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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2008-11-26 Daily Xml
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STATUTES AMENDMENT AND REPEAL (FAIR TRADING) BILL

Introduction and First Reading

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy) (16:10): Obtained leave and introduced a bill for an act to amend the Building Work Contractors Act 1995, the Civil Liability Act 1936, the Conveyancers Act 1994, the Fair Trading Act 1987, the Land Agents Act 1994, the Plumbers, Gas Fitters and Electricians Act 1995, the Second-hand Vehicle Dealers Act 1995, the Security and Investigation Agents Act 1995 and the Travel Agents Act 1986; and to repeal the Consumer Transactions Act 1972 and the Recreational Services (Limitation of Liability) Act 2002. Read a first time.

Second Reading

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy) (16:11): I move:

That this bill be now read a second time.

It is government policy to promote recreation and sporting activities in this state in a way that protects the interests of both consumers and service providers. The Statutes Amendment and Repeal (Fair Trading) Bill 2008 is a reflection of that policy.

Members will recall that in the early part of this decade many community and sporting organisations found it increasingly difficult to obtain affordable public liability insurance. The government responded, along with other states and territories, by reforming the law of tort. The Recreational Services (Limitation of Liability) Act was one plank in the government's reforms that catered specifically for providers of sporting and other recreational services.

After nearly five years, the experience of recreation providers is that safety codes take a lot of time to develop and are difficult to draft. The government has listened to those concerns. The Statutes Amendment and Repeal (Fair Trading) Bill 2008 will repeal the Recreational Services (Limitation of Liability) Act and replace it with a scheme that does not require service providers to develop and register safety codes. This will not excuse service providers from having to put safety measures in place to protect consumers. Under the bill, recreation providers carrying on business will be required to supply services with due care and skill and will not be able to escape liability for reckless conduct.

In addition to reforms to assist recreation providers, the provisions of the Consumer Transactions Act will be updated in line with commonwealth provisions and brought into South Australia's primary consumer protection legislation, the Fair Trading Act. The bill will also extend and strengthen the powers of the Commissioner for Consumer Affairs. I would like to make it clear that the purpose of introducing the bill now is to allow recreation providers and members of the public to review the bill and provide feedback before debate resumes next year. I will consider any feedback and make amendments if needed. I seek leave to have the remainder of the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The Recreational Services (Limitation of Liability) Act 2002 was introduced to allow recreation providers to modify their duty of care to consumers without compromising safety standards. It was intended that the Act would make it easier for service providers to meet their obligations and make public liability insurance more accessible and affordable. The Act was developed in consultation with sporting and recreation groups and came into operation on 1 July 2003.

There have been concerns from recreation providers that the current law does not adequately support the industry. The main concern of service providers is that it is difficult, costly and time consuming to develop and register a safety code. The Bill addresses these concerns by repealing the Recreational Services (Limitation of Liability) Act.

Recreation providers, like other service providers, will be subject to the implied warranty provisions of the Fair Trading Act. New section 74H establishes a warranty that services will be rendered with due care and skill. Moreover, any materials supplied in connection with services will be reasonably fit for the purpose for which they are supplied.

This warranty will only be implied into contracts for the supply of services in the course of a business. The meaning of the term business is wide, and is defined to include not-for-profit groups. The proposed statutory warranties will therefore apply to sporting clubs and associations that charge membership fees and which have systems and procedures in place for the repetitive provision of services to members. The Government does not intend to apply the reforms to one-off and other services that are not supplied in the course of a business.

In response to the concerns of those in the recreation industry, the Bill provides for recreation providers to modify, exclude or restrict the warranty implied into contracts under section 74H of the Fair Trading Act. There are, however, some restrictions.

First and foremost service providers will not be able to modify, exclude or restrict their liability under section 74H for significant injuries that result from reckless conduct. Reckless conduct is defined to mean conduct where the service provider is aware, or should reasonably be aware, of a significant risk that his or her conduct could result in injury to another, and engages in that conduct despite the risk and without justification.

