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House of Assembly - Fifty-Fourth Parliament, First Session (54-1)
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Retail and Commercial Leases (Miscellaneous) Amendment Bill

Committee Stage

In committee (resumed on motion).

Clause 5.

The Hon. V.A. CHAPMAN: I move:

Amendment No 1 [AG–1]—

Page 5, line 26 [clause 5, inserted section 4(3)(a)(i)]—After 'lease' insert:

, and in relation to which the lessor has provided written notice of lodgement to the lessee within 1 month of lodgement,

Amendment No 2 [AG–1]—

Page 5, lines 32 to 36 [clause 5, inserted section 4(3)(b)]—Delete paragraph (b) and substitute:

(b) any renewal of a retail shop lease referred to in paragraph (a)—

(i) that is lodged for registration by the lessor within 3 months after both parties have executed the renewal, and in relation to which the lessor has provided written notice of lodgement to the lessee within 1 month of lodgement; and

(ii) that remains registered for the term of the renewed lease,

Essentially, these amendments provide for a notice to be given within one month of lodgement of a lease—that is, lodgement for registration of a lease—and for such notice be given by the lessor to the lessee. It is as a result of matters raised by the member for Lee, and I have acknowledged that this is a matter that needs to occur on the basis that that is given.

I have managed during the course of the last week to consult with those who are involved in the property level, not as broadly as one would normally with the bill itself, but most importantly I have had the opportunity to discuss the matter with Commissioner Chapman, who is here today ably assisting me in the presentation of this bill. As the commissioner who has the working operation of this legislation, he indicates that that is a reasonable proposal and can be accommodated in this amendment; accordingly, I have moved the amendments in my name.

The Hon. S.C. MULLIGHAN: In place of the amendments that I am unable to move, given that we have moved on from the particular lines in the clause, I am willing to support these amendments because some improved level of protection is better than none. As I said at the outset, before we started to descend into unnecessary and regrettable politicking about these amendments, I do believe that having this additional protection is worthwhile. At the outset, I was pleased that the Deputy Premier was willing to pay some mind to the concerns raised by me, as well as the member for Florey, so I am happy to support these.

Amendments carried; clause as amended passed.

Clauses 6 to 12 passed.

Clause 13.

The Hon. S.C. MULLIGHAN: I move:

Amendment No 2 [Mullighan–1]—

Page 9, line 34 [inserted subsection (1)(b)]—Delete '3' and substitute 'one'

Amendment No 3 [Mullighan–1]—

Page 10, line 7 [clause 13(2), inserted text]—Delete '3' and substitute 'one'

These amendments really maintain the status quo as to the term of the maximum bond. Rather than the three months as proposed by the bill, it leaves it at one. It is important to note that, despite foreshadowing this change, for the reasons that I have already articulated to the house before the break, the other amendments that are desired in relation to the setting of a bond are retained—for example, clarification about the treatment of goods and services tax and the increases in penalties in section 19(1) and (3).

The Hon. V.A. CHAPMAN: For reasons as previously indicated, amendments Nos 2 and 3 are opposed.

The committee divided on the amendments:

Ayes 18

Noes 22

Majority 4

AYES
Bettison, Z.L. Bignell, L.W.K. Boyer, B.I.
Brown, M.E. (teller) Close, S.E. Cook, N.F.
Gee, J.P. Hildyard, K.A. Hughes, E.J.
Koutsantonis, A. Malinauskas, P. Michaels, A.
Mullighan, S.C. Odenwalder, L.K. Picton, C.J.
Stinson, J.M. Szakacs, J.K. Wortley, D.
NOES
Basham, D.K.B. Chapman, V.A. Cowdrey, M.J.
Cregan, D. Gardner, J.A.W. Harvey, R.M. (teller)
Knoll, S.K. Luethen, P. Marshall, S.S.
McBride, N. Murray, S. Patterson, S.J.R.
Pederick, A.S. Pisoni, D.G. Power, C.
Sanderson, R. Speirs, D.J. Tarzia, V.A.
Teague, J.B. van Holst Pellekaan, D.C. Whetstone, T.J.
Wingard, C.L.

Amendments thus negatived; clause passed.

Clause 14 passed.

Clause 15.

The Hon. S.C. MULLIGHAN: I move:

Amendment No 4 [Mullighan–1]—

Page 10, line 23 [clause 15, inserted section 20AA(1), penalty provision]—Delete '$8,000' and substitute '$15,000'

As I foreshadowed in my second reading contribution two weeks ago today, I and the opposition have some concerns that, while there has been an increase in the penalty, we still do not believe that increase in penalty is commensurate with some of the other changes in the bill.

