House of Assembly Fifty-Fifth Parliament, First Session (55-1) 55 1 Parliament of South Australia House of Assembly published Bills Statutes Amendment (Small Business Commission and Retail and Commercial Leases) Bill Statutes Amendment (Small Business Commission and Retail and Commercial Leases) Bill Statutes Amendment (Small Business Commission and Retail and Commercial Leases) Bill Introduction and First Reading Introduction and First Reading The Hon. A. MICHAELS House of Assembly Enfield Minister for Small and Family Business Minister for Consumer and Business Affairs Minister for Arts The Hon. A. MICHAELS (Enfield—Minister for Small and Family Business, Minister for Consumer and Business Affairs, Minister for Arts) (16:01): Obtained leave and introduced a bill for an act to amend the Small Business Commissioner Act 2011, the Retail and Commercial Leases Act 1995, the Fair Trading Act 1987, the Farm Debt Mediation Act 2018, the Late Payment of Government Debts (Interest) Act 2013 and the Work Health and Safety Act 2012. Read a first time. Second Reading Second Reading The Hon. A. MICHAELS House of Assembly Enfield Minister for Small and Family Business Minister for Consumer and Business Affairs Minister for Arts The Hon. A. MICHAELS (Enfield—Minister for Small and Family Business, Minister for Consumer and Business Affairs, Minister for Arts) (16:02): I move: That this bill be now read a second time. The Statutes Amendment (Small Business Commission and Retail and Commercial Leases) Bill 2024 amends the Small Business Commissioner Act 2011, the Retail and Commercial Leases Act 1995, the Fair Trading Act 1987, the Farm Debt Mediation Act 2018, the Late Payment of Government Debts (Interest) Act 2013 and the Work Health and Safety Act 2012. The bill seeks to provide clarity around the advocacy, dispute resolution and regulatory compliance functions undertaken by the South Australian Small Business Commissioner. This reform represents the first major revision of the Small Business Commissioner Act 2011 since its commencement. It will support the future strategic direction of the office in carrying out its dispute resolution and advocacy functions in support of South Australian small businesses. We recognise that business conditions have been particularly challenging. Rising input costs such as wages and rent are increasing the cost of doing business for many. In such a tough environment, a collaborative support network for small businesses is more important than ever to ensure their survival and growth. The SA Small Business Commissioner, Ms Kilvert, and her dedicated team work closely with a wide network of stakeholders who share the same goal of mine—supporting the small business sector. This includes working with small business owners directly, industry associations, state and local governments and federal agencies. Through these networks, the commissioner seeks to understand, interrogate and amplify small business challenges, providing advice to government and seeking to influence an operating environment that supports the success of small businesses. A key role of the commissioner's office is assisting small businesses when they face roadblocks or disputes, whether that be with other businesses or government departments. This can be over matters such as late or non-payment of invoices, disagreements relating to goods and services, commercial leasing matters, warranty issues or contractual disagreements. The bill strengthens the support the commission can offer in dispute resolution. Currently, the commissioner administers a range of industry codes under the Fair Trading Act 1987, which afford the commissioner the power to notify and compel parties in a dispute to attend or participate in an alternative dispute resolution procedure. However, small businesses outside these prescribed industries are unable to benefit from this. To remedy this issue this bill proposes to standardise the level of support the commission can provide to small business owners seeking assistance with alternative dispute resolution irrespective of what industry sector they are in. With that, I seek leave to insert the remainder of the second reading speech and the explanation of clauses into Hansard without my reading them. Leave granted. As part of the designated alternative dispute resolution process, section 12E enables the Commission to require attendance at mediations and to produce documents or other information where this information is relevant to resolving the dispute. A maximum penalty of $20,000 with an expiation fee of $1,200 applies where a person fails to comply with this requirement. To provide certainty in the scope of alternative dispute resolution provided by the Commission, a definition of alternative dispute resolution has been included which excludes arbitration and expert determination. In line with this objective, proposed sections 12A to 12H of the Small Business Commissioner Act and corresponding sections 66 to 68A of Retail and Commercial Leases Act outline the legislative powers available to the Commission to support small businesses in resolving disputes through a formal designated dispute resolution process. Through the creation of Division 3 – Designated Dispute Resolution, a clear distinction is created between the preliminary assistance