[33] which
regulate 'direct commerce contracts' where:
. negotiations leading to the making of a contract take
place between the supplier and the consumer in each
other's presence at a place other than the business or
trade premises of the supplier or over the telephone; and
. the consumer did not invite the supplier to call at that
place or make that telephone call for the purpose of
entering into those negotiations.
2053. In addition, the DNCR Act defines a telemarketing call as a call
where:
. having regard to a number of factors, including the
content of the call, the presentational aspects of the
call and the content that can be obtained using
information mentioned in the call;
. it would be concluded that the purpose of the call is,
among other things, to offer goods or services.
2054. The concept of 'unsolicited' is used, but not defined in the DNCR
Act.
2055. The scope of the prohibition would be no greater than that under
current State and Territory regulation, and the DNCR Act.
2056. The current State and Territory Acts, as well as the DNCR Act,
contain a range of exemptions. These generally reflect areas where
there is alternative industry specific regulation in place, such as
the formation of mortgage contracts, or for unsolicited approaches
that do not target a particular individual, such as mail-outs or
advertisements directed to a substantial section of the public.
2057. The scope of application of a ban on unsolicited selling would
clearly be a key driver of the compliance costs of that approach.
Option A would allow for the possibility of some organisations or
types of activities to be explicitly exempt from the prohibition
having met certain criteria. If such an exemption power was
included in the ACL, exemptions would be subject to the Inter-
Governmental Agreement for the Australian Consumer Law (IGA) voting
arrangements on a case by case basis.
2058. Further consideration would need to be given to the nature of
legislative guidance on the exercise of the power. Such guidance
could restrict the granting of exemptions to businesses or
activities that are subject to industry self-regulation or other
factors that reduce the risk of behaviour that is contrary to the
intent of the more general provisions of the ACL. Types of industry
self-regulation in consumer markets include information campaigns,
service charters, internal complaints handling departments and
procedures, accreditation, licensing and membership certification,
quality assurance systems, standards, and codes of conduct and
dispute resolution schemes.
Option A - Outcome
2059. Option A would impose a very significant cost for businesses that
employ direct selling marketing techniques, which are mostly small
business entities. According to the Direct Selling Association of
Australia (DSAA), direct selling businesses account for $1.2 billion
a year in sales; and the Australian Direct Marketing Association
(ADMA) observes that a study[34] estimated that call centres
generated $2 billion revenue in 2008/09. In addition, almost 67 per
cent of the DSAA's members are small business entities with annual
retail sales of less than $5 million. This option would affect
particularly those businesses that are unable to offer their goods
and/or services other than by way of unsolicited selling.
2060. Under Option A, all businesses would be banned from selling goods
and services through unsolicited sales. Furthermore, all legitimate
businesses that currently rely partly or wholly on an unsolicited
sales business model and that comply with the relevant State and
Territory regulatory requirements would have to cease or restrict
their trading using unsolicited selling. Businesses that choose to
adopt an alternative selling model would face associated
establishment costs, which could potentially be passed on to
consumers in the form of higher prices.
2061. Option A would effectively prevent consumers from purchasing goods
and services via unsolicited sales approaches, which represent a
very small proportion of all goods and services sold. In 2008-09,
for example, the retail sales of members of the DSAA - whose members
are estimated to account for over 90 per cent of industry sales -
represented approximately 0.5 per cent of total Australian retail
trade. The costs to consumers resulting from a prohibition on
purchasing goods and services via unsolicited sales would be offset
to some extent by eliminating the detriment suffered by consumers as
a result of the high pressure sales techniques, however it is
difficult to quantify this impact.
2062. Option A may provide some administrative benefits for consumer
agencies as a per se prohibition would be relatively simple to
administer. Any benefit to government would be eroded to the extent
that exemptions are given and any, further regulatory, requirements
are not adhered to by exempt businesses.
2063. In its submission on the RIS, Telstra considered that there is no
sound reason to abolish door-to-door or telemarketing sales
outright, as doing so would come at an immense cost to businesses
who have invested heavily in the capital and resources to use these
forms of marketing and do so responsibly in compliance with the
various national, State and Territory requirements. An outright ban
would also, in Telstra's view, be utterly destructive to the many
businesses who supply door-to-door and telemarketing services.
2064. ERAA's submission stated that Option A would fundamentally undermine
the competitive environment which has been created in Australia's
retail energy markets. An investigation by the Australian Energy
Market Commission in Victoria found that, despite a small number of
marketing complaints, there was no systematic problem that would
warrant a prohibition of direct marketing; and that the majority of
consumers who switch retailers have had a positive experience when
engaged by marketers of electricity and gas.[35]
2065. The Motor Trades Association of Australia (MTAA) considered Option A
very restrictive and interventionist, and noted that consumers
should be protected from inappropriate conduct. The Financial
Counsellors' Association of Queensland, however, supported Option A.
2066. ADMA noted that it would be extremely concerned if the Government
proceeded with prohibiting all unsolicited telephone sales, given
that they are a vital part of the Australian economy and underpin
the success and growth of many Australian businesses'.
2067. Optus, which allocates extensive resources, and develops and
maintains detailed processes and procedures, to ensure compliance
with its regulatory obligations, strongly opposed Option A on the
basis that it would unjustifiably impose major negative costs on its
business.
Option B - Not include any specific provisions regulating direct
and telephone sales in the ACL and repeal the existing provisions
of State and Territory legislation
2068. Under Option B, unsolicited direct selling practices would be
regulated through the operation of the general consumer protection
provisions of the ACL, including prohibitions on conduct that is
unconscionable, false, misleading or deceptive; and harassment and
coercion.
2069. There have been a small number of cases where the ACCC has taken
action under the general consumer protection provisions of the TP
Act in relation to door-to-door sales practices. On 19 June 2009,
the Federal Court ordered by consent, injunctions for seven years
restraining Craftmatic Australia Pty Ltd from engaging in a wide
range of conduct that was declared to be misleading and
unconscionable, in breach of the TP Act.[36] The ACCC investigation
revealed that the company used misleading and unfair tactics to
convince elderly people to agree to a home presentation by sales
representatives.
2070. In ACCC v Lux Pty Ltd [2004] FCA 926, the Federal Court found that
Lux and a sales representative engaged in unconscionable conduct
regarding a door-to-door sale to a vulnerable consumer. The court
did not find that the conduct constituted harassment and coercion as
defined by section 60 of the TP Act.
2071. Following an investigation into the selling practices of door-to-
door and telemarketing sales companies, Benchmark Sales Pty Ltd and
Axxess Australia Pty Ltd, the ACCC took action in the Federal Court
in 2002. The court made declarations that the companies engaged in
conduct that was unconscionable and misleading, in breach of the TP
Act, and injunctions restraining similar conduct for 12 months.[37]
Option B - Outcome
2072. Removing current jurisdictional direct/door-to-door and telephone
sales regulation under Option B would reduce the compliance costs
incurred by businesses currently complying with those regimes and
would impose no additional regulatory burden.
2073. Option B would give consumers the option to purchase goods and
services sold through unsolicited sales, but would not be afforded
specific protections in respect of this selling method, which are
more certain and less costly to enforce than more general consumer
protection provisions.
2074. In his submission on the RIS, Dr David Cousins noted that the
specific unsolicited selling laws have been adopted in the States
and Territories because the more general provisions relating to
misleading or deceptive conduct, and coercion and harassment, for
example, do not adequately deal with the problems encountered by
consumers. The need for specific unsolicited selling regulation was
also supported by the MTAA.
2075. The DSAA, on the other hand, considered that broader consumer
protection provisions would suffice for a large percentage of the
direct selling market. Optus supported the implementation of Option
B for similar reasons, and considered that the greater penalties for
breaches of the TP Act than existing provisions related to
unsolicited selling would have greater deterrent effect than the
latter.
2076. The impact of removing regulation on enforcement costs is difficult
to estimate, as a reduction in enforcement or conciliation
proceedings relating to specific unsolicited selling regulation may
continue to be borne, at least in part, in respect of increased
regulatory activity under the broader consumer protection provisions
of the ACL.
Option C - Create a harmonised framework for direct and telephone
sales reflecting best practice in State and Territory legislation,
to be included in the ACL
2077. Option C would involve introducing a single national regulatory
framework for all forms of unsolicited offers and sales that occur
in a non-retail environment, either in person or by telephone. This
would be based on harmonisation of the current jurisdictional
direct/door-to-door and telephone sales regimes, although the DNCR
Act and Industry Standard would continue to apply in relation of the
making of telemarketing calls.
2078. One of the key differences between current jurisdictional laws is
the variation in the scope of which unsolicited selling practices
are subject to regulation, including:
. what constitutes a sale or marketing approach outside of a
retail environment;
. the extent to which the regimes place different
obligations on different forms of unsolicited selling (for
example, face-to-face versus telephone sales); and
. the scope and range of exemptions from the general
requirements of the regime.
2079. Option C could provide a scheme that does not discriminate between
different forms of unsolicited selling unless the substance of the
potential harm to consumers warrants a different approach. In doing
this, it would be necessary to define unsolicited sales in a
sufficiently broad way to cover all forms of unsolicited selling
approaches, including face-to-face (in home and other non-retail
environments) and telephone sales. A potential approach could be to
base the definition on section 40B of the NSW Fair Trading Act 1987.
2080. The NSW provisions regulate contracts where:
. negotiations leading to the making of the contract take
place between the supplier and the consumer in each
other's presence at a place other than the business or
trade premises of the supplier or over the telephone; and
. the consumer did not invite the supplier to call at that
place or make that telephone call for the purpose of
entering into those negotiations.
2081. Option C would apply to all goods and services, with the exception
of financial products and services to the extent that they are
regulated by the Corporations Act 2001 (Cth). The anti-hawking
provisions of the Corporations Act 2001 prohibit the offering of
securities, certain financial products and managed investment
products related to unsolicited meetings and telephone calls.
2082. Option C would allow for the possibility of some organisations or
types of activities to be explicitly exempt from regulation having
met certain criteria. If such an exemption power was included in
the ACL, exemptions would be subject to the IGA voting arrangements
on a case by case basis. The Victorian and New South Wales laws,
for instance, include a partial exemption for classified advertising
from the telephone sales legislation on the basis that the contract
is for the supply of a series of advertisements over a period of
time, each of which has a publication deadline.
2083. Further consideration would need to be given to the nature of
legislative guidance on the exercise of the power. Such guidance
could restrict the granting of exemptions to businesses or
activities that are subject to industry self-regulation or other
factors that reduce the risk of behaviour that is contrary to the
intent of the ACL.
2084. Option C could apply to solicited sales in circumstances where a
consumer initially solicits a supplier for the purpose and
expectation of providing, or quoting for, a particular product or
service, and when the supplier consequently comes to the consumer's
home or otherwise approaches the consumer, the supplier applies high
pressure sales techniques to make an unsolicited offer of a related
or unrelated product or service. An example of this approach is in
section 40B of the NSW FTA. The NSW FTA applies if the consumer did
not invite the dealer to call for the purpose of entering
negotiations that would lead to a contract for the supply of goods
or services.
2085. Drawing on current jurisdictional approaches, Option C would include
the following key provisions:
. Express consumer rights, including:
- a cooling-off right, exercisable by providing the
supplier with a cancellation notice (containing
prescribed information) via a wide range of delivery
methods;
- provisions specifying the effect of cancellation under
the cooling-off right; and
- provisions specifying that the consumer can rescind an
unsolicited sales agreement after the cooling off period
in various circumstances related to breaches by the
supplier of certain supplier obligations specified in
the regime.
. Express supplier obligations about the way in which
consumers are approached, including:
- permitted hours of visiting and calling consumers; and
- duties to leave a consumer's premises or end a call when
requested by the consumer,
except as set out for telemarketing calls in the DNCR Act and the
Industry Standard (see below).
. Express supplier disclosure obligations about the making
of contracts, including:
- formal requirements for valid agreements arising from
suppliers approaching consumers by telephone drawing on
subsections 67E(1)-(4) of the Victorian FTA - which
include requirements to, among other things, provide the
full written purchase agreement, which must include
particular details of the transaction, within five days;
- formal requirements for valid agreements arising from
suppliers approaching consumers other than by telephone
drawing on subsections 61(1)-(2) of the Victorian FTA.
A valid agreement would be required to include, for
instance, a cooling-off notice and a cancellation notice
(containing prescribed information); and
- at the outset of an approach or call, a requirement to
clearly advise the consumer of their purpose and to
display or produce identification containing certain
prescribed information.
. Express supplier obligations about post-contractual
behaviour, including:
- prohibitions during the cooling-off period against a
supplier supplying goods or services, or accepting trade-
in goods; and requiring or accepting payment for goods
or services to be supplied;
- a requirement that a supplier immediately repay money
received after the consumer has exercised their cooling
off right;
- prohibitions against a supplier taking action against a
consumer for the purpose of recovering amounts allegedly
payable under a validly cancelled or terminated
unsolicited sales agreement; and
- prohibitions against a supplier from seeking to avoid
provisions concerning a cooling off right or operation
of the regime.
2086. These provisions would take into account that, while the DNCR Act
and the Industry Standard do not regulate the formation of sales
contracts by telephone, together these:
. prohibit unsolicited telemarketing calls to numbers on the
DNCR unless an exception exists (such as consent);
. specify permitted calling times;
. require telemarketers to present Calling Line
Identification;
. require telemarketers to terminate calls on request; and
. require telemarketers to provide a significant amount of
identification as well as other information at the
commencement or during a phone call.
2087. To avoid regulatory duplication and inconsistency, Option C would
therefore regulate telephone agreements to the extent not covered by
the DNCR Act and the Industry Standard.
2088. Option C would also provide that a contravention of any of the
supplier obligations would impose civil and criminal liability under
the ACL.
2089. The national framework would also be supported by the consumer
protection provisions in the TP Act, which are mirrored in almost
all jurisdictions that would be uplifted to form part of the ACL.
2090. In its submission on the RIS, the DSAA considered that only a very
small part of the business operations of its members could be said
to potentially hold the mischief sought to be addressed by cooling-
off rights. While the fundamentals of direct selling, including
network marketing, party plan and doorstop selling, remain, modern
direct selling models are converging with other retail models,
particularly distance selling. This poses a challenge, according to
the DSAA, to adequately define the behaviour that should attract
these rights.
Option C - Outcome
2091. After an initial transitional compliance cost, Option C would
benefit businesses, particularly those operating across State and
Territory borders, by reducing compliance costs through the
application of a single, simplified national law in all Australian
jurisdictions. Transitional costs could be reduced by the
introduction of a national law which broadly adopts the common
requirements of existing laws on unsolicited selling and does not
adopt a 'highest common denominator' approach when taking account of
existing State and Territory consumer laws.
2092. One example of a major cost driver for businesses employing direct
marketing techniques is the varying permitted hours of visiting and
calling consumers found in current jurisdictional laws. Option C
would ensure consistency by taking a common approach to calling
hours, such as the approach reflected in the DNCR Act.
2093. In supporting a new provision that specifically regulates door-to-
door and telemarketing sales nationally, Telstra's submission on the
RIS noted that a new provision is unlikely to come at a great cost
to business given that regulation in this area is not new.
2094. Foxtel noted in relation to its direct selling practices that a
harmonised framework would enable the company to consistently advise
its sales representatives of their obligations and produce uniform
training materials, which would lead to more effective compliance
and should reduce associated costs. Regarding its telephone sales
practices, Foxtel also noted that the company bears significant
compliance costs in adhering to the separate Victorian and NSW
regulation, and that a national cancellation notice introduced under
Option C would reduce compliance costs for businesses.
2095. ADMA also provided its qualified support for Option C on the basis
that the new law not unfairly or unreasonably restrict direct and
telephone sales, noting that the shortcomings of the current
approach impose unnecessary cost and regulatory burden on business,
particularly for businesses who conduct business in more than one
jurisdiction. According to ADMA, this disadvantages consumers as
they ultimately bear these unnecessary costs and suffer if a
business has been unable to comply with the legislation due to its
complexity.
2096. Option C would benefit consumers by providing for enhanced consumer
protection beyond that available for sales undertaken in retail
contexts and over the internet. This would be a benefit in
situations where unsolicited selling approaches pose greater risks
of information asymmetry between suppliers and consumers, or
particularly high pressure sales techniques targeting a range of
vulnerable consumers, which are unlikely to be captured adequately
by the current unfair practices provisions of the TP Act. This
could occur where evidence of breaches of the broader consumer
protection provisions are difficult to prove based on behaviour that
occurs inside a private residence or other non-retail place. It
could also provide clear avenues for consumer redress in instances
where unfair conduct has taken place.
2097. These additional consumer protections would be provided in a
nationally consistent form with common provisions for all forms of
unsolicited sales (including door-to-door and telephone sales).
Nationally consistent consumer protection would encourage confidence
in national consumer product and service markets.
2098. A nationally consistent framework would provide indirect benefits
for consumers, businesses and consumer agencies by making the
unsolicited selling regime easier to understand, to comply with,
under which to provide guidance to consumers and businesses, and to
enforce.
2099. This proposal would incur indirect costs associated with any change
to regulation, such as loss of familiarity and the need for the
government to educate businesses and consumers on the change.
However, these costs would be offset by the benefits to government
associated with a single national framework, including efficiencies
in policy development and consistency in the enforcement approach of
consumer agencies.
2100. In their submissions on the RIS, Option C also received support from
the MTAA and the Australian Finance Conference. The DSAA supported
a harmonised national framework as well, subject to the exclusion
from the harmonised framework of any form of identification
requirement, while FOXTEL's support was subject to not limiting the
existing permitted trading hours for door-to-door sales.
Consultation
2101. SCOCA received 25 public submissions which provided responses to the
'Door-to-door trading and telemarketing' section of An Australian
Consumer Law: Fair markets - Confident consumers. The submissions
reflected a number of key themes, including:
. the need to harmonise regulation across State and
Territory borders in order to reduce regulatory burden for
operators;
. support for an approach based on models such as the
Victorian or NSW FTAs;
. comments on the appropriate length of cooling-off periods
and calling hours; and
. some support for industry specific regulation, while some
stakeholders were cautious of the need for further
regulation of door-to-door trading and telemarketing.
2102. Harmonisation of the laws regulating door-to-door trading and
telemarketing was widely supported by stakeholders, particularly as
a way of reducing the regulatory burden for businesses. They
identified costs of complying with separate jurisdictional regimes
related to: audit requirements; the preparation of different
versions of cooling-off notices; the training of sales
representatives working in different jurisdictions; the
administration of different systems and IT specifications; and the
adoption of different internal policies and procedures. For door-to-
door sales, one submission estimated that the costs of creating,
formatting, reproducing and printing six different versions of a
cooling-off notice are extremely high and that a uniform approach
would reduce this cost by 70 per cent.
2103. SCOCA also received 20 submissions in response to a consultation
draft of this RIS. Of these 15 commented on unsolicited selling
regulation.
2104. Some consumer organisations favoured an outright ban on unsolicited
selling, while some businesses argued that existing more general
consumer protections adequately address unscrupulous practices.
However, consistent with earlier consultation, most submissions from
both business and consumer organisations generally welcomed a single
national approach to regulation in this area.
2105. In addition, some business organisations sought industry-specific
exclusions from any unsolicited selling regulation, citing current
industry-specific regulation or the potential for self-regulation.
In this regard it is noted that such industry specific regulation
applies when expressly excluded, in the context of, rather than
instead of, generic regulation.
Conclusion
2106. In assessing the merits of each option under Proposal 1,
consideration has been had to:
. maintaining current levels of consumer protection within
the context of a generic, national consumer law and
addressing community expectations;
. minimising and, where possible, reducing business
compliance costs under a national consumer law;
. rationalising existing national, State and Territory
consumer laws as much as possible; and
. the practical benefits of achieving national uniformity
through the ACL and the adoption of the ACL by all States
and Territories.
2107. Option A, prohibiting all forms of unsolicited sales nationally,
would carry the greatest impact on businesses, by forcing the end of
previously legal, if regulated, business practices, and potentially
create further complexity through an exemption regime. It would
also potentially reduce consumer welfare, by denying consumers
access to a sales method that can be convenient. Offsetting this to
some extent, Option A would provide the clearest deterrent to a
business engaging in unscrupulous selling practices, albeit at the
greatest cost to those businesses engaged in presently legitimate
unsolicited selling practices.
2108. Under Option B, consumers would retain the choice of purchasing
goods and services through direct and telephone sales, but would
have a lower level of protection than that currently provided.
Businesses would benefit through lower regulatory requirements and
potentially greater access to consumers, particularly in respect of
when they may contact consumers during the week and reduced risk of
consumers withdrawing from sales agreements (such as through a
regulated cooling-off period). Option B would not address specific
concerns about the way in which businesses approach consumers in non-
retail environments reducing certainty for both consumers and
businesses about their rights and obligations. Option B, however
would rely on the more general consumer protection provisions of the
ACL to regulate any unscrupulous conduct that may occur in
unsolicited selling environments, recognising that the specifics of
the manner in which consumers are approached, and contracts are
formed, are not subject to express rules.
2109. Under Option C, consumers would retain the specific protections that
are currently provided by State and Territory unsolicited selling
regimes, particularly with respect to the way in which unsolicited
approaches are made and sales contracts are formed. Businesses
would have to comply with a single regime. However, for those
businesses operating in multiple jurisdictions, this may be offset
to some extent by the rationalisation of the existing regimes into a
single framework. In addition, for businesses operating in only a
single jurisdiction, the ACL regime would not represent an increase
in regulatory burdens over those currently imposed by the applicable
State or Territory regimes.
2110. While the costs and benefits identified for Option C are difficult
to quantify, the merits of regulation under Option C are to be
considered in the context of existing regulation in all States and
Territories concerning unsolicited selling practices. In this
regard, State and Territory governments have expressed strong views
about the importance of specific unsolicited trading regulation as a
means of addressing unscrupulous trader behaviour at a practical
enforcement level and in providing consumers with clear information
about their rights. In the consultation process, many business
stakeholders have also indicated that a single national regulatory
regime under the ACL would be preferable to the status quo, with
very few stakeholders advocating a complete removal of regulation in
this area (Option B).
2111. For these reasons, Option C can be supported by all members of MCCA.
2112. In developing Option C regard has also been had to:
. maintaining an existing consumer protection about which
there are strong community views and expectations; and
. introducing a single, simplified national law, which
reduces business compliance costs compared to the status
quo.
Proposal 2: Asserting a right to payment for unsolicited goods and
services, and unauthorised directory entries and advertisements
Current regulation
2113. Generally, a transaction occurs by agreement between the buyer and
the seller. However, in some cases, a trader may approach a person
or business directly stating a claim for payment for goods or
services which have been provided but were not requested. This
practice is commonly encountered as a scam, known as 'false
billing', which is directed to small businesses and individual
consumers. For example, the publisher of a publication may seek
payment for printing of a directory entry or advertisement that had
not been requested.
2114. Section 64 of the TP Act prohibits asserting a right to payment for
making an entry in a 'directory'. While the definition of directory
is broad enough to include some advertisements, the intention of the
provision is not to provide protection in respect of certain types
of publications: the provision aims to prohibit the practice of
asserting a right to payment for something that a person has not
asked for.
2115. Most jurisdictions have provisions mirroring section 64 of the TP
Act, which prohibits a person from asserting a right to payment for
unsolicited goods or services, unless they have reasonable cause to
believe they have a right to payment, or for making an entry in a
directory without a person's consent.
2116. Proposal 2 would extend the operation of section 64 of the TP Act to
explicitly cover advertisements under the ACL (that is in NSW,
Victoria and, indirectly, in Queensland), and is aimed at ensuring
there is not a loophole for asserting a right to payment for an
entry in a publication if it cannot, in fact, be defined as a
'directory'.
2117. Currently, section 64 of the TP Act and equivalent State and
Territory provisions operate on two levels:
. they prohibit a person from asserting a right to payment
for goods and services unless it has reasonable cause to
believe that there is a right to that payment.
. for directory entries, however, the corporation cannot
seek payment from a person unless it has reasonable cause
to believe that the person has authorised the making of
the entry. The person is deemed not to have given such
authorisation unless a document containing certain
information, and signed by the person (or another
authorised representative of the person), has been given
to the person before the right to payment was asserted.
2118. In both cases, the burden of proof rests with the person making the
claim to a right to payment.
2119. Section 64 and the equivalent State and Territory provisions do not
apply to some legitimate publications that publish large numbers of
advertisements, such as newspapers.
2120. In NSW, Queensland and Victoria, there are also specific additional
provisions that prohibit a supplier from seeking payment for the
making of unauthorised advertisements. These are contained,
respectively, in section 58A of the NSW FTA, section 52 of the
Queensland FTA, and section 27 of the Victorian FTA. There is no
equivalent of these provisions in the TP Act.
2121. The NSW and Queensland provisions also specify that a warning
statement must be included on documents that purport to be invoices
for unsolicited goods or services, or unauthorised directory entries
or advertisements. The requirements for the warning statement are
specifically detailed in the provisions.
2122. In NSW the following statement is required in at least 18 point font
on the first page of the unsolicited document or invoice: 'THIS IS
NOT A BILL. YOU ARE NOT REQUIRED TO PAY ANY MONEY.'
2123. These provisions apply in addition to the general requirements
relating to misleading and deceptive conduct and false or misleading
representations in sections 52 and 53 of the TP Act (and their
equivalents in the State and Territory FTAs).
Evidence of consumer detriment
2124. There is some evidence that assertions of right to payment,
particularly directed at businesses, occur:
. In the last two financial years, CAV recorded 580
enquiries and 50 complaints in relation to unsolicited
goods or services. In one particular instance in 2007,
CAV accepted an enforceable undertaking from a company to
refrain from billing consumers for unsolicited premium SMS
services as part of a telemarketing campaign.
. In the past three financial years, NSW Fair Trading has
received 1,023 enquiries and 369 complaints about
unsolicited goods and services. In the same period, it
received 318 enquiries and 69 complaints about false
billing and reports a reduction in complaints since
section 58A was incorporated into the NSW FTA. A NSW Fair
Trading report in 2003 identified about 170 publications
involved in false billing practices, potentially
defrauding businesses of $20 million per year.[38]
. The Queensland OFT receives over 100 enquiries and 20
complaints a month regarding assertion of a right to
payment through false billing. A majority of these
complaints are from small businesses about requests for
payment for listings in directories or advertising in
publications such as magazines.
2125. In practice, small businesses, rather than individual consumers, are
usually the targets of requests for payment for unsolicited
directory entries and advertisements. The ACCC's Scamwatch website
notes that 'a directory entry or unauthorised advertising scam is a
scam that targets small businesses, trying to bill you for a listing
or advertisement in a magazine, journal or business
register/directory.'[39] The majority of the consumer protection
provisions of the ACL will apply to businesses in their capacity as
consumers. This is consistent with the application of the TP Act
and State and Territory FTAs currently.
Options for Proposal 2
2126. The status quo comprises a national provision in the TP Act and
three jurisdictions (NSW, Queensland and Victoria) with both a
provision mirroring the TP Act provision and an additional
prohibition on a supplier from seeking payment for the making of an
unauthorised advertisement.
2127. Two options are considered for this proposal, and will be compared
with the status quo:
. Option A: Incorporate the current section 64, without
amendment, into the ACL.
. Option B: Extend the TP Act provision to apply to
unauthorised advertisements and to include a regulation-
making power in respect of requirements for the provision
of a statement that an unsolicited 'invoice' is not a
demand for payment.
Impact analysis
Option A - Incorporate the current section 64, without amendment,
into the ACL
2128. Option A would involve repealing the various State and Territory
provisions. Section 64 of the TP Act would apply, without
amendment, in each State and Territory as a provision of the ACL.
2129. The proposed ACL provision would prohibit a person from seeking
payment for unsolicited goods or services, or for the making of
unauthorised directory entries.
2130. Section 64 of the TP Act currently provides a broad prohibition on
demanding payment for any goods or services unless a corporation
believes it has a right to that payment. These broad prohibitions
apply to advertisements - in Rizzo v Fitzgerald (1988) 19 FCR 175, a
person who sent invoices to a business for advertisements in a
magazine which the business did not order was found guilty under
subsection 64(2A). However, section 64 also provides a slightly
different prohibition in respect of directory entries alone - that
is, that a corporation shall not assert a right to payment, unless
it has reason to believe that the person has authorised the making
of the entry (as opposed to merely a belief that the corporation has
a right to payment). Section 64 then provides additional rules
around when a corporation is deemed to have demanded payment in
respect of an unauthorised directory entry. Under Option A, the
additional rules that apply to unauthorised directory entries would
not apply to advertisements.
2131. However, telemarketers can employ techniques, such as calling at
busy periods, which make it difficult for their targets to remember
details of the conversations, which in turn makes it difficult to
prosecute offenders.[40] These same techniques are often employed
in respect of unauthorised advertisements in a similar manner to
directory entries.
Option A - Outcome
2132. Under Option A, businesses in NSW, Queensland and Victoria would
lose explicit protection against a supplier seeking payment for
unauthorised advertisements. Instead these businesses would need to
rely on the more general protections in section 64 of the TP Act in
respect of unsolicited services, where they are targeted by
unauthorised advertisement scams.
2133. This option would not increase compliance cost on businesses and
would potentially reduce some record-keeping costs for businesses
that publish advertisements on behalf of others in NSW, Queensland
and Victoria.
2134. Option B - Extend the TP Act provision to apply to unauthorised
advertisements and to include a regulation-making power in respect
of requirements for the provision of a statement that an unsolicited
'invoice' is not a demand for payment
2135. Option B involves including a section in the ACL based on an amended
section 64 of the TP Act to include a prohibition on traders seeking
payment for unauthorised advertisements, along the lines of the
prohibition currently present in NSW, Queensland and Victoria. In
addition, the ACL would include a regulation-making power for the
Commonwealth Minister in respect of requirements for the provision
of a statement that an unsolicited 'invoice' is not a demand for
payment, along the lines of those in sections 58 and 58A of the NSW
FTA. The relevant State and Territory laws would be repealed.
2136. Advertisements include those placed in newspapers as well as
magazines and other similar publications. Such publications are
also the subject of complaints to consumer agencies, in addition to
complaints relating to directory entries. Recent examples include
complaints received by CAV in relation to companies which publish
handbooks, magazines and online media.
2137. Under Option B, businesses would receive protection against
suppliers seeking payment for unsolicited goods or services, or
unauthorised directory entries or advertisements. Regulators in all
jurisdictions would be able to pursue suppliers on those matters.
In addition, as raised by a submission from the Motor Trades
Association of Queensland, this Option would ensure that the
standing of a third party product or service is not compromised by
such an advertisement, and the public would not be misinformed about
this product or service. The requirement to include a warning
statement on unsolicited invoices would make it easier for consumers
and regulators to distinguish between genuine and scam invoices.
2138. Experience in Queensland suggests that clarifying the application of
the provision to unauthorised advertisements can help in the
successful enforcement of the provision. In Bauer v Power Pacific
International Media Pty Ltd [2007] FCA 349, a person and his sons
were permanently restrained from undertaking certain business
activities after continuing to assert a right to payment for
including unauthorised advertisements in certain directories,
journals and magazines. Importantly, the Queensland OFT has
confirmed that it has not received any representations from
legitimate publishers that the relevant Queensland FTA provision
disrupts their business activities.
Option B - Outcome
2139. Option B provides additional protection to consumers (including
small businesses) across Australia from suppliers who seek payment
for unsolicited goods or services, or unauthorised directory entries
or advertisements, and there would only be one set of laws governing
this area in Australia.
2140. Option B would have a minimal impact on compliance costs for
businesses that publish advertisements on behalf of other
businesses, insofar as it would impose specific requirements on such
businesses to produce and keep documentary evidence in relation to
the authorisation of advertisements. Option B would have no
compliance cost impacts on any other businesses.
2141. Any compliance costs would be further mitigated by retaining the
existing exemption in section 64 of the TP Act for legitimate
publications that carry out large numbers of advertisements, such as
newspapers.
2142. In addition, the warning statement for unauthorised advertisements
would be prescribed in regulations under the ACL, which impose
additional compliance costs on businesses outside of NSW. This
impact would be minimal as section 64 of the TP Act currently
requires (at paragraph 64(5)(e)) that a person is taken to have
asserted a right to payment for an unauthorised directory entry if
they send any invoice stating the amount of payment without also
stating at least as prominently that no claim is made to the
payment. Businesses outside of NSW that would have to comply with
the additional statement prescribed in the regulations in respect of
both directory entries and advertisements, would already have to
comply with TP Act requirement in respect of directory entries,
which is similar in effect.
Consultation
2143. An Australian Consumer Law: Fair markets - Confident consumers
invited submissions on whether the operation of section 64 of the TP
Act could be improved from its current form. Out of 102 submissions
received, there was one submission in favour of extending the
operation of section 64 of the TP Act to unauthorised
advertisements, and none against.
2144. In response to SCOCA's consultation draft of this RIS, six
submissions commented on this proposal. Most submissions favoured
the expansion of the current prohibitions in relation to directory
entries to also cover advertisements.
Conclusion
2145. In assessing the merits of each option under Proposal 2,
consideration has been had to:
. maintaining current levels of consumer protection within
the context of a generic, national consumer law and
addressing community expectations;
. minimising and, where possible, reducing business
compliance costs under a national consumer law;
. rationalising existing national, State and Territory
consumer laws as much as possible; and
. the practical benefits of achieving national uniformity
through the ACL and the adoption of the ACL by all States
and Territories.
2146. There are few, if any, justifications for allowing a business to
assert a right to payment from a consumer (including businesses) for
unsolicited goods and services. Neither option would impose a
significant compliance cost burden on businesses, given that the
provision in either form is intended to tackle conduct by certain
businesses engaged in a form of scam, rather than legitimate
business activities. There are few, if any, justifications for
legitimate business conduct along these lines.
2147. Option A would draw upon existing legislation in the TP Act, which
already applies to a large segment of the business sector but would
reduce protection available currently in some jurisdictions (NSW,
Victoria and Queensland), in respect of scams based on unauthorised
advertisements.
2148. Option B would enhance the existing provision to make it explicit
that it is an offence to assert a right to payment for unauthorised
advertisements, and for those businesses issuing documents
concerning potential payment for the provision of entries in
directories or advertisements to require a warning statement as an
additional layer of protection for consumers.
2149. Both options would benefit consumers (including small businesses) by
making it clear that purporting to require payment to the inclusion
of an unsolicited entry in a directory is against the law. In
practice, there is little to distinguish between unsolicited
directory entries and advertisements in terms of the types of
businesses targeted by these scams. However, imposing the
additional clarification concerning unauthorised advertisements,
including the requirement for a warning statement on marketing
material, makes it easier for consumers and regulators to
distinguish between genuine offers and scams.
2150. NSW Fair Trading, in particular, has found it very useful to have
such a provision as it is easier for them to pursue suppliers that
are operating scams in breach of the prohibition on asserting a
right to payment for unsolicited advertisements.
2151. For these reasons, Option B can be supported by all members of MCCA.
2152. In developing Option B regard has been had to:
. enhancing consumer protection and enhancing consumer
confidence in the law concerning the seeking of payment
for unsolicited goods and services, particularly directory
entries and advertisements;
. the minimal impact that this proposal would have on
legitimate business activities, except in relation to
certain businesses operating scams and similar activities;
and
. the existence of current regulation in NSW, Victoria and
Queensland, covering the substantial majority of
Australian consumers.
Proposal 3: Information standards
Current regulation
2153. The TP Act currently provides that the Commonwealth Minister may
declare, by regulation, a standard to be a consumer product
information standard. Section 65D provides that a corporation must
not supply goods that do not comply with a prescribed information
standard.
2154. Section 65D of the TP Act allows such standards to be made in
relation to:
2155. the disclosure of information relating to the performance,
composition, contents, methods of manufacture or processing, design,
construction, finish or packaging of the goods; and
. the form and manner in which that information is to be
disclosed on or with the goods;
as are reasonably necessary to give persons using the goods
information as to the quantity, quality, nature or value of the
goods. Section 65E provides that the Minister may declare a
standard made by Standards Australia or another prescribed body to
be an information standard for the purpose of section 65D.
2156. Section 65D of the TP Act does not cover products that are for
export only.
2157. All jurisdictions, except Tasmania, have a general power to
prescribe product information standards with respect to goods.
Tasmania has a specific power under its Flammable Clothing Act 1973
to prescribe how clothing is to be labelled.
2158. Victoria, Queensland, SA and WA also have a general power to
prescribe information standards for services. NSW does not have a
general service information standard power but has industry specific
powers to prescribe information standards for employment placement
services and funeral goods or services.
2159. Information standards are an example of regulatory intervention to
address the market failure associated with information asymmetry.
Lack of information on which to base purchasing decisions can lead
consumers to make decisions which are not in their best interests.
This can apply to services as well as goods. The service sector
accounts for a significant share of economic activity in Australia
and covers a wide variety of categories including financial
services, property and business services, telecommunications, health
services, travel and tourism, cultural and recreational services and
personal services. Some services are subject to industry-specific
regulation whereas others are subject only to the general fair
trading laws.
2160. The misleading and deceptive conduct laws in Australia set a minimum
acceptable standard of commercial behaviour. They are reactive,
providing for sanctions (for example prosecution and injunctions)
and remedies (for example compensation orders) to protect the public
when misled or deceived. Information standards, on the other hand,
are proactive, requiring a positive standard of information
disclosure that the market, on its own, has not provided.
2161. Currently there are 26 different information standards in Australia
- 24 which relate to goods and two which relate to services. Below
is a table identifying the information standards currently in place.
|Categories |Jurisdiction |
|Fibre content |NSW, Queensland, SA, WA, |
|labelling for |Tas |
|textiles | |
|Care labelling for |Cth, NSW, WA, ACT |
|textiles | |
|Cosmetics |Cth, Queensland |
|Petrol price signs |NSW |
|Petrol composition |Vic |
|Leather goods |Queensland |
|Footwear |Queensland. SA, WA, Tas |
|Furniture |Queensland, SA, WA |
|Tobacco products |Cth |
|labelling | |
|Opals |SA |
|Builders plates for |WA |
|vessels | |
|Employment placement |NSW |
|services | |
|Funeral |NSW |
|goods/services | |
|Total categories: 13|Total information |
| |standards: 26 |
2162. This RIS considers the impact of including an information standards
regulation-making power in the ACL, and not the relative merits of
prescribing particular standards.
Options for Proposal 3
2163. The status quo comprises the mixture of TP Act and State and
Territory provisions with differing standards relating to goods or,
in some cases, goods and services.
2164. Two options are considered for this proposal, to be compared with
the status quo:
. Option A: Incorporate the TP Act information standards
power, which applies to goods only, without amendment into
the ACL.
. Option B: Include a general power in the ACL to prescribe
information standards in relation to both goods and
services.
2165. Both Options A and B would involve including a regulation making
power in the ACL and in itself will not create regulatory burdens.
There currently exists information standards regulation-making
powers in all jurisdictions. At the Commonwealth level, under the
TP Act, three information standards are currently in place, and
before a new standard can be prescribed a regulation impact analysis
is required.
2166. Under both options, the three current information standards in the
TP Act will be included in the ACL and continue to apply nationally,
whilst existing State and Territory standards will be assessed to
determine whether it is appropriate to 'grandfather' them under the
ACL. For a standard to be 'grandfathered' in the ACL it would need
to be agreed to by MCCA under the existing consensus voting
arrangement. A standard would not be 'grandfathered' unless it is
considered appropriate following an assessment by MCCA.
2167. Under both options, the regulation-making power would be
incorporated in the ACL as a general information standards power for
goods, and in the case of Option B for goods and services.
Currently, the information standards regulation-making power
(sections 65D and 65E) are located in the product safety and
information provisions of the TP Act, however it would be
appropriate to more clearly differentiate the product information
standard power from product safety in the ACL.
Impact analysis
Option A - Incorporate the TPA information standards power in the
ACL, which applies to goods only
2168. Under Option A, it would not be possible for an information standard
to be prescribed in respect of services under the ACL. However, it
would still be possible for industry specific consumer protection
legislation to prescribe information requirements relevant to
particular businesses[41].
2169. New information standards would be made under the ACL by the
Commonwealth Minister. However, each new proposal would be subject
to a separate regulation impact assessment at the time it is
proposed involving an analysis of its likely impacts, and then
subject to the IGA voting requirements. New information standards
could only be made in respect to goods and not to services.
Option A - Outcome
2170. Transfer of the TP Act information standards regulation-making power
to the ACL would have no direct impact on business compliance costs.
Compliance costs under this option would be related to the extent
to which existing State or Territory information standards are
'grandfathered' and nationalised, and in future with the creation
of new standards. Any new standards would be subject to the
regulatory impact analysis process. Having a single set of
nationally consistent information standards would also reduce
compliance costs for businesses.
2171. Despite the potentially lower costs for business, consumers would
not be afforded the protection of any existing State or Territory
information standards that are repealed and not 'grandfathered' in
the ACL, nor information standards for services, should they be
required.
Option B - Include a general power in the ACL to prescribe
information standards in relation to both goods and services
2172. Under Option B, the ACL would include a more general information
standards regulation-making power than that currently in the TP Act,
along the lines of that in South Australia, which applies to both
goods and services.
2173. The information standard making power in the South Australian Trade
Standards Act 1979 allows information standards to be made that:
. prescribe or regulate the content of information in
respect of goods or services, or the manner or form in
which information is to be provided in respect of goods or
services;
. provide that information of a specified kind is not to be
provided in respect of goods or services, or that
information in respect of goods or services is not to be
provided in a specified manner or form;
. require the provision of specified information in respect
of goods or services and prescribe the manner and form in
which it is to be provided;
. assign a meaning to information of a specified kind in
respect of goods or services; and
. prohibit the alteration or variation of, or any
interference with, any information provided in compliance
with any regulation.
2174. Markets for goods and services are inherently subject to asymmetric
information; that is, suppliers almost invariably know more about
the characteristics of the goods and service being offered for sale
than consumers. The information standards power in the TP Act helps
to minimise the impact of asymmetric information by requiring
information to be disclosed to consumers about the quality and
nature of the goods. Information standard requirements provide
public benefits by allowing consumers to access information which
could affect their health, comfort or safety. For example, the
current cosmetics information standard in the TP Act contains
ingredient labelling requirements to allow consumers to identify
ingredients which they may be allergic to or which may cause adverse
reaction. It would be not be possible for a consumer to observe
these characteristics of a good independently of information
provided by the supplier.
2175. The National Competition Policy Review of the Fair Trading
Act 1987[42] has found that the product labelling requirements under
the NSW information standards power addressed potential information
asymmetry by ensuring that appropriate consumer information is
attached to certain products, and noted that it may be desirable in
the future to amend the NSW fair trading law to provide the
flexibility for information standards to be prescribed for services.
2176. Including an additional power for the Minister to declare
information standards for services would enable future action to be
taken where considered appropriate. Informed choices through a
ready access to clear and accurate information about goods, as well
as services, can help to address information asymmetry in the
marketplace and thereby contribute to consumer confidence, which is
vital for effective market operation. For instance, the funeral
service standard in NSW ensures that funeral directors provide
consumers (amongst other things) with information about the costs
and coverage of their 'basic funeral' option (if any), while the
employment placement services standard requires employment service
providers in NSW to inform consumers (amongst other things) of the
prohibition on misleading conduct and the ability to lodge a
complaint with NSW Fair Trading.
2177. New information standards would be made by the Commonwealth Minister
under the ACL and would apply nationally. New standards could apply
to goods (as in the current TP Act and Option A) or to services
(unlike the current TP Act and Option A) . Before a new standard
can be made it would be subject to a separate regulatory impact
assessment and to agreement in accordance with IGA voting processes.
