Statutes Amendment (Small Business Commission and Retail and Commercial Leases) Bill

Second Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (16:59): I move:

That this bill be now read a second time.

I seek leave to insert the second reading explanation and explanation of clauses into Hansard without my reading them.

Leave granted.

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 government 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 other businesses or government departments.

This can be over matters such as the late or nonpayment of invoices, disagreements relating to goods and services, commercial leasing matters, warranty issues or contractual disagreements.

This 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.

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.

Furthermore, the Bill seeks to better reflect the Commissioner's day-to-day functions through an amended 'Objects' section.

The new provision encompasses the independent facilitation of alternative dispute resolution for the benefit of small business owners:

promoting a fair and supportive business environment and acting as a bridge for small businesses in their dealings with government agencies.

The Bill also includes a subtle yet meaningful change, rebranding the Office of the Small Business Commissioner to the Small Business Commission SA.

While this change reflects a more accurate representation of the office's identity, it is not representative of any change in function.

Instead, it aligns with similar frameworks in other states, such as Victoria, and better communicates the scope of the Commission's legislative functions and responsibilities.

This is important for distinguishing the Commission from the Office for Small and Family Business, addressing feedback that some stakeholders have been confused about the distinct roles of these two bodies.

This change is also in line with the Small Business Strategy 2023–2030, ensuring consistency in messaging and purpose.

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's 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 Council.

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 Hon. L.A. Henderson.