provided by Small Business Commissioners' Dispute and Regulation Advisors… …and the process involving engagement of an independent mediator from Small Business Commissioner's approved panel where preliminary assistance cannot resolve the matter. The Bill also seeks to streamline the Magistrate Court's enforcement of settlement agreements reached through Small Business Commissioner facilitated mediation by prescribing them as minor statutory proceedings. This is intended to save small businesses from the additional time and cost of re-prosecuting legal arguments in court. To maintain clarity, we have made a distinction between the enforcement of agreements under these provisions and Retail and Commercial Leases Act applications exceeding $12,000 under section 3(1)(ba) of the Magistrates Court Act 1995. Following the release of the draft Bill for consultation, we identified an opportunity to action requested amendments to Retail and Commercial Leases Act from the Property Committee of the Law Society of South Australia. These amendments were originally proposed in 2018 under the tenure of the former Commissioner in response to the Retail and Commercial Leases (Miscellaneous) Amendment Bill 2017 but were not included in the final version of the 2017 Bill. These amendments aim to: simplify the process of determining whether companies are listed on a stock exchange outside of Australia; clarify that an exclusion of warranty under section 18 of Retail and Commercial Leases Act applies to renewals or extensions of retail shop leases, as well as any new leases between the parties for the same premises, whether on the same or different terms; specify that preference rights do not apply where lessees have a right of renewal or extension, simplify the wording of section 76 to state that the provision applies upon both expiry and termination of a lease; and increase clarity around the exclusion of fittings, fixtures or fit out of a retail shop from the term 'goods' in section 76. Permissible methods of communication referenced throughout the Small Business Commissioner Act have also been updated to reflect modern modes of correspondence. We have undertaken extensive consultation on the Bill throughout 2023 and 2024, with many of the amendments submitted being adopted. Consultation has comprised of open written submissions, targeted stakeholder forums and the workshopping of questions and concerns with individual stakeholders with relevant interests. In closing, I want to reaffirm mine and the Malinauskas Government's commitment to the small business community in South Australia. Small businesses are the backbone of our economy, and through this Bill, we are taking meaningful steps to ensure they receive the support and resources they need. I commend this Bill to the House. Explanation of Explanation of Clauses Part 1—Preliminary 1—Short title 2—Commencement These clauses are formal. Part 2—Amendment of Small Business Commissioner Act 2011 3—Amendment of long title This clause amends the long title of the Act to reflect the establishment of the Small Business Commission. 4—Insertion of heading The Act is currently not divided into Parts. This clause is the first of a number of amendments contained in the measure that insert Part headings to divide the Act into Parts in order to better assist the reader in finding content in the Act. 5—Amendment of section 1—Short title This clause amends the short title of the Act to reflect the establishment of the Small Business Commission. 6—Amendment of section 3—Interpretation This clause adds several new definitions for the purpose of the measure. 7—Insertion of heading This clause inserts a Part heading into the Act. 8—Insertion of section 3A New section 3A is proposed to be inserted: 3A—Establishment of Commission The Small Business Commission is established. The Commission is an agency of the Crown, and is to be constituted by the Commissioner. 9—Amendment of section 4—Small Business Commissioner This clause amends section 4 such that the Small Business Commissioner is no longer an agency of the Crown, consequential to the establishment of the Commission as such an agency. 10—Insertion of section 4A New section 4A is proposed to be inserted: 4A—Objects of Commission Proposed section 4A sets out the objects of the Commission. 11—Amendment of section 5—Functions This clause amends section 5 to establish the functions of the Small Business Commission, and provides that the Commission has power to do anything that is necessary or convenient to be done for or in connection with performing its functions. 12—Amendment of section 6—Ministerial direction This clause amends section 6 such that references to the Commissioner are replaced with references to the Commission. 13—Amendment of section 7—Terms and conditions of appointment This clause amends the heading of section 7 to clarify that the terms and conditions of appointment relate to the Commissioner. 14—Amendment of section 8—Deputy and Acting Commissioner This clause removes various references to the Commissioner and replaces them with references to the Commission where appropriate. 15—Insertion of section 8A New section 8A is proposed to be introduced: 8A—Functions of Commissioner Proposed section 8A establishes the functions of the Commissioner. 