Option B - Outcome
2178. Option B would involve including a general information standards
regulation-making power in the ACL, which in itself will not create
additional regulatory burdens. Where the power is used to prescribe
a new information standard, the impact it will have on business
compliance costs would be related to the particular standard
prescribed. The compliance costs would be limited to businesses
affected by the new standard, and may include needing to adjust
existing operations to comply with the new standard. Some of these
compliance costs, for instance, the costs associated with attaching
new labels to certain goods, may be passed onto consumers. However,
there are also potential cost savings for national suppliers in no
longer needing to comply with different information requirements
between the various jurisdictions. In its submission on the
consultation RIS, the MTAA saw national uniformity as a positive
development for both businesses and consumers, while a confidential
submission welcomed a proposal to nationalise information standards,
believing that national standards would ensure uniformity for
national retailers.
2179. The likely costs and cost savings associated with prescribing a new
standard would equally apply to both Options A and B. However, in
extending coverage to services that could be subject to a standard
(as in Option B) a potential benefit for suppliers is that it could
reduce damages claims and other court actions from consumers arising
where the dispute relates to absent or inadequate information being
provided.
2180. Option B would provide both the protection of the existing national
product information standards, while broadening the scope of
coverage to services that could be subject to a standard in the
future. Expanding the regulation-making power to cover services
would provide the Government with a 'means' to encourage service
providers to behave in a certain manner and disclose information
about its services that may not be apparent to consumers, should it
be required. The power would also help to address information
asymmetry in the services sector where, for instance, particular
information that should be disclosed to consumers is not, and the
market on its own has not been providing this information, where it
is required. The services sector accounts for a significant share
of economic activity, and cover a variety of categories including
financial property, telecommunications, health, travel and tourism,
and recreational services. Some of these services are currently
subject to industry-specific regulation in the States and
Territories.
2181. The regulation-making power under Option B would allow information
standards to apply to goods or services supplied in Australia. The
likely benefits of including a power in the ACL of the kind proposed
in Option B, which includes nationally consistent coverage and the
ability to cover services, would exceed the potential cost to
consumers of reduced coverage if any existing State or Territory
standards are repealed and not 'grandfathered' in the interim.
There was considerable support from the submissions received on the
consultation RIS for including services in the coverage of the
information standards power. For instance, the MTAA supported
Option B and believed there is no reason for services to not form
part of the information standards regime, while the Financial and
Consumer Rights Council, in offering its support for Option B,
believed that it was essential for consumers to be able to access
clear and accurate information about goods or services they may wish
to purchase.
2182. The expanded regulation-making power would only be exercised to make
a new standard on information requirements for goods or services
that are of a particular kind and which the market on its own has
not provided. Further, any new standard would not be introduced
unless its costs and benefits have been considered under a separate
regulatory impact analysis, and approved under the IGA.
2183. MTA Queensland, which preferred Option B, was of the view that the
power should be used where there is evidence that market failure has
occurred or self regulation alone has been insufficient to protect
industry and consumers.
2184. The majority of submissions received on the consultation RIS which
commented on this proposal, were in favour of Option B for
information standards to apply to both goods and services. The
Australian Toy Association and Myer did not express support for
Option A or Option B, but rather made more general comments on the
location of the information standards power in the ACL legislation.
Consultation
2185. SCOCA received 10 submissions relating to this proposal in response
to the consultation draft of this RIS. Most business and consumer
stakeholders considered that the Government should have legislative
competence to make information standards in respect of services.
However, some businesses cautioned against this power being used too
often.
Conclusion
2186. In assessing the merits of each option under Proposal 3,
consideration has been had to:
. maintaining current levels of consumer protection within
the context of a generic, national consumer law and
addressing community expectations;
. minimising and, where possible, reducing business
compliance costs under a national consumer law;
. rationalising existing national, State and Territory
consumer laws as much as possible; and
. the practical benefits of achieving national uniformity
through the ACL and the adoption of the ACL by all States
and Territories.
2187. Both options would continue to provide the Commonwealth Minister
with the ability to make new information standards in the future, if
and when required. This, in itself, would not add to compliance
costs. However, a new information standard made pursuant would
carry associated compliance burdens.
2188. Under both options, each new proposal would be subject to a separate
regulatory impact assessment on a case-by-case basis to determine if
a new standard is warranted, before being subject to the IGA voting
arrangements.
2189. Also common to both options would be a single set of information
standards that would apply nationally. This would ensure that
consumers benefit from the additional protections offered by any
information standards that are considered necessary. Businesses
that operate in more than one jurisdiction would also face reduced
regulatory complexity.
2190. While the impacts of both options are similar, Option B would offer
additional flexibility for Governments to respond to situations
where information standards may be warranted for certain services.
While far less frequent than standards in relation to goods,
information standards in relation to certain services do already
exist.
2191. While offering the Commonwealth Minister the ability to prescribe
information requirements in respect to both goods or services, new
standards would only be made where the circumstances warranted it,
for instance, if the market has not been providing the information
or consumers' health or welfare may be in jeopardy, and subject to
regulatory impact assessments and IGA voting requirements. Further,
the power to make information standards already exists in some
jurisdictions, such as SA, and in NSW information requirements have
been applied to services under industry-specific regulations.
Despite information standards for services being prescribed
sparingly, those jurisdictions that have the extended power have
expressed the view that it has proved to be an effective and useful
tool for governments to require certain consumer information to be
disclosed where there has been a market failure and industry on its
own has failed to provide the information.
2192. For these reasons, Option B can be supported by all members of MCCA.
2193. In developing Option B, regard has been had to:
. enhancing consumer protection by extending the potential
application of information standards to services;
. ensuring that the exercise of that power is, itself,
subject to regulatory impact assessment, so as to minimise
any potential regulatory burdens;
. the adoption of a single, national approach to information
standards, as they are used in relation to goods and
services as agreed by all Australian governments.
Part C Reforms which reflect best practice in State and Territory laws
Introduction
2194. A number of best practice reform proposals relate to laws that exist
in only some jurisdictions. This is the result of legislative and
policy developments by State and Territory governments to deal with
specific issues that may have arisen in particular jurisdictions.
2195. As with the national consistency reforms, the separate consumer
protection laws at the national, State and Territory levels can be
harmonised or removed to eliminate regulatory duplication and
inconsistency. However, as only some jurisdictions have particular
regulations, consideration of the factors for and against each
proposal is required, including:
. the nature of the problem facing consumers;
. the appropriate policy response to address these consumer
issues, including non-regulatory approaches;
. what benefits may result from the change and whether these
can be quantified; and
. whether the proposed change is appropriate for inclusion
in a law which applies generic consumer protections in all
Australian jurisdictions.
2196. All of the proposals considered consist of nationally consistent
regulation in all States and Territories through the applied ACL and
the assessment of those proposals has regard to the matters set out
on page 5 above. The introduction of nationally consistent
regulation would provide significant compliance cost savings for
businesses, which would only have to comply with a single, uniform
set of consumer protection provisions. This would result in cost
savings which should flow through to consumers. There would also be
benefits for consumers through familiarity and consistency of
legislation, particularly when purchasing from interstate. Benefits
also flow to consumer agencies through easier cross-border
enforcement and the ability to issue consistent, national guidance.
2197. The IGA specifies that the Commonwealth, State and Territory
parliaments 'will use best endeavours to repeal, amend or modify any
legislation that is inconsistent with or alters the effect of the
Australian Consumer Law'.[43] In accordance with the IGA, there
will be a separate review of industry-specific legislation following
the full implementation of the ACL.
Proposal 4: Liability of recipient of unsolicited services
Current regulation
2198. Section 65 of the TP Act provides that, subject to certain
conditions, a person is not liable to make any payment for any
unsolicited goods supplied to them, and is also not liable for loss
or damage to the goods unless the loss or damage is a result of a
wilful or unlawful act by the person.
2199. Section 65 of the TP Act complements section 64, which prohibits a
person from asserting a right to payment for unsolicited goods and
services. Section 65 provides a clear statement of the extent to
which a person or businesses in receipt of unsolicited goods can be
held liable for those goods.
2200. Most States and Territories have a provision in their FTAs that
mirrors section 65 of the TP Act. In addition, Victoria also has
section 26 of the Victorian FTA, which provides similar consumer
protection in relation to unsolicited services. This protection
against unsolicited services is not replicated in any other
jurisdiction.
2201. Examples of unsolicited services identified by CAV include:
. unsolicited SMS services;
. where a consumer has returned a product (typically
electronic goods) for a repair quote and the supplier
chooses to perform the repairs without obtaining the
consumer's authorisation beforehand; and
. where a consumer requests a particular service to be
performed (typically on a motor vehicle or a computer),
but the supplier goes beyond what is requested.
2202. Consumers are particularly disadvantaged in their dealings with
suppliers who present them with unsolicited goods or services,
particularly where the consumer's rights and obligations in respect
of those goods or services are uncertain. This is particularly the
case when a trader asserts a right to payment for unsolicited goods
or services. It is timely to consider whether it would be
inconsistent for consumers not to receive protection from the
liability for unsolicited services.
2203. Consumers may also be reluctant to decline an unsolicited service so
as not to jeopardise an ongoing relationship with the supplier. In
those cases, suppliers are relying on inattention, inaction or non-
assertiveness from consumers in order to profit from their
activities.[44] This may apply in particular where a business is
dealing with another business as a supplier.
Evidence of consumer detriment
2204. In the last two financial years, CAV recorded 849 enquiries and 135
complaints in relation to unsolicited goods and services across a
wide range of industries.
2205. There is evidence that unsolicited services scams are directed at
both individual consumers as well as businesses.
. The ACCC, on its Scamwatch website, highlights the
existence of false billing scams and so called 'office
supply scams'. These are scams it describes as involving
'a scam that involves you receiving and being charged for
goods that you did not order'.[45] Scamwatch also
highlights various scams associated with mobile phones,
including the provision of unsolicited services such as
ring tones, SMS services and scams involving missed calls
and text messages which lead to the acquisition of
unsolicited services.[46] What is common to these forms
of business activity is that they lead to the acquisition
of services by consumers when they did not solicit them
and are not, in many cases, aware of their acquisition of
those services.
. In NSW, the NSW OFT has advised that complaints in
relation to unsolicited services generally relate to
'false billing' by businesses where the services performed
have not been actively sought or authorised. Recently,
the NSW Minister for Fair Trading warned consumers of a
scam where false bills are being sent for registering
trademarks or brands online[47].
Options for Proposal 4
2206. The status quo comprises a national provision (section 65 of the TP
Act), with most States and Territories mirroring it in their FTAs.
Victoria also has an additional section that provides similar
consumer protection in relation to unsolicited services.
2207. Two options are considered for this proposal, and would be compared
with the status quo:
. Option A: Include a provision in the ACL based on the
existing TP Act provisions only, without amendment.
. Option B: Include a provision in the ACL based on the
existing TP Act provisions, amended to cover unsolicited
services and limitation of liability as a result of the
supply of such services.
Impact analysis
Option A - TPA provisions only
2208. Option A would involve retaining the existing TP Act provision
without amendment. The various State and Territory provisions would
be repealed. The proposed ACL provision would ensure that a person
is not liable to pay for unsolicited goods from a supplier, and is
not liable for the loss or damage to those goods unless the loss or
damage is caused by wilful or unlawful action by that person.
Despite the repeal of section 26 of the Victorian FTA, it is noted
there is still some protection for consumers from unsolicited
services under this option, as a person is still prohibited from
asserting a right to payment for unsolicited services under
subsection 64(2A) of the TP Act, which will be incorporated into the
ACL. However, the recipient's liability, in the event that a claim
is made, would be uncertain.
Option A - Outcome
2209. Option A would have no significant compliance cost impacts.
Businesses dealing with consumers outside of Victoria would face no
change in the current regulatory environment.
2210. For suppliers and consumers in Victoria, there may be some reduction
in certainty as to liability for unsolicited services, as this would
be a question to be determined on case-by-case basis by a court
where a dispute arises.
2211. Fair trading officers in Victoria would no longer rely on the
unsolicited services provisions to pursue suppliers that have
charged consumers for unsolicited services, but would instead have
to use other provisions, such as the prohibition against asserting a
right to payment for unsolicited services, under the ACL. While no
prosecutions have been commenced in relation to the Victorian
provisions, CAV has indicated that the provisions are useful in
their conciliation and dispute resolution activities. Usually, in
these instances, CAV would approach a supplier on behalf of a
consumer to attempt to resolve a dispute before it is escalated to
resolution by the courts, and generally they are successful in doing
so.
Option B - TPA provisions, provisions dealing with unsolicited
services and limitation of liability as a result of the supply of
such services
2212. Section 64 of the TP Act was introduced in 1975 to prevent a trader
from asserting a right to payment for unsolicited goods, with the
coverage for unsolicited services added in 1977. Unsolicited
services was added to section 64 to deal with the practice of
tradespeople and repairers doing unrequested work, particularly on
private residences, and then demanding payment from the occupier.
Section 65, was subsequently introduced in 1986 to supplement the
effect of section 64, by providing clarity about liability for
damage or loss to goods in situations where goods have already been
supplied, as well as liability for payment for the goods themselves.
2213. Australian markets have evolved in the intervening two decades to
become more service-oriented, so it is timely to consider whether it
is necessary to expand section 65 to cover unsolicited services
also.
2214. Services do not raise the same issues as goods in respect of the
potential for loss or damage to the services themselves after they
have been provided, nor is it possible for an unsolicited service to
be returned to the supplier after it has been provided. However,
the provision of unsolicited services can still give rise to
concerns about liability for loss or damage to a consumer's or a
third party's property as a result of the provision of unsolicited
services. In addition, while the TP Act and most equivalent State
and Territory FTA provisions currently prevent a person from
asserting a right to payment for unsolicited services that they have
provided, they do not provide any guidance on whether a consumer is
actually liable to pay for that service if a request for payment has
been made.
2215. In its submission to the consultation RIS, Telstra commented that
the Victorian provision on unsolicited services does not appear to
have any meaningful or practical effect on business practices, as it
has not been relied upon in court or tribunal cases. While this is
true, the experience of CAV is that the provision is very useful in
their conciliation and dispute resolution work, which provides
consumers with a quicker and less costly method of resolving a
dispute with suppliers.
2216. For these reasons, under Option B, the existing section 65 of the TP
Act would be incorporated into the ACL. In addition, a provision
similar to the Victorian provision, which excuses a person from
liability to pay for unsolicited services, or for loss or damage
resulting from the supply of those services, would also be
incorporated into the ACL.
Option B - Outcome
2217. The compliance cost impact of option B would be limited to
businesses that provide unsolicited services in anticipation of
receiving payment for those services. Even for these businesses,
such costs would be likely to be minimal as expanding section 65 for
the purposes of the ACL to provide limitation on liability for the
receipt of unsolicited services would clarify the legal position
only. In the absence of this amendment, it is not clear that a
recipient of unsolicited services would be liable for those
services, as this would be decided by a court on a case-by-case
basis in the event of a dispute.
2218. Under Option B, consumers across Australia would benefit from a
clear statutory rule that they are not liable to pay for unsolicited
services. In addition, consumers would also be protected against a
liability arising as a direct result of the supply of such services,
rather than just the services themselves. This would remove an
inconsistency in most consumer protection laws, which currently
protects consumers from liability for unsolicited goods, but not
unsolicited services.
Consultation
2219. An Australian Consumer Law: Fair markets - Confident consumers
invited submissions on whether section 65 of the TP Act should be
extended to services. Nine submission commented on this proposal.
Consumer organisations and representatives of the legal profession
supported extending section 65 to services.
2220. SCOCA received six submissions in relation to this proposal in
response to a consultation draft of this RIS. Generally business
and consumer organisations did not object to the extension of
section 65 of the TP Act to cover services. In this regard consumer
organisations pointed to the increasing significance of services in
the economy.
2221. One business stakeholder indicated that the current Victorian
provision has little practical effect, on the grounds that it is not
often litigated.
Conclusion
2222. In assessing the merits of each option under Proposal 4,
consideration has been had to:
. maintaining current levels of consumer protection within
the context of a generic, national consumer law and
addressing community expectations;
. minimising and, where possible, reducing business
compliance costs under a national consumer law;
. rationalising existing national, State and Territory
consumer laws as much as possible; and
. the practical benefits of achieving national uniformity
through the ACL and the adoption of the ACL by all States
and Territories.
2223. There are few, if any, legitimate business justifications for making
a consumer liable for goods or services they did not contract for.
The proposals would make it clear to consumers that they have no
liability in such circumstances and that there is a clear negative
potential consequence for traders in supplying unsolicited goods or
services.
2224. Neither option would impose a significant compliance cost on
legitimate businesses, given that the provision in either form is
intended to tackle conduct by certain businesses engaged in a form
of scam, rather than legitimate business activities. Option A would
draw upon existing legislation in the TP Act.
2225. Option B would enhance the existing provision to make it explicit
that it is an offence to assert a right to payment for the provision
of unsolicited goods and services. While there are some arguments
to suggest that aspects of this practice may be able to be dealt
with under other generic provisions, an explicit provision of this
sort has been often used in Victoria to assist in conciliation and
dispute resolution, providing consumers with a quicker and less
costly method of resolving a dispute with suppliers. In CAV's view,
the existence of an explicit provision facilitates knowledge of the
law by both consumers and businesses and encourages the resolution
of disputes in a way which is preferable to taking action in a court
or tribunal, which would be desirable in a national regulatory
framework.
2226. Both options would benefit consumers (including small businesses) by
making it clear that purporting to require payment to the provision
of unsolicited goods and services is against the law. However,
Option B draws on legislative and enforcement experience that has
proven effective in dealing with scam activity in some
jurisdictions, most notably Victoria.
2227. For these reasons, Option B can be supported by all members of MCCA.
2228. In developing Option B regard has been had to:
. enhancing consumer protection and confidence in the
enforcement of the law concerning the provision of
unsolicited goods and services;
. the minimal impact that this proposal would have on
legitimate business activities; and
. the adoption of a single, national approach to the law in
this respect, and its enforcement nationally by all
consumer agencies, as agreed by all Australian
governments.
Proposal 5: Standards of disclosure for information under the Australian
Consumer Law
Current regulation
2229. The PC has previously recommended that information disclosed to a
consumer should be comprehensible, with a focus on content, clarity
and form of disclosure, in order to facilitate good consumer
decision-making.[48]
2230. Victoria and SA have mandatory minimum disclosure requirements for
consumer documents. Section 163 of the Victorian FTA requires that
a consumer document:
. must be easily legible;
. to the extent that it is printed or typed, must use a
minimum 10 point font; and
. must be clearly expressed.
2231. Subsection 163(1) of the Victorian FTA defines a 'consumer document'
to mean a consumer contract, or a statement, notice or other
document required by the Victorian FTA. A 'consumer contract' is
defined in section 3 of the Victorian FTA as an agreement, whether
or not in writing and whether of specific or general use, to supply
goods or services of a kind ordinarily acquired for personal,
domestic or household use or consumption, for the purposes of the
ordinary personal, domestic or household use or consumption of those
goods or services.
2232. SA also has similar requirements in section 17 of the Consumer
Transactions Act 1972 (SA), which provides that a provision of a
consumer contract that is either:
. hand-written and is not clear and legible; or
. is printed in a typeface or dimensions that do not comply
with the regulations,
is unenforceable.
2233. The definition of a consumer contract in the SA legislation is
different to that in the Victorian legislation, but would capture a
similar range of agreements.
2234. In addition, other Commonwealth and State and Territory consumer
laws contain specific minimum disclosure requirements for particular
documents, although they do not provide a general requirement for
disclosure. For example, under the Corporations Acts 2001,
Financial Services Guides are required to comply with Part 7.7 of
that Act, which specifies information that needs to be included,
such as details of the entity providing the services, remuneration
provided to the entity and related entities, and dispute resolution
systems.
2235. The Victorian and SA requirements impose a basic, minimum standard,
requiring material information about goods and services to be
provided to consumers upon request. It sets a positive standard of
conduct required from suppliers, rather than relying only on
negative prohibitions in other provisions of the law, such as
misleading and deceptive conduct, which may be enlivened where a
document is sufficiently unclear to be misleading. Under the
Victorian provisions, where a document is found to be unclear of
illegible, the regulator can apply to a court or tribunal to
prohibit the supplier from using that provision in the same or
similar terms in other consumer documents.
Evidence of consumer detriment
2236. CAV has advised that section 163 of the Victorian FTA is often used
in conjunction with the Victorian unfair contracts terms provisions.
In the last two financial years, CAV has received 153 enquiries and
11 written complaints that involve section 163 of the Victorian FTA.
As an example, a membership agreement form was found to have a
clause that was not clearly expressed (see Director of Consumer
Affairs Victoria v Craig Langley Pty Ltd and Matrix Pilates & Yoga
Pty Ltd [2008] VCAT 482 and VCAT 1332). The companies in question
were restrained from using that clause in future membership
agreements.
Options for Proposal 5
2237. The status quo comprises the standard of disclosure requirements in
section 163 of the Victorian FTA, with no specific requirements in
the TP Act.
2238. Three options are considered, and would be compared with the status
quo:
. Option A: Not adopting standard of disclosure
requirements in the ACL.
. Option B: Adopting a requirement that documents
specifically required to be provided under the ACL must be
clear and legible.
. Option C: Adopting a requirement that all consumer
documents must be clear and legible.
Impact analysis
Option A - Not adopting standard of disclosure requirements in the
ACL
2239. Option A would involve the repeal of section 163 of the Victorian
FTA, as part of Victoria's application of the ACL, as well as the
repeal of section 17 of the South Australian Consumer Contracts Act.
2240. Option A provides a consistent set of national consumer protection
laws in relation to the requirements for content in consumer
documents. However, consumers in Victoria and South Australia would
lose their current protection and would have to rely on other, more
generic consumer protection laws for redress should they encounter
suppliers that attempt to use consumer documents which are not clear
or are illegible. It has also been suggested that the current laws
prohibiting misleading or deceptive conduct do not ensure that all
disclosure documents adequately highlight all of the important
information about products.[49]
Option A - Outcome
2241. This option would have a minimal impact on compliance costs.
Businesses in Victoria and South Australia may face lower compliance
costs to the extent that they do not have to consider the
possibility of a challenge to their continued use of a particular
form of drafting in consumer documents, and the option also would
not affect the range of documents that must be provided by
businesses. However, this potential reduction in compliance costs
would be limited by the fact that businesses would not be relieved
of the more general requirement to ensure they do not breach the
prohibition against misleading and deceptive conduct which currently
exists in all jurisdictions' consumer protection laws and will be
included in the ACL.
2242. Option A would impose a higher burden on consumers in Victoria and
South Australia that seek to address the use of an unclear form of
drafting in a consumer document that has been presented to them by a
supplier. In such cases a court would need to be satisfied that the
lack of clarity is sufficient to be misleading or deceptive, rather
than unclear. The option would also prevent a regulator from
seeking a court or tribunal order to require a supplier to alter the
drafting a document that is held to be unclear or illegible.
Option B - Adopting a requirement that documents specifically
required to be provided under the ACL must be clear and legible
2243. Under Option B, the provisions in section 163 of the Victorian FTA
would be incorporated, in principle, into the ACL, and would apply
to documents expressly required to be provided under the ACL only.
However, the font size requirement in section 163 would not be
adopted under the ACL. Documents which would be required to be
given under the ACL include a cancellation form under the proposed
unsolicited selling regime and the requirements for receipts and
itemised bills.
2244. Consumer contracts, and all other documents that are not expressly
required to be provided under the ACL, would not be subject to the
general clarity and legibility requirements.
2245. A distinct rationale for this approach can be drawn where Parliament
has expressly considered that particular documents (those required
under the ACL) are important and must be provided to consumers. In
this case, an additional requirement that such documents are clear
and legible would accord with the importance that Parliaments have
placed on them.
2246. Businesses that are not trading in Victoria or South Australia may
incur compliance costs to ensure that their consumer documents
comply with the requirements under this option, to the extent that
they do not already do so. However, this would be mitigated to some
extent by allowing for less prescriptive requirements as to the
clarity of consumer documents (such as minimum type font) than
currently required by the South Australia and Victorian provisions.
2247. Documents should be legible for consumers with normal eyesight, and
a specific requirement on font might be unnecessarily restrictive,
depending on the circumstances of the situation, and a submission to
the consultation RIS has suggested that an appropriate benchmark for
a document that is clear and legible is that it should be readily
understood by persons in the environment where it would be given to
the consumer, such as a shop or an office. Prescribing a specific
font requirement may not be appropriate for every situation,
although a submission to the consultation RIS suggested that there
is no evidence that the font size requirements have caused undue
restriction on business practices in Victoria.
2248. Compliance costs could also be mitigated through the provision by
consumer regulators of guidance on what is considered 'clear and
legible' in consumer documents required to be provided under the
ACL.
Option B - Outcome
2249. Option B would imply a reduction in compliance costs for businesses
currently operating in Victoria and SA, similar to those for Option
A, but reduced to the extent that regulation in respect of documents
expressly required under the law would remain.
2250. Additional compliance costs would be imposed on businesses that are
not currently subject to the Victorian or SA provisions. These
additional compliance costs would be limited to a small number of
documents and would be unlikely to be significant. Businesses would
also need to familiarise themselves with regulators' and courts'
interpretations of the clarity and legibility requirements, in order
to minimise the potential for documents to be held not to meet these
criteria. In the event that a document is held to be unclear or
illegible, a business would incur costs in redrafting that document.
2251. Under Option B, prescribed documents required to be given under the
ACL must be clear and legible, providing more certainty for
consumers on their rights and businesses on their responsibilities,
compared to the current situation which relies on generic protection
in relation to, for example, misleading or deceptive conduct. The
potential compliance burden of Option B for businesses is lowered by
a less prescriptive approach than mandating a particular font size
for text in consumer documents, such as in the Victorian FTA
currently.
2252. While there is no specific regulation in this area in the TP Act,
the general prohibition against misleading or deceptive conduct
would already imply the need for documents provided in accordance
with regulation to be clear and legible. Consequently, the benefits
to consumers of Option B would not be as great as if there was no
regulation in this area. However, the costs to businesses of
implementing the new requirements would be reduced. Furthermore, as
businesses are required to implement the ACL, the costs of this
requirement in addition to the implementation of the requirement for
the issuing of certain documents under the ACL would mean that these
costs are incremental, at most.
Option C - Adopting a requirement that all consumer documents must
be clear and legible
2253. Option C is similar to Option B, but extends the coverage of the
proposed laws to all consumer documents, rather than just those
required under the ACL. This would effectively replicate the
current Victorian and SA provisions. The number of documents
covered by this option is clearly greater than those covered by
Option B.
2254. It is noteworthy that MCCA has also proposed that the ACL contain a
law regulating unfair contract terms (legislation to implement this
proposal is currently before the Australian Parliament)[50]. The
proposed unfair contract terms law would require a court to consider
the extent to which a term is transparent in determining whether or
not a term in a standard form consumer contract is unfair (and
consequently cannot be enforced). Transparency for the purposes of
the UCT law includes the concepts of legibility and clarity.
2255. The requirement for clarity and legibility would overlap to some
extent with the proposed unfair contract terms law, but would still
have a substantive additional effect in relation to:
. terms of consumer documents that are not standard form
contracts (and hence would not be covered by the unfair
contract terms regime); and
. the test of transparency is not determinative of
unfairness in the UCT legislation, so a separate
legislative test relating to clarity and legibility would
provide a more certain means of addressing terms in
standard-form contracts that are not clear.
2256. A regulator would be able to apply to a court or tribunal to have a
document or part of a document declared to be unclear or illegible.
In the event of such a declaration a supplier could be required to
cease using that document or part of a document expressed in those
terms in future.
Option C - Outcome
2257. This option would impose additional compliance costs for businesses
operating outside of Victoria or SA, but would imply no change for
businesses operating within those jurisdictions.
2258. Similar to Option B, businesses would need to familiarise themselves
with regulators' and courts' interpretations of the clarity and
legibility requirements, in order to minimise the potential for
documents to be held not to meet these criteria. In the event that
a document is held to be unclear or illegible, a business would
incur costs in redrafting that document.
2259. As with Options A and B, the impact of this additional burden, such
as the redrafting of documents to comply with the clarity and
legibility requirements, is likely to be small as businesses would
already need to consider the potential for challenge to their
documents on the grounds that they are misleading. In addition,
businesses that are not attempting to mislead or deceive their
customers would generally need to give at least some consideration
to the drafting of their documents to ensure they are clear and
legible as a matter of commercial imperative.
2260. Compliance costs for businesses could be mitigated to some extent by
removing the prescriptive requirements in the Victorian and South
Australian provisions for typed documents to be of a prescribed font
size.
2261. Under Option C, consumers would benefit from a more certain course
of action where they consider a document, such as a consumer
contract, or an invoice, is unclear or is not legible. The
provision of such documents may restrict consumers' ability to
understand their rights or obligations under contracts, or to keep
records of transactions through bills and receipts.
2262. While there is no specific regulation in this area in the TP Act,
the general prohibition against misleading or deceptive conduct
would already imply the need for documents to be clear and legible.
Consequently, the additional benefit to consumers provided by Option
C would be limited.
Consultation
2263. An Australian Consumer Law: Fair markets - Confident consumers
invited submissions on whether there should be a minimum standard
for documents in the ACL. Out of 102 submissions, 11 were in favour
of establishing some form of minimum standard for documents in the
ACL, three were against, and four suggested having regard to
existing laws and regulations on documents and disclosure before
imposing any further requirements on businesses.
2264. SCOCA received six submissions in relation to this proposal in
response to a consultation draft of this RIS. Both business and
consumer organisations were generally supportive of the principle
that documents should be clear and legible and had no objection to a
legislative requirement to this effect. However, consumer
organisations were more supportive of applying the requirement to
all consumer documents, not just those required by the ACL.
2265. Some business groups considered that consumers are already
adequately protected by the general prohibitions on misleading and
deceptive conduct.
Conclusion
2266. In assessing the merits of each option under Proposal 5,
consideration has been had to:
. maintaining current levels of consumer protection within
the context of a generic, national consumer law and
addressing community expectations;
. minimising and, where possible, reducing business
compliance costs under a national consumer law;
. rationalising existing national, State and Territory
consumer laws as much as possible; and
. the practical benefits of achieving national uniformity
through the ACL and the adoption of the ACL by all States
and Territories.
2267. All three options examined for this proposal would provide a net
benefit for the economy compared to the status quo. All three
options would provide nationally consistent rules in relation to the
content in documents given to consumers.
2268. Option A does so by relying on the existing generic provisions in
the TP Act, which would only provide consumer protection in
situations where there is misleading and deceptive conduct.
2269. Options B and C provide specific requirements for the clarity and
legibility of documents, which do not require the additional
requirement for the documents to have the effect of misleading or
deceiving the consumer.
2270. CAV's experience in Victoria with this provision is that, while
aspects of a lack of clarity in documents may be covered by existing
generic protections, such as provisions relating to misleading and
deceptive conduct and unfair contract terms, and the specific
Victorian FTA provision does not result in many prosecutions at the
court level, the existence of a specific provision is very useful
for conciliation and dispute resolution activities.
2271. A simple rule that requires a document to be clear and legible:
. creates an expectation as to the standard of conduct
required of businesses;
. is a concept which is easy for all parties to understand;
and
. serves to improve consumers' confidence in taking issue
with unclear or illegible documents provided by
businesses, thus reducing the need for formal intervention
by a regulator.
2272. Option B limits the application of the proposal to documents
required under the ACL only, reducing the compliance cost of this
provision to an incremental cost in addition to the need to comply
with requirements to provide certain documents under the ACL.
Option C covers a much wider range of consumer documents and a
consequently higher compliance cost.
2273. For these reasons, Option B can be supported by all members of MCCA.
2274. In developing Option B regard has been had to:
. making clear the required standard of disclosure by
businesses in documents required to be provided under the
ACL;
. minimising business compliance costs by applying a single,
non-prescriptive standard to the form and content of such
documents; and
. the adoption of a single, national approach to the law in
this respect, and its enforcement nationally by all
consumer agencies, as agreed by all Australian
governments.
Proposal 6: The provision of bills and receipts
Current regulation
2275. The provision of a bill or a receipt to a consumer is a way of
ensuring they are informed about the goods and services they
receive, and provides evidence of the existence and basic elements
of a transaction when a dispute occurs.
2276. Generally, a bill is a document which is provided to a consumer
after goods or services have been supplied but have not been paid
for, while a receipt is provided after goods or services have been
paid for.
2277. There are no specific requirements for bills and receipts in the TP
Act. However, the Commonwealth goods and services tax (GST) law
requires tax invoices to be provided in relation to 'taxable
supplies'. Taxable supplies cover a large majority of consumer
goods and services.
2278. Currently, the GST law requires that an invoice includes the
Australian Business Number and name of the supplier, the words 'tax
invoice' stated prominently, the date of issue of the tax invoice,
and the price and description of the taxable supply being sold. If
the total amount on the tax invoice is $1,000 or more, the invoice
must also include the ABN and name of the recipient, and a brief
description and quantity of the goods or services supplied.
2279. Section 161A of the Victorian FTA provides the right for a consumer
to request an itemised bill within 30 days of receiving a bill or
account for services performed by a supplier. The same section also
provides an obligation for businesses to provide a 'proof of
transaction' for purchases of more than $50, and the right for a
consumer to request this proof if the purchase is valued at $50 or
less.
2280. Both 'itemised bill' and 'proof of transaction' are terms which are
defined in section 161A of the Victorian FTA, which describes what
information each should contain:
. An 'itemised bill' specifies how costs to perform a
particular service are calculated, including, where
applicable, the hourly rate and number of hours comprising
the labour component, a list of the various materials
used, and the amount charged for each item.
. A 'proof of transaction' identifies the supplier, the date
of the supply and the goods or services supplied to a
consumer.
2281. The Victorian FTA also prohibits a person from charging for an
itemised bill, to ensure that a person is not charged for providing
something they are required to provide by law.
2282. There is significant overlap between the receipts requirements under
the Victorian FTA and the Commonwealth's tax invoice requirements
under the GST law.
1. Comparison of receipts requirements under the GST law and section
161A of the Victorian FTA
| |GST Law |Section 161A of the |
| | |Victorian FTA |
|Applicable|Taxable supplies |All goods and |
|to | |services |
|Transactio|No requirement. |Consumers may request|
|n of $50 | |a 'proof of |
|or less | |transaction'. A |
| | |proof of transaction |
| | |must contain: |
| | |the identity of the |
| | |supplier; |
| | |the date of the |
| | |supply; and |
| | |the goods or services|
| | |supplied to the |
| | |purchaser. |
| | |A proof of |
| | |transaction may be a |
| | |tax invoice under the|
| | |GST law, a cash |
| | |register receipt, a |
| | |lay-by agreement, or |
| | |a confirmation of |
| | |receipt number |
| | |provided in a |
| | |telephone or internet|
| | |transaction. |
|Transactio|No requirement. |As above, except that|
|n of more | |consumers must be |
|than $50 | |provided with such a |
|but less | |document, even if |
|than $75. | |they do not request |
| | |it. |
| |GST Law |Section 161A of the |
| | |Victorian FTA |
|Transactio|Consumers must be|As above. |
|n of more |provided with a | |
|than |document which | |
|$75[51] |contains: | |
|but less |the ABN of | |
|than |issuing entity; | |
|$1,000 |the price and | |
| |description of | |
| |the good; | |
| |the words 'tax | |
| |invoice' stated | |
| |prominently; | |
| |the date of issue| |
| |of the tax | |
| |invoice; and | |
| |the name of the | |
| |supplier. | |
|Transactio|As above, plus |As above. |
|n of |the document must| |
|$1,000 or |also contain the | |
|more |following | |
| |details: | |
| |the name of the | |
| |recipient; | |
| |the address/ABN | |
| |of the recipient;| |
| | | |
| |a brief | |
| |description of | |
| |each good; and | |
| |for each | |
| |description, | |
| |quantity | |
| |supplied. | |
|Itemised |No requirement. |Where a consumer is |
|Bills for | |received a bill or |
|services | |account from a |
| | |supplier for services|
| | |supplied, a purchaser|
| | |to whom the services |
| | |were supplied may |
| | |request an itemised |
| | |Bill. |
| | |A supplier must |
| | |provide an itemised |
| | |bill within 7 days. |
| | |An itemised bill must|
| | |provide an account of|
| | |how the costs are |
| | |calculated and |
| | |include, where |
| | |applicable: |
| | |the hourly rate and |
| | |number of hours |
| | |comprising the labour|
| | |component; and |
| | |a list of the various|
| | |materials used and |
| | |the amount charged |
| | |for each item. |
Evidence of consumer detriment
2283. Bills and receipts are useful as evidence in claims made by
consumers about statutory conditions and warranties, as evidence of
the transaction is usually required by either the trader or the
relevant dispute resolution body. Similarly, disputes with
tradespeople and other common tribunal and lower court consumer
cases will generally be assisted by reference to clear evidence of
the existence and basic elements of a transaction.
2284. In the last two financial years, CAV has received 5,411 enquiries
and 1,102 written complaints relating to overcharging. The right to
obtain bills, in particular, would assist consumers in determining
whether they have been overcharged.
Options for Proposal 6
2285. The status quo comprises the requirements for bills and receipts in
the Victorian FTA, as well as the tax invoice requirements in the
GST law.
2286. Three options are considered, and would be compared with the status
quo:
. Option A: No requirement in the ACL, and retaining the
requirements for tax invoices in the GST law.
. Option B: Adopt a requirement for bills and receipts in
the ACL, in addition to the requirements for tax invoices
in the GST law.
. Option C: Adopt a requirement for bills and receipts in
the ACL, limited to those transactions for goods and
services not already covered by the GST law.
Impact analysis
Option A - No requirement in the ACL, and retaining the
requirements for tax invoices in the GST law
2287. Option A would involve the repeal of section 161A of the Victorian
FTA. This provides a nationally consistent regime (under the GST
law) in relation to receipts, and also removes the regulatory
duplication that currently exists for receipts, but there would be
no specific regulation in relation to bills.
2288. Victorian consumers would lose the protection of laws designed to
ensure they receive a bill or receipt, but the tax invoice
requirements under the GST law would continue to apply.
Option A - Outcome
2289. Compliance costs for businesses operating in Victoria would be
reduced. In particular, record-keeping costs might be reduced to
the extent that a business cannot be compelled to provide detailed
accounts of invoices to consumers. This reduction in compliance
costs would be limited to a great extent by:
. the continued need to provide tax invoices for taxable
supplies pursuant to the GST law;
. the commercial imperative to keep accurate records of
supplies of goods and services made;
. general record-keeping requirements imposed by other
legislation, including income tax legislation; and
. the potential of having to provide documentary evidence of
transactions for the purposes of tribunal or court
proceedings in the event of a dispute with a consumer.
2290. There would be no compliance cost impacts on businesses outside of
Victoria.
2291. The option would impose a reduction in certainty for consumers in
Victoria in relation to their right to a bill or receipt. For
example, where a supplier provides an invoice for services rendered
that only quotes a total figure for payment, a consumer would have
no right to demand a more detailed account. Where a supplier
refuses to provide an account voluntarily, a consumer's only
recourse if they are concerned that the amount they are being
charged does not appropriately reflect the services rendered, would
be to commence tribunal or court proceedings.
Option B - Adopt a requirement for bills and receipts in the ACL,
in addition to the requirements for tax invoices in the GST law
2292. Option B would incorporate the provisions in section 161A of the
Victorian FTA into the ACL. This includes the definitions for
'itemised bill' and 'proof of transaction' that currently exist in
that section.
2293. This aspect of section 161A of the Victorian FTA aims to enhance the
ability of consumers to enforce their rights if they have been
incorrectly or excessively charged for services rendered. It is
designed to encourage service providers to engage in honest and fair
billing practices. It assists with the enforcement of other
provisions of consumer law by enabling consumers to obtain proof of
a transaction if a dispute arises after purchase. The Motor Trades
Association of Queensland's submission to the consultation RIS
agreed with this, pointing out that recourse under warrants or
guarantees is in many cases based on the descriptions of equipment
parts and work itemised in the bill or receipt, and it is in the
interests of both consumers and suppliers to have bills or receipts
that can be used as evidence in such claims.
2294. In relation to bills, consumers would have the right to request an
itemised bill within 30 days of receiving a bill for services from a
supplier. The supplier must provide the itemised bill upon such a
request, and it must contain the details currently set out in the
definition of 'itemised bill' in section 161A of the Victorian FTA.
The provision would also prohibit a person from charging for an
itemised bill, to ensure that a person is not charged for providing
something they are required to provide by law.
2295. In relation to receipts, a supplier would have to provide receipts
to consumers where the price of a good or service is $50 or more. A
receipt must be provided to consumers upon request where the value
of the good or service is less than $50. The tax invoice
requirements under the GST law would continue to apply to goods and
services that are taxable supplies, and that would satisfy the
definition of 'proof of transaction' as it currently exists in the
Victorian FTA.
2296. Under this Option, consumers would receive an itemised bill (upon
request) or receipt where appropriate, and this is an important part
of informing consumers about what goods or services they are
receiving from a supplier. This also allows evidence on
transactions to be presented to tribunals and lower courts in a
straightforward manner, as the relevant bill or receipt would
contain sufficient information for use in those forums.
2297. For businesses, this option would impose very minor compliance
costs, as most businesses would already be set up to produce bills
and receipts, and it would simply be a matter of ensuring that the
correct information is being included on those bills and receipts.
Indeed, submissions to the consultation RIS by Optus and Integral
Energy have suggested that some industries already have requirements
for bills which are stricter and more prescriptive than what is
proposed under this Option.
Option B - Outcome
2298. Under Option B, consumers across Australia would have the right to
receive a bill (for services, upon request) or receipt (for goods or
services). This should assist consumers to prove that they have a
right to, for example, access after-sales support or make warranty
claims.
2299. However, the drawback to this option is that the proposed
requirements in the ACL would overlap with existing requirements
under the GST law. The extent to which this overlap would create
compliance burdens would depend on the extent to which the
information required to be disclosed on a receipt differs from that
required to be included on a tax invoice. Based on the current
provisions in the Victorian FTA, this overlap would not be
significant. However, future changes to the either the ACL
requirements, or changes to the GST law (which would be outside the
scope of the ACL) could lead to inconsistencies and greater
compliance burdens.
Option C - Adopt a requirement for bills and receipts in the ACL,
limited to those transactions for goods and services not already
covered by the GST law
2300. Under Option C, the basic requirement under section 161A of the
Victorian FTA would be incorporated into the ACL, as it is for
Option B, but only insofar as there are not already requirements
under the GST laws. The current Victorian requirements for a 'proof
of transaction' would have overlapped with the tax invoice
requirements under the GST law.
2301. The GST law would be carved-out expressly from the ACL requirements.
This would quarantine any future changes to the GST provisions from
creating compliance burdens due to inconsistencies between the ACL
and GST legislation. This proposal does not suggest any changes to
the GST law.
2302. For receipts, the Victorian requirements for 'proof of transaction'
would be extended under the ACL to all goods and services with a
value of $50 or more which are not already covered by the GST law.
2303. The provision would also prohibit a person from charging for an
itemised bill, to ensure that a person is not charged for providing
something they are required to provide by law.
2304. Similar to Option B, businesses would only incur minor compliance
costs with this Option, as they should already be able to produce
bills and receipts.
Option C - Outcome
2305. The benefits and costs of Option C are similar to those under Option
B. However, Option C would provide certainty that any potential
future inconsistencies that arise between the receipt requirements
of the GST law and the ACL would not result in additional compliance
costs for businesses.
