Retail and Commercial Leases (Miscellaneous) Amendment Bill

Committee Stage

In committee (resumed on motion).

Clause 4.

Ms CHAPMAN: I am on amendment No. 1 in my name. This minister, with his experience and his business understanding and in the knowledge that this is a problem that His Honour Justice Stanley has been stuck with—and I understand that; the poor hapless tenants and landlords who have been caught up in this as a result of a bureaucratic decision—should understand why for years the Law Society and others have sought remedy from progressive ministers to try to fix this by regulation and/or by statute to be consistent with their original commitment rather than stand and read out what is, I would say, the bureaucratic answer, 'This is what the Supreme Court said.'

Of course the Supreme Court said that; that is why we are here and that is why we, on behalf of those who have been caught in this ugly trap, this expensive spiral, are seeking some relief. Just because the Moss review did not put a recommendation on this at all, and just because time has elapsed and it is now too messy, the government says, to fix it up, I would ask this minister to think very seriously about that and understand that that is not acceptable.

Given his experience he ought to be saying to the government, 'Hang on a minute, fair crack of the whip.' Clearly these people have been complaining for some time. We can sit here on the side and say, 'Okay, we're not going to do anything about this,' and just let them say, 'It's up to you to get your legal advice and go to the Supreme Court and get your remedy and get smashed and get the costs and the fees.'

In the future, perhaps we will not be so silly as to increase it by a $150,000 a year increment, and we will take the advice of Mr Moss and do it in a manner in which it is reasonable to have those increments which, in a commercial sense, the landlords and tenants should have to expect. From time to time governments, ministers in particular, by regulation, do make increases. It is a bit like saying, 'This is the fee.' Of course it cannot stay the same forever, and therefore people should be alive to the fact that it is within the prerogative of the minister, through regulation, or as a parliament, through statutes, to change those laws.

However, when you have such a massive change you are going to have some casualties. Initially we were prepared to say to the government that we accept that this may have been inadvertent, that they had not really intended to suddenly smash all these landlords, but please do not come back in here, three ministers later, and try to say to us that they have washed their hands of this, that it is too messy to deal with and, 'We are going to just walk away.' That is completely unprofessional and unacceptable. This minister, with his experience, should know better.

Nevertheless, I accept that he is conveying the wish of the government. He is sitting with them and obviously pursuing an objection on that basis. He is just going to let these people hang in the wind. I think that is appalling behaviour, and quite dismissive of the respect that should be given to our commercial citizens and corporations, as well as the mums and dads who are tenants and landlords in these situations. If you intervene with an irresponsibly large increase of this nature, you give assurances, and then you give no opportunity of remedy, you have to take the consequences.

Clearly the government have decided they are not prepared to take the consequences and they are just going to wash their hands of it. The Hon. Mr Darley, in another place, and the opposition will continue to say that is unfair and unreasonable, and we will move these amendments and continue to maintain that position. I indicate that, in the face of the government's opposition to this and the failure of amendment No. 1, I will not be repeating this same speech for the rest of the amendments, Nos 2, 3 and 4, in schedule 220(1), as provided.

The Hon. M.L.J. HAMILTON-SMITH: I thank the deputy leader for her contribution. What the deputy leader wants to do is essentially go back to the original proposition that was considered by the parliament in 2011 regarding land tax thresholds and revisit the core issue that was determined by the parliament and the subsequent regulations back at that time. As I understand it, the other thing the deputy leader wants to do—and this is very interesting—is, in effect, create a situation where a whole lot of tenants, a whole lot of renters, will have land tax passed on to them. She wants to empower landlords, as I understand it, to pass on land tax.

Ms Chapman interjecting:

The Hon. M.L.J. HAMILTON-SMITH: Yes, so that in itself is interesting because I think there would be a lot of lessees in a lot of shopping centres in a lot of Liberal seats right around the state who might have a very strong view on that. The third thing that the deputy leader wants to do is retrospectively go back and change something that was put in train in 2011 with subsequent regulations and try to unscramble the egg, possibly putting at risk a whole lot of arrangements that have been in place for six years and setting in course a whole lot of litigation that might have very unpleasant outcomes.

The parliament can spend its time revisiting the initial proposition. That was debated back in 2011, and then there were subsequent regulations, or we can get on with the purpose of the bill before the house, that is, to try to improve arrangements between lessors and lessees to their mutual benefit. Not everyone will be happy, but this particular amendment and the one that follows seek to try to go back and rewrite the bill and address issues the parliament addressed quite a long time ago.

Some members will not like the fact that land tax cannot be passed on to tenants. Some people will like the fact that land tax cannot be passed on to tenants under arrangements in the bill, and there are different points of view on that. As a general principle, retrospective legislation or amendments that seek to create such retrospective decision-making by the parliament is just bad lawmaking. Whether you like the original bill or not, it is just not the way to do it.