16—Amendment of section 10—Staff etc This clause makes consequential amendments to references to the Commissioner, and establishes that a Deputy or Acting Commissioner is part of the staff of the Commission. 17—Amendment of section 11—Delegation This clause makes a consequential amendment to a reference to the Commissioner and removes a requirement for the consent of the Minister to be required if a function or power is to be delegated to a person who is not a Public Service employee. 18—Amendment of section 12—Power to require information This clause makes consequential amendments to various references to the Commissioner, amends the section to allow a notice to be sent by email, and establishes an expiation fee for the offence. 19—Insertion of Part 3 New Part 3 is proposed to be inserted: Part 3—Dispute resolution Division 1—Preliminary 12A—Interpretation This section establishes a definition of designated alternative dispute resolution process, for use in the Part. Division 2—General 12B—Alternative dispute resolution Provision is made in relation to the Commission conducting alternative dispute resolution. 12C—Commission may refuse to deal with dispute Provision is made for the Commission to refuse to deal with disputes in certain circumstances. Division 3—Designated alternative dispute resolution 12D—Notice of designated alternative dispute resolution This section provides that the Commission may determine that a dispute will be dealt with through an alternative dispute resolution process, and provides for how parties are to be notified of such a determination. 12E—Commission may require attendance at alternative dispute resolution processes and production of documents This section gives the Commission the power to require attendance at an alternative dispute resolution process, and to require a person to produce documents. 12F—Statements made during alternative dispute resolution Provision is made such that an admission or statement made by a person in the course of a designated alternative dispute resolution process is not admissible as evidence before a court. 12G—Power to issue certificates Provision is made for the Commission to certify the outcome of alternative dispute resolution processes. Division 4—Enforcement 12H—Result of alternative dispute resolution may be enforced This section provides that the results of alternative dispute resolution may be enforced through application to the Magistrates Court in certain circumstances. 20—Insertion of heading This clause inserts a Part heading into the Act. 21—Amendment of section 13—Confidentiality 22—Amendment of section 14—Regulations These amendments are consequential to the establishment of the Small Business Commission. Part 3—Amendment of Retail and Commercial Leases Act 1995 23—Amendment of section 3—Interpretation Definitions of alternative dispute resolution and commission are inserted purpose of the measure, and the now obsolete definition of mediation is removed. 24—Amendment of section 4—Application of Act This amendment establishes that the Act does not apply to where the lessee is a body corporate incorporated outside of the Commonwealth of Australia, or is a subsidiary of or is controlled by such a body corporate. 25—Amendment of section 7—Administration of Act 26—Amendment of section 9—Commissioner's functions 27—Amendment of section 11—Copy of lease to be provided to prospective lessee These amendments are consequential to the establishment of the Small Business Commission. 28—Amendment of section 18—Warranty of fitness for purpose This clause amends section 18 to provide that once a warranty has been excluded for a lease, it is also taken to be excluded if the lease is renewed or extended, or if there is a new lease between the same parties for the same premises. 29—Amendment of section 19—Security bond 30—Amendment of section 20—Repayment of security These amendments are consequential to the establishment of the Small Business Commission. 31—Amendment of section 20C—Application of Division This amendment establishes that Division 3 of the Act does not apply where a lease contains an option to extend or renew the lease. 32—Amendment of section 20H—Failure to comply with rules 33—Amendment of section 20K—Certified exclusionary clause These amendments are consequential. 34—Amendment of section 51—Confidentiality of turnover information This amendment replaces a reference to mediation with one to alternative dispute resolution. 35—Substitution of heading to Part 9 Division 1 This amendment is consequential. 36—Amendment of section 63—Responsibility of the Commissioner to arrange for mediation of disputes These amendments are consequential to the establishment of the Small Business Commission, and establish how the Commission will deal with alternative dispute resolution. 37—Substitution of section 64 Current section 64 is proposed to be deleted and a new section 64 substituted as follows: 64—Statements made during alternative dispute resolution Proposed section 64 provides that an admission or statement made by a person in the course of alternative dispute resolution is not admissible as evidence before a court. 38—Insertion of heading This clause inserts a division heading into the Act. 39—Amendment of section 65—Stay of proceedings This amendment is consequential. 40—Repeal of section 66 Section 66 is repealed. 