A person who pays for a horse-riding lesson, for example, may fall from a horse that is startled by a snake. If the recreation provider knows that snakes frequent the area, is aware that a snake was in the general vicinity on the day, and allows grass to grow to waist height, the conduct of the service provider may well be described as reckless.

Another restriction on the use of waivers under section 74I relates to the age and capacity of the consumer. Under the Bill minors who consume recreational services supplied in the course of a business will receive the protection of the statutory warranty that requires services to be rendered with due care and skill. Neither the child, nor a person who acquires services on behalf of the child, can waive that warranty or indemnify the service provider for a breach of that warranty.

Waivers must also contain prescribed particulars, be in the prescribed form and be agreed to by the consumer in the prescribed manner to be effective. The intention of the Government is that waivers will have to be physically signed in order to be effective. To cater for situations where this is simply not practical, alternative arrangements may be prescribed.

These restrictions on the modification, exclusion or restriction of liability will help consumers who sustain serious injury as the result of reckless conduct.

Nevertheless, the Bill provides important benefits for recreation providers. So long as providers are not reckless, they will be able to exclude liability for personal injury that would otherwise flow from a breach of the statutory warranty in section 74H. Recreation providers will also be able to exclude liability under section 74H for minor injuries such as scratches and bruises (as opposed to significant injuries such as a broken arms or fractured wrists). The repeal of the Recreational Services (Limitation of Liability) Act will also benefit recreation providers by removing restrictions on the modification or exclusion of common-law duties of care.

There has been some confusion about whether people who provide access to their land will be subject to the statutory warranty in section 74H and will have the ability to modify, exclude or restrict that warranty. If a person provides access to their land for dirt-bike riding, for example, is that a service that will be affected by the reforms?

If there is a fee for entering the land, charged in the course of a business, the statutory warranty in section 74H will generally apply. Whether or not that warranty can be waived will then depend on the purpose for which the consumer entered the land. If the consumer entered the land for the purpose of engaging in a recreational activity, the warranty implied under section 74H may be waived (subject to restrictions on the modification or exclusion of liability). If the consumer does not intend to engage in a recreational activity, the warranty cannot be waived.

Repeal of Consumer Transactions Act 1972 and insertion of updated warranties and conditions in the Fair Trading Act

The Consumer Transactions Act sets out certain conditions and warranties that are implied into certain consumer contracts. In summary, these conditions and warranties imply into certain consumer contracts that goods correspond with their description, that goods are of merchantable quality, that goods are fit for purpose, that services will be rendered with due care and skill and that material supplied in connection with the services will be fit for purpose.

Although the Consumer Transactions Act broke new ground when it was first enacted, these warranties and conditions are more limited in scope than the implied conditions and warranties contained in the more modern Commonwealth Trade Practices Act. Accordingly, it is proposed to repeal the Consumer Transactions Act and to include in the Fair Trading Act updated warranties and conditions which will bring South Australia's legislation into line with the Commonwealth Trade Practices Act. Several other jurisdictions have already made similar changes to their fair trading legislation. Importantly, the implied warranty to provide services with due care and skill will now apply to a much wider range of services. This is because the definition of 'services' will be modelled on the broad definition in the Trade Practices Act and will no longer be restricted to the categories set out in the Consumer Transactions Act and regulations.

In addition, several provisions of the Consumer Transactions Act which do not relate to implied warranties and conditions will be transferred across to the Fair Trading Act. The main provision states that the dimensions of the print type in a contract for the supply of goods or services to a consumer in the course of a business may be prescribed by regulation. The purpose is to ensure that such contracts are clear and legible.

Enforcement powers of the Commissioner for Consumer Affairs

The Fair Trading Act review discussion paper released for public consultation in April 2008 proposed a wide range of options for increasing the power of the Commissioner for Consumer Affairs to enforce the provisions of the Fair Trading Act and related licensing Acts. The submissions received have been carefully reviewed and considered and the Bill reflects the outcome of this process.

The Commissioner will have the power to require traders to attend conciliation of a consumer/trader dispute enforced by a monetary penalty (to be expiable where the value of the goods or services in dispute is $1,000 or less). While there is no obligation on the parties to reach an agreement, if the parties do reach a conciliated agreement, that agreement is enforceable in the Magistrates Court by the parties or the Commissioner.