An alternative approach might be for the deputy leader to propose legislation of her own prior to the next election. It might completely reset the agenda on this item. That might be the best way for her to pick up this issue. For the moment, the government will not be supporting retrospective legislation that possibly puts at risk a whole lot of arrangements between lessors and lessees and throws things up in the air with great chaos and confusion.

The parliament made decisions back in 2011 and then passed regulations accordingly, and I do not think we should be revisiting the core issues. I accept the points the deputy leader is making—but another time, another place. If she wants to rewrite the bill, I would suggest a policy to that effect leading up to the next election.

Amendment negatived; clause as amended passed.

Clause 5.

The CHAIR: The minister for Bragg and the minister both have amendments in clause 5. In order to enable both the member and the minister to have an opportunity to put their amendments to the house, I am proposing that we put the member for Bragg's amendment in a truncated form as follows:

To delete all words in clause 5, page 3, lines 26 to 37 and page 4, lines 1 and 2.

Ms CHAPMAN: I move:

To delete all words in clause 5, page 3, lines 26 to 37 and page 4, lines 1 and 2.

The Hon. M.L.J. HAMILTON-SMITH: I think that all these proposals effectively relate to the earlier debate.

The CHAIR: They are consequential.

The Hon. M.L.J. HAMILTON-SMITH: For that reason, we will not be supporting them.

Amendment negatived.

The CHAIR: We will not be proceeding with the remainder.

The Hon. M.L.J. HAMILTON-SMITH: I move:

Amendment No 2 [SmallBus-2]—

Page 4, after line 2—Insert:

(5a) Section 4(2)(c)—after subparagraph (i) insert:

(ia) a body corporate whose securities are listed on a stock exchange outside Australia and the external Territories or a subsidiary of such a body corporate; or

Amendment No 1 [SmallBus–1]—

Page 4, after line 22 [clause 5(7), inserted subsection (4)]—After paragraph (b) insert:

or

(c) the lessee or lessor becomes, or ceases to be, a lessee or lessor referred to in subsection (2)(c) or (d).

Amendment No 2 [SmallBus–1]—

Page 4, after line 38 [clause 5(7), inserted subsection (4), Examples]—After example (3) insert:

(4) The Act may apply to a retail shop lease to which the Act did not apply at the time the lease was entered into, or renewed, because the lessee changed from being a public company to being a proprietary company.

(5) The Act may, after an assignment of the lease, cease to apply to a retail shop lease to which it applied immediately before the assignment because the assignee is no longer a lessee of a kind referred to in subsection (2)(c).

The government has consulted on this with business associations and stakeholders extensively and I have been personally involved in a lot of that, there being in some cases more than two or three meetings with various associations. Some of those parties, including the Law Society of South Australia and the Shopping Centre Council of Australia, have made further submissions on the bill to the Small Business Commissioner to the effect that overseas companies and their subsidiaries should be exempted from the protections of the act in the same way that a company is.

The first of the two amendments merely inserts into the act a definition of subsidiary to have the same meaning as section 9 of the Corporations Act. There was broad support for amending the act to include the definition of 'public company', but without this further amendment this would not extend to companies that are subsidiaries of overseas incorporated companies. A failure to include such an extended definition will mean that multinational operators, such as OPSM, BP and McDonald's, to name a few, will obtain the benefit and the protections of the act.

The Law Society submitted to the commissioner that such an outcome is 'contrary to the fundamental purpose of the act, which is to counterbalance the perceived inequality of bargaining power between lessors and lessees'. The commissioner has considered the submissions made to him in this regard and has also had regard to the equivalent provisions in both Victoria and WA.

Based on these considerations, I have accepted the commissioner's recommendations to incorporate these further amendments and, as a result, the government has further amended its bill and we filed on 12 September. We are discussing it to including a new carve-out for coverage of the act at new subsection 4(2)(c)(ia). That new subsection will prevent 'a body corporate whose securities are listed on a stock exchange outside of Australia in the external territories' or any subsidiary of such a body corporate from acquiring the protections of the act.

Amendments carried; clause as amended passed.

Clauses 6 and 7 passed.

Clause 8.

The Hon. M.L.J. HAMILTON-SMITH: I move:

Amendment No 3 [SmallBus–1]—

Page 6, line 10 [clause 8, inserted section 11(2)]—After 'retail' second occurring insert 'shop'

It is a technical and clarifying change to ensure consistency with other sections of the act which refer to a retail 'shop' lease. This issue was raised with the Small Business Commissioner by the Property Council of Australia. We wanted to take action on it.

Amendment carried; clause as amended passed.

Clause 9.