2306. The implementation cost of this option for businesses should be
minimal, as requirements to issue receipts already exist under the
GST law, and the information requirements would be consistent.
Consultation
2307. An Australian Consumer Law: Fair markets - Confident consumers
invited submissions on whether a consumer should have the right to
request an itemised bill from a supplier of services. Of 102
submissions received, seven were in favour of requiring suppliers to
provide an itemised bill to consumers on request, two were against,
and three suggested having regard to existing laws and regulations
on bills and receipts before imposing any further requirements on
businesses.
2308. SCOCA received seven submissions in relation to this proposal in
response to a consultation draft of this RIS. Most business
organisations did not see the need for the ACL to include provisions
relating to bills and receipts.
2309. Some submissions noted that certain industries, such as
telecommunications and the energy sector, already have prescriptive
requirements regarding the content to be included in bills to
customers.
Conclusion
2310. In assessing the merits of each option under Proposal 6,
consideration has been had to:
. maintaining current levels of consumer protection within
the context of a generic, national consumer law and
addressing community expectations;
. minimising and, where possible, reducing business
compliance costs under a national consumer law;
. rationalising existing national, State and Territory
consumer laws as much as possible; and
. the practical benefits of achieving national uniformity
through the ACL and the adoption of the ACL by all States
and Territories.
2311. Option A would impose no additional compliance costs to businesses,
as they would not have any additional compliance requirement to
issue bills and receipts. However, this imposes a cost on consumers
in circumstances where a dispute may exist about a supply of goods
and services, because:
. they do not have a right to require the provision of clear
evidence of the existence of a transaction and its basic
elements;
. they would be compelled to rely on less easily verifiable
and less relevant information to evidence a transaction,
which may not be cost or time-effective in disputes about
low value goods or services; and
. a lack of clear evidence may either create, or escalate,
the nature of disputes about the supply of goods or
services.
2312. Option B would carry an additional regulatory risk that future
changes to the GST legislation, which is clearly separate from the
ACL legislation, would automatically impose additional compliance
burden on businesses not currently subject to the requirements of
section 161A of the Victorian FTA. In respect of bills, the
proposal is to not require compliance with prescriptive requirements
for the content of such documents, and therefore any additional cost
would be borne by those businesses currently not providing any or
much detail about the provision of goods and services to consumers.
2313. Option C would impose a small additional compliance burden, as it
would not impose any additional requirements where there is already
compliance under the national GST law, and would only require
compliance with the new requirements in the ACL in respect of
receipts for non-taxable supplies. Similarly, in respect of bills,
the proposal is to not require compliance with prescriptive
requirements for the content of such documents, and therefore any
additional cost would be borne by those businesses currently not
providing any or much detail about the provision of goods and
services to consumers.
2314. In addition, CAV has indicated that the existence of this provision
in the Victorian FTA, while not often used in court cases, has
facilitated their conciliation and dispute resolution activities,
and has been very useful in ensuring that suppliers are clear about
what they are offering to consumers, and that consumers have a
written record of this so that disputes can be resolved quickly and
more easily when they arise. These proposal also meets the
objective of obtaining a single national consumer law, while
minimising to the extent possible the regulatory impact.
2315. For these reasons, Option C can be supported by all members of MCCA.
2316. In developing Option C regard has been had to:
. the provision of an additional tool for consumers that
already exists in one jurisdiction (Victoria) and that can
serve to reduce the complexity of enforcement or dispute
actions, particularly in respect of the provision of
services;
. minimising the business compliance costs by ensuring that
disclosure obligations for receipts extend no further than
the existing GST law, which applies nationally, and
disclosure obligations for bills are minimal and non-
prescriptive; and
. the adoption of a single, national approach to the law in
this respect, and its enforcement nationally by all
consumer agencies, as agreed by all Australian
governments.
Proposal 7: Lay-by sales
Current regulation
2317. A lay-by is a method of sale where a consumer purchases a good by
paying amounts to the supplier over a period of time and takes
delivery of the good when it is fully paid for. Depending on their
nature, goods may be held by the supplier for the consumer, may be
made in accordance with the consumer's requirements, or may be
ordered by the supplier in time to be delivered to the consumer when
the lay-by is completed.
2318. There is no specific regulation of lay-by sales in the TP Act.
However, conduct in respect of lay-by sales agreements is subject to
the generic provisions of the TP Act, such as those prohibiting
misleading or deceptive conduct (section 52), false or misleading
representations (section 53), or harassment and coercion (section
60). Lay-by sales agreements would also become subject to the
national unfair contract terms law, subject to passage of the Trade
Practices Amendment (Australian Consumer Law) Bill 2009 by the
Parliament, to the extent they are consumer contracts in a standard
form.
2319. The ACT, NSW and Victoria have specific provisions that regulate lay-
by sales. While the requirements vary significantly between each
jurisdiction, these provisions specify:
. requirements for terms and conditions governing lay-by
sale agreements;
. cancellation procedures by the consumer and supplier;
. issues relating to cancellation charges; and
. rules around the availability of goods.
2320. Lay-by sales agreements are a common method of payment and provide
an alternative to credit or hire purchase as a means of financing
the purchase of a consumer good. Lay-by is a common form of
purchasing by consumers, and is prevalent in both large and small
retail businesses. Currently, all State and Territory agencies
issue guidance in the form of factsheets for consumers and
businesses about lay-by sales agreements.
2321. As with all transactions that involve payment or part-payment prior
to delivery of goods, consumers and businesses face risks in
entering into lay-by sales agreements. Before lay-by sales were
regulated in Victoria, a report by the Consumer Advocacy and
Financial Counselling Association of Victoria[52] identified the key
issues associated with lay-by sales as:
. the supplier cancelling a lay-by without informing the
purchaser;
. goods being unavailable;
. the supplier going into liquidation;
. the denial of any refund if the purchaser sought to cancel
because of changed circumstances;
. general confusion about terms and conditions; and
. default by the purchaser.
Evidence of consumer detriment
2322. In Victoria, there were approximately 1,000 enquiries from members
of the public to CAV on lay-by sales between 2007 and 2009, with
around 30 of those enquiries needing dispute resolution action.
2323. NSW Fair Trading received 368 complaints between 1 January 2004 and
31 May 2009 regarding lay-by sales.
Options for Proposal 7
2324. The status quo comprises the ACT, NSW and Victorian provisions
regulating lay-by sales in their respective jurisdictions. The
generic consumer protection provisions of the TP Act would apply in
other jurisdictions in relation to lay-by sales.
2325. Two options are considered, and would be compared with the status
quo:
. Option A: No specific regulation of lay-by sales
agreements in the ACL.
. Option B: Adopt basic lay-by sales rules in the ACL,
drawing on key principles in existing State and Territory
legislation.
Impact analysis
Option A - No specific regulation of lay-by sales agreements in the
ACL
2326. Option A would involve the repeal of the ACT, NSW and Victorian
provisions specifically regulating lay-by sales. The current
generic consumer protection provisions in the TP Act would continue
to provide protection to consumers in respect of misleading,
deceptive or unconscionable conduct engaged in by suppliers who
offer lay-by sales, but would not provide for statutory remedies.
2327. The national unfair contract terms law, which is currently before
the Australian Parliament, would also apply to terms in most lay-by
sales agreements, if that law is passed. That law renders a term of
a standard form consumer contract void if it is declared by a court
to be unfair. The unfair contract terms law also only imposes
negative obligations on a supplier (that is, a supplier cannot do
certain things) rather than positive obligations (that is, a
supplier must do certain things), and would not provide statutory
remedies in the event of a term being found to be unfair (instead,
remedies would need to be determined by a court).
2328. Withdrawal of ACT, NSW and Victorian legislation could be supported
by national guidance on lay-by sales regulation. Currently all
jurisdictions provide guidance for consumers on lay-by sales
agreements. In jurisdictions that do not have lay-by sales
legislation (WA, Qld, Tas, SA, NT), this guidance addresses key
concerns that consumers should be aware of before entering into lay-
by sales arrangements, including that the specific terms of the
arrangement are not regulated in that jurisdiction and may vary, and
point out how general requirements of the consumer laws may apply.
The guidance issued in NSW, Victoria and the ACT refers to the more
detailed requirements that apply in those jurisdictions.
Option A - Outcome
2329. Option A provides a consistent set of national consumer protection
laws in relation to lay-by sales in Australia. This outcome,
however, relies upon the use of general provisions in the ACL,
rather than specific regulations on lay-by sales, as is currently
the case in the ACT, NSW and Victoria.
2330. Compliance costs on businesses would be reduced for those businesses
operating in NSW, Victoria and the ACT, due to the repeal of lay-by
sales regulation. Current compliance costs in respect of lay-by-
sales are difficult to estimate and would vary between NSW, Victoria
and the ACT. However, based on submissions received by SCOCA, the
ACT legislation is currently the most prescriptive and the
compliance cost savings there would be greatest. For example, Hunt
& Hunt, in making a submission on behalf of a number of suppliers
and retailers noted that the ACT legislation prohibits a business
from accepting more than 20 per cent of the total payment without
providing a consumer with an opportunity to physically inspect the
actual goods. This poses a particular problem for retailers that
have no retail shopfront or physical presence.
2331. Offsetting a potential reduction in compliance costs to some extent,
businesses would still be required to comply with the general
consumer protection provisions of the TP Act in respect of lay-by
sales agreements. Potentially, there would be a reduction in
certainty in relation to the requirements a business must comply
with in respect of lay-by sales agreements. The Australasian
Compliance Institute (ACI) stated in their submission to the
February 2009 consultation paper that an absence of regulation in
this area is a regulatory gap. A submission to the same
consultation paper by the Australian Retailers Association (ARA)
stated that ARA members reported much lower levels of complaints in
jurisdictions with regulation of lay-by sales than those
jurisdictions without.[53]
2332. The ACI noted the potential for suppliers to impose unreasonable
terms (involving lay-by charges and periods, and cancellation
policies and charges) upon consumers in a lay-by sales environment
and that absence of any regulation in this area is a gap[54]. In
his submission to SCOCA, in favouring the more prescriptive
requirements that currently exist in Victoria, Dr David Cousins
noted that lay-by sales are often used by those on low incomes or
who are vulnerable as an alternative to credit.
2333. The contractual remedies available for breach of a lay-by sales
agreement are unlikely to be well understood by most consumers.
Lack of understanding of the law by consumers and businesses may
lead to an increase in disputation regarding lay-by sales
agreements, especially in tribunals and lower courts. Increased
disputation would increase costs for businesses, consumers and
government dispute resolution bodies. The provision of national
guidance could mitigate the loss of clarity for consumers, but
providing practical information about how contract law is likely to
apply in respect of common disputes arising under lay-by sales
agreements.
Option B - Adopt basic lay-by sales rules in the ACL, drawing on
key principles in existing State and Territory legislation
2334. Under Option B, specific principles-based regulation of lay-by sales
would be incorporated into the ACL, based on elements in different
State and Territory provisions. The relevant provisions in the ACT,
NSW and Victoria would be repealed.
2335. The existing lay-by provisions in NSW, Victoria and the ACT vary
greatly in the level of prescription they include. Submissions to
SCOCA from Telstra, Hunt and Hunt and a confidential other noted a
preference for principles-based regulation that avoids the more
prescriptive requirements of the Victorian and, in particular, the
ACT models.
2336. The key principles underpinning lay-by sales under this model would
be:
. Agreements must be in writing. This would provide a
minimum level of evidence of an agreement and reduce the
potential for dispute.
. Consumers can cancel before delivery of the goods. This
would provide a clear statement of a consumer's
cancellation rights, but would be counter-balanced by the
potential of cancellation charges (see below).
. Businesses can cancel before final payment is received.
This would make it clear that there is a reciprocal
cancellation right for businesses.
. In the event of cancellation by either party, the consumer
is entitled to a full refund of amounts paid. This would
provide an explicit right that businesses may not withhold
money from a consumer.
. In the event of cancellation by the consumer, the consumer
may be required to pay a cancellation charge reflecting
the business's reasonable costs. Businesses may incur
costs in commencing a lay-by sales agreement.
2337. A definition of lay-by sales agreement would be necessary, as the
lay-by sales regulation would be targeted at a specific form of
agreement, rather than other forms of financing a purchase. Drawing
on current jurisdictional approaches, a lay-by sales agreement is an
agreement whereby:
. payment is made in three or more instalments (where a
deposit counts as one instalment); and
. the consumer takes delivery only after final payment is
made.
Option B - Outcome
2338. Businesses in jurisdictions other than the ACT, NSW and Victoria
would face additional compliance burdens in adhering to a lay-by
sales framework. However, these burdens are likely to be minimal,
as businesses which chose to offer lay-by sales in an unregulated
environment can be expected to have documented the agreement in
order to protect their own interests and provided storage facilities
where necessary. The main costs for businesses would be seeking
advice on compliance with the legislation and amending agreement
documentation to include information about cancellation rights and
the cancellation fee. These costs are transitional.
2339. Providing a clear statutory remedy will reduce disputation and
businesses that previously operated in an unregulated environment
will benefit from reduced dispute resolution costs.
2340. Consumer agencies would need to develop national guidance on how the
proposed model would operate across Australia, but given the
prevalence of such guidance currently, this would potentially be
useful for both Options A and B.
Consultation
2341. An Australian Consumer Law: Fair markets - Confident consumers
invited submissions on whether there should be a regime regulating
lay-by sales in the ACL. Of 102 submissions received, eight were in
favour of including a lay-by sales regime in the ACL and two were
against.
2342. Seven of the submissions received in response to the consultation
draft of this RIS commented on lay-by sales. Most submissions from
business and consumer stakeholders supported nationally consistent
regulation, with business particularly concerned that any regulation
should be principles based. Some business stakeholders expressed
particular concern if the ACL was to include a provision similar to
the ACT legislation.
Conclusion
2343. In assessing the merits of each option under Proposal 7,
consideration has been had to:
. maintaining current levels of consumer protection within
the context of a generic, national consumer law and
addressing community expectations;
. minimising and, where possible, reducing business
compliance costs under a national consumer law;
. rationalising existing national, State and Territory
consumer laws as much as possible; and
. the practical benefits of achieving national uniformity
through the ACL and the adoption of the ACL by all States
and Territories.
2344. Both options would result in the rationalisation of existing
divergent legislative approaches to lay-by sales across Australia.
However, based on submissions received by SCOCA, it is difficult to
differentiate between the practical impacts that these two
approaches would have on businesses and consumers.
2345. There is evidence that the existing NSW and Victorian laws are
applied nationally by national retailers and there is some evidence
that clarity in the law (while carrying compliance costs for
businesses) may be related to fewer consumer complaints, which carry
their own costs for businesses.
2346. The effect of regulation in NSW and Victoria is extended to some
extent by regulators issuing their own guidance, which is generally
consistent along the lines of the NSW regulation (which is the least
prescriptive of the three current regimes).
2347. The likely differences between the two would relate to smaller and
regionally-based businesses, which may have regard only to guidance
issued by their jurisdictional regulator.
2348. Option A would provide a result in clear regulatory compliance cost
savings for businesses, although the impact of this option on
consumers is difficult to estimate, as there would be reduced
clarity about the key elements of lay-by sales transactions and they
would be required to use other, more general provisions in the ACL
to obtain redress.
2349. Option B provides for some regulation of lay-by sales transactions,
with some compliance, but would provide greater certainty for both
consumers and businesses in their rights and obligations in this
area. This is particularly the case during the time period between
the two parties entering into a lay-by sales agreement and the
consumer receiving the goods, as this is where most of the disputes
occur. Statutory remedies are the clear benefit for consumers. The
potential for fewer complaints from consumers would be a benefit for
businesses, although businesses would also be able to minimise the
potential for consumer complaints through their own internal
policies.
2350. Option A would provide the least regulatory impact. However, those
State and Territory agencies currently administering lay-by sales
regulation, particularly NSW Fair Trading and CAV, have clearly
advocated the utility of nationally applicable basic rules about lay-
by sales (that is, Option B) as being useful in:
. making clear the expectations of both consumers and
businesses about the basic elements of lay-by
transactions, while minimising compliance costs; and
. facilitating the resolution of any disputes over lay-by
sales agreements without resort to court or tribunal
processes.
2351. Similar comments were also made by business stakeholders in their
submissions on the consultation RIS, particularly those operating
national businesses, who would prefer a single a national approach
to this regulation.
Proposal 8: Dual pricing
Current regulation
2352. The TP Act prohibits misleading and deceptive conduct (section 52)
and false or misleading representations of price (section 53(e)).
While both of these provisions apply to pricing, the alleged
contraventions do not provide for any automatic redress mechanisms
for consumers, where relatively minor contraventions (which may not
warrant prosecution through a court process) have occurred.
2353. NSW and the ACT have an additional provision that applies to
pricing. These provisions (section 40 of the NSW FTA and section 22
of the ACT FTA) require that, if a person displays goods with more
than one price appended, they must not sell the goods at the higher
price. The NSW provision has been in force for around 30 years.
2354. These provisions do not seek to address 'was/now' pricing that is
alleged to be misleading, but simply provide that if a business
displays more than one price to goods, including electronic
scanning, those goods cannot be sold to the consumer at a higher
price than the lowest of the displayed prices (however, businesses
retain their right to withdraw the item from sale if they choose).
The dual pricing provisions are, in some respects, self-enforcing,
as they provide a clear rule if multiple prices are appended to
goods.
Evidence of consumer detriment
2355. Between 2005 and August 2009, NSW Fair Trading recorded 365
enquiries and 192 complaints about dual pricing. Since March 2006,
CAV received 44 enquiries and 18 complaints between July 2007 and
June 2009 related to dual pricing. For the financial year 2008-
2009, the Queensland OFT received 84 complaints that have been
identified as dual pricing or double ticketing. A number of State
and Territory fair trading offices also conduct price scanning
audits annually which often reveal high levels of scanner error.
Options for Proposal 8
2356. The status quo comprises no specific regulation of dual pricing at
the national level, but with regulation in NSW and the ACT.
2357. Two options will be considered for this proposal, to be compared
with the status quo:
. Option A: No specific regulation of dual pricing.
. Option B: Where more than one price for goods is
displayed, prohibit selling at higher than the lowest of
the prices.
Impact analysis
Option A - No specific regulation of dual pricing
2358. Option A involves retaining the TP Act provisions that apply to
false or misleading pricing representations, but no specific
regulation of dual pricing under the ACL, as is currently the case
in NSW and the ACT. When their goods have multiple prices appended,
businesses have the option to sell at whichever price they choose,
if the consumer still wants to purchase it, or withdraw the item
from sale.
2359. Telstra supports Option A, citing that existing prohibitions on
misleading and deceptive conduct and false or misleading
representations adequately protect consumers. It also noted that
consumer empowerment would be limited and that consumers would not
be guaranteed the lowest price given that a supplier retains the
right to withdraw the item from sale. A confidential submission
also considered there is no need for dual pricing provisions, citing
the existing TP Act provisions on misleading and deceptive conduct
and false or misleading representations, as well as the existence of
a number of industry codes of relevance to pricing. It also noted
that retailers often honour the lowest price anyway.
Option A - Outcome
2360. Option A would have a minimal impact on compliance costs. Although
businesses in NSW and the ACT would not have to comply with the dual
pricing regulation, there would continue to be incentives to ensure
dual pricing does not occur, including:
. commercial pressures not to annoy consumers through
confusing multiple price representations; and
. industry-specific requirements such as the Scanning Code
of Practice[55].
2361. Option A may reduce consumer empowerment in NSW and the ACT to the
extent that a business refuses to honour a lower price
representation where multiple representations are made. Other
prohibitions on misleading or deceptive conduct and false or
misleading representations would continue to protect consumers in
such situations, but would be considerably more cumbersome, costly
and uncertain for consumers to enforce.
Option B - Where more than one price for goods is displayed,
prohibit selling at higher than the lowest of the prices
2362. Option B is to include in the ACL a specific prohibition on the sale
of goods with multiple displayed prices at a price higher than the
lowest of the prices.
2363. The NSW FTA refers to 'appended' prices which includes a price that
is, among other things, annexed, affixed, stamped on, used in
connection with the goods on a display, encoded, published in a
catalogue (while the catalogue is current) and in any other way
represented in a manner from which it may reasonably be inferred
that the price represented is a price applicable to the goods.
2364. The NSW FTA provision was reviewed when the National Competition
Policy Review of the Fair Trading Act 1987 was undertaken in 2000.
The review report concluded that:
'The dual pricing provision does not appear to have any impact on
competition, since it applies to all NSW retailers. The provision
does not appear to impose any unwarranted costs on traders, given
that it is a matter of good business practice to ensure that
products and coding systems are accurate. Incorrect pricing would
increase the level of customer complaints a trader receives,
thereby increasing complaint handling costs'.[56]
2365. A dual pricing provision would only relate to selling prices, so as
not to conflict with other requirements such as trade measurement
regulation and the unit pricing requirements of the Retail Grocery
Industry (Unit Pricing) Code of Conduct. In an earlier submission
to An Australian Consumer Law: Fair markets - Confident consumers,
the Australian Retailers Association suggested that the ACL provides
an opportunity to address dual pricing on a national basis. It also
suggested that complaints relating to items outside the scope of the
supermarkets' Voluntary Code of Practice for Computerised Checkout
Systems were becoming increasingly common.
2366. The Motor Trades Association of Queensland's submission, in
supporting Option B, noted that consideration should be given to the
effect of dual pricing where only a single price is displayed on a
product in a particular store, but where another store of the same
chain in a different State sold the goods for a different price.
The intention of the provision is that the rules would only apply
within the area in which the particular representations were made.
That is, generally only to tickets on an item within a store, unless
a State-wide or national catalogue was issued.
2367. The Motor Trades Association of Australia also supported Option B,
suggesting in their submission that the general misleading conduct
provisions are not targeted enough to deal with dual pricing.
2368. If a supplier does not wish to sell the product at the lowest
appended price, they retain their right to withdraw the item from
sale. This protects suppliers from loss due to error (where an
incorrect price has inadvertently been displayed) or attempted fraud
(where a price label from a cheaper product has been placed onto a
higher value product by a consumer).
Option B - Outcome
2369. Under Option B, businesses operating outside of NSW and the ACT
would incur some additional costs associated with understanding the
new requirement and possibly adjusting store policies in relation to
resolving complaints raised by consumers about multiple, different
price representations for the same goods. These costs would be
reduced to some extent by the presence of alternative pressures
(outlined at Option A - Outcome) for businesses to ensure their
pricing practices are clear and accurate.
2370. Option B would provide some benefit to consumers by providing a
clear right that businesses cannot demand a higher payment where
multiple price representation are made. This is particularly
relevant in situations where a certain price is labelled on the
shelf, but a higher price scans at the check-out. Dual pricing
provisions might also benefit vulnerable consumers by creating an
easy to remember rule that if the business wants to sell goods they
must sell them at the lowest appended price, independent of any
concerns about misleading conduct. This is likely to be easier for
consumers to self-enforce than conceptually more complex breaches
such as misleading and deceptive conduct.
2371. The impact of this proposal on the marketplace is not likely to be
high. This assertion is supported by the Motor Trades Association
of Australia's belief that dual pricing provides a useful avenue for
redress that is easily understood by business and consumers, and
that there are not likely to be any further, unidentified, costs.
Dual pricing would, however, create a norm of pricing behaviour that
would be easily understood by both businesses and consumers and be
self-enforcing. This would discourage 'sloppy over-ticketing'-a
point made in the submission by Dr Cousins (who supported Option B).
A submission from the Motor Trades Association of Queensland also
supported Option B, suggesting that dual pricing can cause unfair
competition in relation to suppliers who price correctly, and would
be confusing for consumers. The Financial and Consumer Rights
Council's submission also preferred Option B as providing greater
consumer protection and limiting confusion.
Consultation
2372. An Australian Consumer Law: Fair markets - Confident consumers
raised the question of whether the ACL should include a dual pricing
provision such as that found in NSW. Submissions that commented on
this issue were divided. Consumer groups and some retailers
supported the proposal being in the ACL, citing that consumers
should be availed of the lower price that is displayed. However,
other submissions suggested that the existing prohibitions on
misleading and deceptive conduct and false or misleading
representations adequately protected consumers from misleading
pricing.
2373. SCOCA received six submissions in relation to this proposal in
response to a consultation draft of this RIS. Business
organisations were divided on whether the general prohibition on
misleading and deceptive conduct is sufficient to address dual
pricing practices.
Conclusion
2374. In assessing the merits of each option under Proposal 8,
consideration has been had to:
. maintaining current levels of consumer protection within
the context of a generic, national consumer law and
addressing community expectations;
. minimising and, where possible, reducing business
compliance costs under a national consumer law;
. rationalising existing national, State and Territory
consumer laws as much as possible; and
. the practical benefits of achieving national uniformity
through the ACL and the adoption of the ACL by all States
and Territories.
2375. Retaining the existing TP Act provisions only as in Option A has
merits, through national consistency and existing protections from
misleading conduct. However, it still allows for confusion to exist
over the legal status of goods with two marked prices, as consumers
and businesses may have differing expectations or understandings of
their rights in these circumstances. This confusion can have costs
to consumers and businesses in resolving disputes about goods with
two marked prices, through the time taken to resolve the dispute and
loss of confidence in retailers' pricing.
2376. Option B would promote clarity in situations where consumers feel
they have been misled into a transaction (either deliberately or
through error) through multiple prices indicated on a good. Given
that the measure is easy to understand and comply with, it would
only impose low compliance costs for business, since businesses
would retain their right to withdraw the good from sale. This would
allow the status quo, or similar, in NSW and the ACT to continue,
and impose a minimal transitional compliance cost in other
jurisdictions, given that many businesses apply this approach
through industry-led regulation.
2377. NSW Fair Trading has indicated that, while the dual pricing
provision is rarely the subject of significant enforcement or court
action, the provision is an extremely useful tool in NSW, both in
providing for clarity in the marketplace and for conciliation of
disputes between traders and consumers when they arise. The
provision creates a clear, unambiguous rule that consumers and
businesses can understand and refer to, while causing little or no
costs to businesses, and also serves to facilitate the adoption of
consistent national consumer law.
2378. The simple nature of the rule also assists in providing consumers
with advice. Advice based on a simple, unambiguous rule can be much
more effective than that which relies on a much more abstract
concept such as misleading and deceptive conduct or false or
misleading representations. There is little need for argument or
disputes in relation to this provision, as a consumer simply brings
the pricing to a retailer's attention, notes the simple rule and the
retailer must either sell at the lower price or withdraw the item
from sale until the pricing is corrected.
2379. For these reasons, Option B can be supported by all members of MCCA.
2380. In developing Option B regard has been had to the adoption of a
single, national approach to the law in this respect, and its
enforcement nationally by all consumer agencies, as agreed by all
Australian governments.
Proposal 9: Offering gifts and prizes
Current regulation
2381. Section 54 of the TP Act currently prohibits a corporation from
offering gifts, prizes or other free items, in connection with the
supply or possible supply or promotion by any means of goods or
services, with the intention of not providing them or not providing
them as offered.
2382. Section 16 of the Victorian FTA provides a similar prohibition based
on the intention of the supplier, but also contains a second
subsection which provides that the person is guilty of an offence if
such an offer is made and the person 'does not within a reasonable
time from the making of the offer provide a gift, prize or item
which is in accordance with the offer'.
2383. Regulation in this area seeks to deter traders from luring customers
or clients with offers of gifts and prizes which they do not intend
to honour and provides an incentive for traders to engage in fair
conduct in relation to gifts and prizes that can help to contribute
to consumer confidence in traders generally.
2384. If a trader fails to provide gifts and prizes as offered it could
have negative effects, including:
. giving the business an unfair competitive advantage over
competitors that attract sales with genuine offers;
. reducing consumer confidence in future representations by
all businesses; and
. causing the consumer significant costs in following-up to
try and receive the offered gifts or prizes or make
complaints to regulators.
Evidence of consumer detriment
2385. The provision of gifts and prizes is an area of concern for
consumers.
. In the last two financial years, CAV recorded 761
enquiries and 447 written complaints about the supply of
gifts and prizes, including related misrepresentations.
. In the same period, the Queensland OFT has received 168
complaints about gifts and prizes.
. The SA OCBA received 161 complaints from 1 July 2007 to 30
June 2009, but also notes that this represents an increase
in complaints relating to this issue. This is
particularly the case in relation to cash-back offers,
where such offers are increasingly handled by third
parties which can create further delays and difficulties
for consumers accessing their money.
. The WA Department of Commerce has also received 83
complaints concerning cash-back offers and incentive
schemes over the past three years and has taken action
about this form of conduct in the past.[57].
2386. The ACCC publishes guidance in relation to offering gifts and prizes
on its website and in its publication Advertising and selling [58]
and has taken action on a number of occasions in relation to
concerns about gifts and prizes.[59]
Options for Proposal 9
2387. The status quo comprises a national, intent-based provision (section
54 TP Act) and one jurisdiction with both the intent-based provision
and an additional requirement to provide the gifts or prizes within
a reasonable time.
2388. Three options are considered, to be compared with the status quo:
. Option A: Incorporate the current section 54, without
amendment, into the ACL.
. Option B: Replace the intent-based TP Act provision with
a requirement to provide gifts and prizes, as offered,
within a reasonable time; and
. Option C: Add to the intent-based TP Act provision to
include a separate requirement to provide gifts and
prizes, as offered, within a reasonable time.
Impact analysis
Option A - Incorporate the current section 54, without amendment,
into the ACL
2389. Option A would involve retaining the existing TP Act provision
without change. The intent-based provision in the current section
54 of the TP Act, which allows consumer agencies to act as soon as
it is apparent that the business does not intend to provide the gift
or prize, would be retained in the ACL. The Victorian FTA provision
would be repealed as part of Victoria's adoption of the ACL.
Option A - Outcome
2390. Option A would preserve the prohibition on disingenuously offering
gifts or prizes, where the business could gain the promotional
benefits of the offer, but has no intention to provide them. The
Motor Trades Association of Queensland's submission supported Option
A but did not provide reasons for doing so. A submission from
Telstra also supported this Option, considering the 'reasonable
time' element to be unnecessary.
2391. While all Australian consumers and businesses would benefit from
consistent regulation, in Victoria, a business that genuinely
intends to provide the prize but does not provide it, as offered,
for a very long period would no longer be specifically required by
the consumer law to provide it within a reasonable time.
Option B - Replace the intent-based TPA provision with a
requirement to provide gifts and prizes, as offered, within a
reasonable time
2392. Option B would remove the TP Act prohibition of offering a gift or
prize without intending to provide it, and create a prohibition on
the supplier failing to provide gifts and prizes, as offered, within
a reasonable time. These requirements are already present in the
Victorian FTA and, as such, many businesses are already subject to
these requirements if they trade in Victoria.
2393. Telstra's submission supports Option A. However, it further notes
that it could support Option B only if it was clear that, if a
seller communicated the timeframe for providing the gift or prize at
the time the consumer qualified for the gift or entered the
competition, then compliance with that timeframe would be considered
providing it within a reasonable time.
2394. The intention of the provision would be to accept a stated time as
being a reasonable time if communicated at the time the consumer
qualified for a gift or entered a competition. However, if a
supplier specified no time initially but attempted to specify the
time after the consumer had been informed they had won the prize,
they would not be able to rely on that as being a reasonable time in
all circumstances.
2395. The provision would not apply to a situation where a person could
not provide the gifts or prizes as offered or within a reasonable
time based on a mistake of fact or the failure of a third party on
which they reasonably relied upon.
2396. The removal of the requirement that the person intended to provide
the gifts or prizes would remove the ability to act quickly if an
intention not to supply was apparent, potentially to the detriment
of consumers (for example, in instances where a trader goes out of
business or there is evidence that goods do not exist or the supply
is impossible). The submission from Dr Cousins asserts that Option
B would provide equally timely protections to those available under
the intent-based provisions but it is not suggested why this would
be the case.
2397. The fact that a very long time has elapsed may be relevant in trying
to establish that a person does not intend to provide gifts or
prizes. However, delay in itself is unlikely to be sufficient to
prove that a person intended not to provide the gift or prize at the
time of the offer. The actual intention of the defendant has to be
proved[60].
2398. A trader who genuinely intends to provide a gift or prize at the
time it is offered, but subsequently decides not to deliver the gift
or prize to the consumer, does not contravene section 54 of the TP
Act. In the case of TPC v Calderton Corp Pty Ltd[61] a trader
formed the intention not to provide gifts and prizes only after a
competition had commenced (when it became apparent that the
competition results would not be favourable to the trader). The
trader breached section 54 in that case only because it continued to
operate the competition (and continued to offer prizes) after the
requisite intention had been formed. Had the trader ceased the
competition based on the unfavourable results and refused to provide
prizes to the original entrants, there would have been no breach of
section 54. Under the Victorian model, prosecution would be
possible for a failure to supply the gifts or prizes within a
reasonable time. Given this, the Australian Finance Conference
suggested that it would have no objection to either Option B or C.
Option B - Outcome
2399. Option B adds both potential benefits and costs for consumers. The
fact that the test is one based on reasonableness will ensure that
the provision does not become too onerous on businesses.
Reasonableness will be based on the court's interpretation of what
is reasonable in the circumstances, not necessarily what a consumer
may contend is reasonable. While supporting Option A, Telstra noted
that if a reasonable time element was added, it should not be
defined to allow maximum flexibility in the circumstances of each
case.
2400. Some of the potential costs for suppliers are able to be offset
through exclusions for certain situations where failure to supply as
offered or within a reasonable time is beyond the control of the
supplier. Option B was supported as the preferred option in the
submission by Dr Cousins, who asserted that the effect, rather than
the intention that was the key consideration for consumers. It
should be noted, however, that Dr Cousins' comments did not address
Option C at all, which is a combination of Options A and B.
2401. While Option B would have benefits and costs for consumers, many of
the benefits could be offset to some extent through the loss of the
intent-based cause of action which can be taken at any time
following the offer. Option B would also incur indirect costs
associated with any change to regulation, such as loss of
familiarity and the need for the government to educate businesses
and consumers.
Option C - Add to the intent-based TPA provision to include a
separate requirement to provide gifts and prizes, as offered,
within a reasonable time
2402. Option C would add to the current section 54 of the TP Act by
including an additional prohibition based on the act of a supplier
not providing gifts and prizes, as offered, within a reasonable
time, which creates distinct ways of contravening the provision.
2403. As discussed in Option B, this prohibition is already present in the
Victorian FTA. It would not apply to a situation where a person
could not provide the gifts or prizes as offered, within a
reasonable time based on a mistake of fact or the failure of a third
party on which they reasonably relied upon.
Option C - Outcome
2404. The retention of the existing provision provides the ability for a
consumer to seek the assistance of the law where a person makes an
offer they do not intend to fulfil. For a business that does not
intend to mislead a consumer by offering but not providing the gifts
or prizes, there is no cost of the continuing application of this
contravention.
2405. Option C, as discussed under Option B above, provides both potential
benefits and costs. The majority of costs for businesses could be
avoided by taking all reasonable steps to ensure that they provide
the gifts and prizes offered within a reasonable time, and certain
defences would be available. The Motor Trades Association of
Australia stated in its submission that it could support Option C,
but noted that additional record-keeping costs could be incurred.
The Financial and Consumer Rights Council also preferred this option
as providing the highest consumer protection.
2406. There would be benefits where the provision can help consumers
receive the gift or prize in a timely manner, having regard to all
the circumstances. While there are potential costs for businesses,
those costs would only be borne by those that are at fault for an
unreasonable delay in providing the gifts or prizes or for providing
the gifts or prizes different to those promised.
Consultation
2407. An Australian Consumer Law: Fair markets - Confident consumers
raised the question of whether the ACL should include a further
'reasonable time' requirement for provision of gifts and prizes.
Nearly all respondents that addressed the issue were in favour of an
extension of the TP Act provision along the lines of the Victorian
FTA provision, as outlined in Option C.
2408. SCOCA received six submissions in relation to this proposal in
response to a consultation draft of this RIS. Most submissions from
both business and consumer organisations were in favour of including
a reasonable time test, however one business stakeholder suggested
that this should only apply where the supplier has not specified a
timeframe upfront.
Conclusion
2409. In assessing the merits of each option under Proposal 9,
consideration has been had to:
. maintaining current levels of consumer protection within
the context of a generic, national consumer law and
addressing community expectations;
. minimising and, where possible, reducing business
compliance costs under a national consumer law;
. rationalising existing national, State and Territory
consumer laws as much as possible; and
. the practical benefits of achieving national uniformity
through the ACL and the adoption of the ACL by all States
and Territories.
2410. There would be benefits from Option A as businesses operating
nationally would be familiar with that requirement and would incur
no additional compliance costs. However, Victorian consumers would
no longer have the benefit of the statutory requirement to have the
offered gift or prize provided within a reasonable time and
consumers in the rest of Australia would not have a specific
statutory right to receive them within a reasonable time.
2411. Option B could lead to a reduction of consumer protection in
situations where, prior to the passage of a reasonable time, for
some other reason it becomes clear that a business does not intend
to offer a gift or prize. In this situation a consumer would be
unable to take action until after the passage of a 'reasonable'
time. This option would also have a cost to business of complying
with a new regulatory approach to this area, particularly for those
businesses which do not already operate in Victoria where this
requirement already exists.
2412. Option C would benefit consumers through a broader scope to pursue a
trader that the consumer believed had either: taken an unreasonably
long time to provide the gifts or prizes they had offered, or where
they are not provided as offered; or, did not intend to provide them
at all. This approach would have some compliance costs for
businesses that do not already operate in Victoria through the new
reasonable time-based requirement; however, the fact that the
requirement is based on the concept of reasonableness should, in
itself, help to ensure that the requirement is not too onerous.
2413. Noting the general level of support for Option C in submissions
(including from some businesses), the overall compliance costs of
this option are likely to be low. Businesses that engage in honest,
open use of promotions such as gifts and prizes should experience
very low or no costs from this proposal being implemented. The only
businesses that would see a restriction on the use of gifts and
prizes as promotional tools would be those businesses that exploit
consumers' desire to receive free items and subsequently either make
consumers wait a very long time to receive them or do not bother
providing them at all.
2414. CAV have also indicated that this is an effective provision in
Victoria, as the likelihood of obtaining redress for consumers who
have not received gifts or prizes is substantially increased. This
is because the focus of a proceeding is on what is a reasonable time
in the circumstances, rather than (as under the TP Act provisions)
the more difficult to establish intention or knowledge of a supplier
at the time when the offer was made. Option C would also serve to
facilitate enforcement of a prohibition that currently exists in the
TP Act, particularly in tribunals and lower courts as part of a
single national law, rather than in the Federal Court.
2415. On balance, Option C can be supported by all members of MCCA.
2416. In developing Option C regard has been had to:
. enhancing consumer protection and confidence in the
enforcement of the law concerning the promises made about
and the provision of gifts and prizes to consumers;
. the minimal impact that this proposal would have on
legitimate business activities; and
. the adoption of a single, national approach to the law in
this respect, and its enforcement nationally by all
consumer agencies, as agreed by all Australian
governments.
Proposal 10: Accepting payment without intending to supply
Current regulation
2417. Section 58 of the TP Act prohibits a corporation from accepting
payment or other consideration for goods or services where, at the
time of the acceptance, the corporation:
. intends not to supply the goods or services;
. intends to supply materially different goods or services;
or
. there are reasonable grounds, of which the corporation is
aware or ought reasonably to be aware, for believing the
corporation will not be able to supply the goods in the
time specified or, if no time is specified, within a
reasonable time.
2418. The NSW FTA contains a section in substantially the same terms as
section 58 of the TP Act. Section 19 of the Victorian FTA prohibits
a person who accepts payment or other consideration for the supply
of goods or services from:
. failing to supply all the goods or services within the
period specified by the person or, if no period is
specified, within a reasonable time; or
. supplying goods or services that are materially different.
2419. Consumers expect to receive goods and services that they pay for.
Non-receipt of goods and services can be particularly distressing
for consumers and cause them direct and indirect financial losses.
It is particularly concerning where a trader accepts payment without
ever intending to supply goods and services.
Evidence of consumer detriment
2420. There is evidence that there is concern over the way in which goods
and services are supplied, and whether they are in fact supplied:
2421. NSW Fair Trading has received on average over the last three years
734 enquiries and 504 complaints. Over that period 14 per cent of
these matters were referred to the Consumer, Trader & Tenancy
Tribunal.
. CAV received 4,140 enquiries and 1,744 written complaints
in relation to non-supply, delays in supply and
allegations of an intention to not supply in 2008-09.
This represents a significant increase from the 3,159
enquiries and 1,424 written complaints in 2007-08.
Complaints relating to non-delivery or late delivery of
goods ranked in the top 10 complaints in the 2008 CAV
research paper Consumer confidence and market experience
study. An example of enforcement action by CAV was its
acceptance of enforceable undertakings in relation to
section 19 of the Victorian FTA against Mr Steven Xerri,
following concerns about failure to supply goods as
ordered.[62]
. The Queensland OFT receives on average 760 complaints a
year relating to the supply of goods or services
generally.
. The SA OCBA also received 516 complaints relating to the
non-supply of goods and services from 1 July 2007 to
30 June 2009.
2422. The ACCC, on its Scamwatch website, highlights the existence of door-
to-door sales and home maintenance scams. These are scams it
describes as involving 'promoting goods or services that are not
delivered or are of a very poor quality'.[63] Scamwatch also
highlights various scams associated with mobile phones, including
the acceptance of payment for services associated with internet
transactions and mobile phone services.[64] What is common to these
forms of business activity is that they can involve the acceptance
of payment when there is no intention of supplying the goods or
services.
2423. The ACCC has taken enforcement action under section 58 of the TP Act
on a number of occasions, including against Commercial and General
Publications Pty Ltd, ADT Security and Blue Book Directories Ltd (in
liquidation).[65] A recent enforcement example of the Victorian
provision being pursued can be found in a case against Robert Ewan
Day of Grove Construction Services, where Mr Day was convicted of
six counts of failing to provide services following the collapse of
his conveyancing business.[66]
Options for Proposal 10
2424. The status quo comprises a national provision (TP Act) that is
mirrored in all jurisdictions, except Victoria, which has a
provision based on a requirement to supply within the specified time
or, if no time is specified, within a reasonable time.
2425. Three options will be considered for this proposal, to be compared
with the status quo:
. Option A: Incorporate the current section 58, without
amendment, into the ACL.
. Option B: Replace the TP Act provision with: a
requirement to supply within the specified time or, if no
time is specified, within a reasonable time; and a
prohibition on supplying materially different goods or
services.
. Option C: Add to the TP Act provision: a requirement to
supply within the specified time or, if no time is
specified, within a reasonable time; and a prohibition on
supplying materially different goods or services.
Impact analysis
Option A - Incorporate the current section 58, without amendment,
into the ACL
2426. Option A would involve retaining the existing TP Act provision
without significant change. The intent-based provision in the
current section 58 of the TP Act would be retained in the ACL. The
Victorian provision would be repealed as part of Victoria's adoption
of the ACL.
2427. This prohibition allows the consumer agencies to act as soon as it
may become apparent that the business did not intend to provide the
goods or services.
Option A - Outcome
2428. Option A would preserve the prohibition on accepting payment where
the business has no intention to provide them or intends to provide
them in a materially different form to what was agreed. The Motor
Trades Association of Queensland supported Option A as representing
a reasonable approach, but did not give reasons why it should be
preferred over Options B or C. Telstra also supported Option A,
suggesting that intention should remain the key aspect of this
provision, and that the proposed amendments in Options B & C would
interfered with contractual arrangements and that there are many
legitimate reasons a business may fail to supply and that
contractual remedies may be available.