It should be noted that the term conciliation has not been limited by definition and has a broad meaning. For example, conciliation may include circumstances where the conciliator speaks separately to the parties in dispute, or where the conciliator brings the parties together by telephone or other electronic means rather than in a face-to-face meeting.

The Commissioner will have the power to seek positive assurances from traders to engage in particular conduct and not only assurances to refrain from certain conduct as is the case now (for example a trader may be asked to undertake a particular training course).

The narrow definition of document has been removed so that the broader definition of document in the Acts Interpretation Act 1915 which includes electronic records will apply throughout the Act.

The powers of authorised officers to obtain information will be increased by allowing officers to retain and copy documents which have been produced under section 77 (in addition to the current power to retain and copy documents which have been seized under section 78). Authorised officers will also have the power to compel persons to attend a meeting to answer questions and produce documents (in addition to the current power to compel persons to answer questions and produce documents).

The powers of authorised officers to enter and inspect premises will be expanded to enable an officer to enter and inspect vehicles and vessels. Authorised officers will also be able to give directions reasonably required in connection with the exercise of their powers under the Act and failure to comply with such directions without reasonable excuse will be an offence.

The current offence of providing false information has been extended to include circumstances where misleading information is knowingly provided and a new offence has been created making it an offence to threaten, intimidate or coerce a potential witness.

The Commissioner will have the power to suspend the licence of certain licensed traders for up to six months if the Commissioner is of the opinion that:

there are reasonable grounds to believe that the trader has engaged or is engaged in conduct that constitutes grounds for disciplinary action;

it is likely that the trader will continue to engage in that conduct;

there is a danger that consumers may suffer significant harm, or significant loss or damage, as a result of that conduct unless action is taken urgently.

The Commissioner's power to suspend will apply to building work contractors under the Building Work Contractors Act 1995, contractors licensed under the Plumbers, Gas Fitters and Electricians Act 1995, licensed dealers under the Second-hand Vehicle Dealers Act 1995 and licensed travel agents under the Travel Agents Act 1986.

The Commissioner will have the power to note on the existing licence register certain events (for example that the licence holder is insolvent or has been disqualified in another State or Territory). Currently, when these events occur the Commissioner is entitled to take disciplinary action to remove the person's licence but this cannot be noted on the licence register until the disciplinary proceedings are complete. This amendment will enable consumers to find out this information easily as soon as possible and not have to search the Commonwealth registers for this information, or wait until the disciplinary proceedings are complete.

Under the current section 67 of the Fair Trading Act, it is necessary to prove intention on the part of a trader not to supply goods or services in order to prove breach of that provision. Even though traders' failure to supply is a common source of consumer complaints, it is difficult to prove breach of this provision due to the requirement to prove 'intent'. The Bill removes the requirement for intent, consistent with a similar provision in the Victorian legislation. Standard defences will still be available to traders.

The Bill provides for the doubling of the existing penalties for offences under the Fair Trading Act (other than the offences in Part 10 which mirror the consumer protection provisions of the Commonwealth Trade Practices Act). This is slightly greater than the increase required to account for inflation since the penalties were set in 1987. In addition, the Bill makes certain offences relating to door-to-door trading and failing to state the cash price of goods subject to expiation fees.

I commend the bill to members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause is formal.

2—Commencement

This clause provides for commencement of the measure on a day to be fixed by proclamation.

3—Amendment provisions

This clause is formal.

Part 2—Amendment of Building Work Contractors Act 1995

4—Amendment of section 9—Entitlement to be licensed

This clause updates section 9 of the Building Work Contractors Act 1995 by substituting the correct reference to insolvent persons.

5—Insertion of Part 3A

This clause inserts a new Part into the Building Work Contractors Act 1995.

Section 19A in Part 3A gives the Commissioner the power to suspend the licence of a building work contractor if the Commissioner is of the opinion that—

there are reasonable grounds to believe that the contractor has engaged in conduct that constitutes grounds for disciplinary action; and

it is likely that the contractor will continue to engage in that conduct; and

there is a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of the contractor's conduct unless action is taken urgently.