41—Insertion of Part 9 Division 1B New Part 9 Division 1B is proposed to be inserted: Division 1B—Designated alternative dispute resolution 66—Notice of designated alternative dispute resolution This section provides that the Commission may determine that a dispute will be dealt with in an alternative dispute resolution process, and provides for how parties are to be notified of such a determination. 66A—Commission may require attendance at alternative dispute resolution processes and production of documents This section gives the Commission the power to require attendance at an alternative dispute resolution process, and to require a person to produce documents. 66B—Power to issue certificates Provision is made for the Commission to certify the outcome of alternative dispute resolution processes. 42—Amendment of section 67—Power to intervene This amendment is consequential. 43—Insertion of section 68A New section 68A is proposed to be inserted: 68A—Result of alternative dispute resolution may be enforced This section provides that the results of alternative dispute resolution may be enforced through application to the Magistrates Court in certain circumstances. 44—Amendment of section 70—The Fund 45—Amendment of section 72—Accounts and audit These amendments are consequential. 46—Amendment of section 76—Abandoned goods This amendment inserts a definition for use in the section, clarifies the application of the section and makes a consequential amendment. 47—Amendment of section 77—Exemptions 48—Amendment of section 78—Annual reports 49—Amendment of section 80—Regulations These amendments are consequential. Part 4—Amendment of Fair Trading Act 1987 50—Amendment of long title 51—Amendment of section 3—Interpretation 52—Amendment of section 4B—Administration of Act 53—Amendment of section 16—Meaning of generic terms used in Australian Consumer Law 54—Amendment of section 28F—Regulations relating to industry codes 55—Amendment of section 28J—Compliance with applicable code of conduct 56—Amendment of section 28L—Regulations 57—Amendment of section 46—Interpretation 58—Amendment of section 47—Conduct of legal proceedings on behalf of consumers 59—Amendment of section 48—Public warning statements 60—Amendment of section 49—Immunity from liability 61—Amendment of section 76—Authorised officers 62—Amendment of section 78A—Use and inspection of books or documents produced or seized 63—Amendment of section 79—Assurances 64—Amendment of section 80—Registration of deeds of assurance 65—Amendment of section 81—Offence 66—Amendment of section 82—Enforcement orders 67—Amendment of section 83—Injunctions 68—Amendment of section 85—Orders for compensation 69—Amendment of section 86—Sequestration orders 70—Amendment of section 86B—Civil penalties 71—Amendment of section 86D—Civil expiation notices 72—Amendment of section 86E—Late payment 73—Amendment of section 86H—Withdrawal of civil expiation notices 74—Amendment of section 91—Evidentiary provisions 75—Amendment of section 96A—Confidentiality 76—Amendment of section 96B—Delegation by Minister responsible for administration of Small Business Commissioner Act 77—Amendment of section 97—Regulations The amendments to the Fair Trading Act 1987 made by this Part are consequential to the establishment of the Small Business Commission. Part 5—Amendment of Farm Debt Mediation Act 2018 78—Amendment of section 4—Interpretation 79—Amendment of section 8—Notice of availability of mediation to be given 80—Amendment of section 9—Farmer may request mediation 81—Amendment of section 10—Creditor may agree to or refuse mediation 82—Amendment of section 12—Application by farmer for issue of prohibition certificate 83—Amendment of section 13—Issue of prohibition certificate 84—Amendment of section 14—Application by creditor for issue of exemption certificate 85—Amendment of section 15—Issue of exemption certificate 86—Amendment of section 17—Duration of exemption certificate 87—Amendment of section 18—When is a farmer or creditor presumed to have refused to participate in mediation? 88—Amendment of heading to Part 3 89—Amendment of heading to Part 3 Division 1 90—Amendment of section 19—Administration of Act 91—Amendment of section 20—Functions of Commissioner 92—Amendment of Section 21—Functions of mediators 93—Amendment of section 22—Commissioner must arrange mediation 94—Amendment of section 23—Conduct of mediation 95—Amendment of section 25—Mediation fees 96—Amendment of section 32—Regulations The amendments made to the Farm Debt Mediation Act 2018 made by this Part are consequential to the establishment of the Small Business Commission. Part 6—Amendment of Late Payment of Government Debts (Interest) Act 2013 97—Amendment of section 7—Disputes This amendment is consequential to the establishment of the Small Business Commission. Part 7—Amendment of Work Health and Safety Act 2012 98—Amendment of section 274—Approved codes of practice This amendment is consequential to the establishment of the Small Business Commission. Schedule 1—Transitional provision 1—Transitional provision Provision is made such that a reference in an instrument or document to the Small Business Commissioner will, unless context requires, be taken to be a reference to the Small Business Commission. Debate adjourned on motion of Mr Cowdrey.