2429. Option A would create benefits for consumers and business through
nationally consistent regulation, but could also have potential
costs for some Victorian consumers (as opposed to the status quo) in
circumstances where goods or services are not provided within a
reasonable time, or where different goods are provided.
Option B - Replace the TPA provision with: a requirement to supply
within the specified time or, if no time is specified, within a
reasonable time; and a prohibition on supplying materially
different goods or services
2430. Option B would replace the current section 58 of the TP Act with
requirements in the ACL to deliver within a reasonable time and not
to supply materially different goods or services. These
requirements are already present in the Victorian FTA and, as such,
many businesses are already subject to this requirement if they
trade in that jurisdiction and may, where they operate nationally,
apply the same standard elsewhere.
2431. The Victorian offence provision is subject to defences of reasonable
mistake, the act or omission of another person where the defendant
had taken reasonable precautions to avoid the contravention. This
option would see these defences retained in the ACL provision.
2432. Removal of the intent-based TP Act requirement would mean that
failure to supply can only be challenged after: a reasonable time
has elapsed (even where it is apparent there is no intention to make
the supply; or, where something other than what was offered is
supplied). A 2002 National Competition Policy review of the NSW FTA
found that taking action under the NSW equivalent of section 58 of
the TP Act has sometimes proved to be difficult in practice, due to
the problem of proving in retrospect that a trader was aware that
goods or services would not be supplied.[67]
2433. The submission from Dr Cousins suggested that the key outcome for
consumers was that they receive their goods or services in a timely
manner, and recommended Option B, suggesting that the intent-based
requirement added little enforcement benefit beyond those provided
by Option B.
Option B - Outcome
2434. Option B provides both potential benefits and costs for consumers
through providing a different type of protection. Option B could
provide greater certainty for consumers purchasing goods, knowing
that they have a specific statutory right of challenge for
unreasonable delay or where they did not receive what they ordered.
Businesses may also need to be particularly careful to ensure that
their supplies are not subject to unreasonable delays and that they
supply what is ordered.
2435. The Victorian model was applied by the Victorian Supreme Court in
the case of Cousins v Merringtons[68]. The Court found that the
trader had accepted payment but failed to supply prescription
spectacles and contact lenses within the time specified or within a
reasonable time. The trader in that case had also breached section
19 of the Victorian FTA by providing incorrect prescriptions to
consumers after accepting payment, such services being materially
different to those to which the agreement to supply related.
Pursuing redress for the consumer under the TP Act would have been
more difficult as the intention to provide incorrect lenses at the
time the payment was accepted would have needed to proven.
2436. The broader nature of section 19 has allowed CAV to provide more
effective dispute resolution in a higher number of cases than would
have been the case under a provision which requires the trader's
intention to not supply to be proven. Prohibiting failure to
supply, as ordered, within a reasonable time can be more effective
in negotiating with a trader to resolve a dispute, because they
would be unable to simply (honestly or otherwise) rely on an
assertion that they intended to supply the goods or services as a
justification to refuse to negotiate with the consumer or regulator.
2437. Some of the potential costs for suppliers are able to be offset
through exclusions for situations where failure to supply is beyond
the control of the supplier. The fact that the reasonable time test
is one based on reasonableness would ensure that the provision does
not become too onerous on business. Reasonableness would be based
on the court's interpretation of what is reasonable in the
circumstances, not necessarily what a consumer may contend is
reasonable. There would also be defences available for situations
where the failure to provide the goods or services within a
reasonable time or as offered is due to a mistake of fact or
reasonable reliance on another person. The requirements to provide
goods or services as offered would also not apply if a consumer
agreed to accept replacement goods or services.
2438. However, the removal of the requirement that the person intend to
provide the goods or services would remove the ability to act
quickly if an intention not to supply as ordered was apparent,
potentially to the detriment of consumers.
Option C - Add to the TPA provision: a requirement to supply within
the specified time or, if no time is specified, within a reasonable
time; and a prohibition on supplying materially different goods or
services
2439. Option C would add to the current section 58 of the TP Act by
creating additional prohibitions based on the act of a supplier
accepting payment but not supplying goods or services within a
reasonable time, or supplying something materially different to what
was agreed. This option would result in many of the benefits
outlined in Option B, without the costs associated with the removal
of the existing TP Act requirements.
Option C - Outcome
2440. Under Option C, the retention of the existing provision provides the
ability for a consumer to seek the assistance of the law where a
person makes an offer they do not intend to fulfil. For a business
that does not intend to mislead a consumer by failing to provide the
goods or services, there is no cost associated with the continuing
application of this contravention.
2441. The addition of the requirements to supply as ordered and within a
reasonable time, as discussed under Option B above, adds both
potential benefits and costs. The majority of costs for businesses
could be avoided by taking all reasonable steps to ensure that they
provide, within a reasonable time, the goods or services for which
they accept payment.
2442. There would be benefits for Option C where the provision would help
consumers receive their goods or services, as ordered, in a timely
manner, having regard to all the circumstances. Unreasonable delays
can cause detriment to consumers both directly and through loss of
confidence in the market. The Financial and Consumer Rights Council
preferred this option, suggesting it provided the highest level of
consumer protection, including in relation to scams. The Motor
Trades Association of Australia indicated in its submission that it
prefers Option C.
Consultation
2443. An Australian Consumer Law: Fair markets - Confident consumers
raised the question of whether the ACL should include a provision
requiring supply within a 'reasonable time'. In the five
submissions that addressed the issue, businesses generally did not
favour the extension, preferring to leave delays or failure to
supply as a matter of contract, whereas consumer groups and some
smaller businesses generally suggested that specific statutory
relief should be provided for unreasonable delay.
2444. SCOCA received five submissions (three from business organisations
and two from consumer organisations) in relation to this proposal in
response to a consultation draft of this RIS. Consumer
organisations noted that enforcement of the intent-based provisions
is unwieldy and, in this regard, a stricter test is more effective.
Conclusion
2445. In assessing the merits of each option under Proposal 10,
consideration has been had to:
. maintaining current levels of consumer protection within
the context of a generic, national consumer law and
addressing community expectations;
. minimising and, where possible, reducing business
compliance costs under a national consumer law;
. rationalising existing national, State and Territory
consumer laws as much as possible; and
. the practical benefits of achieving national uniformity
through the ACL and the adoption of the ACL by all States
and Territories.
2446. There would be benefits from Option A, the retention in the existing
TP Act provision only (which is based on the intention or knowledge
of ability to provide), as businesses nationally would be familiar
with that requirement. However, Victorian consumers would no longer
have access to the specific statutory entitlement to have their
goods or services provided within a reasonable time.
2447. Option B - replacing the intent or knowledge-based requirements with
a requirement based on reasonable time - could create a reduction of
consumer protection during the interim period if it is clear a
business does not intend to provide the goods or services, but where
a reasonable time has not elapsed to allow a consumer to take
action. This option would also have a cost to business of complying
with a new regulatory approach to this area, particularly for those
businesses which do not already operate in Victoria where this
requirement already exists.
2448. Option C would benefit consumers by providing a broader scope to
pursue a trader that the consumer believed had either: taken an
unreasonably long time to provide the goods or services they had
offered, or where they are not provided as offered; or, did not
intend to provide them at all. This approach would have some
compliance costs for businesses that do not already operate in
Victoria through the new reasonable time-based requirement; however,
the fact that the requirement is based on the concept of
reasonableness should, in itself, help to ensure that the
requirement is not too onerous. Through the concept of
reasonableness and defences relating to things outside the
supplier's control, this option would have minimal compliance costs
for businesses that genuinely attempt to provide goods and services
to consumers as offered and in a timely manner - as most businesses
do.
2449. CAV have also indicated that this is an effective provision in
Victoria, as the likelihood of obtaining redress for consumers who
have not received goods or services is substantially increased.
This is because the focus of a proceeding is on what is a reasonable
time in the circumstances, rather than (as under the TP Act
provisions) the more difficult to establish intention or knowledge
of a supplier at the time when the agreement was made. Option C
would also facilitate the enforcement of a prohibition that
currently exists in the TP Act, particularly in tribunals and lower
courts as part of a single national law, rather than in the Federal
Court.
2450. On balance, Option C can be supported by all members of MCCA.
2451. In developing Option C regard has been had to:
. enhancing consumer protection and confidence in the
enforcement of the law concerning the promises made about
and the provision of goods and services to consumers;
. the minimal impact that this proposal would have on
legitimate business activities; and
. the adoption of a single, national approach to the law in
this respect, and its enforcement nationally by all
consumer agencies, as agreed by all Australian
governments.
Proposal 11: False or misleading representations
Current regulation
2452. Section 52 of the TP Act prohibits conduct, in trade or commerce,
that is misleading or deceptive or that is likely to mislead or
deceive. Section 52 is broadly framed and does not attract civil or
criminal penalties. Section 53 of the TP Act provides specific
prohibitions on certain false and misleading representations in
relation to the supply or possible supply of goods or services.
Section 53 attracts criminal penalties.
2453. Section 14 of the Victorian FTA provides an additional prohibition
on representations that purport to be a testimonial, or that are
about a testimonial, from being false or misleading in any material
particular. The Victorian provision also puts a burden on the
person accused of using a false or misleading testimonial to either
adduce evidence to the contrary or, in relation to a body corporate,
prove that the testimonial or statement is not false or misleading.
2454. In Australia, CAV has received 10 complaints about false or
misleading testimonials since 2007 and has undertaken a number of
prosecutions of such conduct.[69] In 2007, the ACCC took action
against Mr Ian Turpie and others for their involvement in conduct
that involved the provision of a false testimonial about erectile
dysfunction treatments by the Advanced Medical Institute.[70]
Similarly, WA DOCEP has taken action in relation to false
testimonials.[71]
2455. In 2007, the ACCC, as part of the International Consumer Protection
Enforcement Network (ICPEN), took part in an international internet
sweep on the topic 'Who can you trust (online)? Targeting
testimonials, guarantees (trustmarks) and endorsements'.[72]
Australian consumer agencies such as the ACCC, Fair Trading NSW and
CAV also list warnings for consumers about misleading testimonials
on their websites[73].
2456. The US Federal Trade Commission has recently highlighted false
testimonials as a problem in this context by issuing guidance in
October 2009, including specific guidance covering endorsements by
consumers, celebrities and experts.[74]
2457. Testimonials can provide consumers with confidence in a product on
the basis that another person (particularly a celebrity or well-
known person) is satisfied with the goods or services in question.
Consequently, false or misleading representations that purport to be
a testimonial or that are about a testimonial can have a detrimental
impact on consumers as they may be induced into buying something
based largely or wholly on their belief in the testimonial.
Options for Proposal 11
2458. The status quo comprises a national provision (TP Act) prohibiting
certain misleading or false representations, the elements of which
are mirrored in all jurisdictions, but with an extra provision in
Victoria that relates to testimonials.
2459. Three options will be considered for this proposal, to be compared
with the status quo:
. Option A: Incorporate the current section 53 of the TP
Act, without amendment, into the ACL.
. Option B: Add to the TP Act provision a separate
prohibition on representations that purport to be a
testimonial, or that are about a testimonial, from being
false or misleading; and
. Option C: Option B, but with an evidentiary burden on a
person alleged to have made a false or misleading
testimonial or representation about a testimonial.
Impact analysis
Option A - Incorporate the current section 53, without amendment,
into the ACL
2460. Option A would involve retaining the existing TP Act section 53 in
the ACL without significant change. The Victorian provision dealing
specifically with testimonials would be repealed, as part of
Victoria's adoption of the ACL.
2461. The general prohibition on conduct that is misleading or deceptive
(based on section 52 of the existing TP Act) in the ACL would apply
to representations about testimonials. However, contraventions of
this provision would not attract civil or criminal penalties that
are associated with the more specific prohibition on false and
misleading representations. Telstra's submission supported Option
A, citing adequate coverage by existing sections 52 and 53 of the TP
Act. The Motor Trades Association of Australia also supported
Option A, but noted that it did not see any reason why testimonials
should not be listed in this provision, even though it would already
be covered by section 52.
Option A - Outcome
2462. This proposal would create benefits for consumers and business
through nationally consistent regulation, but would also have
potential costs for some Victorian consumers (as opposed to the
status quo) if section 53 TP Act does not cover false or misleading
use of testimonials as broadly as subsection 14(1) of the Victorian
FTA.
2463. This proposal would have no additional compliance cost impacts on
businesses, since the general prohibition on misleading or deceptive
claims currently applies in every Australian jurisdiction without
exception.
Option B - Add to the TPA provision a separate prohibition on
representations that purport to be a testimonial, or that are about
a testimonial, from being false or misleading
2464. Option B would see the ACL contain both a provision based on section
53 TP Act and on subsection 14(1) of the Victorian FTA. The
provision would include a separate prohibition on representations
that purport to be a testimonial, or that are about a testimonial,
from being false or misleading.
2465. The provision would not only prohibit fake testimonials, but also
the misleading use of a testimonial; for instance, quoting a notable
celebrity's genuine quote and then claiming that it was made about a
product when it was, in fact, not made.
2466. The submission from Dr Cousins suggests that the inclusion of
specific reference to testimonials in this provision would simply
reflect the concerns that have existed in relation to testimonials
in recent years, citing the areas of health, weight loss and
property investment.
Option B - Outcome
2467. The costs to businesses of a specific prohibition would be minimal.
The vast majority of businesses would use genuine testimonials, and
need only be sure that they are using them in a manner that is not
misleading. Misleading representations about testimonials are
already unlawful under section 52 of the TP Act, but do not attract
punitive penalties.
2468. Businesses would not be restricted in any way in relation to their
use of genuine testimonials. Businesses that currently only use
testimonials that are accurate could benefit to the extent that an
explicit prohibition on false or misleading testimonials would deter
other businesses from making such representations and hence gain an
unfair competitive advantage.
2469. A specific prohibition on false or misleading representations in
relation to testimonials would mean that consumers could be more
confident that testimonials are more likely to be genuine, and in
instances where they are not, action could be more easily taken.
Option C - Option B, but with an evidentiary burden on a person
alleged to have made a false or misleading testimonial or
representation about a testimonial
2470. As with Option B, Option C would place a specific prohibition on
making false or misleading representations that purports to be a
testimonial or that are about a testimonial, but would be augmented
to require someone accused of breaching the provision to adduce
evidence (in court) that the testimonial was not false (or
misleading as the case may be), or else the representation would be
deemed to be misleading.
2471. As such, failure to adduce evidence that a claim was not false or
misleading would result in the claim being deemed to be misleading.
This burden would be evidentiary only (that is, require a person to
put evidence before the court) and would not place a persuasive or
legal burden on the respondent to prove they had reasonable grounds.
Testimonials can be distinguished from other representations, as
whether or not they are true, or being used in a genuine manner,
they are only likely to be in the knowledge of the respondent and
the person making the testimonial statement. As such, an
evidentiary onus on the respondent would ensure that all relevant
information is put before the court.
2472. Dr Cousins did not support the evidentiary onus, suggesting that the
new substantiation notice power would provide for much the same
outcome. It should be noted, however, that substantiation notices
would not assist private parties, as they are only available to the
regulators. In contrast, the Financial and Consumer Rights Council
strongly supported this Option, in particular because of the
improvements to the ease of taking action that the evidentiary onus
would provide.
Option C - Outcome
2473. Option C would place an additional burden on a business accused of
making a false or misleading representation that purported to be a
testimonial or that was about a testimonial, but the burden would
not be high. A business making a genuine representation should
easily be able to adduce evidence that the testimonial is real and/
or accurate by producing relevant evidence verifying the
testimonial.
2474. The introduction of an evidentiary onus on the person making the
representation would ensure that action taken by both consumers and
consumer agencies in relation to testimonials is made easier. In
the absence of a reverse onus, the regulator would have difficulty
ascertaining whether a testimonial is real and/or accurate without
the use of extensive information gathering powers, which themselves
would impose compliance costs on businesses accused of making false
or misleading representations about testimonials.
Consultation
2475. An Australian Consumer Law: Fair markets - Confident consumers
raised the question of whether the ACL should include an expanded
prohibition on false or misleading representations. Some types of
representation listed there are not proposed to be included in the
ACL. Of the eight submissions covering this issue, generally
speaking, businesses considered that the existing section 53 was
broad enough. Consumer groups generally argued that, in some cases,
extensions are justified to ensure adequate protection for
consumers.
2476. SCOCA received five submissions commenting on false or misleading
testimonials in response to a consultation draft of this RIS.
Consumer respondents indicated that a prohibition on false of
misleading testimonials would respond to a growing area of concern.
Conclusion
2477. In assessing the merits of each option under Proposal 11,
consideration has been had to:
. maintaining current levels of consumer protection within
the context of a generic, national consumer law and
addressing community expectations;
. minimising and, where possible, reducing business
compliance costs under a national consumer law;
. rationalising existing national, State and Territory
consumer laws as much as possible; and
. the practical benefits of achieving national uniformity
through the ACL and the adoption of the ACL by all States
and Territories.
2478. Option A would ensure that consumers and businesses remain protected
from misleading and deceptive conduct (including in relation to
testimonials) through the equivalent of section 52 of the TP Act in
the ACL, as well as other specific types of false or misleading
representations currently in section 53 of the TP Act. While this
option still results in nationally consistent regulation, there
would be no specific prohibition on false or misleading
representations regarding testimonials.
2479. The introduction of a specific new prohibition on making a false or
misleading representation concerning a testimonial under Option B
would ensure that consumers and consumer agencies are better
equipped to take action in this area because of a specifically
targeted provision. There should not be a burden on businesses that
make genuine representations in respect of testimonials, as to prove
that a testimonial is genuine and honestly used, the business should
retain both evidence of the original testimonial, and in many cases
is likely to be able to contact the person who made the testimonial
for corroboration.
2480. CAV has advised that the inclusion of a specific reference to
testimonials, combined with an evidentiary burden that a respondent
would have to discharge in court, provides a significantly more
effective means of pursuing false or misleading testimonials. This
is because testimonials are potentially extremely misleading and are
also particularly difficult to investigate if the person suggested
to have made the testimonial statement cannot be located. The
intention of this provision is not to further regulate businesses
using genuine testimonials, but to assist in enforcing the law
against businesses engaging in misleading behaviour through using
testimonial statements.
2481. Option C would have all the likely net benefits of Option B, but the
requirement on the person making the representation regarding a
testimonial to adduce evidence in support of the representation
would provide for more effective and efficient court-based
proceedings without significant costs to business. Consumers and
consumer agencies would be able to more easily ensure that the
maximum available evidence is before a court to determine whether a
representation that purports to be a testimonial or is about a
testimonial is false or misleading. Option C would also facilitate
enforcement of a prohibition that currently exists in the TP Act,
particularly in tribunals and lower courts as part of a single
national law, rather than in the Federal Court.
2482. On balance, Option C can be supported by all members of MCCA.
2483. In developing Option C regard has been had to:
. enhancing consumer protection and confidence in the
enforcement of the law concerning the use of false
testimonials by traders;
. the minimal impact that this proposal would have on
legitimate business activities; and
. the adoption of a single, national approach to the law in
this respect, and its enforcement nationally by all
consumer agencies, as agreed by all Australian
governments.
Clarifying amendment to section 53
2484. Section 53 of the TP Act has been amended a number of times since
1974, including in 1977 and 1986. The framing of the specific
prohibitions refer variously to representations that are false and
misleading, only false, or only misleading. The explanatory
memoranda also use 'false' and 'false or misleading'
interchangeably, indicating that the differences in the legislation
may not have been deliberate.
2485. There appears no reason why, over time, the additional 'misleading'
element has been introduced for later subsections of the provision,
but some of the earlier subsections remain only as prohibiting
'false' representations. As an example, a business is prohibited
from making false or misleading representations about whether goods
have spare parts available, but is only prohibited from making false
representations about whether those goods are new; there seems to be
no policy reason for this distinction.
2486. The section could be redrafted to ensure that both false and
misleading representations of the types in the section are
prohibited. While the scope of parts of section 53 would be
widened, most misleading representations would already be covered by
the section 52 prohibition on misleading and deceptive conduct, so
additional prohibitions by extending some parts of the section to
misleading representations as well as false should not provide
significant compliance burdens for business, but the potential
consequences of non-compliance would be greater.
Part D Implementation and Review
2487. In October 2008, COAG agreed to the implementation of a national
consumer law, based on the TP Act and enacted by application
legislation in each of the States and Territories. The ACL is to be
implemented by 1 January 2011, in accordance with the COAG NPA
timeline.
2488. Amendments to the TP Act to implement any of the proposals contained
in this RIS would constitute part of the implementation of the ACL,
to be effected through a Bill to be introduced in the Australian
Parliament in early 2010.
2489. In accordance with the IGA, the enforcement and administration of
the ACL, including the operation of the measures discussed in this
RIS, will be reviewed within seven years of its commencement.[75]
Do not remove section break.
Introduction
2490. The Regulation Impact Statement (RIS) set out below was prepared for
the consideration of the Ministerial Council on Consumer Affairs at
its 4 December 2009 meeting.
2491. The RIS was considered by the Office of Best Practice Regulation
(OBPR) and passed on 30 November 2009. The RIS was given the OBPR
reference number 10203.
Part A Background
Introduction
2492. This Regulation Impact Statement (RIS) addresses the case for making
a number of legislative amendments to the existing provisions of the
Trade Practices Act 1974 (TP Act), as part of their incorporation
into the Australian Consumer Law (ACL) to give effect to some of the
recommendations of the Productivity Commission's (PC) 2006 Research
Report, Review of the Australian Consumer Product Safety System
(PC Report).
2493. If implemented, the recommendations considered in this RIS would
require legislative amendments to the product safety and information
provisions and enforcement provisions of the TP Act (Division 1A of
Part V and Division 3 of Part VC of the TP Act).
2494. In May 2008, at the request of the Council of Australian Governments
(COAG), the Ministerial Council on Consumer Affairs (MCCA) developed
a model for reform of Australia's consumer product safety regulatory
framework. This decision responded in part to the PC Report and
involves:
. the Commonwealth assuming responsibility for making
permanent product bans and safety standards;
. the States and Territories retaining their power to issue
interim bans; and
. national, State and Territory agencies sharing
responsibility for enforcing the national product safety
law.
2495. MCCA agreed in principle to implement the majority of the PC's
recommendations as part of this reform process. In July 2008, COAG,
through the Business Regulation and Competition and Working Group
(BRCWG), endorsed the model agreed by MCCA for product safety
reform.[76]
2496. This RIS describes the problem which has given rise to the need for
a number of the PC's legislative recommendations, the objectives of
these reforms, options for achieving these objectives, the costs and
benefits of these options, the results of consultation undertaken on
the options, and how the proposed reform will be reviewed after
implementation. This RIS draws on the findings of the PC Report.
Background
2497. In March 2005, the then Parliamentary Secretary to the Treasurer
requested the PC to examine options for reforming Australia's
general consumer product safety system. This system consists of the
product safety provisions of the TP Act and the equivalent
provisions in the State and Territory Fair Trading Acts, along with
the administration and enforcement of those provisions and other non-
regulatory activities conducted by governments to achieve consumer
product safety objectives.
2498. The terms of reference for the research study required the PC to
assess the effectiveness of current regulatory arrangements in
addressing product safety-related market failures. The PC was also
asked to examine the direct and indirect economic and social costs
and benefits of each of the reform options presented in the 2004
MCCA discussion paper, Review of the Australian Product Safety
System.[77]
2499. The PC released its report in January 2006. The report's findings
and recommendations included options for creating more clearly
defined roles for the Commonwealth and the States and Territories
with respect to generic consumer product safety regulation (referred
to in this RIS as framework reforms). The PC also recommended a
number of specific legislative amendments to enhance the
effectiveness of the TP Act, which could be implemented
independently of the national model for product safety regulation
(referred to in this RIS as non-framework reforms). This RIS
examines the case for implementing the non-framework reforms only.
2500. If the non-framework recommendations of the PC are implemented, the
proposed legislative amendments would form part of the broader
reforms agreed to by COAG on 2 October 2008 to implement an ACL.[78]
Part B Options for Reform
2501. This RIS deals only with the non-framework legislative reforms
recommended by the PC. These recommendations relate to amendments
to existing provisions of the TP Act, which will form the basis of
the national product safety law, which will, in turn, form part of
the ACL.
The problem
2502. Responsibility for regulating consumer product safety in Australia
is shared between the Australian, State and Territory governments.
Due to the limitations on the Commonwealth's powers under the
Australian Constitution, the TP Act only applies to corporations and
to businesses engaged in interstate trade, operating in one of the
Territories, or operating through post or telecommunications
technology. This limitation does not extend to the States and
Territories. However, jurisdictional legislation only applies to
situations within the legislative reach of the Commonwealth to the
extent that it is not inconsistent with the TP Act.
2503. While the objectives of all jurisdictions are very similar, the
individual statutes vary in a number of significant ways between
jurisdictions. This can result in variations in the interpretation
and enforcement of similar legislation.
2504. The TP Act product safety provisions have not been updated
comprehensively since they were introduced in 1986. The PC noted
that there is considerable scope to improve the existing system of
regulation to make it more efficient, effective and responsive.
Given the decision of COAG to create a new national system of
product safety regulation, which is to be based on the TP Act and
implemented by the end of 2010, it is timely to consider whether the
scope and range of product safety regulation under the TP Act is
appropriate.
Objectives of government action
2505. Product safety regulation plays a necessary and important role in
identifying and removing unsafe products from the market through
recalls, bans, safety standards and public warnings. Consumers
should be able to purchase goods and services that meet their safety
expectations. Unsafe products should be readily detected, reported,
and, if necessary, removed from the market and consumers should be
able to obtain redress and compensation where appropriate.
2506. Product safety regulation should not hinder the efficient operation
of markets in safe consumer products by imposing unnecessary costs
on businesses or unduly limiting the ability of businesses to supply
products with varying price/quality levels demanded by consumers.
The primary objective of product safety regulation is to promote
consumer confidence in the market through eliminating risks that
cannot be mitigated by market forces alone and, in doing so, to
enhance demand. There are also savings in health and welfare costs
for individuals and the community associated with improved product
safety regulation, which impacts broadly across the community since
most citizens and businesses regularly engage in consumer
transactions. Accordingly, product safety regulation can be most
effective when regulators are able to act proactively in a
nationally consistent and clear manner.
The existing law
2507. Currently, all nine Australian governments have responsibility for
regulating product safety. The relevant product safety provisions
at the Commonwealth level are contained in Division 1A of Part V and
Division 3 of Part VC of the TP Act. The key regulatory provisions
within the TP Act include the power to issue warning notices on
goods (section 65B), the power to ban the supply of goods (section
65C), the power to establish product safety standards (sections 65C
and 65E), the power to establish product information standards
(sections 65D and 65E) and the power to order product recalls
(section 65F). All of these powers are vested in the relevant
Commonwealth Minister. In addition, suppliers must notify the
Minister of all voluntary safety related product recalls (section
65R).
2508. All of the States and Territories have fair trading legislation
containing product safety provisions that are similar, but not
identical to, the provisions of the TP Act. Policy making and
enforcement under these Acts is undertaken by the relevant State or
Territory fair trading agency or equivalent.
2509. The TP Act also establishes a statutory liability regime for
manufacturers and importers of defective goods. Part VA of the TP
Act provides for statutory rights of action against a manufacturer
or importer who supplies defective goods and, as a result of that
defect, a consumer suffers injury, loss or damage. A good is
considered to be defective for the purposes of Part VA if their
safety is not such as persons are generally entitled to expect.
Part VA serves a distinct, complementary purpose to Parts V and VC.
It provides an avenue to recover damages after an incident has
occurred, whereas the regulatory provisions in Parts V and VC are
designed to reduce the risk of consumer product related injury from
occurring in the first instance.
Proposed reforms
2510. There are two options to respond to the PC's recommendations:
. implement the recommendations by amending or augmenting
the established product safety legislative provisions in
the TP Act; or
. not implement the recommendations and maintain the
existing product safety provisions in the TP Act.
2511. Alternative, non-regulatory or quasi-regulatory approaches would not
be appropriate in the context of the existing legislative product
safety regulatory system.
2512. The specific non-framework recommendations of the PC, which are the
subject of this RIS, are set out below.
. Recommendation 7.1: Governments should amend consumer
product safety provisions in all jurisdictions to cover
services related to the supply, installation and
maintenance of consumer products.
. Recommendations 6.1 and 8.1: The threshold test for bans
and recalls should cover all goods of a kind which, under
normal or reasonably foreseeable conditions of use, will
or may cause injury to any person.
. Recommendation 9.3: Governments should require suppliers
to report to the appropriate regulator, products which
have been associated with serious injury or death.
. Recommendation 11.2: Governments should have the power to
undertake a recall directly where no supplier can be found
to undertake such a recall.
2513. The specific reform proposals are described in more detail in Part C
below, as part of the impact analysis.
Part C Impact Analysis
2514. In this Part, the respective costs and benefits of either
implementing the PC's recommendations by legislative means, or not
implementing them at all, are examined for each of the four
recommendations.
2515. In its report, the PC recognised the difficulty of this task, citing
the paucity of data and research available in Australia that could
assist with assessing product related injury costs across the
country and the size and nature of the problem posed by unsafe
consumer products.[79]
2516. The changes discussed in this RIS would apply to the legislative
framework for product safety actions. The actual costs and benefits
of these changes would depend on the number of regulatory actions
actually taken (that is, the number of individual bans, standards
and recalls undertaken).
2517. Currently, the Australian Government has 11 active product bans and
approximately 35 mandatory product safety and information standards
in place under the TP Act. These numbers may grow slightly with the
transfer of existing State and Territory bans and standards to the
Commonwealth under a national product safety regime, but it is
unlikely that the changes discussed in this RIS would lead to a
proportionately large increase in regulatory actions.
2518. In addition, the Australian Government's regulatory impact analysis
requirements apply to the development of mandatory standards,
including the preparation of individual Regulation Impact Statements
before any such standard can be made.
PC Recommendation 7.1
2519. The PC recommended that governments should amend consumer product
safety provisions in all jurisdictions to cover services related to
the supply, installation and maintenance of consumer products.
Background
2520. The product safety provisions in Division 1A, Part V of the TP Act
currently relate only to the safety of consumer 'goods'. Division
1A contains a comprehensive set of provisions dealing with the
publication of warning notices in relation to goods, the
establishment of mandatory safety and information standards for
goods, the banning of unsafe goods, compulsory recalls of unsafe
goods and the requirement to notify the Minister of voluntary safety
related recalls. The TP Act is silent on the safety of services.
Other consumer protection provisions of the TP Act relate to
services, including sections 52, 53 and 74, but none of these
directly deal with the provision of unsafe services.
2521. Services may be unsafe because of the nature of the service itself,
or because of the relationship between the service and a particular
good, such as the installation of looped blind cords within easy
reach of small children and infants. The PC examined existing
legislative approaches to safety of services in some States and
Territories, as well as overseas approaches. Some jurisdictions,
including Victoria, Queensland and South Australia, have consumer
product safety laws that apply to services.
2522. The PC concluded that there would be net benefits in extending the
reach of product safety legislation in some situations to cover the
safety of services. This implies that governments would have the
power to issue warning notices on services, to introduce safety
standards for services, to introduce information standards for
services and to ban certain services considered unsafe. The PC
concluded that these powers should only apply to limited situations
relating to the supply, installation and maintenance of consumer
goods, as the provision of these services have the greatest
potential to render an otherwise safe good unsafe.
Option A: Amend the TPA to extend the consumer product safety
provisions to services related to the supply, installation and
maintenance of consumer goods
2523. Implementation of this recommendation would be achieved by
amendments to the existing product safety provisions of the TP Act
to allow the Minister to publish warning notices in relation to
services, to prescribe mandatory safety and information standards
for services, and to ban certain unsafe services where appropriate.
The administrative provisions of the TP Act, which relate to the
existing product safety provisions, such as information gathering,
review and penalty provisions, would also apply in respect of
services.
2524. This amendment would allow the national product safety law to be
applied fully to situations where there is an underlying consumer
product which, although in itself is not dangerous, may pose a
danger to sections of the community as a result of how the product
is supplied, installed or maintained.
Costs and benefits to suppliers
2525. Suppliers may incur higher compliance costs in ensuring that their
product related service meets any relevant safety or information
standards introduced. Suppliers may also lose business where a
service is banned. There would be initial transition costs
associated with understanding new requirements and implementing new
systems and processes, with ongoing costs associated with meeting
new standards, if any. The nature of these costs would be similar
to those already imposed by the regulation of goods.
2526. However, evidence from Australian jurisdictions where product safety
regulation already covers services indicates that the number of bans
or mandatory standards for services would be low compared with bans
and standards for goods. Further, standards introduced by the
Commonwealth in respect of goods are supported by regulatory impact
analysis, including consideration on a case-by-case basis of the
compliance costs, and a similar process would apply before a new
standard was to be introduced for services. The PC also noted in
its report that services which pose the greatest consumer hazards
are already covered by sector-specific regulatory arrangements (that
is electrical product and equipment safety) and would not be likely
to be affected by this amendment.[80]
2527. The relatively narrow scope of the PC's recommended amendment (that
is to services related to the supply, installation and maintenance
of consumer products) would also contribute to minimising compliance
costs for businesses. An alternative suggested by the PC is to
extend the product safety provisions to cover all services
(including those not related to a good). Currently, some State and
Territory product safety laws extend to the safety of all services.
However, evidence gathered by the PC indicated that in practice
these provisions have not been applied to services unrelated to the
supply of consumer goods.[81]
Costs and benefits to consumers
2528. Although impossible to quantify, consumers would benefit from the
potential for government action in respect of unsafe services, when
justifiable bans are introduced; and improved safety of services,
when mandatory service standards are introduced. These measures
have the potential to reduce consumers' exposure to unreasonable
risks of injury from unsafe services relating to consumer products.
Examples of potentially unsafe services include the unsafe
installation of blind and curtain cords which create a strangulation
hazard for young children, the installation of highly flammable
material as insulation in roof cavities, and the incorrect
installation of heat lamps in ceilings creating a fire hazard.
There have been a number of avoidable deaths of young children in
Australia from strangulation on incorrectly installed blind and
curtain cords. The PC noted there was a paucity of data relating to
injuries and property losses arising from unsafe services.
2529. In his submission on the consultation RIS, Dr David Cousins noted
that not extending coverage to all services would reduce protection
for consumers in those jurisdiction where product safety laws
currently cover services, such as in Victoria, Queensland and SA.
Myer, on the other hand, favoured limiting coverage to consumer
product related services and not all services.
2530. While it is acknowledged that not applying the product safety
requirements to all services, including non-product related services
like tourism and repair services, may potentially leave consumers of
those services exposed to safety risks, some of these service
sectors are currently subject to industry-specific regulation in the
States and Territories. Extending the product safety requirements
to cover product related services would offer consumers with
protection which was previously absent at the Commonwealth level
under the TP Act. It should also reduce the business compliance
burden by limiting the requirements to those services which are
related to the supply, installation or maintenance of a consumer
product, rather than to all services.
2531. The benefits to consumers would potentially be offset by any
corresponding increase in the prices of services or lack of
availability of services or service providers. The prices of
services may be pushed up where service providers are required by
law to increase the time or effort to ensure that a service is
provided lawfully. However, these effects would be limited to only
a few categories of services which are capable of posing risks to
consumers. Experience with safety of services regulation in those
jurisdictions where it currently exists indicates that this power
would not be used often.
Costs and benefits to governments
2532. The PC noted that the number of instances of regulatory action in
relation to services is likely to be relatively limited.
Accordingly, costs to government associated with considering and
implementing regulatory interventions in respect of safety of
services would be small compared to the costs of regulating the
safety of goods. Evidence of the infrequent use of safety of
services powers in those jurisdictions that have them supports this
view.[82]
2533. Selective and soundly-based use of this power would meet the
reasonable expectations of consumers that regulators can act to help
ensure the safety of services.
Option B: No change to the TPA
2534. Currently, Division 1A of Part V of the TP Act relates only to
product safety and product information in respect of goods. Not
amending the product safety provisions in the TP Act would mean that
the safety of goods only would be regulated. In the absence of any
amendments, consumer regulators would not be able to take action on
behalf of consumers in relation to safety of services issues.
Costs and benefits to suppliers
2535. To not introduce powers to issue warning notices, bans or mandatory
standards for services related to the supply, installation and
maintenance of consumer products (that is, to maintain the status
quo) would essentially be cost neutral to suppliers. Suppliers of
services would continue to make their own assessments and decisions
about the safety of their services, and the current sanctions and
remedies in place (sections 52, 53 and 74 of the TP Act) would
continue to apply.
2536. Suppliers may benefit from being able to provide and perform
services to their own standards (provided they meet consumers'
perceptions of an acceptable standard) without the risk of a ban on
the service, even if it is unsafe. However, suppliers may be
subject to potential legal action if injuries or property losses
arise. The common law duty of care in tort and rising insurance
premiums are also strong deterrents to potential providers of unsafe
services.
2537. Maintaining the existing system, within a national product safety
regime, would lead to reduced coverage in some jurisdictions across
Australia. State and Territory product safety legislation that
currently applies to services would need to be narrowed in order to
apply the national law.
Costs and benefits to consumers
2538. In the absence of a power to regulate the safety of services,
consumers would need to continue to rely of section 74 of the TP
Act, which implies a warranty into contracts that services will be
performed with due care and skill, as well as actions under the
common law. However, because section 74 is an implied term in
consumer contracts, consumers can only rely on private court action
to recover any loss or injury caused as a result of a breach of this
term, rather than an action under the TP Act brought by the ACCC.
2539. Some protection is also provided to consumer services under sections
52 and 53 of the TP Act, which prohibit misleading or deceptive
conduct and false or misleading representations, although these
provisions do not directly address underlying safety concerns with
services.
Costs and benefits to governments
2540. Not extending the product safety powers to cover services would be
cost neutral to governments.
2541. While governments would avoid the costs associated with
investigations, policy development, compliance strategies and
enforcement actions relating to unsafe services, without these
amendments regulators would not be able to respond in an
appropriately targeted way to instances of services-related deaths
and injuries. Consumer criticism could also be expected if laws did
not meet the reasonable expectation of consumers of protection from
unsafe service delivery. Although governments could still take
action regarding the underlying product, such action may be poorly
targeted where the safety of the product is compromised by the
performance of a related service.
Conclusion
2542. While recognising that there were limited instances of safety
problems related to services which were not already addressed by
specific safety regimes, the PC concluded that there would be an
overall benefit from extending the product safety provisions of the
TP Act to cover services related to the supply, installation and
maintenance of consumer goods.
2543. Given the effective use of similar powers within some Australian
jurisdictions, it would be preferable to adopt Option A and
incorporate the PC's recommended amendment into the national product
safety legislation.
PC Recommendations 6.1 and 8.1
2544. The PC recommended that the threshold test for bans and recalls
should cover all goods of a kind which, under normal or reasonably
foreseeable conditions of use, will or may cause injury to any
person.
Background
2545. Currently, the product safety provisions of the TP Act permit the
Minister to ban or recall goods which are unsafe due a defect in the
product itself. It is unclear whether the Minister may ban or
recall products that pose a significant threat to consumer safety as
a result of their misuse. Some products pose a significant hazard
to consumers not because they are defective but because they have a
high probability of causing injury through the behaviour of the
user. For instance, where a person uses a product in a manner
which, whilst not its normal or intended use, nevertheless should
have been reasonably foreseen, then the product should be supplied
in a form that can remain safe in circumstances of their 'reasonably
foreseeable use'. An example of this is a child playing with a toy
and putting it in his mouth.
2546. The PC argued that the concept of 'reasonably foreseeable use' is
already part of the regulatory environment in some Australian
jurisdictions (Victoria, New South Wales and Western Australia) and
is embedded in common law. The PC viewed such amendments as
materially contributing to reducing injuries associated with the use
of consumer products. The PC has estimated that the vast majority
(generally greater than 90 per cent) of consumer product related
deaths and serious injuries are caused by the behaviour of the user
of the product and not because the product is defective.
Incorporating this concept into product safety regulation would not
mean that the number of bans and standards would increase
proportionately.
2547. Implementation of this recommendation would expressly recognise
product hazards arising in the course of a reasonably foreseeable
use of a consumer product to be appropriate grounds for introducing
a ban on the supply of a specific product or to order the recall of
the product.
Option A: Amend the TPA to apply the recommended threshold test
to bans and recalls
2548. The concept of 'reasonably foreseeable use' would be expressly
included in the threshold test for the exercise of the power to ban
goods (section 65C), to order the recall of goods (section 65F) or
to issue a warning notice in respect of a good (section 65B). The
Minister would have the power to ban or recall goods which are
assessed as unsafe in the course of their intended use or
'reasonably foreseeable use'. Such circumstances may arise if a
consumer uses a product in a manner which, while not the primary or
normal use of the product, should nevertheless have been foreseen,
and the product causes an injury as a result.
2549. The amendment would ensure that the ban and mandatory recall powers
are consistent with the 'duty of care' principle in common law
negligence and the safety standard embodied in the Part VA (Product
Liability) of the TP Act.[83]
2550. Both the Australian Toy Association (ATA) and a confidential
submission on the consultation RIS noted that currently, under the
TP Act, the Commonwealth Minister is able to make a product ban or
recall in circumstances where goods 'will or may cause injury', and
viewed this was broad enough to cover situations of consumer misuse.
While this may be the case, in the process of amending the TP Act
there would be utility in taking the opportunity to clarify in the
law that the Minister has the ability to introduce a ban or recall
not only in circumstances where a normal or intended use of a
product may cause injury, but also in situations where a reasonably
foreseeable misuse of a product may result in injury.
Costs and benefits to suppliers
2551. The PC noted in its report that 'the same preventative measures that
[suppliers] would take to avoid potential [product] liability suits
would also protect them from government action to withdraw their
product from the market'.[84] These measures include knowing any
safety risks associated with their products, reducing such risks
through product design, research and testing, and providing adequate
instructions and warnings to address any residual risks. Few
product bans have been made, and the test of 'reasonable foreseeable
use' proposes a fairly limited expansion in the circumstances of
when the government can conduct a ban or recall on unsafe goods.
2552. However, suppliers may incur additional costs if uncertainty about
the definition of 'reasonably foreseeable' misuse leads to
overcautious approaches to product design and distribution. A
confidential submission on the consultation RIS considered that
'reasonably foreseeable' would not create certainty for consumers
and businesses, and that suppliers could incur additional costs if
an 'over zealous approach' is taken by the regulator. This concern
could be mitigated through clear legislative drafting and timely
guidance issued by regulators to suppliers. Further, the courts are
familiar with the concept of 'reasonably foreseeable' in relation to
the requisite 'standard of care' in common law negligence actions.
Costs and benefits to consumers
2553. Consumers would benefit from improved product design, product
information and product warnings that would result from suppliers'
knowledge that their product would be banned or recalled if it will
or may cause injury under conditions of 'reasonably foreseeable
use'.
2554. Consumers may face some reduction in the availability of consumer
products resulting from price increases that may be passed by
suppliers who incur additional costs in design and manufacture of
their products, or in educating consumers about appropriate uses of
their products. This may be a particular disadvantage for consumers
that use existing products strictly in accordance with their normal
or intended use.
2555. Amending the threshold test for bans and recalls to incorporate the
concept of 'reasonably foreseeable' use or misuse would provide the
Commonwealth Minister with the ability to introduce a ban or recall
products in appropriate circumstances. In itself, this amendment
would not capture a large number of products, such as the improper
use of kitchen appliances, should it not be required.