The Commissioner is required to serve a notice of the suspension on the licence holder or registered person. The Commissioner may not suspend the licence for a period of more than 6 months.

A contractor whose licence is suspended is required to surrender the licence to the Commissioner within seven days of being notified of the suspension.

If, during the period of the suspension, the Commissioner becomes satisfied that the facts and circumstances that gave rise to the suspension have so altered that the suspension should be terminated, the Commissioner is required to terminate the suspension without delay. The section also gives a person whose licence has been suspended a right of appeal to the Administrative and Disciplinary Division of the District Court. The Court is required hear and determine the appeal as expeditiously as possible.

6—Amendment of section 46—Registers

Section 46 as amended by this clause will authorise the Commissioner to include on the register of persons licensed or registered under the Act a note of the occurrence of any of the following events in relation to a person licensed as a building work contractor or director of a body corporate that is licensed as a building work contractor:

the person is suspended or disqualified from practising or carrying on an occupation, trade or business under a law of South Australia, the Commonwealth, another State or a Territory of the Commonwealth;

the person becomes an insolvent under administration within the meaning of the Corporations Act 2001 of the Commonwealth;

a body corporate is wound up for the benefit of creditors and the person was a director of the body corporate—

when the body corporate was being so wound up; or

within the period of 12 months preceding the commencement of the winding up;

the person, being a body corporate, is being wound up or is under official management or in receivership.

Part 3—Amendment of Civil Liability Act 1936

7—Amendment of section 38—No duty to warn of obvious risk

This amendment removes a reference to the Recreational Services (Limitation of Liability) Act 2002, which is to be repealed.

Part 4—Amendment of Conveyancers Act 1994

8—Amendment of section 7—Entitlement to be registered

This clause updates section 7 of the Conveyancers Act 1994 by substituting the correct reference to insolvency.

9—Amendment of section 54—Register of conveyancers

Section 54 as amended by this clause will authorise the Commissioner to include on the register of persons registered under the Act a note of the occurrence of any of the following events in relation to a registered person or a director of a body corporate that is a registered person:

the person is convicted of an offence of dishonesty;

the person is suspended or disqualified from practising or carrying on an occupation, trade or business under a law of South Australia, the Commonwealth, another State or a Territory of the Commonwealth;

the person becomes an insolvent under administration within the meaning of the Corporations Act 2001 of the Commonwealth;

a body corporate is wound up for the benefit of creditors and the person was a director of the body corporate—

when the body corporate was being so wound up; or

within the period of 6 months preceding the commencement of the winding up;

the person, being a company, is being wound up or is under official management or in receivership.

Part 5—Amendment of Fair Trading Act 1987

10—Amendment of section 3—Interpretation

The purpose of the amendment made by this clause to the definition of consumer is to establish that for the purposes of Part 10 Division 2A of the Fair Trading Act, the term includes persons acting in the course of a business or in the course of setting up a business. Division 2A is to be inserted by clause 35.

When reference is made in the Act to the Magistrates Court, the reference is to the Civil (Consumer and Business) Division of that Court.

This clause also deletes subsection (4) of section 3. The subsection is redundant because section 4AA of the Acts Interpretation Act 1915 provides that if an Act defines a word or phrase, other parts of speech and grammatical forms of the word or phrase have corresponding meanings.

11—Amendment of section 8—Functions of Commissioner

Subsection (2) of section 8 of the Act provides that the Commissioner must not attempt to resolve a dispute by conciliation except in certain specified circumstances. The subsection is deleted by this clause but is to be reproduced in new section 8A, which deals with conciliation.

12—Insertion of section 8A

One of the Commissioner's functions under section 8 is to attempt to resolve disputes between consumers and traders by conciliation. New section 8A deals with various matters connected with this function. Consistently with repealed section 8(2), subsection (1) of section 8A provides that the Commissioner must not attempt to resolve a dispute between a consumer and a trader by conciliation except at the request, or with the consent, of the consumer, or at the request of a court, board or tribunal in which proceedings have been taken in relation to the dispute.