The Hon. M.L.J. HAMILTON-SMITH: I move:

Amendment No 4 [SmallBus–1]—

Page 6, line 27 [clause 9(2), inserted subsection (4)]—Delete 'in duplicate'

Amendment No 5 [SmallBus–1]—

Page 6, line 35 [clause 9(2), inserted subsection (4)(c)]—Delete 'registered'

Amendment No 6 [SmallBus–1]—

Page 7, lines 6 to 9 [clause 9(2), inserted subsection (4b)]—

Delete '1 copy of the disclosure statement signed by or on behalf of the lessee to the lessor or the lessor's agent (with the remaining copy to be signed by or on behalf of the lessee and retained by the lessee or lessee's agent)' and substitute:

a signed acknowledgement of receipt of the disclosure statement to the lessor or the lessor's agent

These amendments were suggested during consultation on the bill. The Property Council of Australia and the Law Society of South Australia both contend that using registered post is archaic and simple service by post is sufficient. Similarly, the removal of the word 'duplicate' reduces paperwork and the signed acknowledgement is deemed sufficient to provide evidence, which the lessor can hold should a dispute arise in the future. On the face of it, documents by email 'in duplicate' could literally be interpreted as sending an email twice, which is clearly not the intention of the provisions.

Amendments carried; clause as amended passed.

Clauses 10 and 11 passed.

Clause 12.

The Hon. M.L.J. HAMILTON-SMITH: I move:

Amendment No 7 [SmallBus–1]—

Page 7, lines 29 to 32 [clause 12, inserted section 16(b)]—

Delete 'an executed copy of the registered lease within 1 month after the lease is returned to the lessor or the lessor's lawyer or agent following registration of the lease.' and substitute:

—

(i) an executed copy of the lease; and

(ii) confirmation that the lease has been registered,

within 1 month of the date of its registration.

The amendment picks up the issue raised by the Lands Titles Office and other stakeholders, including the Law Society of South Australia and the Property Council of South Australia, in consultation on the bill. The issue that has arisen is that the Lands Titles Office no longer provides certified copies of leases, as was required under section 16 of the existing act. As such, lessors cannot comply in terms of providing an executed copy of the stamped and registered lease.

This follows a change to the LTO's procedures, and it has been acknowledged that the Retail and Commercial Leases Act 1995 should have been amended to acknowledge this change when the Real Property (Electronic Conveyancing) Amendment Act 2016 was prepared. The LTO now provides a confirmation of registration notice. These changes will bring day-to-day practicality to this section of the act.

Ms CHAPMAN: I do not have a question on that, but you know you can never rely on that Attorney-General; he always mucks things up, so I am pleased that this has been remedied.

The CHAIR: I am sure he has noted your pleasure at it and he will welcome some way to obliterate that.

Amendment carried.

Ms CHAPMAN: I move:

Amendment No 1 [Chapman–2]—

Page 7, after line 32 [Clause 12, inserted section 16]—After line 32 insert:

(2) The period within which the lessor must lodge a lease for registration under subsection (1)(b) is to be extended for any delay attributable to—

(a) the need to obtain any consent from a head lessor or mortgagee (being delay not due to any failure by the lessor to make reasonable efforts to obtain consent); or

(b) the requirement for a plan delineating the premises to be filed in the Lands Titles Office (being delay not due to any failure by the lessor to make reasonable efforts to procure the filing of a plan); or

(c) requirements arising under the Real Property Act 1886 that are beyond the control of the lessor.

This amendment is to remedy the matter I raised in the second reading, which essentially was that 30 days without the opportunity to extend in certain circumstances can obviously cause some problems. I do not think I need to repeat myself. I think the minister understands what we are talking about. I would seek the government's endorsement to resolve that matter.

The Hon. M.L.J. HAMILTON-SMITH: I thank the member for her amendment. The government feels that this section of the act already requires the registered lease to be returned within one month, and this is not changing. We understand why the member is moving this, but we feel it is already dealt with. The current one-month period provides a driver to the lessor to complete the process. It is noted that there is no penalty in the act for noncompliance.

The Small Business Commissioner advises me that he would be happy to liaise with any party that is found to be causing a delay and to assist. However, on the basis that we feel the matter raised by the proposed amendment is already dealt with in the bill, the government feels it should oppose the amendment as being unnecessary.

Amendment negatived; clause as amended passed.

Remaining clauses (13 to 27) and title passed.

Bill reported with amendment.

Third Reading

The Hon. M.L.J. HAMILTON-SMITH (Waite—Minister for Investment and Trade, Minister for Small Business, Minister for Defence and Space Industries, Minister for Health Industries, Minister for Veterans' Affairs) (17:44): I move:

That this bill be now read a third time.

I thank the deputy leader and all who have contributed to the debate for their efforts. Although this is finetuning of the act, I am confident that it delivers on promises that both sides of the house have made to try to make arrangements between lessees and lessors more workable. It follows up on the delivery of Mr Moss's report and his recommendations. Without adding too much more red tape, as the bill comes out of committee, we have delivered something that will improve relationships between lessees and lessors and I think that is a good thing. I thank everyone for their efforts and commend the bill to the house.

Bill read a third time and passed.