2556. This was a concern expressed by Myer in its submission on the
consultation RIS. Myer also suggested limiting the recommendation
to children, since adults should be expected to assess the risks
before using products in an unintended manner. Limiting the scope
of the threshold test would restrict the flexibility of the Minister
to make bans and recalls in situations where misuse of a particular
product is reasonably foreseeable and, in the process, reduce
consumer protection.
Costs and benefits to governments
2557. This recommendation would allow regulators in all jurisdictions to
take appropriate action when a product poses an unacceptably high
risk to consumer safety as a result of its 'reasonably foreseeable
use'. Regulatory actions in respect of reasonably foreseeable use
would be likely be in addition to the total product safety actions
(bans, recalls and mandatory standards) currently undertaken.
2558. Regulators may also face increased expectations from consumers to
act where goods are associated with injuries or property damage.
Such expectations would need to be managed through clear guidance to
suppliers and consumers on the interpretation of 'reasonably
foreseeable'.
Option B: No change to the TPA
2559. Currently, Division 1A of Part V of the TP Act empowers the Minister
to declare specific goods to be unsafe, and hence ban their supply
or order the supplier to recall the goods, if it appears to the
Minister that the goods 'will or may cause injury to a person'. The
'will or may cause injury to a person' test allows some latitude in
determining whether a product poses a danger. The phrase 'may cause
injury' calls for a judgement to be made in respect of likelihood or
probability that an injury event may occur with a causal link to a
particular consumer product. In the absence of any amendments, such
judgements would continue to be made, drawing on any available
injury evidence and the experience and judgement of policy advisors
and the Minister. However, it would not be clear that the
reasonably foreseeable misuse of a product constitutes sufficient
grounds for a ban or recall.
Costs and benefits to suppliers
2560. Suppliers would benefit from the status quo by continuing to make
their own assessments of the safety of their products under normal
or other foreseeable conditions of use, and also make their own
judgments about the level of information and warnings to provide
with their products. Further, maintaining the status quo would be
cost neutral to suppliers, who would be exposed to the same product
related injury risks (and consequential product liability claims or
other legal action), and the same regulatory intervention risks that
currently exist.
Costs and benefits to consumers
2561. In the absence of including 'reasonably foreseeable use' in the
threshold test for bans and mandatory recalls, regulators may not be
able to act when a product poses a danger when used in ways other
than its primary purpose. This may lead to the exposure of
consumers, particularly vulnerable or disadvantaged consumers, to
unreasonable risk of injury. A related cost to consumers would be
that suppliers may be less motivated to provide clear use
instructions and warnings with their products, which again may
result in a small increase in injuries.
Costs and benefits to governments
2562. Maintaining the status quo would be cost neutral for the government.
Conclusion
2563. The PC concluded that there were net benefits in revising the
threshold test for bans and compulsory recalls under the TP Act to
explicitly allow for 'reasonably foreseeable use'. Adopting Option
A and making the PC's recommended amendment would contribute to
reducing injuries associated with the use of consumer products.
2564. Overseas experience where regulators have the power to ban or recall
products subject to 'reasonably foreseeable use' indicates only a
small number of requests for regulators to take action. Within
Australia, the Victorian, NSW and WA agencies already have the power
to ban or recall products because of their foreseeable use.
PC Recommendation 9.3
2565. The PC recommended that the Government amend the TP Act to require
suppliers to report products which have been associated with serious
injury or death.
Background
2566. Currently, the TP Act requires that suppliers must report to the
Minister, within two days, when they undertake a voluntary product
recall on safety grounds. State and Territory legislation also
contains reporting requirements to State regulatory agencies.
Before making a decision to take action as significant as a
voluntary recall, a supplier would usually undertake extensive
internal investigations, which may take some time to complete.
Currently, there are no other formal requirements for suppliers to
report potential or actual issues with the safety of their products
to product safety regulators. This lack of early reporting by
businesses reduces the opportunity for regulators to take timely
actions to protect consumers from unsafe products, which may lead to
an unsafe good remaining on the market for a longer time than would
otherwise be the case.
2567. The PC examined the case for requiring businesses, in certain
circumstances, to provide information on the safety of products they
supply, such as when a consumer makes a complaint directly to the
supplier. This would give regulators access to more timely
information about potential safety hazards.
2568. The PC recommended creating a new requirement for a supplier to
report to the Minister if they become aware that a product they have
supplied has been associated with a serious injury or death. The PC
favoured a definition of serious injury as any injury requiring
admission to a hospital as this would provide a clear, objective
trigger for the reporting requirement.[85] Consistent with the
current reporting requirement for voluntary recalls, a time limit of
two days would be appropriate for reporting such events to the
Minister after the supplier becomes aware of the injury or death.
2569. There would be no requirement for the supplier to substantiate the
report or to admit that their product was either at fault or even a
contributing factor. The product need not be the direct cause of
the serious injury or death or the only cause; it is only necessary
for the product to be 'associated' with the injury or death to
trigger the reporting requirement. Consumer behaviour and/or
environmental factors are often contributing elements to product
related deaths or injuries.
2570. An alternative suggested by the PC would be to require businesses to
report any product associated with a successful product liability
claim or multiple out-of-court settlements. This option has similar
benefits and costs of the obligation to report products which have
been associated with serious injury or death.[86] While this option
would provide governments with some useful information, it is
unlikely to significantly improve the responsiveness of the current
regime and, thereby, to reduce the incidence of consumer injury.
Often it would take some time after the consumer is injured before a
product is the subject of a successful liability claim or out-of-
court settlement. During this period, it is likely that regulators
would have discovered the danger of the product from other sources.
Option A: Introduce a new legislative requirement for suppliers
to report products associated with serious injury or death
2571. To implement this recommendation a new mandatory reporting
requirement would be imposed on suppliers to report to the Minister,
in writing in a timely manner, when they become aware that a product
they have supplied has been associated with the serious injury or
death of a person.
Costs and benefits to suppliers
2572. The policy objective in introducing a mandatory reporting
requirement is to ensure that regulators are informed about serious
injuries and fatalities that could be related to a defect or
characteristic in a product in the market. The new information
would enable regulators to conduct further investigations to
identify emerging hazards or risky products, to take appropriate
regulatory action (if any) to remove the product from the market,
and to help prevent similar injuries or fatalities from arising in
the future.
2573. Introducing this additional reporting requirement would lead to
suppliers incurring compliance costs associated with forming
judgements about what information needs to be reported, including
establishing internal reporting mechanisms to ensure that
information subject to the reporting requirement is identified in a
timely way. However, provided that the reporting requirement is
framed with clearly designed triggers for reporting information, the
compliance costs of meeting this requirement would be low. The cost
of producing and providing each report to government would be
straightforward and should be relatively inexpensive.
2574. A confidential business submission raised concerns with how the
reporting requirement would apply in relation to motor vehicles. It
noted that the nature of motor vehicle usage means that motor
vehicles may be associated with cases of serious injuries or
fatalities, which would impose significant additional costs on
participants in the automotive supply chain to comply with the
requirement. Specifically, the submission raised concerns with how
'associated with', 'becomes aware' and 'serious injuries' would be
defined in the law. The submission pointed out that given the
nature of consumer usage of motor vehicles and that vehicles are
invariably involved in accidents requiring hospital admission,
reporting every accident would be required even if the vehicle was
not a contributing factor to the accident.
2575. The ATA also expressed concerns that the 'associated with' test
could be too broad and would carry overly onerous burdens on
suppliers and government.
2576. In drafting the legislation, the reporting requirement (including
the term 'associated with') would be clearly framed to not apply to
situations where the injury or fatality is clearly not related, or
very unlikely to be related, to a defect in the product or to a
product failure, but instead could, for instance, have arisen by
user behaviour, environmental factors (such as the weather),
external influences (such as alcohol or another person) or a
combination of these. For example, many road accidents are not
related to a defect in motor vehicles, while most sporting injuries
are unrelated to sporting equipment, clothing or footwear that was
being used at the time of the injury. The ATA, for instance, citied
the example of injury caused by tripping over a toy, while the Motor
Trades Association of Australia (MTAA) observed that many motor
vehicle accidents may have resulted from operator error and that the
safety of the vehicle was not in question.
2577. That said, in situations where there is a possibility that an
accident may be related to a defect in the product or to a product
failure, such as with motor vehicles, sporting equipment or
footwear, then a supplier of such product would need to report this
to the regulator. There would be potentially significant regulatory
burdens of not framing the requirement tightly, including the term
'associated with'. These burdens would fall on suppliers in terms
of compliance costs, as well as regulators in terms of
administrative costs.
2578. One submission on the consultation RIS also pointed out that the
automotive industry currently operates under a voluntary code of
practice, developed by the Federal Chamber of Automotive Industries,
which imposes requirements and procedures for the conduct of
automotive product safety recalls.
2579. There were also submissions received on the consultation RIS on this
recommendation expressing confusion over how the trigger of 'becomes
aware' would apply in practice, and if information received
indirectly, such as through the media, would need to be reported.
2580. For instance, the ATA queried whether the reporting requirement
would be triggered if the information became known to an employee or
to more senior staff. In drafting this requirement the law would be
clearly framed to make it clear that a supplier would be required to
report every time they receive information (that is 'becomes aware')
that a product has been 'associated with' a serious injury or
fatality, regardless of the source of that information. This
includes receiving information from a medical, insurance or media
report or from a direct consumer complaint to a call centre or a
customer service agent.
2581. There would be no requirement on suppliers to investigate or monitor
the safety of products they supply. Rather, the requirement would
be to report once the supplier 'becomes aware' that their product
has been 'associated with' a death or serious injury. This would
avoid imposing additional compliance burdens for business. In
addition, only being required to report to the one (Commonwealth)
Minister under the national consumer law arrangements (and not being
required to also report to State or Territory authorities where the
product is sold in more than one jurisdiction) would help minimise
compliance costs.
2582. Some of the submissions received on the consultation RIS also
expressed confusion about who in the supply chain would be required
to report to the regulator; for instance, the retailer,
manufacturer, distributor or repairer of the relevant product. The
reporting requirement would require all participants in the supply
chain of the associated product to report the required information
to the regulator.
2583. The ATA, for example, noted that this would be burdensome for
suppliers and could result in multiple reporting of the same
incident. While it is acknowledged that this could result in a
duplication of information being reported and could impose
additional compliance costs for suppliers and administrative costs
for regulators, to prevent similar accidents in future, it is
important that adequate information is communicated to the
regulator, even if it is reported more than once and from a
different source.
2584. In circumstances where a particular supplier (such as a small
trader) is no longer operating, to avoid the situation of
information about potentially risky products not being reported to
the regulator, all suppliers should be required to report the
necessary information even if it may result in duplication.
2585. Adopting the PC's definition of 'serious injury' as those injuries
requiring hospital admission could provide a relatively clear-cut
trigger for the reporting requirement and should reduce the
compliance burden for business. The submission on the consultation
RIS from Mr John Wood stated, however, that in more regional areas
and in territories, hospital admissions may not be an option and
treatment by a doctor or nurse may be the only practical recourse.
To address this point, careful consideration would need to be given
in drafting the law to ensure that injuries considered 'serious'
enough to warrant reporting to the regulator, but that do not
necessarily result in hospitalisation, are reported.
2586. The ATA considered that the reporting time frame of the proposed two
days was very short and that more time should be provided for
suppliers to verify information and investigate incidences before
reporting . The time frame to report the required information to
the regulator would commence once the supplier 'becomes aware' that
one of its product is 'associated with' a serious injury or death.
This would exclude the time for suppliers to verify whether they
should report certain information to the regulator. Further,
suppliers would not be required to investigate the products they
supply.
2587. Resulting regulatory or other action taken by government in response
to these notifications, such as a recall, may generate costs for
business, but such action would only be taken after a thorough
product risk assessment and when clearly necessary to protect
consumers. All new product safety standards introduced by the
Commonwealth in respect of goods must be supported by regulatory
impact analysis on a case-by-case basis. Information received by
the Commonwealth under the reporting requirement would be subject to
the information protection requirements in Part XII of the TP Act.
2588. Suppliers may benefit from this reporting requirement where any
necessary remedial action is negotiated with regulators and such
action reduces the supplier's future product liability exposure.
Costs and benefits to consumers
2589. There would be no identifiable costs flowing to consumers from
introducing this reporting requirement.
2590. Consumers would benefit from the potential for improved
responsiveness by regulators to emerging product hazards. Unsafe
products would be more readily identified and appropriate action
would be taken to remove product hazards from the market or to warn
consumers of the risks associated with the use, or misuse, of a
product.
2591. Costs and benefits to governments
2592. An additional reporting requirement may place significant
enforcement obligations on regulators and would be likely to require
a substantial administrative infrastructure to process and assess
the reports. Such obligations would include acknowledging reports,
capturing and analysing data, conducting appropriate product safety
investigations and assessments, negotiating with suppliers where
necessary, exchanging information and liaising with other
regulators, and undertaking regulatory or non-regulatory
interventions where justified. These obligations may also require
additional resources for regulators. Further, there could be
duplication and multiple reporting of the same information relating
to one product by various sources throughout the supply chain
(retailers, manufacturers and importers). It is difficult to
ascertain the number of unique product related incidents that would
be reported under this requirement.
2593. Government would benefit from the improved quality and nature of
product data received, which would allow regulators to improve
responses to product safety issues. Government would also benefit
from implementing measures towards addressing reasonable consumer
expectations about its role in regulating product safety.
Option B: No change to the TPA
2594. Currently, the only statutory reporting requirement for suppliers in
respect of product safety relates to voluntary recall actions
initiated by the supplier under section 65R of the TP Act. Section
65R provides that where a corporation voluntarily takes action to
recall goods because the goods will or may cause injury to any
person, the corporation must, within 2 days of taking that action,
report this to the Minister. All notified recalls are posted on the
Product Recalls Australia website, thus making recall information
available to all interested parties, including consumers, regulators
and suppliers.
Costs and benefits to suppliers
2595. No change to the product safety legislative reporting requirements
is expected to be cost neutral to suppliers. No required reporting
of deaths and injuries associated with consumer products would
subject suppliers to the same product liability risks that they are
currently subject to.
2596. The benefits to suppliers of not having to report products that have
been associated with serious injury of death would include avoiding
minor information collection and reporting costs, and possibly
avoiding the risk of regulatory action which may impact on the
continued supply of a product.
Costs and benefits to consumers
2597. Consumers would continue to rely on the ability of regulators to
gather intelligence on unsafe products though existing mechanisms,
including consumer complaints to regulators, media reports, injury
data research, supplier liaison and general market surveillance.
However, suppliers often have better information than regulators
about the safety of their products and market incidents relating to
their own products.
2598. There would be no identifiable benefits to consumers of maintaining
the status quo. Maintaining the status quo may prevent any
opportunity for realising the potentially significant safety
benefits from introducing a mandatory reporting obligation.
Costs and benefits to governments
2599. Regulators would continue to rely on secondary sources for
information about the incidence of consumer product related
accidents.
Conclusion
2600. Following an analysis of costs and benefits and having regard to
possible disincentives if reporting requirements were too onerous,
the PC concluded that there were benefits to requiring suppliers to
report to the government products (supplied by them) which have been
associated with serious personal injury or death, and that non-
compliance with the requirement should carry appropriate financial
penalties.
2601. The PC's view was that a tightly defined mandatory reporting
requirement should limit business compliance costs and was likely to
be a cost effective way of enhancing the ability of regulators to
identify the most hazardous consumer products early. Nonetheless,
the PC noted the uncertainty of the potential benefits and costs
and, accordingly, that the operation of this requirement would need
to be reviewed within three years after implementation.[87]
2602. The potential exists to improve consumer product safety by adding a
hazard identification system to the data sources available and
providing governments with more timely and comprehensive information
to improve the responsiveness of the regulatory regime for injury
prevention. It also encourages businesses to be more mindful of
safety in the design, production and marketing of their products.
2603. Submissions received on this recommendation were broadly supportive
of the policy objective for introducing a mandatory reporting
requirement, although many expressed concerns about how the
requirement would apply in practice and commented on the lack of
clarity in how the consultation RIS presented the requirement. It
is acknowledged that, in respect of this recommendation, the
consultation RIS did not provide detail on the intended scope and
application of the reporting requirement.
2604. In drafting the product safety provisions and the reporting
requirement, the framing of the requirement would be more clearly
defined to clarify for suppliers the 'triggers' for the requirement,
including:
. under what circumstances the requirement would apply;
. the information that would be required to be reported;
. the time in which information would need to be reported;
and
. those who would be subject to the requirement.
2605. A balance would need to be struck between framing the reporting
requirement tightly to minimise the potential for imposing
significant regulatory burdens on both suppliers and regulators; and
ensuring there is enough flexibility in the scope of the requirement
to ensure that adequate information would be reported to regulators
to take appropriate regulatory action (if required) to prevent
future accidents.
2606. The additional regulatory burdens would potentially be offset by the
corresponding benefits of strengthening consumer protection in the
area of product safety, which would include ensuring that adequate
information is reaching regulators for the purposes of investigating
potentially dangerous products, and taking appropriate action in
order to prevent similar injuries or deaths from occurring in the
future.
PC Recommendation 11.2
2607. The PC recommended that the Australian Government amend the TP Act
to give express power to the government to undertake a recall
directly where no supplier can be found to undertake such a recall.
Background
2608. The PC considered the issue of 'orphan goods', that is, goods on the
market for which a supplier (such as a manufacturer, importer or
wholesaler) cannot be identified or no longer exists as a legal
entity. Instances have arisen in the past where such goods are
found to be unsafe and a recall would clearly be justified.
However, there is no identifiable supplier responsible for the
product that could undertake a recall. The PC recommended that, in
such circumstances, governments should have the express power to
undertake appropriate recall action to remove the hazardous product
from the market. Such recall action would be expected to be
conducted by the ACCC, and could include appropriate notices to
consumers about the defective goods, the hazards presented and
procedures for the safe disposal of the goods.[88]
Option A: Amend the TPA to give the regulator power to
undertake a recall where no supplier can be found
2609. A new express power would be included in Division 1A of Part V of
the TP Act to allow the Minister (through the ACCC) to conduct a
product recall in cases where a recall is considered necessary
because of the potential or actual safety risk of a product, but a
supplier for the product does not exist or cannot be identified to
conduct the recall. The nature of the recall action that would be
undertaken would be determined on a case-by-case basis.
Costs and benefits to suppliers
2610. The express power for the government to conduct a recall would only
be exercised where a supplier (that is manufacturer, importer or
wholesaler) cannot be found or no longer exists, and the recall is
expected to have no impact on upstream suppliers (manufacturers or
importers).
2611. Downstream suppliers, such as retailers, would benefit from the
government managing the recall process rather than leaving
individual suppliers to liaise with customers. Suppliers may also
derive some benefit from the expected increase in consumer
confidence in the safety of products in the market generated by such
a power.
Costs and benefits to consumers
2612. There would be no identifiable costs to consumers by providing the
government with an express power to conduct a recall in
circumstances where a supplier cannot be identified.
2613. Consumers would benefit from the greater flexibility of regulators
to provide a place for consumers to return products that would need
to be recalled, particularly where disposal of those products may be
hazardous. A confidential submission on the consultation RIS noted
the benefits for consumers of seeking to achieve product safety
irrespective of the ongoing presence of the supplier.
Costs and benefits to governments
2614. The Government would bear the costs of conducting the product recall
where a supplier cannot be identified or no longer exists as a legal
entity. These costs could be managed on a case-by-case basis
through the conditions and arrangements set by the Government for
conducting the recall, commensurate with the effective removal of
the defective product from the market. However, there may be mixed
results when a large percentage of products remain in consumer hands
after the recall process.
2615. In such circumstances, significant government resources may be
required to undertake the recall, with no certainty regarding the
success of the recall. The decision to undertake a recall would
consider on a case-by-case basis the potential outcomes and the
associated costs and benefits.
Option B: No change to the TPA
2616. The absence of an express power to conduct a recall means that the
Government would need to rely on existing tools such as a warning
notice (under section 65B of the TP Act) and/or media releases to
alert consumers to the product hazard and provide advice on the
appropriate action to avoid potential associated injuries.
Costs and benefits to suppliers
2617. The absence of an express power for the Government to conduct a
recall would leave retailers and other downstream suppliers with the
existing uncertainty of how to deal with products they have supplied
for which there is some consumer demand for a recall action,
possibly in response to a warning notice issued by a regulator.
Costs and benefits to consumers
2618. The costs to consumers of no express power for the Government to
conduct a recall are associated with injuries which may arise due to
a defective product remaining on the market because no supplier
exists to recall it. There would be no readily identifiable
benefits to consumers of not including an express recall power.
Costs and benefits to governments
2619. By not recalling defective goods in the absence of an identified
supplier, governments could be criticised for failing to meet the
reasonable expectations of consumers of protecting from products
which will or may cause injury.
Conclusion
2620. The PC considered the lack of an express power for governments to
conduct a recall in circumstances where no supplier could be
identified as a significant gap in the current range of available
powers to effectively address hazardous products and protect
consumers from continuing exposure to such hazards.
2621. There is a likely qualitative net benefit to consumers and
governments of introducing this power since most of the costs of
this measure would be borne by government and these costs can be
managed on a case-by-case basis. On this basis, Option A is to be
preferred.
Consultation
PC consultation
2622. Consumer product safety regulation is of broad interest within the
community, including suppliers, consumers and regulators at all
levels of government. The PC undertook extensive public
consultation in developing the recommendations discussed in this
RIS, including through the publication of a draft report. A brief
summary of participants' views on the proposed areas for reform is
provided below. Further information about the PC's study processes,
including transcripts of hearings and copies of written submissions,
is available at www.pc.gov.au.
Amend the threshold test for bans and recalls to cover goods of a
kind which, under normal or reasonably foreseeable conditions of
use, will or may cause injury to any person.
2623. There was considerable support from consumer groups and the ACCC for
broadening the threshold test to explicitly cover foreseeable use
and not just normal or intended uses for a product.
2624. Some participants, mainly industry and business groups, did not
believe any change to the current wording was warranted and that the
current system had been working well. There were also some concerns
about the uncertainty in the definition of 'reasonably foreseeable
misuse', and the potential that action could be taken too frequently
or in an unnecessary manner to impose substantial costs on business.
Amend the consumer product safety provisions to cover services
related to the supply, installation and maintenance of consumer
products.
2625. There was some support from consumer groups and within government
for a limited extension of the TP Act to cover particular ancillary
services that have a bearing on the safety performance of a product.
Amend the TPA to require suppliers to report products which have
been associated with serious injury or death.
2626. Some participants considered the current reporting requirements
(through voluntary recalls) were sufficient and working effectively
to provide for appropriate reporting of proven identifiable and
significant risks, and that any further requirement would be onerous
on business.
2627. On the other hand, consumer groups were concerned that maintaining
the status quo through voluntary reporting would continue to result
in critical safety information not reaching the public.
Amend the TPA to give the government express power to undertake a
recall directly where no supplier can be found.
2628. Consumer groups argued for the government to be more involved during
the recall process. Some participants noted incidents where the
hazard justified a recall but there was no supplier to be found to
recall the defective good, a problem identified in the electrical
products area.
MCCA and SCOCA consultation
2629. Prior to the PC study process, during 2004 MCCA undertook its own
public review of product safety regulation. A number of the
recommendations of the PC's report were also examined in the MCCA
review. Further information about MCCA's study, including copies of
written submissions, is available at www.consumer.gov.au.
2630. A consultation RIS on the proposed areas of reform (based on the
PC's four non-framework legislative recommendations), was released
by the Standing Committee of Officials of Consumer Affairs (SCOCA)
on 16 November 2009 for public comments. A total of seven
submissions were received on the consultation RIS. Further
information about the consultation RIS, including copies of written
submissions, is available at www.treasury.gov.au.
2631. The majority of submissions on the consultation RIS supported
adopting Recommendation 11.2 (direct recalls by the Government where
the supplier cannot be found), while most were in support of
Recommendations 6.1 and 8.1 (amending the threshold test for bans
and recalls to cover reasonably foreseeable use) and Recommendation
7.1 (extending the product safety provisions to product related
services). Although all submissions agreed with the policy for
introducing a provision similar to Recommendation 9.3 (mandatory
reporting requirement), some expressed concerns with how the
proposed reform would operate in practice in terms of clarity of its
intended scope and application.
Part D Implementation and review
2632. In October 2008, COAG agreed to create a national consumer law,
based on the TP Act and enacted by application legislation in each
of the States and Territories. The national consumer law is to be
implemented by the end of 2010. The national consumer law will
incorporate implementation of the product safety reforms agreed by
COAG in July 2008.
2633. Any amendments to the product safety provisions along the lines
outlined in this RIS would form part of legislation to implement the
national consumer law. The operation of these provisions would be
reviewed within five years of their being made, in accordance with
the Government's usual policy for reviewing all new regulations made
within five years.
2634. The PC recommended that a review of the mandatory reporting
provisions (Recommendation 9.3) should be conducted within three
years of its introduction. This review would provide an opportunity
to consider whether the reporting requirement should remain, and if
so, whether to refine its scope, timing and form after some
practical experience of its operation.
Do not remove section break.
Introduction
2635. The Regulation Impact Statement (RIS) set out below was prepared for
the consideration of the Ministerial Council on Consumer Affairs at
its 4 December 2009 meeting.
2636. The RIS was considered by the Office of Best Practice Regulation
(OBPR) and passed on 30 November 2009. The RIS was given the OBPR
reference number 10953.
Part A: Background
Introduction
2637. This Regulation Impact Statement (RIS) has been prepared by the
Ministerial Council on Consumer Affairs (MCCA). Its purpose is to
assist MCCA to make decisions regarding reforms to the laws in
Australia that imply conditions and warranties into consumer
contracts for the supply of goods and services. To achieve this,
the RIS assesses the impact of various options for regulating
specific rights that are applicable to all consumer contracts.
2638. Two studies by the Standing Committee of Officials of Consumer
Affairs (SCOCA) National Education and Information Advisory
Taskforce (NEIAT) have provided evidence of difficulties experienced
by consumers and businesses under the current regulatory
arrangements in both understanding their rights and obligations and
in their practical application.[89] The Productivity Commission's
2008 Review of Australia's Consumer Policy Framework (PC Review)
also considered statutory implied conditions and warranties and
recommended that the adequacy of existing legislation related to
implied conditions and warranties should be examined[90]. In
response to that recommendation, the Commonwealth Consumer Affairs
Advisory Council (CCAAC) was commissioned to conduct a comprehensive
review of law in this area. CCAAC published an issues paper titled
Consumer rights: Statutory implied conditions and warranties (the
Issues Paper) in July 2009 and conducted a public consultation
process to develop recommendations to government for reforms to laws
on implied conditions and warranties in consumer contracts.
2639. Evidence presented by the PC, NEIAT and CCAAC shows that the
existing legislative arrangements for implied terms in consumer
contracts are unduly complex, leading to uncertainty for consumers
and businesses. The current mode of regulation in this area, namely
implying terms into consumer contracts, is difficult for consumers
and businesses to understand and practically utilise. Further, the
fact that 15 laws of the States, Territories and the Commonwealth
currently imply such terms into consumer contracts leads to
additional costs for businesses that trade in more than one
jurisdiction and precludes a national approach to educating
consumers about their rights.
2640. The RIS considers a range of options for addressing complexity,
uncertainty and excessive regulatory burdens in this area of the
law. The objective of government action concerning statutory
conditions and warranties is identified as providing consumers with
a minimum level of protection in all transactions for the
acquisition of goods and services while minimising complexity,
uncertainty and the cost burden of regulation. The RIS concludes
that legislating to provide for a national system of statutory
consumer guarantees is the most appropriate option given the
objectives of government action.
2641. The preferred option is consistent with the decision of the Council
of Australian Governments (COAG) to proceed with the Australian
Consumer Law (ACL). In addition, the preferred option is consistent
with findings made by CCAAC. Thirty-three submissions were received
in response to publication of the issues paper by CCAAC. CCAAC
considered these submissions and provided a final report to the
Australian Government recommending the repeal of the existing system
of implied conditions and warranties, included in the Trade
Practices Act 1974 (TP Act) and the State and Territory Fair Trading
Acts, and their replacement with a system of statutory consumer
guarantees.
2642. The RIS discusses the impact of implementing the CCAAC
recommendations, including the costs and benefits of moving from a
system of implied conditions and warranties to statutory consumer
guarantees. Given that the proposal does not involve a change in
the substantive rights and obligations of businesses or consumers,
the only cost is transitional in nature. On the other hand, the
benefits of reduced complexity and uncertainty will be enduring, as
will be the reduced costs of compliance for businesses, particularly
those businesses that trade in more than one State or Territory of
Australia.
Assessing the problem
The current environment
2643. Consumers play a vital role in promoting well-functioning markets.
Purchases by consumers send signals to suppliers who compete for
business based on cost and quality. Competition between suppliers
improves the productivity of the Australian economy and provides
benefits for consumers in terms of lower prices, improved quality
and increased variety in the goods and services available in the
marketplace. These outcomes, however, rely on consumers being well
informed and sufficiently confident to act on available information
about the quality of goods and services being offered in the
marketplace. A key contributor to consumer confidence is ready
access to clear and accurate information about the characteristics
of goods and services.[91] This allows consumers to obtain what
they expect from a purchase, or failing that, to seek redress by way
of warranty or other claims against suppliers.
2644. Driven by technological change and globalisation, markets are
becoming increasingly complex. Markets have become more globalised
as consumers increasingly engage in cross-border transactions.
Consumers increasingly respond to price and quality signals by
seeking supplies outside of their local area or outside of
Australia. More widespread use of the internet in the home,
assisted by financial innovation and low cost postal services, is
increasingly allowing consumers to purchase goods and services with
little regard to geography. Businesses trading within only one
jurisdiction are increasingly rare, as are consumers without access
to geographically distant markets for goods and services.
Warranties for consumers
2645. A warranty is a promise extended by the supplier of a good or
service to the purchaser stating the extent to which the supplier
guarantees the quality or performance of the good or service.
A warranty typically also provides for certain remedies in the event
that the good or service does not meet the guaranteed standard of
quality or performance. There are currently two basic types of
warranties - statutory implied conditions and warranties (implied
terms), and manufacturer's voluntary (or express) warranties.
Statutory implied terms
2646. In Australia, the TP Act, State and Territory fair trading laws, and
State and Territory sale of goods laws imply certain rights and
obligations into contracts for the sale of goods and services to
consumers. These can be categorised as:
. 'conditions' - which are essential terms of the contract
that are so important to the purpose of the contract that,
if breached, will allow a consumer to cancel the contract
and seek a refund and compensation for any loss or damage
suffered; or
. 'warranties' - which are less significant terms that if
breached, will generally allow consumers to seek
compensation for any loss or damage suffered, but will not
allow them to terminate the contract.
Summary of implied conditions and warranties regulation in
Australia
2647. Statutory conditions and warranties are currently regulated by a
network of inter-linked, but complex, national, State and Territory
laws.
Commonwealth legislation
2648. Part V, Division 2 of the TP Act implies conditions and warranties
into consumer contracts. The provisions apply only to sale of goods
by corporations to consumers. The application of the provisions is
limited by the definition of 'consumers' in section 4B of the TP
Act, which defines consumer by reference to the price of goods
purchased and the type of goods. In general terms, the effect of
this provision is to apply the relevant law to purchases of goods by
consumers where the price of the goods is less than the currently
prescribed amount of $40,000 or where the goods are of a type
ordinarily acquired for 'personal, domestic or household use or
consumption'.
2649. The TP Act applies the following implied conditions and warranties
to all supplies of goods by a corporation to consumers:
. A condition that the supplier has the right to sell the
goods (paragraph 69(1)(a)).
. A warranty that the consumer will enjoy quiet possession
of the goods (paragraph 69(1)(b)).
. A warranty that the goods are free from any undisclosed
charge or encumbrance (paragraph 69(1)(c)).
. A condition that the goods supplied by description
correspond with the description (subsection 70(1)).
. A condition that goods are of merchantable quality
(subsection 71(1)).
. A condition that goods are fit for a purpose that the
consumer makes known to the supplier (subsection 71(2)).
. A condition that the goods correspond to a sample
(section 72).
2650. The TP Act applies the following conditions and warranties to all
supplies of services by a corporation to consumers:
. A warranty that services will be rendered with due care
and skill (subsection 74(1)).
. A warranty that any goods supplied in connection with
services - other than services of a professional nature
provided by a qualified architect or engineer - will be
reasonably fit for the purpose for which they were
supplied (subsection 74(1)).
. A warranty that services - other than services of a
professional nature provided by a qualified architect or
engineer - will be reasonably fit for any particular
purpose that the consumer makes known to the supplier
(subsection 74(2)).
. A warranty that services - other than services of a
professional nature provided by a qualified architect or
engineer - are of such a nature and quality that they can
be reasonably expected to achieve any particular result
that the consumer desires to achieve and makes known to
the supplier (subsection 74(2)).
2651. Remedies are generally not provided for in the TP Act in respect of
breaches of statutory implied conditions or warranties. Consumers
are required to enforce their rights in tribunals or courts as
breaches of contract. Section 75A provides a right of rescission in
respect of a breach of a condition implied into a contract by Part
V, Division 2 of the TP Act. This right of rescission allows a
consumer to obtain a refund if one of the conditions (but not the
warranties) outlined above is breached. The right to rescind is
limited to a 'reasonable time' after the consumer has had a
reasonable opportunity to inspect the goods.
State and Territory legislation
2652. State and Territory legislation implies substantially the same terms
and conditions into contracts as are provided for in the TP Act.
State and Territory legislation applies to the sale of goods by
natural persons (including sole traders and partnerships) as well as
corporations. Appendix A provides a table listing the relevant
provisions in the Commonwealth and in each State and Territory.
Appendix B provides a tabular comparison of Australian conditions
and warranties provisions.
2653. There are many minor variations between the laws applicable in each
State and Territory. While these minor differences are so
multifarious that a full exposition is beyond the scope of this
document, some examples reveal the extent of the problem[92].
. While Victoria, WA and SA apply a $40,000 monetary
threshold to consumer goods in a similar way to that which
applies under the TP Act, NSW, Queensland and the NT do
not apply a threshold. In relation to the implied terms
relating to supply by description or sample, the NSW, WA
and NT provisions apply if a supply is in the course of a
businesses whereas the SA and Victorian legislation apply
to all supplies. The SA legislation also applies implied
terms related to quality and fitness for purpose to all
sales, whereas all other jurisdictions apply these terms
only to sales in the course of a business. In Victoria,
the implied terms applying to services are conditions,
rather than warranties, as in all other jurisdictions.
. There are also minor differences in the extent to which
implied terms can be excluded, particularly in relation to
recreational services, where there are minor differences
in the definition of that term across jurisdictions.
Further, WA, Victoria and NT allow liability to be limited
in respect of goods not of a kind ordinarily acquired for
personal, domestic or household use or consumption,
whereas the other jurisdictions do not allow for
limitation of liability in such circumstances.
Manufacturers' voluntary warranties
2654. Manufacturers often provide voluntary warranties to customers for
their products. A voluntary warranty is commonly offered for
electronic goods, whitegoods, mobile phones and motor vehicles, and
often for a period ranging from one to five years. A manufacturer's
voluntary warranty sets out the terms and conditions under which the
manufacturer agrees to repair or replace the product or refund the
purchase price should the product fail. These warranties are
usually in writing and subject to time limits and other conditions.
2655. The terms and conditions of manufacturers' voluntary warranties are
generally not the subject of regulation. Manufacturers, therefore,
have absolute discretion as to whether such warranties are provided
and in relation to any applicable terms and conditions. However, if
provided, a voluntary warranty creates a contract between the
consumer and the manufacturer and the buyer has the right to take
private legal action against the manufacturer if the warranty is not
honoured.
Problems with the existing law
2656. Recent studies have identified three key problems with the current
statutory implied terms regime, which collectively could result in a
failure of the regime to provide consumers with the desired
protections.[93] The identified problems are:
. lack of clarity in the legislation;
. lack of awareness of the law on the part of consumers and
suppliers; and
. difficulties experienced by consumers who seek to enforce
their rights.
2657. These problems combine to reduce incentives for suppliers to comply
with the law.
Complexity and uncertainty in the existing law
2658. Some of the ambiguity and complexity associated with the current
provisions has resulted from the way the law has developed over
time. The origins of the implied terms lies in the English common
law, which was codified in the United Kingdom's Sales of Goods Act
1893 and adopted by the Australian colonies in the late 19th
century. The implied terms in the UK were never intended to act as
a broader consumer protection regime.
2659. The adoption of the UK model in each Australian jurisdiction has
also resulted in 15 separate pieces of legislation across the
country (in Fair Trading Acts (FTAs) or Sale of Goods Acts (SGAs),
or both), leading to significant compliance costs for businesses
attempting to operate in the national marketplace. The archaic
terminology used, such as 'merchantable quality', has failed to
provide the consumers with clear and meaningful guidance on the
essence of the law. Hence, current laws are not only fragmented and
inconsistent, but they also lack clarity for consumers and
suppliers.
2660. Given the existence of considerable anecdotal evidence, and some
statistical evidence, that the existing system of implied conditions
and warranties does not work well to serve the interests of
consumers or businesses, NEIAT was commissioned to conduct a
comprehensive study of warranties and refunds in Australia. NEIAT
published its Baseline Study for Statutory Warranties and Refunds
(NEIAT study) in October 2009 (see the box on page 8 for summary of
the methodology and results of the NEIAT study).
2661. Part of the uncertainty experienced by consumers and traders may be
explained by a lack of awareness of consumers' statutory rights.
However, even in cases where it appears traders are aware of these
rights, the evidence suggests that they are often unaware of the
applicable remedies, and of what their responsibilities are in terms
of providing the relevant redress. This may be a result of existing
laws failing to clearly set out the obligations that arise in the
event of a breach of consumers' statutory rights.
2662. Some of the features of the current law which contribute to its
uncertainty are as follows:
. the existing statutory implied terms regime is based on
the law of contract; [94]
. the existing regime fails to explicitly set out all the
rights and remedies that flow from a breach of a term;
[95]
. it is unclear how the implied terms of 'fit for purpose'
and 'merchantable quality' are to be applied;[96]
. the definition of 'consumer' varies across the different
Acts;[97]
. there are differences between the various Acts on whether
the implied consumer rights can be modified or
excluded;[98] and
. there are complex interactions between the SGAs, FTAs and
the TP Act.[99]
2663. The differences and interactions between the various Acts add to
complexity, uncertainty and compliance costs. Further, it is
unreasonable to expect consumers to understand the differences (or,
indeed, that there are differences at all) between an implied term
that is a 'condition' and a 'warranty', or the differences between
jurisdictions on the scope and application of some of the implied
terms and the definition of 'consumer'.
2664. Changes in the consumer environment have placed further pressure on
the adequacy of the current state of the law. Technological changes
and changing methods of purchase, such as online shopping, have
created electronic platforms for bringing buyers and sellers into
contact and have revolutionised the way they interact.[100] The
associated benefits of these changes, such as increased access to
markets and to a variety of products, have arisen alongside other
issues like increasing complexity both within products and markets,
a wider variety of consumer needs and higher consumer expectations.
Consumers' awareness of their statutory rights
2665. The complexity of the law has also contributed to a widespread lack
of consumer awareness of their statutory implied rights. If a
consumer is unable to understand the legislation that is applicable
to their situation, it is unlikely that they will be fully aware of
their rights.
2666. Many consumers are not aware that the rights granted under the
statutory implied terms regime are attached to the contract the
consumer has with the supplier. Consumers often do not realise that
in purchasing goods or services from a supplier they are entering
into a contract which carries obligations for both parties, and the
contract law implications of the differences between an implied
condition and an implied warranty in terms of redress options.
Further, consumers may not understand the differences between
statutory warranties, voluntary warranties and extended warranties.
The coexistence of statutory warranties, manufacturers' voluntary
warranties and extended warranties can add to the complexity and
uncertainty in the current law, blurring the boundaries of statutory
rights and the additional rights granted by retailers and
manufacturers.[101]
2667. It may, therefore, come as a surprise to many consumers to learn
that, in the event of a dispute with a retailer, they are currently
required to enforce their contract rather than seek redress under
the law. Many consumers lack sufficiently comprehensive knowledge
of the law of contract to know how to enforce their rights, or lack
the resources to obtain expert advice to do so.
|NEIAT 2009: National Baseline Study on Warranties and |
|Refunds |
|Methodology |
|The NEIAT study had two stages: |
|A qualitative phase - a series of five group |
|discussions with consumers, an online bulletin board |
|involving 66 consumers, and a small sample of |
|qualitative in-depth interviews - 12 with traders and |
|two with indigenous consumers. |
|A quantitative phase - three separate telephone |
|surveys with key 'audiences', including consumers |
|(3,023 people aged 16 and over across Australia), |
|retailers (500 retailers of target goods) and |
|manufacturers/importers (123 from across Australia, |
|also focussing on target goods). |
|The focus of the research was on three markets for |
|'target goods' - white goods, electronic goods and |
|mobile telephones. |
|Key findings |
|Virtually all persons surveyed (93 per cent) were |
|recent buyers of the target goods. |
|More than half of those surveyed (51 per cent) had |
|experienced problems with such products in the past |
|two years. |
|The average consumer facing product problems |
|experienced 2.15 problems during the previous two |
|years, resulting in an estimate of more than 18 |
|million problems occurring in the total Australian |
|population during a two year period. |
|Out-of-pocket costs for the Australian population were|
|estimated at $1.9 billion over the two years leading |
|up to the survey, or 17 per cent of the original cost |
|of the target goods. |
|Replacement items accounted for approximately |
|two-thirds of the out of pocket expenses. |
|Repairs made up 19 per cent of out of pocket expenses.|
| |
|Follow up costs, mentioned by those surveyed as being |
|'given the run around' by traders, amounted for more |
|than $300 million per annum. |
|Australian consumers were estimated to have spent an |
|average of 5.7 hours addressing each problem with |
|target goods or more than 100 million hours over 2 |
|years, representing an implied cost to consumers of an|
|additional $1.2 billion per year. |
|Consumers who were better informed about their rights |
|spent 39 per cent less time addressing problems than |
|uninformed consumers. |
|Total costs to Australian businesses associated with |
|problems with target goods were estimated at more than|
|$700 million per year, made up of $370 million for |
|retailers and $340 million for manufacturers and |
|importers. |
|Almost one-half of consumers knew of no consumer |
|protections other than manufacturers' voluntary |
|warranties. |
|Fifty-seven per cent of retailers and 47 per cent of |
|manufacturers/importers knew of no consumer |
|protections other than manufacturers' voluntary |
|warranties. |
2668. The NEIAT study suggests that a key problem with the current
statutory implied terms regime is a lack of awareness by consumers
and suppliers of their rights and obligations. For instance, less
than 20 per cent of Australians are able to demonstrate actual
knowledge and understanding of their basic consumer rights in
federal or State legislation.[102] The NEIAT study also found that
seven in ten consumers, after reading a succinct definition of
statutory warranties, were not aware such rights existed. [103]
2669. While consumer agencies in Australia have released a range of
publications in an attempt to educate consumers and suppliers about
their statutory rights and responsibilities in relation to the
implied terms, the continued level of complaints and inquiries on
product problems made to consumer agencies suggests that the lack of
consumer awareness remains an issue. If consumers were more aware
of their rights and the available remedies, they would likely take
their issues directly to consumer tribunals rather than complaining
to consumer agencies. The level of complaints is also likely to
result from the lack of awareness demonstrated by manufacturers and
retailers, as a common understanding of the law by business and
consumers would otherwise reduce the scope for disputes.