The Commissioner may call a conciliation conference. A conciliation conference may be voluntary or compulsory. If the Commissioner is requested to resolve a dispute by conciliation and the consumer fails to attend a conference called for that purpose, the Commissioner may refuse to take further action in relation to the dispute. A trader who fails to attend a compulsory conciliation conference is guilty of an offence. A conference may be conducted by telephone or other electronic means.

If the parties to a dispute reach an agreement as a result of conciliation, and the agreement is recorded in a signed instrument, a copy of the agreement is to be given to each party. If a party to the agreement fails to carry out his or her obligations under the agreement, the Commissioner or the other party may apply to the Magistrates Court for an order enforcing the terms of the agreement.

13—Amendment of section 11—Secrecy

The maximum penalty for an offence against section 11 is currently a fine of $10,000. This clause amends the section by increasing the maximum to $20,000.

14—Amendment of section 15—Prohibition of certain contractual terms

The maximum penalty for an offence against section 15 is currently a fine of $5,000. This clause amends the section by increasing the maximum to $10,000.

15—Amendment of section 17—Requirements in relation to prescribed contracts

The maximum penalty for an offence against section 17(2) is currently a fine of $5,000. This clause amends the section by increasing the maximum to $10,000. An expiation fee of $500 is also inserted.

16—Amendment of section 18—Acceptance of consideration etc

The maximum penalty for an offence against section 18(1) is currently a fine of $5,000. This clause amends the section by increasing the maximum to $10,000. An expiation fee of $500 is also inserted.

17—Amendment of section 19—Prohibition hours

The maximum penalty for an offence against section 19 is currently a fine of $5,000. This clause amends the section by increasing the maximum to $10,000. An expiation fee of $500 is also inserted.

18—Amendment of section 20—Duties of dealers

The maximum penalty for an offence against section 20(1) or (2) is currently a fine of $5,000. This clause amends the section by increasing the maximum penalty to $10,000.

19—Amendment of section 21—Harassment or coercion

The maximum penalty for an offence against section 21(1) or (2) is currently a fine of $5,000. This clause amends the section by increasing the maximum to $10,000.

20—Amendment of section 24—Restitution

The maximum penalty for an offence against section 24(7) is currently a fine of $5,000. This clause amends the section by increasing the maximum to $10,000.

21—Amendment of section 27—Prohibition of certain actions

The maximum penalty for an offence against section 27(1) or (5) is currently a fine of $5,000. This clause amends the section by increasing each maximum penalty to $10,000.

22—Amendment of section 28—Prohibition of mock auctions

The maximum penalty for an offence against section 28(1) is currently a fine of $2,500. This clause amends the section by increasing the maximum to $5,000.

23—Amendment of section 36—Offences

The maximum penalty under section 36 is currently a fine of $5,000. This clause amends the section by increasing the maximum penalty to $10,000.

24—Amendment of section 37—Powers of District Court

The maximum penalty for an offence against section 37(4) is currently a fine of $5,000 or imprisonment for two years. This clause amends the section by increasing the maximum fine to $10,000.

25—Amendment of section 38—Limited offers and failing to supply as demanded

The maximum penalty for an offence against section 38(1) or (2) is currently a fine of $2,500. This clause amends the section by increasing the maximum to $5,000.

26—Amendment of section 40—Price tickets

The maximum penalty for an offence against section 40 is currently a fine of $5,000. This clause amends the section by increasing the maximum to $10,000. An expiation fee of $315 is also inserted.

27—Amendment of section 41—Approval of consumer affairs authority not to be implied

The maximum penalty for an offence against section 41 is currently a fine of $5,000. This clause amends the section by increasing the maximum to $10,000.

28—Amendment of section 42—Substantiation of claims

The maximum penalty for an offence against section 42(2) is currently a fine of $5,000. This clause amends the section by increasing the maximum penalty to $10,000.

29—Amendment of section 43—Unlawful actions and representations

The maximum penalty for an offence against section 43(1) or (2) is currently a fine of $2,500. This clause amends the section by increasing the maximum in each case to $5,000. Under section 43(2), the maximum penalty includes imprisonment for six months.