This amendment proposes that the maximum penalty provision in this part of the act be amended up to $15,000 rather than it being amended up to $8,000, as is proposed in the government's bill. Quite contrary to the assertions of the Deputy Premier, I did not simply wake up this morning and decide that $15,000 as an increased penalty was appropriate. As I said, I foreshadowed two weeks ago that we had concerns with this.

I sought the advice of parliamentary counsel and they suggested to me a figure of $15,000, which I am advised is commensurate with the highest monetary penalty elsewhere in the bill for an offence under the act. In that regard, I do not think it is too much to ask that the government supports this.

I do hope that the government takes the view that the original act held; that is, this is about consumer protection or, more specifically, the protection of lessees in lease arrangements between themselves and landlords. As ready as the Deputy Premier may have been to leap to the example where the party needing protection was indeed the landlord, I still believe that this act is designed to ensure, moreover, that it is the lessee who is protected.

In also providing a further reflection on the report, which was drafted by Alan Moss into the act, he does note the significant power imbalance that can operate between a landlord and a tenant: landlords, of course, by the very nature of being ongoing property owners and tenants who may, in many instances, be coming in to a lease arrangement for the first time. Understanding how leases operate, what are reasonable terms and so on in those circumstances is something that is worthy of protection by virtue of the act.

I do not think it is unreasonable that we increase this maximum penalty. It is not an exorbitant or an outrageous increase beyond the purview of other provisions within the bill or the act and I would hope that the government could see fit to support it.

The Hon. V.A. CHAPMAN: As previously indicated, the government will not be supporting this amendment in the absence of there being any information to justify it. Clearly, there are a number of penalties that are to apply that are consistent with the recommendations of the Moss review. The obligation to return an original bank guarantee to a lessee within two months is a new obligation as recommended and with it a commensurate penalty.

I do not think anybody reading this bill and the proposed penalties for other offences at $15,000 could in any way see the level of mischief from a failure to do something within the two-month period—that is, return a document to a party—as being anywhere near commensurate with the laws, for example, on prohibiting a premium for renewal or extension, which is obviously a really important thing to protect consumers against.

Essentially, it is the landlord requiring that extra moneys be paid just for the privilege of having that opportunity. That is not extortion in a criminal sense, but it is clearly a power imbalance and should not be allowed to occur. Mr Moss confirms that and says that the penalty should be increased. The $15,000 is there for that type of offence. I do not think an obligation to return a document within two months is anything like that.

Similarly, the penalty for unlawful threats is recommended to be increased. It is now proposed in this bill to go from $10,000 to $15,000. These are the types of offences that deserve to have a serious penalty. Confidentiality of turnover information is probably one of the most potentially damaging pieces of disclosure of information against a business, especially if it goes public or goes to a competitor. This is the type of material that is important for negotiations in relation to landlord and tenant, but should it get into the wrong hands it could crucify the business in question. Clearly, that also attracts a proposed $15,000 penalty.

The proposal of the member to increase the penalty for failure to return a document within a two-month period really is not commensurate with these. I still do not know from the presentation made by the member for Lee why this should attract this level of penalty. It is without merit, it is without support and it is without any evidence to justify it occurring.

The committee divided on the amendment:

Ayes 18

Noes 22

Majority 4

AYES
Bettison, Z.L. Bignell, L.W.K. Boyer, B.I.
Brown, M.E. (teller) Close, S.E. Cook, N.F.
Gee, J.P. Hildyard, K.A. Hughes, E.J.
Koutsantonis, A. Malinauskas, P. Michaels, A.
Mullighan, S.C. Odenwalder, L.K. Picton, C.J.
Stinson, J.M. Szakacs, J.K. Wortley, D.
NOES
Basham, D.K.B. Chapman, V.A. Cowdrey, M.J.
Cregan, D. Gardner, J.A.W. Harvey, R.M. (teller)
Knoll, S.K. Luethen, P. Marshall, S.S.
McBride, N. Murray, S. Patterson, S.J.R.
Pederick, A.S. Pisoni, D.G. Power, C.
Sanderson, R. Speirs, D.J. Tarzia, V.A.
Teague, J.B. van Holst Pellekaan, D.C. Whetstone, T.J.
Wingard, C.L.

Amendment thus negatived; clause passed.

Remaining clauses (16 to 31) and title passed.

Bill reported with amendments.

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