2670. Further, the NEIAT study demonstrates that retailers, manufacturers
and importers lack awareness and understanding of the law. It
indicates that 57 per cent of retailers and 47 per cent of
manufacturers were not aware that consumers were entitled to any
remedies beyond those for breach of the manufacturer's
warranty.[104] Further, one in five traders did not consider that
they were subject to any legal obligation to give refunds on faulty
products when sought by consumers.[105] In addition, 15 per cent of
retailers thought that, beyond the manufacturer's express warranty,
the only available protection for consumers was their own
insurance.[106]
Difficulty in enforcement
Personal enforcement
2671. The lack of consumer awareness of their rights and the lack of
awareness of the obligations of suppliers can lead to consumers
failing to successfully enforcing their rights. The contractual
remedies available for breach of an implied term may elude consumers
who lack adequate knowledge of the law of contract. Failure by
consumers to seek redress due to complexity in the law has a twofold
impact on incentives for suppliers. Suppliers have less incentive
to ensure that the goods and services that they supply are of
adequate quality and less incentive to honour their obligations when
consumers bring defects in those goods and services to their
attention.
2672. The implied terms of Part V, Division 2 of the TP Act vest consumers
with contractual rights to remedy and the statutory rights of
Division 2A vest consumers with direct rights to compensation.
Therefore, it is for consumers themselves to enforce these rights,
the role of consumer agencies being largely limited to ensuring
consumers are armed with accurate information about their rights.
Such rights must be enforced in consumer tribunals or the courts.
These types of enforcement action impose significant costs on
consumers. In particular, the opportunity cost of personal time
foregone is a significant deterrent to enforcement action by
consumers.
2673. Professor Carter indicated, in his submission to CCAAC, that
consumers will very rarely go to court to enforce their rights under
an implied statutory term or statutory right. He indicated that
rights and remedies should be so clear and unambiguous that formal
legal action to enforce rights and seek remedies becomes
unnecessary.[107]
Coordination problems
2674. It may sometimes be the case that a retailer engages in a systemic
breach of consumer rights. The Consumer Action Law Centre (CALC)
suggested that this might occur because 'of some comfort on the part
of traders, that failing to honour their obligations - even
misleading consumers - will lead to cost savings without any risk of
regulatory action'.[108] That is, since the likelihood of consumers
personally enforcing their rights is small, there may be little
incentive for unscrupulous retailers to comply with their implied
contractual obligations. CALC suggests that there is evidence of
this in the practice of retailers referring consumers back to
manufacturers and denying liability.
2675. Where a retailer acts in such a manner there are likely to be a
number of consumers harmed by that conduct. Ordinarily, there would
be an incentive for harmed consumers to band together and bring a
common action - to the extent possible - for any systemic breach by
retailers. However, given the rights arising under implied terms
are inextricably linked with the individual contracts entered into
between retailers and consumers, coordinated action may be difficult
to achieve.
Enforcement by consumer agencies
2676. The difficulty in crafting a scheme whereby consumer agencies are
empowered to act for breaches of implied terms and statutory rights
lies in the nature of those provisions. The provisions are
expressed as positive obligations, and if those obligations are not
met this gives rise to a right to a remedy. By way of contrast,
consumer agencies are generally asked to enforce negative
obligations, where certain conduct is prohibited and, if the conduct
is engaged in, this may attract both remedies and penalties.
Part B: Reform proposals
Objectives of government action
2677. The primary objective of government action in this area is to
promote well-functioning markets for consumer goods and services
through effective regulation of the terms applicable to consumer
purchases of goods and services.
2678. A free-market economy emphasises the benefits of markets behaving in
a way in which resources are allocated efficiently. The efficient
allocation of resources is critical in maximising consumer welfare.
When this does not occur a market failure exists and there may be a
need for government intervention to improve outcomes for the
community, the environment, businesses and the wider economy.
2679. Markets for goods and services are subject to asymmetric
information; the supplier of goods or services almost invariably
knows more about the quality of what is being offered than does the
prospective purchaser. Regulation of the terms applicable to
purchases of goods and services by consumers seeks to address a
market failure that would otherwise arise as a result of asymmetric
information. Consumer warranties ameliorate the impact of
asymmetric information by giving consumers a right of redress in the
event that products are defective. Suppliers also benefit from
effective laws, as consumers are willing to pay higher prices for
goods and services when they are confident they have the protection
of a warranty.
2680. The PC Review recommended that the adequacy of existing laws
relating to implied terms should be examined as part of the
development of the new national consumer law.[109] The PC indicated
that inconsistency across jurisdictions made the statutory implied
terms regime less effective as consumers were not well informed in
relation to their rights.
2681. Evidence collected and presented by NEIAT indicates that consumers
who are well informed about their rights were able to address
problems experienced with goods in 39 per cent less time than those
consumers who were less informed.[110] Given that NEIAT estimated a
cost to consumers of over $2 billion per annum[111] as a result of
problems with white goods, mobile telephone and electronic goods
alone, the scope for government action in this area to improve the
wellbeing of consumers is considerable. In addition, effective law
in this area is essential for well-functioning markets, efficient
resource allocation and improved economic productivity.
Reducing complexity and uncertainty in the law
2682. The NEIAT study presented evidence that consumers and businesses
experience difficulties understanding, complying with and enforcing
their rights and obligations under the existing laws. Accordingly,
an important objective of government action is to reduce complexity
of the existing law. It is expected that reduced complexity would
provide benefits for consumers and businesses. Achievement of this
objective would enhance consumer wellbeing by providing improved
access to redress when a product does not meet the standard required
by law. Professor Carter, in his submission to CCAAC, indicated
that, under the current law, consumers are required to argue for
contractual rather than statutory remedies against retailers, which
'relies too much on legal analysis'.[112]
2683. Reduced complexity also benefits businesses by way of clearer
requirements and reduced compliance costs. Simplified law in this
area is expected to reduce compliance costs businesses incur in
seeking legal advice and performing administrative tasks that relate
to complying with their obligations under the law, particularly if
they operate in more than one jurisdiction. Further, a single
nationally consistent law would help to achieve the objective of
reduced complexity in this area by improving consumer and supplier
certainty regarding protections and obligations under the law,
regardless of location.
2684. Harmonising and clarifying the law can help raise consumer and
business awareness, understanding of the law and encourage
enforcement of consumer rights. For instance, by removing difficult
concepts like 'conditions', 'warranties' and 'merchantable quality',
and providing for more clearly stated remedies that flow from
failures.
2685. There is widespread support for clarifying the existing implied
terms in this way. The Australian Industry Group, in its submission
to CCAAC, noted that 'terms such as merchantable quality are poorly
or only partially understood by consumers. This situation is, we
suggest, the root of disputes between suppliers and consumers'.[113]
Improving consumers' awareness of their rights
2686. Increasing the knowledge and awareness of consumers and suppliers,
together with clearer rights, obligations and enforcement
mechanisms, is fundamental to reducing consumer detriment.
2687. Existing campaigns by consumer agencies to improve consumer
awareness of the implied terms are necessarily fragmented, due to
differences between the 15 various Acts that apply across Australia.
For instance, there are currently eight different sets of
information being distributed to consumers in the States and
Territories relating to refund policies. The policy rationale for
the law dealing with refunds is basically the same in each
jurisdiction, but the exact content of the law differs, leading to
the need for subtle differences in the information distributed in
each jurisdiction.
2688. The PC Review concluded that 'most consumers are not fully aware of
the protections and redress options available under the implied
warranty provisions'.[114] It recommended that consumer agencies in
Australia 'raise awareness among consumers and suppliers about the
statutory rights and responsibilities conferred by the implied
warranties and conditions in the generic consumer law'.[115]
2689. Further, the NEIAT study demonstrated that when consumers had a
greater understanding of statutory rights it lowered consumer
detriment. In relation to the average number of hours different
groups of consumers spent on addressing their product problems, they
ranged from 3.7 hours for consumers with a detailed knowledge of
their rights, to 5.8 hours for consumers with partial awareness and
as high as 6.1 hours for consumers with no awareness at all.[116]
Effective enforcement mechanisms
2690. In order for consumer protection laws to be effective they must be
enforceable. Inexpensive and consistent enforcement mechanisms are
particularly important in this area as consumers often have limited
resources, compared to businesses, to access legal representation or
other private sources for advice and assistance.
2691. Government action to simplify legislation, and ensure it is
nationally consistent, will also help improve enforcement by
enhancing consumer awareness of their rights and avenues for
redress. Mechanisms for enforcing the statutory guarantees must be
accessible if they are to be effective. Rights only carry substance
insofar as they are backed by effective remedies. If consumers have
no means of securing timely and cost-effective remedies, their
rights are, ultimately, of little value.
2692. Reducing complexity in the law promises to improve the ability of
businesses to understand their obligations and the ability of
consumers to enforce their rights. For example, the NEIAT study
found that 20 per cent of retailers and 22 per cent of manufacturers
and importers did not consider that consumers had a statutory right
to a refund for faulty products.[117] The policy of consumer
protection not only encompasses protecting consumers from unfair
business practices but also ensuring that consumers are getting what
they are paying for and are able to seek redress when they encounter
problems.
Options that may achieve the objectives of government action
2693. Three options have been considered in order to best achieve the
objectives of government action set out above.
Option A: Status quo
2694. Option A would involve retaining the 15 different Acts that imply
conditions and warranties into consumer contracts across all
Australian jurisdictions. This would involve no legislative
amendments.
Option B: Increase education on the existing law
2695. As a significant problem identified with the existing law relates to
limited awareness, this option would involve increased efforts to
educate consumers and business about their rights and obligations
under the existing statutory implied terms regimes. Under Option B,
there would be no legislative amendments.
Option C: Uniform regulation by way of statutory consumer
guarantees
2696. Option C would involve the Commonwealth, the States and Territories
introducing a single set of nationally consistent provisions that
would provide consumers with statutory guarantees of their rights in
consumer sale contracts. The Commonwealth would repeal the implied
terms provisions in the TP Act and introduce a set of consumer
guarantee provisions that would apply to consumer contracts in the
Australian Consumer Law, which would be applied by the States and
Territories. The States and Territories would apply this law by
referring to the Commonwealth law in their relevant statutes. These
laws would continue to be enforceable in State and Territory
tribunals and courts.
Part C: Impact analysis
Option A: Status quo
2697. Under Option A, the existing system of 15 national, State and
Territory laws would continue to apply to provide for implied
conditions and warranties in consumer contracts.
Benefits
2698. Maintaining the status quo would offer no benefits compared to
existing arrangements.
Costs
2699. Numerous recent studies, including the NEIAT study that has been
quoted extensively in part one of this RIS, have identified three
key problems with the current implied terms regime, which
collectively can fail to provide consumers with the intended rights
and remedies. Lack of clarity in legislation, lack of awareness of
the law on the part of consumers, retailers and manufacturers, and
difficulties experienced by consumers seeking to enforce their
rights all combine to provide little incentive for retailers and
manufacturers to comply with the law.
2700. The existing law, applied by 15 different Acts across Australia, is
complex with many consumers and suppliers either unaware that
statutory implied terms exist or are uncertain about their rights
and obligations. Consumers' lack of awareness means they are not
enforcing warranties effectively, and therefore likely to be
experiencing losses which are not being properly compensated by the
suppliers of faulty goods. In addition differences in requirements
between jurisdictions impose additional compliance costs on
businesses.
2701. As set out in more detail in part one of this RIS, existing law is
not contributing as much to consumer wellbeing as might be possible
under alternative arrangements. Consumers experience detriment
under existing laws when they are unable to obtain redress in
respect of failures by suppliers to comply with their obligations.
2702. Effective terms applicable to purchases of goods and services are
also important for the functioning of markets. The identified
deficiencies in the existing law means it is not effectively
addressing a market failure created by asymmetric information in the
market for goods and services. If suppliers believe that they can
supply defective goods or services without the threat of effective
enforcement action by consumers the average quality of goods in the
market place will be lower than otherwise would be the case. If
consumers lack the ability to distinguish between low quality and
high quality goods due to asymmetric information, then the average
price of goods and services will be lower than would otherwise be
the case. To some extent, high quality goods will be outpriced and
eliminated from the market as the price that can be charged is lower
than would otherwise be charged for high quality goods. Effective
laws providing for consumer guarantees can avoid this 'race to the
bottom'.
Option B: Increase education on the existing law
2703. Option B would involve consumer agencies and government increasing
their consumer and trader education activities regarding implied
terms in consumer contracts. This might involve, amongst other
things:
. production of pamphlets and other written information for
distribution to consumers and traders regarding implied
conditions and warranties;
. television, radio, newspaper and magazine advertisements
regarding implied conditions and warranties;
. announcements and media releases by consumer ministers
regarding implied conditions and warranties; and
. maintenance of websites and consumer telephone assistance
centres that provide information to consumers and traders
on implied conditions and warranties and other consumer
issues.
Benefits
2704. Increased education on the existing law would seek to ameliorate the
problems identified by CCAAC and NEIAT that relate to lack of
awareness of the existing law. As noted in part A of this RIS,
consumer agencies in Australia have released a range of publications
in an attempt to educate consumers and suppliers about their
statutory rights and responsibilities in relation to the implied
terms. Successful efforts to educate consumers would have benefits
for individual consumers who are better able to enforce their rights
and for businesses who more readily understand their obligations
under implied conditions and warranties in consumer contracts. If
businesses and consumers can be encouraged to have a common
understanding of the law the level of disputation involving consumer
contracts might be reduced. Fewer disputes would reduce costs for
businesses, consumers and government tribunals established to
mediate or adjudicate disputes.
2705. Also as noted in more detail in part A of this RIS, improved
enforcement of consumer rights would have a flow-on effect to
incentives for suppliers to provide consumers with high quality
goods and services and to provide consumers with redress when goods
or services are not of the required quality.
Costs
2706. The main cost of this approach would be those involved in developing
education campaigns for governments. If education is to be
effective, consumers and businesses would also incur costs devoting
time to engaging with education campaigns. Whilst the confidence
level around estimates is low, the business costs calculator[118]
indicates that the cost of additional education campaigns on the
existing law would average $160 per business per year. This is
based on an assumption that one person in each business devotes two
hours four times per year to engaging with education campaigns on
statutory implied conditions and warranties.
2707. The complexity of the existing law is currently a major constraint
on the effectiveness of existing and future education campaigns.
Given the differences which exist between jurisdictions it is not
possible to implement a single national education campaign to deal
with the existing law in order to effectively provide guidance and
to raise awareness amongst consumers and suppliers. This limits the
economies of scale and scope for education campaigns relating to
consumer rights.
2708. Submissions to CCAAC provided significant anecdotal evidence that
education campaigns alone will not address the problems with the
existing law. As indicated in part A of this RIS, the existing law
has been in place since the late 19th and early 20th centuries and
has been the subject of many education campaigns by regulators over
those years. Consumer groups, such as CHOICE, have also sought to
educate consumer about their warranty rights. Evidence from the
NEIAT study, quoted extensively in part A of this RIS, indicates
that these education campaigns have not been as effective as might
be desired.
Option C: Uniform regulation
2709. Option C would create a single law that would apply across
Australia. In substance, the same rights and obligations would
apply as exist under the current implied terms regime in the TP Act.
2710. Each existing implied condition or warranty would be converted into
a more clearly expressed statutory guarantee, which would avoid the
complexity arising from the current implication of terms into
contracts, the use of archaic legal concepts and terms in the
legislation and the many minor variations between the existing
variety of national, State and Territory laws.
2711. The following provides an outline of the new provisions that would
form part of the ACL.
A national consumer guarantees law
2712. Consumers would have the benefit of the following statutory
guarantees in respect of the supply of goods:
. A guarantee as to title - that the supplier has the right
to sell the goods, the goods are free from any undisclosed
security and the consumer has the right to undisturbed
possession of the goods.
. A guarantee as to acceptable quality - that the goods are
fit for all purposes for which goods of that type are
commonly supplied, acceptable in appearance and finish,
free from defects, safe and durable.
. A guarantee that goods are reasonably fit for any
particular purpose that the consumer makes known to the
supplier.
. A guarantee that goods comply with their description.
. A guarantee that goods comply with a sample provided or
shown to the consumer.
. A guarantee that repairs and spare parts are reasonably
available for a reasonable period.
2713. Consumers would have the benefit of the following statutory
guarantees in respect of the supply of services:
. A guarantee that services will be carried out with
reasonable care and skill.
. A guarantee that services will be reasonably fit for any
particular purpose that the consumer makes known to the
supplier.
. A guarantee that services are of such a nature and quality
that they can be reasonably expected to achieve any
particular result that the consumer desires to achieve and
makes known to the supplier.
. A guarantee that services will be completed within a
reasonable time.
Remedies for failure to comply with guarantees
2714. Remedies available to consumers where a supplier has failed to
comply with a consumer guarantee would be clearly set out in the
law. Different remedies would be available against the suppliers of
goods compared to the manufacturers of goods.
2715. The guarantees as to title, acceptable quality, fitness for purpose
and compliance with sample would be enforceable against the
suppliers of goods. The following remedies would apply in respect
of the failure of any goods to comply with a relevant guarantee:
2716. The consumer may require the supplier to remedy the failure within a
reasonable time.
. Where the supplier fails or refuses to remedy a failure
the consumer may reject the goods or have the failure
remedied elsewhere and obtain from the supplier all
reasonable costs incurred in having the failure remedied.
. In respect of a failure of a substantial character or
where the failure cannot be remedied, the consumer may
reject the goods or obtain damages from the supplier in
respect of the reduction in value of the goods.
2717. The guarantees as to acceptable quality, compliance with description
and availability of repairs and spare parts would be enforceable
against the manufacturers of goods. Consumers would be entitled to
seek damages from manufacturers of goods in respect of any failure
of goods to comply with the aforementioned guarantees.
2718. In respect of any failure of services to comply with the relevant
guarantees, consumers would be able to require the supplier to
remedy the failure within a reasonable time or have the failure
remedied elsewhere and recover the costs of doing so when the
supplier refuses or neglects to remedy the failure, or does not do
so within a reasonable time. Where a failure is not capable of
being remedied the consumer would be able to cancel the contract and
seek damages from the supplier.
Redrafting the law for clarity
2719. Archaic or ambiguous concepts, such as 'merchantable quality' and
'encumbrance' would be replaced by modernised terms that are easier
for consumers and businesses to understand. The term merchantable
quality would be replaced with 'acceptable quality'. The term
'encumbrance' would be replaced by 'undisclosed security interest'.
Other minor terminology changes would also be made to enhance
clarity of the law, in accordance with current Commonwealth drafting
practices. The policy intent of such changes is to enhance clarity
of the law without changing its effect or application.
Application of guarantees to online auctions
2720. Application of the law to online auctions would be clarified,
potentially by providing for a definition of 'auction' for the
purposes of statutory consumer guarantees.
2721. The policy intent of excluding suppliers who sell by way of auctions
from the requirement to provide consumers with rights of redress is
no longer being satisfied due to technological change. Recent court
decisions, such as Peter Smythe v Vincent Thomas [2007] NSWSC 844
have considered the meaning of the term 'auction', and whether that
term can be applied to auctions such as those conducted online
between buyers and sellers without the intervention of an
auctioneer. The courts have decided that online auctions conducted
in that way fall within the definition of auction. Accordingly, the
auction exclusion in the TP Act would exempt traders, including
those with a significant physical store presence in Australia, from
the obligation to provide consumers with the usual protections when
they sell goods by way of online auctions.
2722. The proposed amendment to the TP Act would continue to exempt
traditional auctions conducted with the assistance of an auctioneer
from the obligation to provide consumer guarantees. Statutory
guarantees would apply to auctions conducted without an auctioneer.
Enforcement powers for consumer agencies
2723. Consumer agencies would be provided with a new power to enforce
consumer guarantees on behalf of consumers in circumstances where
such action would provide a public benefit. This power would take a
similar form to section 75AQ of the TP Act and would allow consumer
agencies to commence a representative action on behalf of one or
more persons if it has obtained the written consent of each of the
persons.
2724. In accordance with existing practice of consumer agencies, it is
expected that this new power would be exercised only in
circumstances where there has been a blatant breach of the law,
significant and widespread public detriment, or the potential for
successful action to have a worthwhile deterrent effect.
Benefits
2725. Statutory guarantees would have a number of advantages over implied
conditions and warranties. Statutory guarantees would be directly
enforceable as breaches of the ACL, whereas the existing statutory
provisions are indirectly enforceable as breaches of terms implied
into consumer contracts. Accordingly, remedies would be set out in
the ACL, whereas existing law requires consumers to pursue remedies
as breaches of contractual terms. Both characteristics of consumer
guarantees would make it easier for consumers and businesses to
understand the law as it applies to their individual circumstances.
2726. An additional advantage of statutory consumer guarantees, when
compared to implied conditions and warranties, relates to improving
the ability of consumers and businesses to understand the law. The
rights, obligations and applicable remedies for failure to meet
obligations in respect of consumer purchases of goods or services
would all be set out in the ACL. Consumers and businesses would no
longer require an understanding of contract law, the meaning of
'implied terms' or the distinction between 'warranties' and
'conditions' in order to comply with the law or to enforce their
rights.
2727. As noted for Option B, improved understanding of the law by
consumers and businesses, in this case due to simplified and uniform
regulation, promises to reduce disputation regarding consumer
contracts. Reduced disputation would lead to cost savings for
businesses, consumers and government dispute resolution bodies.
2728. In the event that disputes occur under a system of national
statutory consumer guarantees, consumers would have improved access
to justice. As rights and obligations would be more readily
understood by consumers they would face fewer difficulties enforcing
their rights. Consumers and community organisations would
experience reduced costs as there would be less need for consumers
to seek expert assistance in order to enforce their rights in
tribunals or Courts.
2729. NEIAT estimated that the cost to consumers of warranty claims, in
relation to mobile telephones, white goods and electronic goods
alone, amounts to over $2 billion per annum.[119] A further cost of
$700 million per annum was incurred by retailers, manufacturers and
importers.[120] Significantly, 55 per cent of the cost to
consumers, 40 per cent of the cost to retailers and 28 per cent of
the cost to manufacturers and importers relate to time taken to
resolve warranty issues.[121] Accordingly, clarifying the law to
make it easier for business and consumers to understand has the
potential to significantly reduce the cost of warranty claims for
consumers and businesses. For example, a 20 per cent reduction in
the time taken by consumers and businesses to resolve warranty
issues would result in a benefit of over $200 million per annum.
2730. The move to a single national law on terms for consumer purchases of
goods and services would be used as an opportunity to clarify
ambiguous and archaic terms in the law. Consideration would be
given to modernised and simplified drafting to aid comprehension of
the law by business and consumers. Such simplification would be
more difficult without a national approach to law in this area, as
15 separate Acts would require amendment to clarify terms and such
amendment would need to be co-ordinated across nine governments.
2731. This option would reduce compliance costs for businesses and
uncertainty of redress options for consumers that are associated
with the differences between jurisdictions. In addition, a single
national law would create the possibility of a national education
campaign that would benefit from economies of scale and scope when
compared to State-based consumer education efforts. Moving to a
single harmonised system would help to reduce the complexity in the
law that results from the multi-layered and fragmented nature of the
current law, and reduce duplication in terms of laws and education.
2732. New Zealand enacted laws to provide for statutory consumer
guarantees in 1993. The stark contrast between New Zealanders'
understanding of their rights and that of Australian consumers
demonstrates the benefits of a system based on statutory, rather
than implied contractual, rights. According to the National
Consumer Survey 2009, 67 per cent of New Zealanders were able to
name a piece of consumer protection legislation, [122] 84 per cent
correctly indicated that they would be eligible for a replacement,
refund or repair of a faulty product[123] and only 16 per cent of
consumers indicated that they are not confident that the New Zealand
legislation would protect them if they have a problem.[124] The
October 2009 NEIAT study of Australian consumers, whilst not
directly comparable, indicated that 46 per cent of consumers did not
know that statutory protections exist in addition to manufacturer
and retailer warranties[125] and 57 per cent of retailers did not
know that consumers had rights to repair or refund beyond express
warranties.[126]
2733. Consideration of the evidence on consumer awareness from Australia
and New Zealand would tend towards the conclusion that statutory
guarantees are more readily understood by consumers. Accordingly,
it is expected that amendment of law to provide for statutory
guarantees would result in increased action by consumers to enforce
their rights to repairs and refund in respect of faulty goods and
services. Warranty claims by consumers against retailers and
manufacturers are a zero sum game, as payments by businesses equal
receipts by customers. A net benefit is likely to result from
increased warranty claims by consumers as perverse incentives for
suppliers to sell poor quality goods and avoid their
responsibilities in relation to consumer claims will be more
adequately addressed.
2734. The NEIAT study indicated that 81 per cent of Australian consumers
did not seek advice from anyone when a supplier did not provide
redress in respect of a faulty product.[127] The NEIAT study
considered the cost to business of dealing with protracted consumer
warranty claims. Dealing with such claims in respect of electronic
goods, mobile telephones and whitegoods cost retailers an average of
$28,500 per year.[128] Forty per cent of such costs arose from
staffing implications of dealing with warranty claims.[129] It
might be expected that such costs will be reduced if the law is more
readily understood by consumers and businesses, as disputes will be
less likely to be protracted.
2735. Anecdotal evidence suggests that some extended warranties are costly
compared to the benefits they offer. For example, the CALC noted
'extensive problems' with the marketing of extended warranties to
consumers.[130] The CCAAC report indicated that the lack of
awareness of statutory rights is contributing to the 'growing uptake
of extended warranties by consumers'.[131] Further, ACCC complaints
data reveals that a total of 255 complaints and inquiries were made
in relation to extended warranties between January 2006 and
September 2008. Improved awareness of statutory rights might be
expected to improve the wellbeing of consumers by limiting purchases
of extended warranties in circumstances where their cost outweighs
the benefits offered.
2736. The proposed amendment providing for a definition of 'auction' will
ensure parity of treatment irrespective of the mode of sale of goods
and services and would ensure that consumers receive the benefit of
a warranty irrespective of the mode of purchase. Businesses that
sell goods by way of online auctions will be required to provide
statutory consumer guarantees in the same way that businesses that
sell goods in shops are required to provide statutory consumer
guarantees. As explained earlier in this section, warranties play
an important role in addressing a market failure that would result
from asymmetric information in the market for goods and services.
Extending statutory guarantees to online auctions will improve the
functioning of that market in the same way as statutory implied
conditions and warranties improve the functioning of in-person
physical markets. Consumers will benefit from obtaining the right
to seek redress when they do not receive the promised benefits from
the purchase of a good or service. Businesses will achieve some
benefits as a result of higher prices being achieved for goods and
services.
2737. Whilst the costs of moving to a national system of consumer
guarantees are largely transitional, the benefits, in terms of
reduced complexity, uncertainty and access to justice for consumers,
will be enduring.
Costs
2738. The main costs with this option will be borne by governments in
terms of legislative amendments to create a uniform set of consumer
guarantees, and the costs of educating consumers and suppliers of
the changes.
2739. Given that in substance there is no substantive difference between
the protections provided for under the existing implied terms regime
in the TP Act and the proposed consumer guarantees regime under the
national law, both the transitional costs and compliance costs for
businesses would be relatively minimal. Transitional costs for
suppliers, if any, would involve moving to a single consumer
protection model for consumer sale contracts from one which applied
to the jurisdiction they were operating in (as well as the TP Act if
there were any differences between the two).
2740. In relation to the application of statutory consumer guarantees to
online auction websites, businesses will incur costs only to the
extent that they are required to remedy faults in products that they
sell to consumers. These costs will be exactly the same as if goods
were sold in a shop. The costs associated with repairs and
replacement goods will be exactly offset by the benefits achieved by
consumers from receiving repaired goods or replacement goods.
2741. Whilst the level of confidence around estimates is low, the business
cost calculator indicates that the average cost per business of
moving to uniform regulation would be $75 (or $150 million across
the economy). The main costs for business involved in the change
would be seeking advice on the new law and redrafting standard
contracts to refer to the new law. Only a small minority of
businesses would be involved in these activities. This estimated
cost compares favourably to an estimate of a benefit of $1.5 to $4.5
billion per year made by the PC for the ACL as a whole. While the
PC did not separately estimate the benefit of moving to a national
system of consumer guarantees, it represents a significant part of
the ACL and therefore likely represents a significant portion of
this aggregate benefit.
Consultation
2742. On 26 July 2009, the Minister for Competition Policy and Consumer
Affairs, the Hon Dr Craig Emerson MP, released an Issues Paper,
Consumer rights: Statutory implied conditions and warranties, on
behalf of CCAAC. The Issues Paper explored and posed questions
about the adequacy of the current laws on implied terms and the
need, if any, for amendments to improve existing laws and to empower
regulators to ensure compliance with these laws.
2743. The Issues Paper also considered some related matters, like 'lemon
laws' which seek to protect consumers where goods repeatedly fail to
meet expected standards, the interaction of extended warranties with
laws on implied terms, and other possible means to improve the
operation of the existing laws on implied terms in Australia.
2744. Interested parties were invited to comment on the paper and written
submissions closed on 24 August 2009. In response to the Issues
Paper, CCAAC received 33 submissions from a range of stakeholders,
including individual consumers, consumer agencies, consumer advocate
bodies, regulators, industry peak bodies, consumer legal centres,
academics, law firms and businesses.
2745. CCAAC held a roundtable with State and Territory consumer agencies
on 21 August 2009. A targeted consultation process was also
undertaken based on written submissions. CCAAC met with seven
stakeholders on 7 September 2009 and 8 September 2009 and conducted
teleconferences with four stakeholders on 16 and 17 September 2009.
Stakeholders consulted in person had a wide range of interests in
consumer issues and included regulators, industry peak bodies,
retailers and individuals. A representative sample of comments
received by CCAAC is provided below.
Comments made by consumers and consumer groups
2746. CHOICE cited a survey that indicated that 'only about half' of
respondents understood the idea of a statutory warranty, that
consumers should receive clear information about their statutory
rights at the point of sale and that this might be achieved by
signage at the point of sale. CHOICE also indicated that consumers
should be targeted with information from consumer agencies and that
breaches of consumer rights should be met with vigorous enforcement
action by consumer agencies.
2747. CHOICE also stated that the use of the term 'warranty' may be
problematic as it has multiple possible meanings. CHOICE suggested
the use of the terms 'primary protections' and 'secondary
protections' instead of conditions and warranties, respectively.
CHOICE considered that consumers should be given the opportunity to
purchase extended warranties other than when they purchase goods.
2748. CALC stated:
...it is time to consider policy responses other than merely
increasing information and education to consumers and
traders, given the significant and systematic nature of the
problem.[132]
and
...national harmonisation and clarification of Australia's
laws regarding statutory conditions and warranties. The New
Zealand Consumer Guarantees Act 1993 provides an example of
how this could be done by removing the difficult concepts
such as the differences between conditions and warranties
and simply providing for more clearly stated remedies that
flow from failures to comply with guarantees.[133]
Comments made by business and business-related groups
2749. The Australian Industry Group indicated that:
terms such as merchantable quality are poorly or only
partially understood by consumers. This situation is, we
suggest, the root of disputes between suppliers and
consumers.[134]
2750. The Australian Retailers Association indicated that auction sales
should be subject to the same warranties as other purchases and that
the definition of recreational services in the TP Act is sufficient.
The Retailer Traders Association of WA Inc. also indicated that
auction sales should be subject to the same warranties as other
purchases.
2751. The Australian Industry Group indicated that standard auctions where
the buyer can inspect goods should be 'buyer beware' but, in the
case of on-line auctions where the consumer is not able to inspect
the goods, there is a need for greater consumer protection.
2752. The Australian Automotive Aftermarket Association indicated that
reform in this area cannot be focussed on more consumer education
as, in their opinion, consumers are victims of deliberate and
coordinated misinformation. This leads purchasers of automobiles to
believe that express warranties are the only means of redress in
respect of faults with automobiles.
Comments made by others
2753. Professor Carter indicated that:
...very little is said in [Part V, Division 2 of the TP Act]
about consumer rights and remedies. To a large extent,
these are based on common law, that is implied by law. In
fact, [Part V, Division 2] does not explain the distinction
between conditions and warranties by reference to consumer
rights. That is left to the sale of goods legislation and
the common law...ideally both the existence and content of
all consumer rights and remedies should be expressed in
detail in the consumer protection regime.[135]
2754. The Law Council of Australia indicated that it:
...would welcome proposals aimed at clarifying the
application of the existing regime...introducing narrow and
prescriptive regimes would not be helpful or practical and
would likely result in greater complexity and confusion for
consumers and suppliers. Laws which are simply drafted and
broadly applicable are preferable, particularly in the
context of consumer goods, as they are able to adapt to
evolving technologies and changes in reasonable consumer
expectations.[136]
2755. The Australian Finance Conference indicated that there is a need for
a national legislative framework. The Australian Finance Conference
also indicated that there is a need to recognise the tiered nature
of selling to ensure that the law is appropriately tailored to the
relationships between manufacturers, suppliers, financiers, insurers
and customers.
2756. NEIAT was recently commissioned by consumer agencies to conduct a
national study of warranties and refunds. It published its final
report in October 2009. As noted in the preface to the final
report, it was intended to inform the review of statutory warranties
and refunds for the ACL. Further details of the NEIAT study are
provided in Part A of this RIS.
2757. Overall, written submissions and comments made during consultation
were supportive of legislative action to provide for statutory
consumer guarantees.
Conclusion and recommended option
2758. Given the considerable problems identified with the existing system
of 15 national, State and Territory laws that imply terms into
consumer contracts, Option A of maintaining the status quo is not
the most preferred option. A preliminary case for government action
was made out by the PC Review. The NEIAT study revealed evidence
that consumers experience costs of over $2 billion per annum in
relation to problems experienced with a subset of goods comprising
mobile telephones, white goods and electronics.
2759. NEIAT presented further evidence that consumers who are informed
about their rights spend significantly less time seeking remedies in
respect to problems experienced with goods. Accordingly, government
action to improve awareness of consumers with respect to implied
conditions and warranties would generate considerable benefits that
are likely to exceed the transitional costs of any such action.
2760. Given that improving consumer awareness of their rights is a key
element of the objectives of government action in this area, Option
B considered whether further education campaigns dealing with
implied conditions and warranties is the best solution to the
identified problem. Consideration of this option reveals that
complexity and inconsistencies in the existing law is a key
constraint on the efficacy of further education campaigns on the
existing law.
2761. Additional education efforts would impose costs on governments in
relation to the production of education materials and costs on
consumer and businesses in terms of time spent engaging with
additional education efforts by consumer agencies. Costs of
education efforts based on the existing law are greater than would
be the case under a single national law, as State and Territory
consumer agencies do not benefit from the economies of scale and
scope that would apply to a national education campaign based on a
nationally consistent approach to terms applicable to consumer
contracts.
2762. Evidence, from the NEIAT study and other studies of implied terms in
consumer contracts, that a significant proportion of consumers and
traders have no knowledge of statutory protections in this area,
despite past education efforts of consumer agencies and consumer
representative bodies, suggests that additional education efforts
are unlikely to be sufficient to address the identified problem.
Given evidence that education efforts have been of limited effect in
the past, it is unlikely that the cost of additional education
efforts can be justified based on the current complex and
inconsistent set of provisions.
2763. Option C is the preferred option. The $2.5 billion per annum in
costs being incurred by consumers, retailers, manufacturers and
importers in relation to the repairs, replacement items, incidental
costs and time involved in warranty claims, as evidenced in the
NEIAT study, suggest that government action in this area has the
potential to generate significant net benefits.
2764. A single national law providing for consumer guarantees instead of
implied conditions and warranties promises to form a basis for
nationally consistent education campaigns on consumer guarantees.
Such education campaigns would benefit from economies of scale and
scope associated with a national approach. Consumer guarantees
would be easier for consumers to understand compared to implied
conditions and warranties. Education campaigns would, therefore,
have the potential to be more effective.
2765. Levels of disputation are likely to be reduced if consumers and
traders share a common understanding of their respective rights and
obligations. Disputes that do arise would be more readily resolved
under a law that is more explicit about the terms applicable to
consumer contracts.
2766. A move to legislate for statutory guarantees would also provide an
opportunity to modernise and simplify the drafting of the relevant
provisions, further enhancing the ability of consumers and traders
to understand the law.
2767. Application of statutory consumer guarantees to online auction
websites is expected to result in a net benefit in the same way as
statutory consumer guarantees provide a net benefit in respect of
the sale of goods and services by other methods. The payments
flowing between businesses and consumers in respect of faulty goods
and services will be a zero-sum game - payments by businesses
exactly equal receipts by consumers. A net benefit will result from
the incentive created for suppliers to strive to provide goods that
are of the highest possible quality to avoid warranty claims. If
consumers were left to bear the costs of repairing goods that are
faulty when sold, a perverse incentive would exist to minimise costs
of production at the expense of quality, even if quality could be
improved at minimal cost.
2768. Each of the identified benefits of Option C is enduring in nature,
whilst the costs are one-off and transitional. The benefits of
Option C exceed the costs by the largest margin when compared to
Options A and B, leading to Option C being the preferred option.
Part D: Implementation and review
2769. Any amendments to the implied terms provisions in the TP Act would
form part of the broader Australian consumer law. In October 2008,
COAG agreed to create a national consumer law, based on the TP Act
and enacted via application legislation in each of the States and
Territories. In accordance with the National Partnership Agreement
to Deliver a Seamless National Economy, the national consumer law is
to be implemented by the end of 2010 and commence from
1 January 2011. To meet this timeframe, reforms to implied terms
would be incorporated into the second Trade Practices Amendment
(Australian Consumer Law) Bill, which is expected to be introduced
into the Australian Parliament in early 2010.
2770. Reforms to implied terms will be reviewed together with the review
of the Intergovernmental Agreement for the Australian Consumer Law,
which COAG has agreed will take place seven years after the IGA has
operated.