30—Amendment of section 43A—Prohibition on trading or carrying on business as Starr-Bowkett society

The maximum penalty for an offence against section 43A(1) is currently a fine of $5,000. This clause amends the section by increasing the maximum to $10,000.

31—Amendment of section 45B—Offences

The maximum penalty under section 45B is currently a fine of $5,000. This clause amends the section by increasing the maximum penalty to $10,000.

32—Amendment of section 46—Interpretation

Section 46 of the Act provides definitions that apply for the purposes of Part 10. This clause amends section 46 by deleting the definition of document so that the definition contained in the Acts Interpretation Act 1915 applies for the purposes of the Part. The definition of goods is amended to make it clear that the definition includes water, sewerage and telecommunications as well as any component part of, or accessory to, goods. The definition of services is amended so that the term includes a contract for or in relation to the provision of gas or electricity or the provision of any other form of energy.

33—Amendment of section 55—Application

This clause makes a consequential amendment to section 55 by adding a reference to new Division 2A.

34—Substitution of section 67

This clause recasts section 67. Under the new section, it is an offence for a person to, in trade or commerce, accept payment or other consideration for the supply of goods or services if the person does not supply all the goods or services within the period specified by the person or within a reasonable time, or if the person supplies goods or services that are materially different from the goods or services to which the agreement to supply is related.

35—Insertion of Part 10 Division 2A

This clause inserts a new Division into Part 10. Part 10 consists of provisions related to trade practices. The new Division is primarily concerned with implying conditions and warranties into contracts for the supply of goods and services.

Division 2A—Conditions and warranties in consumer transactions

74A—Interpretation and application

This section includes interpretation and application provisions relevant only to Division 2A.

A reference in Division 2A to the quality of goods includes a reference to the state or condition of the goods. A reference to negotiations in relation to a contract for the supply by a person of goods to a consumer is a reference to negotiations or arrangements conducted or made with the consumer by another person in the course of a business carried on by the other person in respect of which the consumer was induced to enter into the contract or that otherwise promoted the transaction to which the contract relates.

Goods are of merchantable quality if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to any description applied to them, the price and all other relevant circumstances.

Division 2A does not apply to contracts made before the commencement of the Division.

The section makes it clear that Division 2A does not affect the operation of the Sale of Goods Act 1895, or of any other Act or law in relation to contracts for the supply of goods or services, except to the extent of inconsistency with the provisions of the Sale of Goods Act 1895, or the other Act or law.

74B—Application of provisions not to be excluded or modified

Under this section, a term of a contract is void if it purports to exclude, restrict or modify or has the effect of excluding, restricting or modifying—

the application of any or all of the provisions of Division 2A; or

the exercise of a right conferred by a provision of Division 2A; or

liability of a person for breach of a condition or warranty implied by a provision of Division 2A.

The section operates subject to section 74I.

74C—Penalties for including void provisions

If a contract for the supply of goods or services to a consumer contains a provision that is void under section 74B, the supplier of the goods or services is guilty of an offence.

74D—Implied undertakings as to title, encumbrances and quiet possession

This section implies the following warranties and conditions into contracts for the supply of goods:

a condition that, in the case of a supply by way of sale, the supplier has a right to sell the goods, and, that in the case of an agreement to sell or a hire-purchase agreement, the supplier will have a right to sell the goods at the time when the property is to pass;

a warranty that the consumer will enjoy quiet possession of the goods except so far as it may lawfully be disturbed by the supplier or by another person who is entitled to the benefit of any charge or encumbrance disclosed or known to the consumer before the contract is made;

in the case of a contract for the supply of goods under which the property is to pass or may pass to the consumer—a warranty that the goods are free, and will remain free until the time when the property passes, from any charge or encumbrance not disclosed or known to the consumer before the contract is made.

74E—Supply by description

This section provides that in every contract for the supply (otherwise than by way of sale by auction or sale by competitive tender) by a person in the course of a business of goods to a consumer by description, there is an implied condition that the goods will correspond with the description.