Appendix A
Australian statutory conditions and warranties provisions
| |Cth |
|Item 1: Chapter 1, section 1 |2.9, 10.163 |
|Item 1: Chapter 1, section 2 |2.10, 3.12, |
| |4.20, 6.102, |
| |6.104, 6.182, |
| |6.196, 6.209, |
| |6.221, 6.238, |
| |6.408, 8.38, |
| |10.19, 10.20, |
| |10.164, 11.32,|
| |12.19, 14.19, |
| |15.92, 16.16, |
| |16.29, 16.30 |
|Item 1: Chapter 1, subsection 3(5) |2.13 |
|Item 1: Chapter 3, Part 3-2, Division 1 |2.14 |
|Item 1: Chapter 3, Part 3-2, Division 2 |2.14 |
|Item 1: Chapter 3, Part 3-2, Division 3 |2.14 |
|Item 1: Chapter 3, Part 3-2, Division 4, |2.14 |
|section 101 | |
|Item 1: Chapter 1, section 14 |2.14 |
|Item 1: Chapter 5, Part 5-5, Division 1 |2.14 |
|Item 1: Chapter 2, Part 2-2 |2.15 |
|Item 1: Chapter 2, Part 2-2, section 21(1) |2.15 |
|Item 1: Chapter 1, section 3 |2.18, 2.23, |
| |10.48 |
|Item 1: Chapter 1, paragraph 3(1)(a) |2.19 |
|Item 1: Chapter 1, paragraph 3(1)(b) |2.19 |
|Item 1: Chapter 1, subsection 3(2) |2.20 |
|Item 1: Chapter 1, subsection 3(3) |2.21 |
|Item 1: Chapter 1, section 4 |2.24 |
|Item 1: Chapter 1, section 4 |2.28 |
|Item 1: Chapter 3, Part 3-3 |2.30, 2.31 |
|Item 1: Chapter 3, Part 3-4 |2.30, 2.31 |
|Item 1: Chapter 3, Part 4-3 |2.30, 2.31 |
|Item 1: Chapter 1, Subsection 5(1) |2.30 |
|Item 1: Chapter 1, Subsection 5(2) |2.31 |
|Item 1: Chapter 1, Subsection 6(1) |2.33, 2.34 |
|Item 1: Chapter 3, Parts 3-2 and 5-4 |2.37 |
|Item 1: Chapter 3, Part 3-5 |2.37 |
|Item 1: Chapter 1, Part 5-3 |2.37 |
|Item 1: Chapter 1, paragraph 7(1)(a) |2.40 |
|Item 1: Chapter 1, paragraph 7(1)(b) |2.40 |
|Item 1: Chapter 1, paragraph 7(1)(c) |2.40 |
|Item 1: Chapter 1, paragraph 7(1)(d) |2.40 |
|Item 1: Chapter 1, paragraph 7(1)(e) |2.40 |
|Item 1: Chapter 1, paragraph 7(2)(a) |2.41 |
|Item 1: Chapter 1, paragraph 7(2)(b) |2.42 |
|Item 1: Chapter 1, subsection 7(3) |2.43 |
|Item 1: Chapter 1, section 8 |2.44 |
|Item 1: Chapter 5, Part 5-3 |2.45, 6.113 |
|Item 1: Chapter 1, subsection 9(1) |2.46, 12.15 |
|Item 1: Chapter 1, subsection 9(2) |2.47, 12.16 |
|Item 1: Chapter 1, subsections 9(3) and 9(4)|2.48 |
|Item 1: Chapter 3, Part 3-1, Division 2, |2.49 |
|sections 40 and 43 | |
|Item 1: Chapter 1, subsection 10(1) |2.50 |
|Item 1: Chapter 1, subsection 10(2) |2.52 |
|Item 1: Chapter 1, section 11 |2.55 |
|Item 1: Chapter 1, section 12 |2.57 |
|Item 1: Chapter 1, subsection 13(a) |2.59 |
|Item 1: Chapter 1, subsection 13(b) |2.60 |
|Item 1: Chapter 5, Part 5-5 |2.62 |
|Item 1: Chapter 1, subsection 14(1) |2.62 |
|Item 1: Chapter 1, subsection 14(2) |2.63 |
|Item 1: Chapter 1, section 15 |2.64 |
|Item 1: Chapter 1, subsection 16(1) |2.65 |
|Item 1: Chapter 1, subsection 16(2) |2.66 |
|Item 1: Chapter 1, section 17 |2.67 |
|Item 1: Chapter 2, Part 2-1, subsection |3.7 |
|18(1) | |
|Item 1: Chapter 2, Part 2-1, subsection |3.8 |
|18(2) | |
|Item 1: Chapter 5, Part 5-2 |3.10 |
|Item 1: Chapter 5, Part 5-1, Division 1 |3.17, 4.24, |
| |4.40, 4.58, |
| |6.134, 6.157, |
| |6.169, 6.187, |
| |6.201, 6.214, |
| |6.226, 6.243, |
| |6.255, 6.275, |
| |6.288, 6.325, |
| |6.339, 6.354, |
| |6.380, 6.390, |
| |6.401, 6.410, |
| |6.419, 8.88, |
| |9.27, 10.205, |
| |11.35 |
|Item 1: Chapter 5, Part 5-1, Division 2 |3.17, 4.24, |
| |4.40, 4.58, |
| |6.134, 6.157, |
| |6.169, 6.187, |
| |6.201, 6.214, |
| |6.226, 6.243, |
| |6.255, 6.275, |
| |6.288, 6.325, |
| |6.339, 6.354, |
| |6.380, 6.390, |
| |6.401, 6.410, |
| |6.419, 8.88, |
| |9.27, 10.205, |
| |11.35 |
|Item 1: Chapter 5, Part 5-1, Division 3 |3.17, 4.24, |
| |4.40, 4.58, |
| |6.134, 6.157, |
| |6.169, 6.187, |
| |6.201, 6.214, |
| |6.226, 6.243, |
| |6.255, 6.275, |
| |6.288, 6.325, |
| |6.339, 6.354, |
| |6.380, 6.390, |
| |6.401, 6.410, |
| |6.419, 8.88, |
| |9.27, 10.205, |
| |11.35 |
|Item 1: Chapter 5, Part 5-2, Division 2 |3.17, 4.24, |
| |4.40, 4.58, |
| |5.87, 6.134, |
| |6.157, 6.169, |
| |6.187, 6.201, |
| |6.214, 6.226, |
| |6.243, 6.255, |
| |6.275, 6.288, |
| |6.325, 6.339, |
| |6.354, 6.380, |
| |6.390, 6.401, |
| |6.410, 6.419, |
| |8.88, 9.27, |
| |10.205, 11.35 |
|Item 1: Chapter 5, Part 5-2 ,Division 3 |3.17, 4.24, |
| |4.40, 4.58, |
| |6.134, 6.157, |
| |6.169, 6.187, |
| |6.201, 6.214, |
| |6.226, 6.243, |
| |6.255, 6.275, |
| |6.288, 6.325, |
| |6.339, 6.354, |
| |6.380, 6.390, |
| |6.401, 6.410, |
| |6.419, 8.88, |
| |9.27, 10.205, |
| |11.35 |
|Item 1: Chapter 5, Part 5-2, Division 4, |3.17, 4.24, |
|Subdivision A |4.40, 4.58, |
| |6.134, 6.157, |
| |6.169, 6.187, |
| |6.201, 6.214, |
| |6.226, 6.243, |
| |6.255, 6.275, |
| |6.288, 6.325, |
| |6.339, 6.354, |
| |6.380, 6.390, |
| |6.401, 6.410, |
| |6.419, 8.88, |
| |9.27, 10.205, |
| |11.35 |
|Item 1: Chapter 5, Part 5-2, Division 4, |3.17, 4.24, |
|Subdivision B |4.40, 4.58, |
| |6.134, 6.157, |
| |6.169, 6.187, |
| |6.201, 6.214, |
| |6.226, 6.243, |
| |6.255, 6.275, |
| |6.288, 6.325, |
| |6.339, 6.354, |
| |6.380, 6.390, |
| |6.401, 6.410, |
| |6.419, 8.88, |
| |9.27, 10.205, |
| |11.35 |
|Item 1: Chapter 5, Part 5-2, Division 5, |3.17, 4.24, |
|section 246 |4.40, 4.58, |
| |6.134, 6.157, |
| |6.169, 6.187, |
| |6.201, 6.214, |
| |6.226, 6.243, |
| |6.255, 6.275, |
| |6.288, 6.325, |
| |6.339, 6.354, |
| |6.380, 6.390, |
| |6.401, 6.410, |
| |6.419, 8.88, |
| |9.27, 10.205, |
| |11.35 |
|Item 1: Chapter 2, Part 2-1, section 19 |3.19 |
|Item 1: Chapter 2, Part 2-1, subsections |3.21 |
|19(2)-(4) | |
|Item 1: Chapter 2, Part 2-1, subsections |3.22 |
|19(5) and (6) | |
|Item 1: Chapter 2, Part 2-2, subsection |4.19 |
|20(1) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |4.23, 4.39, |
|section 224 |4.57, 6.133, |
| |6.156, 6.168, |
| |6.186, 6.200, |
| |6.213, 6.225, |
| |6.242, 6.254, |
| |6.274, 6.287, |
| |6.324, 6.338, |
| |6.353, 6.379, |
| |6.389, 6.400, |
| |6.409, 6.418, |
| |7.78, 7.82, |
| |7.85, 8.87, |
| |9.26, 14.38, |
| |14.39 |
|Item 1: Chapter 2, Part 2-2, subsection |4.27 |
|20(2) | |
|Item 1: Chapter 2, Part 2-2, subsection |4.28 |
|21(1) | |
|Item 1: Chapter 2, Part 2-2, subsections |4.30 |
|21(5) and 21(6) | |
|Item 1: Chapter 2, Part 2 2, subsection |4.33 |
|21(7) | |
|Item 1: Chapter 2, Part 2-2, subsection |4.34 |
|21(1) | |
|Item 1: Chapter 2, Part 2-2, subsection |4.35 |
|21(2) | |
|Item 1: Chapter 2, Part 2-2, subsection |4.36 |
|21(3) | |
|Item 1: Chapter 2, Part 2-2, paragraph |4.37 |
|21(4)(a) | |
|Item 1: Chapter 2, Part 2-2, paragraph |4.38 |
|21(4)(b) | |
|Item 1: Chapter 2, Part 2-2, subsections |4.43 |
|22(1), (6) and (7) | |
|Item 1: Chapter 2, Part 2-2, paragraphs |4.45 |
|22(1)(a) and (b) | |
|Item 1: section 2 |4.45 |
|Item 1: Chapter 2, Part 2-2, subsection |4.46, 4.51 |
|22(2) | |
|Item 1: Chapter 2, Part 2-2, subsection |4.48, 4.52 |
|22(3) | |
|Item 1: Chapter 2, Part 2-2, subsection |4.49 |
|22(8) | |
|Item 1: Chapter 2, Part 2-2, subsection 22(1|4.50 |
|Item 1: Chapter 2, Part 2-2, subsection |4.53 |
|22(4) | |
|Item 1: Chapter 2, Part 2-2, paragraph |4.54 |
|22(5)(a) | |
|Item 1: Chapter 2, Part 2-2, paragraph |4.55 |
|22(5)(b) | |
|Item 1: Chapter 2, Part 2-3, subsections |5.17 |
|23(1) and (2) | |
|Item 1: Chapter 2, Part 2-3, section 2 and |5.18 |
|subsection 23(3) | |
|Item 1: Chapter 2, Part 2-3, section 2 |5.20, 5.78 |
|Item 1: Chapter 2, Part 2-3, section 28 |5.21, 5.76 |
|Item 1: Chapter 2, Part 2-3, section 2 and |5.22 |
|subsection 24(1) | |
|Item 1: Chapter 2, Part 2-3, paragraph |5.23 |
|24(1)(a) | |
|Item 1: Chapter 2, Part 2-3, section 2, |5.25 |
|paragraph 24(1)(b) | |
|Item 1: Chapter 2, Part 2-3, subsection |5.26 |
|24(4) | |
|Item 1: Chapter 2, Part 2-3, paragraph |5.29 |
|24(1)(c) | |
|Item 1: Chapter 2, Part 2-3, |5.35 |
|subsection 24(2) | |
|Item 1: Chapter 2, Part 2-3, |5.36 |
|paragraph 24(2)(a) | |
|Item 1: Chapter 2, Part 2-3, section 1 and |5.37 |
|subsection 24(3) | |
|Item 1: Chapter 2, Part 2-3, paragraph |5.41 |
|24(2)(b) | |
|Item 1: Chapter 2, Part 2-3, subsection |5.42 |
|25(1) | |
|Item 1: Chapter 2, Part 2-3, paragraphs |5.43 |
|25(1)(a)-(m) | |
|Item 1: Chapter 2, Part 2-3, paragraph |5.46 |
|25(1)(n) | |
|Item 1: Chapter 2, Part 2-3, section 26(1) |5.58 |
|Item 1: Chapter 2, Part 2-3, paragraph |5.59 |
|26(1)(a) | |
|Item 1: Chapter 2, Part 2-3, section 2, |5.62 |
|paragraph 26(1)(b) and subsection 26(2) | |
|Item 1: Chapter 2, Part 2-3, paragraph |5.71 |
|26(1)(c) | |
|Item 1: Chapter 2, Part 2-3, subsections |5.72 |
|27(1) and 27(2) | |
|Item 1: Chapter 2, Part 2-3, subsection |5.74 |
|27(2) | |
|Item 1: Chapter 2, Part 2-3, subsection |5.77 |
|28(1) | |
|Item 1: Chapter 2, Part 2-3, section 28(2) |5.80 |
|Item 1: Chapter 2, Part 2-3, subsection |5.82 |
|28(3) | |
|Item 1: Chapter 2, Part 2-3, section 2 |5.83 |
|Item 1: Chapter 5, Part 5-2, Division 5, |5.85, 15.119 |
|section 249 | |
|Item 1: Chapter 5, Part 5-2, Division 3 |5.87 |
|Item 1: Chapter 5, Part 5-2, Division 4 |5.87 |
|Item 1: Chapter 2, Part 2-3, section 2, |5.89 |
|subsection 232(3), subparagraph | |
|237(1)(a)(ii) and paragraph 238(1)(b) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.109 |
|paragraph 29(1)(a) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.114 |
|paragraph 29(1)(b) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.110 |
|paragraph 29(1)(c) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.115 |
|paragraph 29(1)(d) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.120 |
|paragraph 29(1)(e) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101 |
|subsection 29(1)(f) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.116 |
|paragraph 29(1)(g) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.117 |
|paragraph 29(1)(h) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.118 |
|paragraph 29(1)(i) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.111 |
|subsection 29(1)(j) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.112 |
|paragraph 29(1)(k) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.119 |
|paragraph 29(1)(l) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.126 |
|paragraph 29(1)(m) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.101, 6.128 |
|paragraph 29(1)(n) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.120 |
|paragraph 29(1)(f) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.121 |
|paragraphs 29(e) and (f) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.122 |
|paragraphs 29(2)-(3) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.124 |
|paragraph 29(3)(a) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.125 |
|paragraph 29(3)(b) | |
|Item 1: Chapter 4, Part 4-1, section 151 |6.130 |
|Item 1: Chapter 4, Part 4-6, section 207 |6.132, 6.155, |
| |6.167, 6.185, |
| |6.199, 6.212, |
| |6.224, 6.241, |
| |6.253, 6.273, |
| |6.286, 6.323, |
| |6.337, 6.352, |
| |6.378, 6.388, |
| |6.399, 8.86, |
| |9.25, 10.203 |
|Item 1: Chapter 4, Part 4-6, section 208 |6.132, 6.155, |
| |6.167, 6.185, |
| |6.199, 6.212, |
| |6.224, 6.241, |
| |6.253, 6.273, |
| |6.286, 6.323, |
| |6.337, 6.352, |
| |6.378, 6.388, |
| |6.399, 8.86, |
| |9.25, 10.203, |
| |13.25 |
|Item 1: Chapter 4, Part 4-6, section 209 |6.132, 6.155, |
| |6.167, 6.185, |
| |6.199, 6.212, |
| |6.224, 6.241, |
| |6.253, 6.273, |
| |6.286, 6.323, |
| |6.337, 6.352, |
| |6.378, 6.388, |
| |6.399, 8.86, |
| |9.25, 10.203 |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.138 |
|subsection 30(1) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.139, 6.140 |
|paragraph 30(1)(a) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.139, 6.141 |
|paragraph 30(1)(b) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.139, 6.142 |
|paragraph 30(1)(c) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.139, 6.143 |
|paragraph 30(1)(d) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.139, 6.144 |
|paragraph 30(1)(e) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.139 |
|paragraph 30(1)(f) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.139, 6.145, |
|paragraph 30(1)(g) |6.146 |
|Item 1: Chapter 4, Part 4-1, section 152 |6.153 |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.160 |
|subsection 31 | |
|Item 1: Chapter 4, Part 4-1, section 153 |6.165 |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.172 |
|subsection 32(1) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.173 |
|subsections 32(1)(c)-(d) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.174 |
|section 32 | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.175, 6.177 |
|subsection 32(2) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.178 |
|subsection 32(3) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.179 |
|subsection 32(4) | |
|Item 1: Chapter 4, Part 4-1, section 154 |6.183 |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.191 |
|section 33 | |
|Item 1: Chapter 4, Part 4-1, section 155 |6.197 |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.204 |
|section 34 | |
|Item 1: Chapter 4, Part 4-1, section 156 |6.210 |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.217 |
|subsection 35(1) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.218 |
|subsection 35(2) | |
|Item 1: Chapter 4, Part 4-1, section 157 |6.222 |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.229 |
|subsections 36(1)-(3) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.230 |
|subsection 36(4) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.231 |
|paragraph 36(4)(a) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.232 |
|paragraph 36(4)(b) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.233 |
|subsection 36(5) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.234 |
|subsection 36(6) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.235 |
|subsection 36(7) | |
|Item 1: Chapter 4, Part 4-1, section 158 |6.239 |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.246 |
|subsection 37(1) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.247 |
|subsection 37(2) | |
|Item 1: Chapter 4, Part 4-1, section 159 |6.251 |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.258 |
|subsection 38(1) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.259 |
|subsections 38(2)-(4) | |
|Item 1: Chapter 3, Part 3-1, Division 1, |6.260 |
|subsections 20(5) and (6) | |
|Item 1: Chapter 4, Part 4-1, Division 2, |6.261 |
|section 160 | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.263 |
|subsection 39(1) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.264 |
|subsection 39(2) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.265 |
|subsections 39(3) and (4) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.266 |
|subsection 39(5) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.267 |
|subsection 39(6) | |
|Item 1: Chapter 1, section 2 |6.268 |
|Item 1: Chapter 4, Part 4-1, section 161 |6.271 |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.278 |
|subsections 40(1) and (2) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.279 |
|subsection 40(3) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.280 |
|subsection 40(4) | |
|Item 1: Chapter 1, section 10 |6.281 |
|Item 1: Chapter 4, Part 4-1, section 162 |6.284 |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.292 |
|subsection 41(1) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.293 |
|subsection 41(4) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.294 |
|subsection 41(5) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.295 |
|subsection 41(2) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.296 |
|subsection 41(3) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.304 |
|subsection 43(1) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.307 |
|subsection 43(2) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.308 |
|subsections 43(2) | |
|Item 1: Chapter 1, section 10 |6.309 |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.310 |
|subsections 43(4) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.313 |
|subsections 43(1) and (2) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.314, 6.315 |
|subsection 43(3) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.317 |
|subsection 43(5) | |
|Item 1: Chapter 3, Part 3-1, Division 2, |6.318 |
|subsection 43(6) | |
|Item 1: Chapter 4, Part 4-1, section 163 |6.321 |
|Item 1: Chapter 3, Part 3-1, Division 3, |6.329 |
|subsections 44(1) and (2) | |
|Item 1: Chapter 3, Part 3-1, Division 3, |6.330 |
|subsection 44(3) | |
|Item 1: Chapter 3, Part 3-1, Division 3, |6.331 |
|section 45 | |
|Item 1: Chapter 3, Part 3-1, Division 3, |6.332 |
|section 46 | |
|Item 1: Chapter 4, Part 4-1, section 164 |6.335 |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.342 |
|subsection 47(1) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.344 |
|subsection 47(2) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.345 |
|subsection 47(3) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.346 |
|paragraph 47(4)(a) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.347 |
|paragraph 47(4)(b) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.348 |
|paragraphs 47(4)(c)-(d) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.349 |
|subsection 47(5) | |
|Item 1: Chapter 4, Part 4-1, section 165 |6.350 |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.357 |
|subsection 48(1) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.359 |
|subsection 48(2) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.360 |
|subsection 48(3) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.362 |
|subsection 48(4) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.363 |
|subsection 48(5) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.364 |
|paragraphs 48(6)(a) and (b) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.365 |
|paragraph 48(6)(c) | |
|Item 1: Chapter 3, Part 3-1, Division 4, |6.366 |
|subsection 48(7) | |
|Item 1: Chapter 4, Part 4-1, section 166 |6.376 |
|Item 1: Chapter 3, Part 3-1, Division 5, |6.383 |
|section 49 | |
|Item 1: Chapter 4, Part 4-1, section 167 |6.386 |
|Item 1: Chapter 3, Part 3-1, Division 5, |6.393 |
|subsection 50(1) | |
|Item 1: Chapter 3, Part 3-1, Division 5, |6.395 |
|subsection 50(2) | |
|Item 1: Chapter 4, Part 4-1, section 168 |6.397 |
|Item 1: Chapter 3, Part 3-2, Division 4, |6.404 |
|subsection 100(1) | |
|Item 1: Chapter 3, Part 3-2, Division 4, |6.405 |
|subsections 100(2) and (3) | |
|Item 1: Chapter 3, Part 3-2, Division 4, |6.406 |
|subsection 100(4) | |
|Item 1: Chapter 3, Part 3-2, Division 4, |6.408 |
|subsection 100(5) | |
|Item 1: Chapter 3, Part 3-2, Division 4, |6.413, 6.414 |
|subsection 101(1) | |
|Item 1: Chapter 3, Part 3-2, Division 4, |6.415 |
|subsections 101(2) and (3) | |
|Item 1: Chapter 3, Part 3-2, Division 4, |6.416 |
|subsection 101(4) | |
|Item 1: Chapter 3, Part 3-2, Division 4, |6.417 |
|subsections 101(5) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.17 |
|section 64 | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.17 |
|section 67 | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.18 |
|subsection 51(1) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.19 |
|subsection 51(2) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.20 |
|subsection 51(3) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.21 |
|subsection 52(1) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.22 |
|subsection 52(2) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.23 |
|subsection 52(3) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.24 |
|subsection 53(1) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.27 |
|subsection 53(2) | |
|Item 1: Chapter 3, Part 3-2. Division 1, |7.28 |
|subsection 54(1) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.29 |
|subsection 54(2) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.30 |
|subsection 54(3) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.33 |
|subsection 54(4) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.33 |
|subsection 54(5) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.36 |
|subsection 54(6) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.38 |
|subsection 54(7) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.40 |
|subsection 55(1) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.44 |
|subsection 56(1) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.45 |
|subsection 56(2) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.46 |
|subsection 56(3) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.47 |
|paragraph 57(1)(c) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.48 |
|paragraph 57(1)(d) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.49 |
|paragraph 57(1)(e) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.50 |
|subsection 57(2) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.51 |
|section 58 | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.53 |
|section 59 | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.56 |
|paragraph 63(a) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.58 |
|paragraph 63(b) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.59 |
|section 60 | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.60 |
|subsection 61(1) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.61 |
|subsection 61(2) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.62 |
|subsection 61(3) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.63 |
|section 62 | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.67 |
|section 65 | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.69 |
|subsection 66(1) | |
|Item 1: Chapter 3, Part 3-2, Division 1, |7.71 |
|subsection 66(2) | |
|Item 1: Chapter 3, Part 3-2, Division 4, |7.73 |
|section 102 | |
|Item 1: Chapter 3, Part 3-2, Division 4, |7.74 |
|subsection 102(3) | |
|Item 1: Chapter 3, Part 3-2, Division 4, |7.76 |
|section 103 | |
|Item 1: Chapter 4, Part 4-2, Division 1, |7.77, 13.14 |
|section 169 | |
|Item 1: Chapter 4, Part 4-2, Division 4, |7.81 |
|section 191 | |
|Item 1: Chapter 4, Part 4-2, Division 1, |7.84 |
|section 193 | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.89, 7.97 |
|section 258 | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.90 |
|paragraph 260(a) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.90 |
|paragraph 260(b) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.90 |
|paragraphs 260(c) and (d) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.90 |
|paragraph 260(e) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.91 |
|subsection 258(7) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.92 |
|paragraph 258(2)(a) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.93 |
|section 261 | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.94 |
|subparagraph 258(2)(b)(i) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.95 |
|subsection 258(4) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.96 |
|subsection 258(5) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.98 |
|section 263(5) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.100 |
|Section 263 | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.101 |
|section 264 | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.105 |
|section 265 | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.107 |
|section 266 | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.108 |
|section 267 | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.109 |
|paragraph 268(a) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.109 |
|paragraph 268(b) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.109 |
|paragraph 268(c) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.109 |
|paragraph 268(d) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.109 |
|paragraph 268(e) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.110 |
|paragraph 267(2)(a) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.111 |
|paragraph 267(2)(b)(i) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.111 |
|subsection 270(3) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.112 |
|section 269 | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.113 |
|subsection 268(4) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.114 |
|subsection 268(3) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.114 |
|subsection 269(3) | |
|Item 1: Chapter 5, Part 5-4, Division 1, |7.116, 7.117 |
|section 270 | |
|Item 1: Chapter 5, Part 5-4, Division 2, |7.119 |
|subsections 271(1), 271(2), 271(3) and | |
|271(5) | |
|Item 1: Chapter 5, Part 5-4, Division 2, |7.120 |
|paragraph 272(1)(a) | |
|Item 1: Chapter 5, Part 5-4, Division 2, |7.121 |
|paragraph 272(1)(b) | |
|Item 1: Chapter 5, Part 5-4, Division 2, |7.122 |
|Subsection 272(2) | |
|Item 1: Chapter 5, Part 5-4, Division 2, |7.122 |
|Subsection 272(3) | |
|Item 1: Chapter 5, Part 5-4, Division 2, |7.123 |
|subsection 271(6) | |
|Item 1: Chapter 5, Part 5-4, Division 2, |7.124 |
|paragraph 271(2)(a) | |
|Item 1: Chapter 5, Part 5-4, Division 2, |7.125 |
|subsection 271(2)(b) | |
|Item 1: Chapter 5, Part 5-4, Division 2, |7.126 |
|paragraph 271(2)(c) | |
|Item 1: Chapter 5, Part 5-4, Division 2, |7.127 |
|section 273 | |
|Item 1: Chapter 5, Part 5-4, Division 3, |7.130 |
|subsection 274(2) | |
|Item 1: Chapter 5, Part 5-4, Division 3, |7.131 |
|subsection 274(1) | |
|Item 1: Chapter 5, Part 5-4, Division 3 , |7.132 |
|section 274 | |
|Item 1: Chapter 5, Part 5-4, Division 3, |7.133 |
|subsection 274(4) | |
|Item 1: Chapter 5, Part 5-4, Division 3, |7.135 |
|section 275 | |
|Item 1: Chapter 5, Part 5-4, Division 3, |7.139 |
|section 277 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.8 |
|subsection 69(1) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.10 |
|paragraph 69(1)(a) | |
|Item 1: Chapter 1, sections 2 and 3 |8.10 |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.11 |
|paragraph 69(1)(b) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.13 |
|paragraph 69(1)(c) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.16 |
|paragraph 69(2) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.17 |
|paragraph 69(1)(d) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.18 |
|paragraph 69(1)(d)(ii) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.19 |
|subsections 69(3) and (4) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.20 |
|section 70 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.24 |
|section 71 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.25 |
|section 72 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.26 |
|sections 73, 74, 75 and 76 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.27 |
|sections 73, 74 and 75 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.28 |
|paragraphs 73(1)(b) and (c) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.30 |
|paragraph 73(1)(a) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.31 |
|subsection 73(2) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.33 |
|section 74 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.34 |
|subsection 75(1) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.35 |
|subsection 75(2) and paragraph 75(3)(a) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.36 |
|paragraph 73(3)(b) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.38 |
|section 82 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.39 |
|subsection 76(a) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.40 |
|subsections 76(b) and (c) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.41 |
|subsections 76(d) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.42 |
|section 77 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.43 |
|subsections 78(1) and (2) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.44 |
|subsection 78(3) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.45 |
|sections 79, 80 and 81 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.46 |
|sections 79 and 81 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.47 |
|section 80 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.48 |
|subsection 82(1) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.49, 8.50 |
|paragraphs 82(3)(a) and (b) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.51 |
|paragraph 82(3)(c) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.53 |
|paragraph 82(3)(d) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.55 |
|paragraphs 82(3)(c) and (d) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.56 |
|paragraph 82(3)(e) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.57 |
|subsections 82(1) and (6) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.58 |
|subsection 82(4) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.59 |
|subsection 82(5) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.60 |
|subsection 82(2) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.61 |
|subsection 83(1) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.62, 8.63 |
|subsection 83(2) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.64 |
|subsection 83(3) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.66 |
|section 85 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.67 |
|subsection 85(1) | |
|Item 1: Chapter 3, Part 3-2, Division 2,, |8.68 |
|subsection 85(2) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.69 |
|subsection 85(3), (4) and (5) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.70 |
|subsection 85(6) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.71 |
|section 86(1) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.72 |
|subsections 86(1)(d) and (e) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.74 |
|subsection 86(2) and (3) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.75 |
|sections 84 and 87 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.76 |
|section 88 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.77 |
|subsection 89(1) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.78 |
|subsections 89(2) and (3) | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.79 |
|section 90 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.80 |
|sections 91 and 92 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.81 |
|section 93 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.82 |
|section 94 | |
|Item 1: Chapter 3, Part 3-2, Division 2, |8.83 |
|section 95 | |
|Item 1: Chapter 4, Part 4-1, |8.84 |
|sections 170-186 | |
|Item 1: Chapter 3, Part 3-2, Division 3, |9.9 |
|subsections 96(3) and (4) | |
|Item 1: Chapter 3, Part 3-2, Division 3, |9.10 |
|subsections 96(1) and (2) | |
|Item 1: Chapter 3, Part 3-2, Division 3, |9.12 |
|subsection 97(1) | |
|Item 1: Chapter 3, Part 3-2, Division 3, |9.14 |
|section 98 | |
|Item 1: Chapter 3, Part 3-2, Division 3, |9.18 |
|subsections 99(1) and (2) | |
|Item 1: Chapter 3, Part 3-2, Division 3, |9.19 |
|subsection 99(3) | |
|Item 1: Chapter 3, Part 3-2, Division 3, |9.20 |
|subsection 97(3) | |
|Item 1: Chapter 3, Part 3-2, Division 3, |9.22 |
|subsection 97(2) | |
|Item 1: Chapter 4, Part 4-2, Division 3, |9.23 |
|subsections 188(1), 189(1), 189(3), 190(1) | |
|and 191(1) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.16, 10.18 |
|subsection 104(1) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.21 |
|subsections 104 (1) and (2) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.25 |
|subsections 104(2) and 104(3) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.27 |
|subsection 104(2) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.28 |
|subsection 104(3) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.29 |
|paragraph 105 | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.31 |
|paragraph 105(1)(b) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.32 |
|subsection 105(2) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.34 |
|sections 106 and 107 | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.35 |
|subsections 106(3) and (4) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.36 |
|subsection 106(4) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.37 |
|subsection 106(5) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.39 |
|subsection 106(6) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.40 |
|subsections 106(7) and 107(3) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.44 |
|subsection 108 | |
|Item 1: Chapter 3, Part 3-3, Division 2 |10.45 |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.49 |
|paragraph 109(1)(a) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.51 |
|subsection 109(1) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.53, 10.54 |
|paragraph 109(1)(b) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.56 |
|paragraph 109(2)(a) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.58 |
|subsection 109(2) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.60, 10.61 |
|paragraph 109(2)(b) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.63 |
|subsection 110(1) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.64 |
|subsection 110(2) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.65 |
|subsection 110(3) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.66 |
|subsection 111(1) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.67, 10.68 |
|subsection 111(2) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.70, 10.71 |
|subsection 111(3) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.72 |
|subsection 111(4) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.74 |
|subsection 111(5) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.75 |
|subsection 111(6) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.77, 10.78, |
|subsection 112(1) |10.79 |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.80 |
|subsection 112(2) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.81 |
|subsection 113 | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.82 |
|paragraph 113(a) | |
|Item 1: Chapter 3, Part 3-3, Division 1, |10.84 |
|paragraph 113(b) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.85 |
|section 114 | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.86 |
|subsections 114(1) & (2) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.88, 10.89 |
|subsection 114(1) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.90, 10.91 |
|subsection 114(2) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.92 |
|section 115 | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.93 |
|subsection 116 | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.94 |
|paragraph 117(a) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.95 |
|paragraph 117(b) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.96, 10.97 |
|subsection 118(1) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.97 |
|subsection 118(2) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.97 |
|subsection 118(3) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.98, 10.106 |
|sections 110 and 115 | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.99 |
|subsection 118(4) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.100 |
|subsection 118(5) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.101 |
|subsection 118(6) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.103 |
|subsection 118(7) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.105 |
|subsections 119(1) and (2) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.107 |
|subsection 119(2) | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.109 |
|section 120 | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.110 |
|section 121 | |
|Item 1: Chapter 3, Part 3-3, Division 2, |10.112 |
|subsection 121(2) | |
|Item 1: Chapter 3, Part 3-3, Division 3 |10.113 |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.114 |
|section 122 | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.115 |
|paragraph 122(1)(b) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.116 |
|paragraph 122(1)(c) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.117 |
|subsection 122(2) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.119 |
|subsection 122(3) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.120 |
|subsection 122(1) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.122, 10.123|
|subsection 123(1) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.124 |
|subsection 123(1)(c) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.125 |
|subsection 123(2) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.126 |
|subsection 123(3) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.127 |
|subsection 123(4) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.128 |
|subsection 124(2) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.129 |
|subsection 124(3) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.130 |
|subsection 124(4) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.131 |
|subsection 125(1) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.132 |
|subsections 125(1) & (3) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.133 |
|subsection 125(2) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.134 |
|subsection 125(4) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.135, |
|section 126 |10.136, 10.137|
|Item 1: Chapter 3, Part 3-3, Division 3, |10.138 |
|subsections 127(1) and (2) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.139, 10.140|
|subsection 127(3) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.141 |
|subsection 127(4) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.143 |
|Subdivision B | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.144 |
|subsection 128(2) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.144 |
|subsection 128(3) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.145 |
|subsection 128(1) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.147 |
|subsection 128(5) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.148 |
|subsection 128(6) | |
|Item 1: Chapter 3, Part 3-3, Division 3, |10.149 |
|subsections 128(4) & (7) | |
|Item 1: Chapter 3, Part 3-3, Division 4, |10.151 |
|section 129 | |
|Item 1: Chapter 3, Part 3-3, Division 4, |10.152 |
|subsections 129(1) and (2) | |
|Item 1: Chapter 3, Part 3-3, Division 4, |10.153 |
|subsection 129(1) | |
|Item 1: Chapter 3, Part 3-3, Division 4, |10.154 |
|subsection 129(2) | |
|Item 1: Chapter 3, Part 3-3, Division 4, |10.155, 10.157|
|subsection 130(1) | |
|Item 1: Chapter 3, Part 3-3, Division 1 |10.156 |
|Item 1: Chapter 3, Part 3-3, Division 4, |10.158 |
|subsection 130(2) | |
|Item 1: Chapter 3, Part 3-3, Division 5 |10.159 |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.160 |
|subsection 131(1) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.167 |
|subsection131(3) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.168 |
|paragraph 131(2)(a) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.169 |
|paragraph 131 (2)(b) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.173 |
|paragraph 131(1)(b) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.174 |
|subsection 131(4) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.175 |
|paragraph 131(2)(c) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.176 |
|paragraph 131(2)(d) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.177 |
|paragraph 131(5) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.182 |
|subsections 131(1) and (2) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.183 |
|subsection 131(1) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.186 |
|subsection 131(6) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.186 |
|section 132 | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.187 |
|section 131 | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.190 |
|subsection 132(3) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.191 |
|paragraph 132(2)(a) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.191 |
|paragraph 132(2)(b) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.191 |
|paragraph 132(2)(c) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.191 |
|paragraph 132(2)(d) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.192, 10.195|
|subsection 132(1) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.194 |
|subsection 132(4) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.196 |
|subsection 132(5) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.197 |
|paragraph 133(b) | |
|Item 1: Chapter 3, Part 3-3, Division 5, |10.198 |
|paragraph 133(a) | |
|Item 1: Chapter 4, Part 4-3, sections 194, |10.199 |
|195 197, 198 and 199 | |
|Item 1: Chapter 4, Part 4-3, section 196 |10.200 |
|Item 1: Chapter 4, Part 4-3, sections 200, |10.201 |
|201 and 202 | |
|Item 1: Chapter 3, Part 3-4, section 134 |11.13 |
|Item 1: Chapter 3, Part 3-4, subsection |11.15, 11.18, |
|134(1) |11.19 |
|Item 1: Chapter 3, Part 3-4, section 135 |11.20 |
|Item 1: Chapter 3, Part 3-4, paragraph |11.21 |
|135(1)(a) | |
|Item 1: Chapter 3, Part 3-4, paragraph |11.22 |
|135(1)(b) | |
|Item 1: Chapter 3, Part 3-4, subsection |11.23, 11.26 |
|135(1) | |
|Item 1: Chapter 3, Part 3-4, subsection |11.24 |
|135(2) | |
|Item 1: Chapter 3, Part 3-4, section 136 and|11.27 |
|137 | |
|Item 1: Chapter 3, Part 3-4, subsections |11.28 |
|136(1) and 137(1) | |
|Item 1: Chapter 3, Part 3-4, subsections |11.28 |
|136(2) and 137(2) | |
|Item 1: Chapter 3, Part 3-4, subsection |11.28 |
|136(2) | |
|Item 1: Chapter 3, Part 3-4, subsections |11.28 |
|136(1), (2) and (2) and 137(1) and (2) | |
|Item 1: Chapter 3, Part 3-4, subsection |11.29 |
|136(5) | |
|Item 1: Chapter 3, Part 3-4, subsection |11.30 |
|136(6) | |
|Item 1: Chapter 3, Part 3-4, subsection |11.31 |
|136(7) | |
|Item 1: Chapter 3, Part 3-4, subsections |11.34 |
|136(8) and 137(3) | |
|Item 1: Chapter 3, Part 3-5, Division 1 |12.13, 12.14 |
|Item 1: Chapter 1, subsection 9(3) |12.17 |
|Item 1: Chapter 1, subsection 9 |12.18 |
|Item 1: Chapter 1, section 7 |12.20 |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.21 |
|subsection 138(1) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.21 |
|paragraph 138(1)(a) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.22 |
|subsection 138(2) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.23 |
|subsection 138(3) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.24 |
|subsection 139 (1) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.24 |
|paragraph 139(1)(a) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.25 |
|subsection 139(2) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.26 |
|subparagraph 139(1)(d)(ii) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.27 |
|subparagraph 139(1)(e) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.28 |
|subparagraph 140(1) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.28 |
|paragraph 140(1)(a) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.29 |
|subsection 140(2) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.30 |
|paragraph 140(1)(c) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.31 |
|subparagraph 140(1)(d) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.32 |
|subsection 141(1) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.32 |
|subsection 141(1)(a) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.33 |
|subsection 141(2) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.34 |
|paragraph 141(1)(d) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.35 |
|paragraph 141(1)(e) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.36 |
|section 142 | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.37 |
|paragraph 142(a) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.39 |
|subparagraph 142(a)(i) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.40 |
|paragraph 148(1)(b) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.41 |
|subsection 148(1) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.42 |
|subsection 148(2) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.42 |
|subsection 148(3) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.43 |
|subsection 142(c) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.45 |
|subsection 142(d) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.46 |
|subsection 143(1) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.47 |
|subsection 143(2) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.48 |
|section 144 | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.49 |
|section 145 | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.50 |
|section 146 | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.51, 12.52 |
|subsection 147(1) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.55 |
|subsection 147(2) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.57 |
|subsection 149(1) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.58 |
|subsection 149(2) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.59 |
|subsection 150(1) | |
|Item 1: Chapter 3, Part 3-5, Division 1, |12.60 |
|subsection 150(2) | |
|Item 1: Chapter 4, Part 4-1, Division 1, |13.9 |
|section 151 | |
|Item 1: Chapter 4, Part 4-1, Division 1, |13.9 |
|section 152 | |
|Item 1: Chapter 4, Part 4-1, Division 1, |13.9 |
|section 153 | |
|Item 1: Chapter 4, Part 4-1, Division 1, |13.9 |
|section 154 | |
|Item 1: Chapter 4, Part 4-1, Division 1, |13.9 |
|section 155 | |
|Item 1: Chapter 4, Part 4-1, Division 1, |13.9 |
|section 156 | |
|Item 1: Chapter 4, Part 4-1, Division 1, |13.9 |
|section 157 | |
|Item 1: Chapter 4, Part 4-1, Division 1, |13.9 |
|section 158 | |
|Item 1: Chapter 4, Part 4-1, Division 1, |13.9 |
|section 159 | |
|Item 1: Chapter 4, Part 4-1, Division 2, |13.9 |
|section 161 | |
|Item 1: Chapter 4, Part 4-1, Division 2, |13.9 |
|section 162 | |
|Item 1: Chapter 4, Part 4-1, Division 2, |13.9 |
|section 163 | |
|Item 1: Chapter 4, Part 4-1, Division 2, |13.9 |
|section 164 | |
|Item 1: Chapter 4, Part 4-1, Division 2, |13.9 |
|section 165 | |
|Item 1: Chapter 4, Part 4-1, Division 2, |13.9 |
|section 166 | |
|Item 1: Chapter 4, Part 4-1, Division 2, |13.9 |
|section 167 | |
|Item 1: Chapter 4, Part 4-1, Division 2, |13.9 |
|section 168 | |
|Item 1: Chapter 4, Part 4-1, Division 1, |13.10 |
|paragraph 160(1)(a) | |
|Item 1: paragraph 160(1)(b) |13.10 |
|Item 1: subsections 160(2) to (4) |13.12 |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 170 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 172 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 173 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 174 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 175 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 176 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 177 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 178 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 179 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 180 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 181 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 182 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14 |