74F—Implied undertakings as to quality or fitness

Under this section, if a person supplies (otherwise than by way of sale by auction) goods to a consumer in the course of a business, there is an implied condition that the goods supplied under the contract for the supply of the goods are of merchantable quality. However, there is no such condition by virtue of section 74F—

as regards defects specifically drawn to the consumer's attention before the contract is made; or

if the consumer examines the goods before the contract is made—as regards defects that the examination ought to have revealed.

If the supplier of goods to a consumer (otherwise than by way of sale by auction) has been made aware by the consumer of any particular purpose for which the goods are being acquired, there is an implied condition that the goods supplied are reasonably fit for that purpose.

74G—Supply by sample

If there is a term in a contract for the supply by a person in the course of a business of goods to a consumer to the effect that the goods are supplied by reference to a sample, there is implied under section 74G a condition that the bulk will correspond with the sample in quality. There is also an implied condition that the consumer will have a reasonable opportunity of comparing the bulk with the sample and a condition that the goods will be free from any defect, rendering them unmerchantable, that would not be apparent on reasonable examination of the sample. The section does not apply in relation to supply by way of sale by auction or sale by competitive tender.

74H—Warranties in relation to the supply of services

This section provides that every contract for the supply by a person in the course of a business of services to a consumer includes an implied warranty that the services will be rendered with due care and skill and that any materials supplied in connection with the services will be reasonably fit for the purpose for which they are supplied.

Section 74H also provides that if a person supplies services (other than services of a professional nature provided by a qualified architect or engineer) to a consumer in the course of a business and the consumer, expressly or by implication, makes known to the person any particular purpose for which the services are required or the result that the consumer desires the services to achieve, there is an implied warranty that the services supplied under the contract for the supply of the services and any materials supplied in connection with those services will be reasonably fit for that purpose or are of such a nature and quality that they might reasonably be expected to achieve that result. This provision does not apply if the circumstances show that the consumer does not rely on the skill and judgment of the person or that it is unreasonable for the consumer to rely on the skill and judgment of the person.

The section does not apply to a contract providing for the carrying out of domestic building work within the meaning of the Building Work Contractors Act 1995.

74I—Liability relating to provision of recreational services may be limited

Section 74I provides that a term of a contract for the supply of recreational services may exclude, restrict or modify a warranty implied in the contract by section 74H or a substantially similar provision of an Act of the Commonwealth. (Section 74 of the Trade Practices Act 1974 is an example of a substantially similar provision.)

This provision operates subject to the following requirements being met:

the exclusion, restriction or modification contained in the term is limited to excluding, restricting or modifying the liability of the supplier for any personal injury suffered by the consumer or some other person for whom or on whose behalf the consumer is acquiring the services (ie, a third party consumer);

the consumer and any third party consumer are of full age and legal capacity;

the term contains the prescribed particulars and is in the prescribed form;

the term was brought to the attention of the consumer prior to the supply of the services;

the consumer has agreed to the term in the prescribed manner.

The provision does not operate to exclude, restrict or modify the liability of the supplier for damages for any significant personal injury suffered by the consumer or a third party consumer if it is established that the reckless conduct of the supplier caused the injury. Subsection (6) makes it clear that a person causes personal injury if the person's conduct causes or contributes to the injury.

Under subsection (4), a term of a contract that purports to indemnify a person who supplies recreational services in relation to any liability that may not be excluded, restricted or modified under the section is void. This provision does not apply in relation to a contract of insurance.

A person's conduct is reckless if the person engages in the conduct even though the person is aware, or should reasonably have been aware, of a significant risk that his or her conduct could result in injury to another.

Personal injury is defined to include mental or nervous shock and death.

Recreational services are services that consist of participation in—

a sporting activity or a similar leisure-time pursuit; or

any other activity that—

involves a significant degree of physical exertion or physical risk; or

is undertaken for the purposes of recreation, enjoyment or leisure.

Significant means not nominal, trivial or minor.

74J—Representations etc

If a statement or representation is made by an employee or a person acting on behalf of a supplier of goods or services, and the goods or services are or become subject to a contract for the supply of those goods or services, the statement will be taken to be a statement or representation made by the supplier.