|section 183 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.14, 13.15 |
|section 184 | |
|Item 1: Chapter 4, Part 4-2, Division 3, |13.14 |
|section 188 | |
|Item 1: Chapter 4, Part 4-2, Division 3, |13.14 |
|section 189 | |
|Item 1: Chapter 4, Part 4-2, Division 3, |13.14 |
|section 190 | |
|Item 1: Chapter 4, Part 4-2, Division 3, |13.14 |
|section 191 | |
|Item 1: Chapter 4, Part 4-2, Division 4, |13.14 |
|section 192 | |
|Item 1: Chapter 4, Part 4-2, Division 4, |13.14 |
|section 193 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.16 |
|section 185 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.17 |
|section 186 | |
|Item 1: Chapter 4, Part 4-2, Division 2, |13.18 |
|section 187 | |
|Item 1: Chapter 4, Part 4-3, Division 1, |13.19 |
|section 194 | |
|Item 1: Chapter 4, Part 4-3, Division 1, |13.19 |
|section 195 | |
|Item 1: Chapter 4, Part 4-3, Division 1, |13.19 |
|section 196 | |
|Item 1: Chapter 4, Part 4-3, Division 2, |13.19 |
|section 196 | |
|Item 1: Chapter 4, Part 4-3, Division 2, |13.19 |
|section 198 | |
|Item 1: Chapter 4, Part 4-3, Division 3, |13.19 |
|section 199 | |
|Item 1: Chapter 4, Part 4-3, Division 3, |13.19 |
|section 200 | |
|Item 1: Chapter 4, Part 4-3, Division 3, |13.19 |
|section 201 | |
|Item 1: Chapter 4, Part 4-3, Division 4, |13.19 |
|section 202 | |
|Item 1: Chapter 4, Part 4-4, section 203 |13.20 |
|Item 1: Chapter 4, Part 4-4, section 204 |13.20 |
|Item 1: Chapter 4, Part 4-5, section 205 |13.21 |
|Item 1: Chapter 4, Part 4-5, section 206 |13.21 |
|Item 1: Chapter 4, Part 4-6, subsections |13.26 |
|209(a) and 209(b) | |
|Item 1: Chapter 4, Part 4-6, subsection |13.27 |
|209(c) | |
|Item 1: Chapter 4, Part 4-6, paragraphs |13.28 |
|210(1)(a) and 211(1)(a) | |
|Item 1: Chapter 4, Part 4-6, paragraphs |13.28 |
|210(1)(b) and 211(1)(b) | |
|Item 1: Chapter 4, Part 4-6, subparagraphs |13.29 |
|210(1)(c)(i) and 210(1)(d)(i); | |
|Item 1: Chapter 4, Part 4-6, paragraphs |13.29 |
|210(1)(c)(ii) and 210(1)(d)(ii) | |
|Item 1: Chapter 4, Part 4-6, subsections |13.31 |
|210(2) and 211(2) | |
|Item 1: Chapter 4, Part 4-7, section 212 |13.33 |
|Item 1: Chapter 4, Part 4-7, section 213 |13.34 |
|Item 1: Chapter 4, Part 4-7, section 214 |13.35 |
|Item 1: Chapter 4, Part 4-7, section 215 |13.36 |
|Item 1: Chapter 4, Part 4-7, section 216 |13.37 |
|Item 1: Chapter 5, Part 5-1, Division 1, |14.20 |
|section 218 | |
|Item 1: Chapter 5, Part 5-1, Division 1, |14.21 |
|subsection 218(2) | |
|Item 1: Chapter 5, Part 5-1, Division 1, |14.22 |
|subsections 218(3)-(4) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.23 |
|subsection 219(1) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.24 |
|paragraph 219(1)(a) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.24 |
|section 219(1)(b) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.24 |
|paragraph 219(1)(c) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.25 |
|paragraph 219(2)(a) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.25 |
|paragraph 219(2)(b) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.25 |
|paragraph 219(2)(c) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.26 |
|section 219 | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.28 |
|subsection 219(3) | |
|Item 1: Chapter 5,, Part 5-1, Division 2, |14.29 |
|subsection 219(4) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.30 |
|subsection 219(5) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.31 |
|paragraph 219(6)(a) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.31 |
|paragraph 219(6)(b) | |
|Item 1: Chapter 5: Part 5-1, Division 2, |14.31 |
|paragraph 219(6)(c) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.32 |
|section 220 | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.33 |
|subsections 221(1) & (2) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.35 |
|subsection 221(3) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.36 |
|subsection 222(1) | |
|Item 1: Chapter 5, Part 5-1, Division 2, |14.37 |
|subsection 222(2) | |
|Item 1: Chapter 5, Part 5-1, Division 3, |14.42 |
|paragraph 223(1)(a) | |
|Item 1: Chapter 5, Part 5-1, Division 3, |14.42 |
|paragraph 223(1)(b) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.28 |
|subparagraph 224(1)(a)(i) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.28 |
|subparagraph 224(1)(a)(ii) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.28 |
|subparagraph 224(1)(a)(iii) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.28 |
|subparagraph 224(1)(a)(iv) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.28 |
|subparagraph 224(1)(a)(v) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.28 |
|subparagraph 224(1)(a)(vi) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.28 |
|subparagraph 224(1)(a)(vii) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.28 |
|subparagraph 224(1)(a)(viii) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.28 |
|subparagraph 224(1)(a)(ix) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.28 |
|subparagraph 224(1)(a)(x) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.29 |
|subparagraph 224(1)(b)-(f) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.30 |
|subsection 224(4) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.31 |
|subsection 224(2) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.32 |
|subsection 224(3) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.33 |
|subsection 224(3), Items 1 and 2 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.34 |
|subsection 224(3), Item 3 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.37 |
|subsection 224(3), Item 4 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.39 |
|subsection 224(3), Item 5 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.41 |
|subsection 224(3), Item 6 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.43 |
|subsection 224(3), Item 7 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.45 |
|subsection 224(3), Item 8 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.47 |
|subsection 224(3), Item 9 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.48 |
|subsection 224(3), Item 10 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.49 |
|subsection 224(3), Item 11 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.50 |
|subsection 224(3), Item 12 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.51 |
|subsection 224(3), Item 13 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.52 |
|subsection 224(3), Item 14 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.53 |
|subsection 224(3), Item 15 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.55 |
|subsection 225(1) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.56 |
|subsection 225(2) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.57 |
|subsection 225(3) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.58 |
|subsection 225(4) | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.60 |
|section 226 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.61 |
|section 227 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.62 |
|section 228 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.63 |
|section 229 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.64 |
|section 230 | |
|Item 1: Chapter 5, Part 5-2, Division 1, |15.65 |
|section 231 | |
|Item 1: Chapter 5, Part 5-2, Division 2, |15.66 |
|section 232 | |
|Item 1: Chapter 5, Part 5-2, Division 2, |15.67 |
|subsection 232(3) | |
|Item 1: Chapter 5, Part 5-2, Division 2, |15.68 |
|subsection 232(2) | |
|Item 1: Chapter 5, Part 5-2, Division 2, |15.69 |
|subsection 232(4) | |
|Item 1: Chapter 5, Part 5-2, Division 2, |15.69 |
|subsection 232(7) | |
|Item 1: Chapter 5, Part 5-2, Division 2, |15.70 |
|subsection 232(6) | |
|Item 1: Chapter 5, Part 5-2, Division 2, |15.71 |
|section 233 | |
|Item 1: Chapter 5, Part 5-2, Division 2, |15.72 |
|section 234 | |
|Item 1: Chapter 5, Part 5-2, Division 2, |15.73 |
|subsection 234(2) | |
|Item 1: Chapter 5, Part 5-2, Division 2, |15.74 |
|section 235 | |
|Item 1: Chapter 5, Part 5-2, Division 2, |15.75 |
|section 236 | |
|Item 1: Chapter 5, Part 5-2, Division 3, |15.76 |
|subsection 236(2) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.78 |
|subsection 237(1) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.79 |
|subsection 238(1) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.80 |
|subsections 238(2) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.81 |
|subsections 238(3) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.82, 15.103 |
|section 243 | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.83 |
|paragraph 243(a) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.83 |
|paragraph 243(b) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.83 |
|paragraph 243(c) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.83 |
|paragraph 243(d) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.83 |
|paragraph 243(e) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.83 |
|paragraph 243(f) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.83 |
|paragraph 243(g) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.83 |
|paragraph 243(h) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.85 |
|section 244) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.86 |
|section 245 | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.94 |
|section 239 | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.95 |
|subsection 239(2) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.96 |
|subsection 239(3) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.97 |
|subsection 242(1) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.98 |
|subsection 239(4) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.99 |
|subsections 240(1) and (2) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.100 |
|subsections 240(3) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.101 |
|subsections 241(1) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.102 |
|subsections 241(3) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.104 |
|subsection 243(a) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.104 |
|subsection 243(b) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.104 |
|subsection 243(c) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.104 |
|subsection 243(d) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.104 |
|subsection 243(e) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.104 |
|subsection 243(f) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.104 |
|subsection 243(g) | |
|Item 1: Chapter 5, Part 5-2, Division 4, |15.104 |
|subsection 243(h) | |
|Item 1: Chapter 5, Part 5-2, Division 5, |15.105 |
|subsection 246 | |
|Item 1: Chapter 5, Part 5-2, Division 5, |15.106 |
|subsection 246(1) | |
|Item 1: Chapter 5, Part 5-2, Division 5, |15.107 |
|subsection 246(2)(a) | |
|Item 1: Chapter 5, Part 5-2, Division 5, |15.109 |
|subsection 246(2)(b) | |
|Item 1: Chapter 5, Part 5-2, Division 5, |15.111 |
|subsection 246(2)(c) | |
|Item 1: Chapter 5, Part 5-2, Division 5, |15.112 |
|subsection 246(2)(d) | |
|Item 1: Chapter 5, Part 5-2, Division 5, |15.113 |
|section 247 | |
|Item 1: Chapter 5, Part 5-2, Division 5, |15.114 |
|section 247(2) | |
|Item 1: Chapter 5, Part 5-2, Division 5, |15.116 |
|section 248 | |
|Item 1: Chapter 5, Part 5-2, Division 5, |15.118 |
|subsection 248(2) | |
|Item 1: Chapter 5, Part 5-2, Division 6, |15.122 |
|section 251 | |
|Item 1: Chapter 5, Part 5-2, Division 6, |15.124 |
|section 252 | |
|Item 1: Chapter 5, Part 5-2, Division 6, |15.126 |
|section 254 | |
|Item 1: Chapter 5, Part 5-2, section 254 |16.14 |
|Item 1: Chapter 5, Part 5-2, section 258 |16.15 |
|Item 1: Chapter 5, Part 5-2, subsection |16.19, 16.40, |
|255(1) |16.43, 16.47, |
| |16.48 |
|Item 1: Chapter 5, Part 5-2, subsection |16.21 |
|257(1) | |
|Item 1: Chapter 5, Part 5-2, subsection |16.22 |
|257(2) | |
|Item 1: Chapter 5, Part 5-2, subsection |16.23, 16.49 |
|255(2) | |
|Item 1: Chapter 5, Part 5-2, paragraph |16.24 |
|255(3)(a) | |
|Item 1: Chapter 5, Part 5-2, paragraph |16.25 |
|255(3)(b) | |
|Item 1: Chapter 5, Part 5-2, subsection |16.27, 16.28, |
|256(1) |16.33 |
|Item 1: Chapter 5, Part 5-2, paragraph |16.31 |
|256(2)(a) | |
|Item 1: Chapter 5, Part 5-2, paragraph |16.32 |
|256(3)(a) | |
|Item 1: Chapter 5, Part 5-2, paragraph |16.35 |
|256(2)(b) | |
|Item 1: Chapter 5, Part 5-2, paragraph |16.36 |
|256(3)(b) | |
|Item 1: subsection 256(1) |16.37 |
|Item 1: Chapter 5, Part 5-2, paragraph |16.38 |
|256(2)(c) | |
|Item 1: Chapter 5, Part 5-2, paragraph |16.39 |
|256(3)(c) | |
|Item 1: Chapter 5, Part 5-2, subsection |16.41 |
|255(4) | |
|Item 1: Chapter 5, Part 5-2, subsection |16.45 |
|255(5) | |
|Item 1: Chapter 5, Part 5-2, subsection |16.51 |
|255(7) | |
|Item 1: Chapter 5, Part 5-2, subsection |16.52 |
|255(8) | |
|Item 1: Chapter 5, Part 5-2, subsection |16.53 |
|255(9) | |
|Item 1, Chapter 1, section 2 |19.35, 19.36 |
|Item 1: section 14 |20.13 |
|Item 1: section 2 |20.13 |
|Item 1: subsection 278(1) |20.14 |
|Item 1: subsection 278(2) |20.16 |
|Item 1: section 279 |20.17 |
|Item 1: subsection 280(1) |20.18 |
|Item 1: subsections 280(2)-(3) |20.19 |
|Item 1: subsections 280(4)-(6) |20.20 |
|Item 1: section 281 |20.21 |
|Item 1: section 282 |20.22 |
|Item 1: section 283 |20.23 |
|Item 1: subsections 284(1) & (4) |20.24 |
|Item 1: subsection 284(2) |20.25 |
|Item 1: section 285 |20.26 |
|Item 1: section 286 |20.27 |
|Item 1: section 287(1) |20.28 |
|Item 1: section 287(2) |20.29 |
Schedule 2: Application of the Australian Consumer Law
|Bill reference |Paragraph |
| |number |
|Item 1, subsection 131E(1) |17.23 |
|Item 1, subsection 131E(2) |17.25 |
|Item 1, subsection 131E(3) |17.26 |
|Item 1, section 131F |17.27 |
|Item 1, sub section 131G(1) |17.28 |
|Item 1: Part XI, subsection 139G(2) |5.47 |
|Item 1, section 131G(2) |17.29 |
|Item 1, section 140A |17.30 |
|Item 1, section 140 |17.31, 17.32, |
| |17.33, 17.36 |
|Item 1, section 140 |17.34, 17.35 |
|Item 1, sections 140 & 140B |17.38 |
|Item 1, section 140C |17.40 |
|Item 1, section 140D |17.42 |
|Item 1, sections 140E and 140G |17.44 |
|Item 1, subsections 140F(1) and (6) |17.45 |
|Item 1, subsection 140F(2) |17.46 |
|Item 1, subsection 140F(3) |17.47 |
|Item 1, subsections 140F(4) and (5) |17.48 |
|Item 1, section 140H |17.49 |
|Item 1, section 140J |17.50 |
|Item 1, section 140K |17.52 |
|Item 1: section 137(1) & (2) |18.10 |
|Item 1: section 137(3)-(5) |18.11 |
|Item 1: section 137B |18.12 |
|Item 1: sections 137C(1) & 137E(1) |18.13 |
|Item 1: sections 137C(2) & 137E(2) & (3) |18.14 |
|Item 1: section 137D |18.16 |
|Item 1: subsections 137K(1) & (2) |18.17 |
|Item 1: subsection 137K(3) |18.18 |
|Item 1:section 137K(4) |18.19 |
|Item 1: section 137K (5) |18.20 |
|Item 1: section 137L |18.21 |
|Item 1: section 137M(1) |18.22 |
|Item 1: section 137M(2) |18.23 |
|Item 1: section 138 |18.25 |
|Item 1: section 138A |18.26 |
|Item 1: section 138B |18.27 |
|Item 1: section 138C |18.28 |
|Item 1: section 138D |18.29 |
|Item 1: section 138E |18.30 |
|Item 1: section 139 |18.31 |
|Item 1: section 139A(1) & (3) |18.32 |
|Item 1: section 139A(2) |18.33 |
|Item 1: section 139A(4) & (5) |18.34 |
|Item 1: sections 139B & 139C |18.35 |
|Item 1: section 139D & 139E |18.36 |
|Item 1:section 139F |18.37 |
|Item 1:section 139G |18.38 |
|Item 1: Part XI, Division 5 |7.79, 7.83, |
| |7.86 |
|Item 1, Part XI, Division 4, subdivision D, |19.48 |
|section 133H | |
|Item 1, Part XI, Division 4, Subdivision D, |19.50 |
|subsections 133H(3) and 133H(4) | |
|Item 1, Part XI, Division 4, Subdivision D, |19.51 |
|subsection 133H(1) | |
|Item 1, Part XI, Division 4, Subdivision D, |19.52 |
|subsection 133H(2) | |
|Item 1, Part XI, Division 4, Subdivision D, |19.53 |
|section 133J | |
|Item 1, Part XI, Division 6, Subdivision A, |19.54 |
|subsection 135(3) | |
|Item 1, Part XI, Division 6, Subdivision B, |19.56 |
|section 135H | |
|Item 1, Part XI, Division 6, Subdivision A, |19.58 |
|subsections 135(1) and 135(2) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.59 |
|paragraphs 135A(1)(a) and 135A(2)(b) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.59 |
|paragraph 135A(1)(b), 135A(1)(e) and | |
|135A(2)(b) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.59 |
|paragraph 135A(1)(c) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.59 |
|paragraphs 135A(1)(d) and 135A(2)(a) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.59 |
|paragraphs 135A(1)(f) and 135A(2)(c) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.59 |
|sections 135B and 135C | |
|Item 1, Part XI, Division 6, Subdivision E, |19.59 |
|section 135S | |
|Item 1, Part XI, Division 6, Subdivision E, |19.59, 19.76 |
|sections 135V and 135W | |
|Item 1, Part XI, Division 6, Subdivision A, |19.60 |
|section 135B | |
|Item 1, Part XI, Division 6, Subdivision A, |19.61 |
|subsection 135C(1) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.62 |
|subsection 135C(2) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.63 |
|subsection 135C(3) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.65 |
|subsections 135M(1) and 135M(2) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.65 |
|subsection 135M(3) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.66 |
|subsections 135N(1), 135N(4) and 135N(5) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.67 |
|subsections 135N(2) and 135N(3) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.68 |
|subsections 135P(1) and 135P(2) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.68 |
|subsection 135P(3) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.69 |
|section 135Q | |
|Item 1, Part XI, Division 6, Subdivision D, |19.70 |
|subsection 135R(1) | |
|Item 1, Part XI, Division 6, Subdivision D, |19.71 |
|subsections 135R(2), 135R(3) and 135R(4) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.73 |
|subsection 135S(1) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.74 |
|subsection 135S(3) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.75 |
|subsection 135S(2) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.77 |
|subsection 135S(4) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.77 |
|subsection 135S(5) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.78 |
|subsection 135T(1) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.79 |
|subsections 135T(2) and 135T(5) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.79 |
|subsections 135T(3) and 135T(4) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.80 |
|section 135U | |
|Item 1, Part XI, Division 6, Subdivision E, |19.81 |
|subsections 135Y(1) and 135Y(2) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.81 |
|subsection 135Y(3) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.82 |
|subsection 135Y(4) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.83 |
|subsection 135X(1) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.84 |
|subsection 135X(2) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.85 |
|subsection 135X(3) | |
|Item 1, Part XI, Division 6, Subdivision E, |19.85 |
|subsection 135X(4) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.86 |
|subsection 135F(1) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.86 |
|subsection 135F(2) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.86 |
|subsection 135F(3) | |
|Item 1, Part XI, Division 6, Subdivision A, |19.87 |
|section 135G | |
|Item 1, Part XI, Division 6, Subdivision B, |19.87, 19.98 |
|section 135J | |
|Item 1, Part XI, Division 6, Subdivision A, |19.88 |
|section 135D | |
|Item 1, Part XI, Division 6, Subdivision A, |19.89 |
|section 135E | |
|Item 1, Part XI, Division 6, Subdivision F, |19.90 |
|subsection 135Z(1) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.91 |
|subsection 135Z(2) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.92 |
|subsection 136(1) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.92 |
|subsection 136(2) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.93 |
|subsections 136(3) and 136(4) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.94 |
|subsection 136(5) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.94 |
|subsection 136(6) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.94 |
|subsection 136(7) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.94 |
|subsection 136(8) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.94 |
|subsection 136(9) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.95 |
|subsection 136(10) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.95 |
|subsection 136(11) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.96 |
|subsection 135Z(3) | |
|Item 1, Part XI, Division 6, Subdivision G, |19.97 |
|subsection 136B(1) | |
|Item 1, Part XI, Division 6, Subdivision G, |19.97 |
|subsection 136B(2) | |
|Item 1, Part XI, Division 6, Subdivision G, |19.97 |
|subsection 136B(3) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.99 |
|subsection 135K(1) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.99 |
|subsection 135K(2) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.99 |
|subsection 135K(3) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.100 |
|subsection 135L(1) | |
|Item 1, Part XI, Division 6, Subdivision C, |19.100 |
|subsection 135L(2) | |
|Item 1, Part XI, Division 6, Subdivision F, |19.101 |
|section 136A) | |
|Item 1, Part XI, Division 3 |19.102 |
|Item 1, Part XI, Division 3, subsection |19.104 |
|132(1) | |
|Item 1, Part XI, Division 3, subsection |19.105 |
|132(3) | |
|Item 1, Part XI, Division 3, paragraph |19.106 |
|132(3)(e) | |
|Item 1, Part XI, Division 3, subsection |19.106 |
|132(4) | |
|Item 1, Part XI, Division 3, section 132B |19.107 |
|Item 1, Part XI, Division 3, subsection |19.107, 19.113|
|132B(2) | |
|Item 1, Part XI, Division 3, subsection |19.108 |
|132(2) | |
|Item 1, Part XI, Division 3, subsection |19.109, 19.115|
|132(5) | |
|Item 1, Part XI, Division 3, subsection |19.110 |
|132A(1) | |
|Item 1, Part XI, Division 3, subsection |19.111 |
|132A(3) | |
|Item 1, Part XI, Division 3, paragraph |19.112 |
|132A(3)(e) | |
|Item 1, Part XI, Division 3, subsection |19.112 |
|132A(4) | |
|Item 1, Part XI, Division 3, subsection |19.113 |
|132B(1) | |
|Item 1, Part XI, Division 3, subsection |19.114 |
|132A(2) | |
|Item 1, Part XI, Division 3, subsection |19.116, 19.117|
|132C(1) | |
|Item 1, Part XI, Division 3, subsection |19.117 |
|132C(3) | |
|Item 1, Part XI, Division 3, subsection |19.118 |
|132C(2) | |
|Item 1, Part XI, Division 3, section 132D |19.119 |
|Item 1, Part XI, Division 3, paragraphs |19.120 |
|132D(1)(a) & 132D (2)(a) | |
|Item 1, Part XI, Division 3, paragraphs |19.121 |
|132D(1)(b) & 132D(2)(b) | |
|Item 1, Part XI, Division 3, subsection |19.122 |
|132D(3) | |
|Item 1, Part XI, Division 3, subsections |19.124 |
|132J(1) and 132J(2) | |
|Item 1, Part XI, Division 3, subsection |19.124, |
|132J(4) |19.126, 19.139|
|Item 1, Part XI, Division 3, subsection |19.125, 19.138|
|132J(3) | |
|Item 1, Part XI, Division 3, subsection |19.127 |
|132E(1) | |
|Item 1, Part XI, Division 3, subsection |19.128, 19.130|
|132E(2) | |
|Item 1, Part XI, Division 3, subsections |19.129 |
|132E(1) and 132E(4) | |
|Item 1, Part XI, Division 3, subsection |19.130 |
|132E(3) | |
|Item 1, Part XI, Division 3, subsection |19.131 |
|132F(1) | |
|Item 1, Part XI, Division 3, subsection |19.131 |
|132F(4) | |
|Item 1, Part XI, Division 3, subsection |19.132 |
|132F(2) | |
|Item 1, Part XI, Division 3, subsection |19.133, 19.134|
|132G(1) | |
|Item 1, Part XI, Division 3, subsection |19.135 |
|132G(2) | |
|Item 1, Part XI, Division 3, subsection |19.137 |
|132J(1) | |
|Item 1, Part XI, Division 3, subsection |19.140, 19.142|
|132H(3) | |
|Item 1, Part XI, Division 3, subsection |19.140 |
|132H(1) | |
|Item 1, Part XI, Division 3, paragraph |19.141 |
|132H(1)(e) | |
|Item 1, Part XI, Division 3, subsection |19.141 |
|132H(2) | |
|Item 1, Part XI, Division 3, subsection |19.143 |
|132K(1) | |
|Item 1, Part XI, Division 3, subsection |19.144 |
|132K(2) | |
|Item 1, Part XI, Division 3, subsection 132K|19.144 |
|(3) | |
|Item 1: Part 5-1, Division 3, paragraph |14.42 |
|223(1)(c) | |
|Item 1: Part XI, Division 7, section 137H |15.84 |
|Item 1: Part 5-1, Division 3, subsection |14.43 |
|223(2) | |
|Item 1: Part XI, paragraph 131E(2)(f) |14.45 |
|Item 1: Part XI, Division 7, section 137A |15.87 |
|Item 1: Part XI, Division 7, subsection |15.88 |
|137A(1) | |
|Item 1: Part XI, Division 7, subsection |15.89, 15.90 |
|137A(2) | |
|Item 1: Part XI, Division 7, subsection |15.91 |
|137A(2) | |
|Item 1: Part XI, Division 5 |4.26, 4.42, |
| |4.60, 6.136, |
| |6.159, 6.171, |
| |6.189, 6.203, |
| |6.216, 6.228, |
| |6.245, 6.257, |
| |6.277, 6.341, |
| |6.356, 6.382, |
| |6.392, 6.403, |
| |6.412, 6.421, |
| |9.29, 14.40, |
| |14.41 |
|Item 1, section 130 |17.14 |
|Item 1, section 131 |17.15 |
|Item 1, section 131A |17.16 |
|Item 1, section 131B |17.17 |
|Item 1, section 131C(1) |17.18 |
|Item 1, section 131C(2) |17.19 |
|Item 1, section 131C(3) |17.20 |
|Item 1, section 131D |17.21 |
|Item 1: Part XI, Division 5, section 134F |21.22, 21.43 |
|Item 1: Part XI, Division 1, section 130 |21.23 |
|Item 1: Part XI, Division 5, subsection |21.24 |
|134A(2) | |
|Item 1: Part XI, Division 5, section 134A |21.27 |
|Item 1: Part XI, Division 5, section 134D |21.28, 21.29, |
| |21.34, 21.36, |
| |21.40 |
|Item 1: Part XI, Division 5, subsection |21.30 |
|134A(1) | |
|Item 1: Part XI, Division 5, subsections |21.31 |
|134A (3) and (4) | |
|Item 1: Part XI, Division 5, section 134B |21.32 |
|Item 1: Part XI, Division 5, subsections |21.37 |
|134D | |
|Item 1: Part XI, Division 5, subsections |21.44 |
|134F(4)-(5) | |
|Item 1: Part XI, Division 5, subsection |21.45 |
|134G(1) | |
|Item 1: Part XI, Division 5, subsection |21.46 |
|134G(2) | |
|Item 1: Part XI, Division 5, subsection |21.47 |
|134G(3) | |
|Item 1: Part XI, Division 5, subsection |21.48 |
|134G(4) | |
|Item 1: Part XI, Division 5, subsection |21.49 |
|134G(5) | |
|Item 1: Part XI, Division 5, subsection |21.51 |
|134G(6) | |
|Item 1: Part XI, Division 5, subsection |21.52 |
|134G(7) | |
|Item 2, Part XI, Division 4, section 133D |19.40 |
|Item 2, Part XI, Division 4, subsection |19.41 |
|133D(3) | |
|Item 2, Part XI, Division 4, subsection |19.43 |
|133F(1) and section 133G | |
|Part 2, item 9, subsection 86E(3) |15.135 |
|Part 4, item 17, subsection 87(1A) |15.133 |
|Part 4, item 20, paragraph 156(1)(d) |15.134 |
|Part XI, subsection 133(3) |19.30 |
|Part XI, Division 4, subsection 133D |19.42 |
|Part XI, subsection 133(4) |19.30 |
|Part XI, Division 4, subsection 133F(2) |19.44, 19.45 |
|Part XI, subsection 133A(6) |19.31 |
|Part XI, subsection 133A(1) |19.31 |
|Part XI, subsection 133A(4) and 133A(5) |19.32 |
|Part XI, Division 4, subsection 133B(1) |19.34 |
|Part XI, subsection 133(1) |19.28 |
|Part XI, Division 4, subsections 133B(2) and|19.38 |
|133C(2) | |
|Part XI, subsection 133(2) |19.28 |
Schedule 3: Amendment of the Corporations Legislation
|Bill reference |Paragraph |
| |number |
|Item 1: section 131 |3.9 |
|Item 1: Part XI, Division 5 |8.90 |
|Item 6: section 12BB |2.29 |
|Items 8, 9, 10, 11, 12 and 13 |4.56 |
|Item 8: section 12BEA |2.53 |
|Item 14 |6.137 |
|Items 18-23 |6.190 |
|Items 24-28 |6.291 |
|Item 28, subsection 12DMB(6) |6.318 |
|Item 28, subsection 12DMB(2) |6.308 |
|Item 28, subsections 12DMB(1) and (2) |6.313 |
|Item 28, section 12DMA |6.297, 6.299 |
|Item 28, subsection 12DMB(3) |6.314, 6.315 |
|Item 28, subsection 12DMB(1) |6.306 |
|Item 28, subsection 12DMB(5) |6.317 |
|Item 28, subsection 12DMB(4) |6.311 |
|Item 29: section 12DN |3.23 |
|Item 29, section 12DN |6.262 |
|Items 32-35 |15.121 |
|Part 3, item 14, section 12GLD |15.136 |
|Part 3, item 14, section 12GLD |15.137 |
|Part 3, item 15, section 206EB |15.138 |
|Part 3, item 15, paragraph 1273AA(1)(a |15.139 |
|Part 3, item 17, paragraph 1273AA(2)(ab) |15.139 |
|Part 5, item 24, subsection 12GM(2) |15.133 |
|Part 5, item 27, paragraph 12HB(1)(b) |15.134 |
Schedule 4: Enforcement of Industry Codes
|Bill reference |Paragraph |
| |number |
|Item 1, subsection 4(1) |22.19 |
|Item 4, subsection 51AEAA(1) |22.15 |
|Item 4, subsection 51AEAA(2) |22.17 |
|Item 4, subsections 51AEAB(1) and 51AEAB(3) |22.18 |
|Item 4, Section 51AEAH |22.13 |
|Item 4, subsection 51AEAB(2) |22.20 |
|Item 4, subsection 51AEAB(1) |22.21, 22.27 |
|Item 4, subsection 51AEAB(4) |22.22 |
|Item 4, subsection 51AEAB(5) |22.23 |
|Item 4, subsection 51AEAB(6) |22.24 |
|Item 4, subsection 51AEAB(8) |22.25 |
|Item 4, subsection 51AEAB(9) |22.26 |
|Item 4, section 51AEAC |22.27, 22.28 |
|Item 4, subsections 51AEAD(1) and (2) |22.29 |
|Item 4, Subsection 51AEAD(3) |22.30 |
|Item 4, subsection 51AEAD(3) |22.32 |
|Item 4, subsection 51AEAD(5) |22.33 |
|Item 4: section 51AEAF |22.34 |
|Item 4, subsection 51AEAE(1) |22.35 |
|Item 4, subsection AEAE(2) |22.35 |
|Item 4, subsection 51AEAG(1) |22.36 |
|Item 4, subsection 51AEAG(2) |22.37 |
Schedule 5: Other Amendment of the Trade Practices Act 1974
|Bill reference |Paragraph |
| |number |
|Item 1 |1.3, 1.6 |
|Item 2 |1.4, 1.6 |
|Items 3-129 |1.6 |
Schedule 6: Amendment of Other Acts to change references to the Trade
Practices Act 1974
|Bill reference |Paragraph |
| |number |
|Items 1-191 |1.6 |
Schedule 7: Transitional Matters
|Bill reference |Paragraph |
| |number |
|Items 2 and 3 |10.212 |
|Item 4 |10.211 |
|Item 5 |11.42 |
|Item 6 |3.26, 4.63, |
| |6.424, 7.142, |
| |8.93, 9.32, |
| |10.210, 11.40,|
| |12.63, 13.40, |
| |14.48, 15.129,|
| |16.56, 17.55, |
| |18.41, 19.147,|
| |20.32, 21.55, |
| |22.41 |
|Item 7 |3.27, 4.64, |
| |6.425, 7.143, |
| |8.94, 9.33, |
| |10.213, 11.43,|
| |12.64, 13.41, |
| |14.49, 15.130,|
| |16.57, 17.56, |
| |18.42, 19.148,|
| |20.33, 21.56, |
| |22.42 |
|Item 8 |5.90, 5.91, |
| |5.93 |
|Item 11 |11.44 |
|Item 12 |3.28, 4.65, |
| |6.426, 7.144, |
| |8.95, 9.34, |
| |10.214, 11.45,|
| |12.65, 13.42, |
| |14.50, 15.131,|
| |16.58, 17.57, |
| |18.43, 19.149,|
| |20.34, 21.57, |
| |22.43 |
Do not remove section break.
-----------------------
[1]
[2] Quinlivan v Australian Competition and Consumer Commission [2004]
FCAFC 175 (5 July 2004) at 14.
[3] See Australian Competition and Consumer Commission v Universal Sports
Challenge [2002] FCA 1275 at 44.
[4] Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17.
[5] Parkdale Custom Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 190.
[6] Hornsby Building Information Centre Pty Ltd v Sydney Building
Information Centre Ltd (1978) 140 CLR 216.
[7] Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31.
[8] Central Equity Limited v Central Corporation Pty Ltd [1995] FCA 1572
at [34].
[9] Paris Convention for the Protection of Industrial Property, Article
1, paragraph 2.
[10] TPC v J & R Enterprises Pty Ltd (1991) 99 ALR 325 at [87].
[11] TPC v J & R Enterprises Pty Ltd (1981) 99 ALR 325 at [87].
[12] [2009] HCA 19.
[13] ACCC v Maritime Union of Australia (2001) 186 ALR 487.
[14] For a case dealing with similar facts, see David Jones Ltd v Willis
(1934) 52 CLR 110.
[15] For a case involving similar factual scenario, see Mayne Nickless v
Crawford (1992) 59 SASR 490.
[16] For a case involving a similar factual scenario, see Dillon v Baltic
Shipping Co (1989) 21 NSWLR 614.
[17] (1967) FCR 93.
[18] (2004) 209 ALR 270.
[19] Productivity Commission (2008) Review of Australia's Consumer Policy
Framework, vol. 2, 19.
[20] Corones and Christensen (2007) Comparison of Generic Consumer
Protection Regulation, report prepared for the Productivity Commission,
25-6.
[21] Productivity Commission (2008) Review of Australia's Consumer Policy
Framework, vol. 2, 65, 81-7.
[22] Ibid., 227.
[23] Ibid.,19.
[24] Corones and Christensen (2007) Comparison of Generic Consumer
Protection Regulation, report prepared for the Productivity Commission,
21, 22, 130-2.
[25] Productivity Commission (2008) Review of Australia's Consumer Policy
Framework, recommendation 4.1.
[26] PC (2008) Review of Australia's Consumer Policy Framework, vol. 2,
51.
[27] Consumer Action Law Centre (CALC) and the Financial & Consumer Rights
Council (FCRC) (2007) Coercion and harassment at the door - Consumer
experiences with energy direct marketers, p 33,
http://www.consumeraction.org.au/downloads/EnergyMarketinginVictoria-
Finalv.3.pdf.
[28] Newsletter of the Energy and Water Ombudsman of NSW, September 2006.
[29] CALC and FCRC (2007), p.29.
[30] FCRC (2009) Still an Unfair Deal? Reassessing the impacts of energy
reform and deregulation on low income and vulnerable consumers, see
http://www.fcrc.org.au/files/YIDOUVF93M/FCRC_Still_an_Unfair_Deal_-
_FINAL_REPORT.pdf.
[31] National Competition Policy Review: Fair Trading Act 1987 and the NSW
Door-to-Door Sales Act 1967, p. 49.
http://www.fairtrading.nsw.gov.au/pdfs/About_us/ftadtdreport.pdf
[32] Consumer Affairs Victoria (2009) Cooling-off periods in Victoria:
their use, nature, cost and implications, Research Paper no. 12, 12.
[33] Section 40B of the NSW Fair Trading Act 1987.
[34] callcentres.net Australian Contact Centre Industry Benchmarking
Report 2009, see
http://www.callcentres.net/CALLCENTRES/LIVE/me.get?site.sectionshow&CALL
142.
[35] Australian Energy Market Commission (2009) Review of the
Effectiveness of Competition in Electricity and Gas Markets in Victoria-
First Draft Report, 66 and 69, see http://www.aemc.gov.au/Market-
Reviews/Completed/Review-of-the-Effectiveness-of-Competition-in-the-
Electricity-and-Gas-Retail-Markets-Victoria.html.
[36] ACCC Door-to-door sellers must clean up act after ACCC action against
Craftmatic (19 June 2009) (see
http://www.accc.gov.au/content/index.phtml/itemId/877681/fromItemId/8154
56?pageDefinitionItemId=16940).
[37] See http://www.accc.gov.au/content/index.phtml/itemId/331644.
[38] Referred to by the then NSW Minister for Fair Trading, the Hon. Linda
Burney MP, in the second reading speech for the Fair Trading
(Amendment) Bill 2006 (NSW).
[39] http://www.scamwatch.gov.au/content/index.phtml/itemId/694342.
[40] See ACCC Scamwatch: Directories and advertising (false billing) at
http://www.scamwatch.gov.au/content/index.phtml/itemId/694342.
[41] The ACL establishes a generic consumer law. The ACL allows for the
continuation of industry specific regulation provided it is not
inconsistent with the ACL or alters the effect of the ACL. The IGA
requires MCCA to consider the extent of 'inconsistent with or alters
the effect of' the ACL, including in respect of industry specific
regulation, once implementation of the initial text of the ACL
legislation is complete.
[42] National Competition Policy Review - Fair Trading Act 1987 and Door-
to-Door Sales Act 1967, NSW Department of Fair Trading (2002).
[43] Council of Australian Governments (2009). Inter-Governmental
Agreement for the Australian Consumer Law, 3.2.
[44] NZ Ministry of Consumer Affairs (2001). Regulation of Unsolicited
Services: Options for Reform, 6-7.
[45] See
http://www.scamwatch.gov.au/content/index.phtml/tag/OfficeSupplyScams.
[46] See
http://www.scamwatch.gov.au/content/index.phtml/tag/RingToneScams;
http://www.scamwatch.gov.au/content/index.phtml/tag/MissedCallsTextMessa
ges;
http://www.scamwatch.gov.au/content/index.phtml/tag/SMSCompetitionTrivia
Scams.
[47] The Hon Virginia Judge MP, Don't get taken in by trademark scams
(Media Release, 6 November 2009).
[48] PC (2008) Review of Australia's Consumer Policy Framework,
recommendation 11.1.
[49] Financial Ombudsman Service (2009) Submission to the An Australian
Consumer Law: Fair markets - Confident consumers paper, page 5.
[50] Trade Practices Amendment (Australian Consumer Law) Bill 2009.
[51] This threshold is set by the A New Tax System (Goods and Services
Tax) Amendment Regulations 2007 (No. 1), and took effect from 1 July
2007.
[52] The Consumer Advocacy and Financial Counselling Association of
Victoria (1994) Why Lay-by?
[53] Australian Retailers Association (2009). Submission to An Australian
Consumer Law: Fair markets - Confident consumers, 17.
[54] Australasian Compliance Institute, submission to An Australian
Consumer Law: Fair Markets - Confident Consumers, p.32.
[55] The Scanning Code of Practice is a voluntary code that applies to the
supermarket industry. Under the code, supermarkets that are
signatories to the code are required to ensure the price accuracy of
their check-out systems and self pricing procedures. The code is
maintained by the Australian Retailers Association.
[56] NSW Office of Fair Trading (2002), National Competition Policy
Review: Fair Trading Act 1987 & Door to Door Sales Act 1967, 38-9.
[57] WA DOCEP Consumers Warned About Discount Travel (20 September 2001)
http://www.commerce.wa.gov.au/Corporate/Media/statements/2001/September/
Consumers_Warned_Abo.html.
[58] http://www.accc.gov.au/content/index.phtml/itemId/815464;
http://www.accc.gov.au/content/index.phtml/itemId/303213.
[59]
http://www.accc.gov.au/content/index.phtml/itemId/88088/fromItemId/37801
4;
http://www.accc.gov.au/content/item.phtml?itemId=871667&nodeId=22b681fa2
f9c9f0fd34e03d0c33707b1&fn=Undertaking.pdf; Australian Competition and
Consumer Commission v Nationwide News (1996) ATPR 41-519.
[60] Australian Competition and Consumer Commission v Nationwide News
(1996) ATPR 41-519.
[61] (1994) ATPR 41-306.
[62] http://www.consumer.vic.gov.au/CA256902000FE154/Lookup/CAV_
Enforceable_Undertakings_2007/ $file/steven%20xerri.pdf.
[63] See
http://www.scamwatch.gov.au/content/index.phtml/tag/HomeMaintenanceScams
.
[64] See
http://www.scamwatch.gov.au/content/index.phtml/tag/RingToneScams;
http://www.scamwatch.gov.au/content/index.phtml/tag/MissedCallsTextMessa
ges;
http://www.scamwatch.gov.au/content/index.phtml/tag/SMSCompetitionTrivia
Scams.
[65]
http://www.accc.gov.au/content/index.phtml/itemId/88221/fromItemId/37801
4;
http://www.accc.gov.au/content/index.phtml/itemId/551738/fromItemId/4650
54;
http://www.accc.gov.au/content/index.phtml/itemId/322909/fromItemId/3780
08.
[66] R v Day [2009] VSC 266 (31 July 2009).
[67] Department of Fair Trading, 2002, National Competition Policy Review:
Fair Trading Act 1987 & Door to Door Sales Act 1967, Sydney, p.68.
http://www.fairtrading.nsw.gov.au/pdfs/About_us/ftadtdreport.pdf.
[68] [2007] VSC 542.
[69] See Cedar Club International Pty Ltd of Thornbury, see CAV 2001-2002
Annual Report p.64 (See
http://www.consumer.vic.gov.au/CA256902000FE154/Lookup/CAV_Publications_
Annual_Report_2002/$file/of_about_AR_2002.pdf). In 2003, the Victorian
Minister for Consumer Affairs the on John Lenders MP noted that false
testimonials were a common feature of scams: Consumers beware of top 5
scams (5 September 2003) at
http://www.legislation.vic.gov.au/domino/Web_Notes/newmedia.nsf/798c8b07
2d117a01ca256c8c0019bb01/b6e319c9121aea89ca256d9a007fd122!OpenDocument.
[70] See ACCC Federal Court declares Advanced Medical Institute's
advertising 'misleading' at
http://www.accc.gov.au/content/index.phtml/itemId/758911.
[71] WA DOCEP Dodgy website testimonials earn trader $20,000 fine (23
January 2006) See
http://www.commerce.wa.gov.au/Corporate/Media/statements/2006/January/Do
dgy_website_testim.html.
[72]
http://www.accc.gov.au/content/index.phtml/itemId/799577/fromItemId/6223
03.
[73] http://www.accc.gov.au/content/index.phtml/itemId/815373;
http://www.fairtrading.nsw.gov.au/About_us/News_and_events/Media_release
s/2007_media_releases/20071004onlinescams.html;
http://www.consumer.vic.gov.au/CA256902000FE154/Lookup/CAV_Publications_
Computers_Internet_Factsheets/$file/scams.pdf.
[74] www.ftc.gov/opa/2009/10/endortest.shtm.
[75] Council of Australian Governments (2009). Inter-Governmental
Agreement for the Australian Consumer Law, para 23.
[76] COAG Communiqué of 3 July 2008, see
http://www.coag.gov.au/coag_meeting_outcomes/2008-07-03/index.cfm.
[77] Available at www.consumer.gov.au.
[78] COAG Communiqué of 2 October 2008, see
http://www.coag.gov.au/coag_meeting_outcomes/2008-10-02/index.cfm.
[79] Other, non-legislative recommendations of the PC are being
implemented to address the future paucity of data.
[80] Productivity Commission (2006) Review of the Australian Consumer
Product Safety System, Australian Government, Canberra, pages 155 and
163.
[81] PC (2006) pages 161 and 163.
[82] PC (2006) page 159.
[83] Section 75AC(2)(e) provides that a factor in determining the safety
of a defective good includes 'what might reasonably be expected to be
done with or in relation to them'.
[84] PC (2006) page 149.
[85] PC (2006) page 224.
[86] PC (2006) page 225.
[87] PC (2006) pages 225 and 226.
[88] The Product Recalls Australia website (www.recalls.gov.au) currently
provides a list of products which have been the subject of a product
safety recall either voluntarily by the supplier or under a mandatory
order.
[89] NEIAT, Warranties and Refunds, Research Paper No. 1, October 2008;
NEIAT,
National Baseline Study on Warranties and Refunds, Research Paper No.
2, October 2009.
[90] See pages 173-177 of the PC Review.
[91] GK Hadfield, R Howse, and MK Trebilcock, 'Information-Based
Principles for Rethinking Consumer Protection Policy' (1998) 21 Journal
of Consumer Policy 131 at 150.
[92] Pages 19 to 26 of the CCAAC report provides a more comprehensive
analysis of the differences between the laws in each State and
Territory.
[93] See, for example, ACCC 2004 Warranties and Refunds, Canberra; NEIAT
2008 Warranties and Refunds, Research Paper No. 1, Melbourne; NEIAT
2009, National Baseline Study on Warranties and Refunds, Research Paper
No. 2, Melbourne; CCAAC 2009, Consumer rights: Statutory implied
conditions and warranties, Issues Paper, Canberra.
[94] CCAAC 2009, Consumer rights: Reforming statutory implied conditions
and warranties, Final Report (CCAAC Final Report), page 33.
[95] CCAAC Final Report, page 33.
[96] CCAAC Final Report, page 33.
[97] CCAAC Final Report, page 43.
[98] CCAAC Final Report, page 25.
[99] CCAAC Final Report, page 11.
[100] For some recent overseas studies see Federal Trade Commission,
Bureau of Consumer Protection, Consumer Protection in the Global
Electronic Marketplace (September 2000) and Office of Fair Trading,
Internet Shopping, An OFT market study (June 2007).
[101] Consumer Affairs Victoria 2009, Warranties and refunds in the
electronic goods, white goods and mobile telephone industries.
[102] NEIAT study, page ix.
[103] NEIAT study, page 69.
[104] NEIAT study, page 53.
[105] NEIAT study, page 53.
[106] NEIAT study, page 52.
[107] Submission to CCAAC,
http://www.treasury.gov.au/documents/1614/PDF/Freehills.pdf.
[108] Submission to CCAAC,
http://www.treasury.gov.au/documents/1614/PDF/Consumer_Action_Law_Centre
.pdf.
[109] Recommendation 8.1, PC Report, 2008.
[110] NEIAT study, page 21.
[111] NEIAT study, page 22.
[112] Submission to CCAAC,
http://www.treasury.gov.au/documents/1614/PDF/Freehills.pdf.
[113] Submission to CCAAC,
http://www.treasury.gov.au/documents/1614/PDF/Australian_Industry_Group.
pdf.
[114] PC 2008, vol. 1, page 36.
[115] ibid., Recommendation 8.1.
[116] NEIAT study, page 23.
[117] NEIAT study, page 75.
[118] The business cost calculator is an IT-based tool developed by the
Australian Government to help identify and calculate the compliance
costs of regulatory proposals. It provides an automated and standard
process for quantifying compliance costs of regulation on business
using activity-based costing methodology.
[119] NEIAT study, page 22.
[120] NEIAT study, pages 24 and 26.
[121] NEIAT study, pages 22, 25 and 26.
[122] NZ Ministry of Consumer Affairs 2009, National Consumer Survey 2009,
A Colmar Brunton Report, page 5.
[123] NZ Ministry of Consumer Affairs 2009, page 3.
[124] NZ Ministry of Consumer Affairs 2009, page 5.
[125] NEIAT study, page 51.
[126] NEIAT study, page 53.
[127] NEIAT study, page 44.
[128] NEIAT study, pp. 24.
[129] NEIAT study, pp. 25.
[130] Submission to CCAAC,
http://www.treasury.gov.au/documents/1614/PDF/Consumer_Action_Law_Centre
.pdf.
[131] CCAAC report, page 81.
[132] Submission to CCAAC,
http://www.treasury.gov.au/documents/1614/PDF/Consumer_Action_Law_Centre
.pdf.
[133] Submission to CCAAC,
http://www.treasury.gov.au/documents/1614/PDF/Consumer_Action_Law_Centre
.pdf.
[134] Submission to CCAAC,
http://www.treasury.gov.au/documents/1614/PDF/Australian_Industry_Group.
pdf.
[135] Submission to CCAAC,
http://www.treasury.gov.au/documents/1614/PDF/Freehills.pdf.
[136] Submission to CCAAC,
http://www.treasury.gov.au/documents/1614/PDF/Law_Council_of_Australia.p
df.
[137] Includes Manufacturers' Warranties Act 1974 (SA), which specifically
provides for non-excludable manufacturer warranties.
[138] The implied terms of title, encumbrance and quiet enjoyment still
apply to private sales in jurisdictions where the other warranties do
not.
[139] In the Fair Trading Act 1999 (Vic), the implied terms of quality and
fitness and regarding service need to be in the course of business,
otherwise the implied terms will apply to private sales.
[140] Includes Manufacturers' Warranties Act 1974 (SA), which specifically
provides for non-excludable manufacturer warranties.
[141] Under the TP Act and the State and Territory legislation, the
provisions implying terms are either limited to 'consumers' or to
certain types of contracts. In the TP Act and WA legislation a
'consumer' is a buyer of goods and services the price of which does not
exceed $40,000 or (if the price exceeds $40,000) where the goods or
services are of a kind ordinarily acquired for personal, domestic or
household use. In Victoria, the implied terms apply to certain
contracts but the effect of their application is the same as under the
TP Act. In NSW the implied terms only apply to goods or services of a
kind ordinarily acquired for personal, domestic or household use and in
SA the provisions apply to contracts for the supply of goods and
services which do not exceed $40,000. In the NT, the definition of
'consumers' is broad but the implied terms cannot be excluded, limited
or restricted in the case of goods or services of a kind ordinarily
acquired for personal, domestic or household use.
[142] The CTA and Regulations list certain services that are captured by
the CTA, however, not all services of qualified architects or engineers
may be captured.