74K—Rescission of contract

Under this section, a consumer is entitled to rescind a contract for the supply of goods if there is a breach of a condition implied in the contract by a provision of Division 2A. The consumer is entitled to rescind the contract by—

serving on the supplier a notice in writing signed by the consumer giving particulars of the breach; or

returning the goods to the supplier and giving to the supplier, either orally or in writing, particulars of the breach.

For a purported rescission to have effect, the notice must be served, or the goods returned, within a reasonable time after the consumer has had a reasonable opportunity of inspecting the goods. Also, a purported rescission does not have effect in the case of a rescission effected by service of a notice if, after the delivery of the goods to the consumer but before the notice is served—

the goods were disposed of by the consumer, were lost, or were destroyed otherwise than by reason of a defect in the goods; or

the consumer caused the goods to become unmerchantable or failed to take reasonable steps to prevent the goods from becoming unmerchantable; or

the goods were damaged by abnormal use.

A purported rescission effected by a return of goods is of no effect if, while the goods were in the possession of the consumer, the consumer caused the goods to become unmerchantable or failed to take reasonable steps to prevent the goods from becoming unmerchantable, or the goods were damaged by abnormal use.

If a contract for the supply of goods has been rescinded in accordance with this section, and the property in the goods had passed to the consumer before the notice of rescission was served on, or the goods were returned to, the supplier, the property in the goods re-vests in the supplier on the service of the notice or the return of the goods. The consumer is entitled to recover from the supplier, as a debt, the amount or value of any consideration paid or provided by the consumer for the goods.

74L—Powers of Magistrates Court in event of rescission

If a dispute arises in respect of the rescission of a contract, the Magistrates Court can, on the application of the consumer, make orders—

to give effect to, or to enforce, rights or liabilities consequent on the rescission arising under Division 2A; or

to restore the parties as nearly as practicable to their respective positions prior to the formation of the contract (subject to such rights or liabilities).

74M—Nature of writing

If a provision of a written contract for the supply of goods and services is in handwriting that is not clear and legible, or is printed in type that does not comply with the regulations, the provision is not enforceable against the consumer by the supplier.

74N—Relief against civil consequences of non-compliance with Division

Under this section, if a person has made, or stands to make, a loss because of contravention of or non-compliance with a provision of Division 2A, the person can apply to the Magistrates Court for relief against the consequences of the contravention or non-compliance. If the Court is satisfied that the contravention or failure to comply with Division 2A does not, in the circumstances, warrant the consequences prescribed by the Division, it can grant relief against those consequences.

In determining whether it should make an order, and in determining the terms on which relief is to be granted, the Court is required to have regard to—

the gravity of the contravention or non-compliance; and

the conduct of the applicant in relation to the transaction to which the application relates; and

any prejudice that may result from the making of the order.

36—Amendment of section 77—Obtaining information

This clause amends section 77, which deals with the powers of authorised officers to obtain information. Under the section as amended, an authorised officer may, for the purpose of requiring a person to answer a question or produce a book or document, require the person to attend at a specified time or place. The requirement must be made by written notice served on the person.

Under subsection (2), it is an offence for a person to—

refuse or fail to comply with a reasonable requirement under the section; or

without reasonable excuse, to refuse or fail to attend at a time and place specified in a notice (or some other time and place allowed by an authorised officer); or

to knowingly make a statement that is false or misleading in a material particular (whether by reason of the inclusion or omission of a particular) in an answer given or information provided under the section.

The maximum penalty is a fine of $20,000.

An authorised officer may require that the answer to a question be verified by statutory declaration or given under oath.

37—Amendment of section 78—Entry and inspection

Under section 78, authorised officers are given certain powers of entry and inspection. This clause amends the section to give authorised officers powers to enter and search vehicles and to give directions that are reasonably required in connection with the exercise of a power conferred by section 78(1) or otherwise in connection with the administration, operation or enforcement of the Act.

If a person fails to comply with a direction, and the person does not have a reasonable excuse for the failure, he or she is guilty of an offence. The maximum penalty is a fine of $20,000.

38—Insertion of section 78A

This clause inserts a new section. Section 78A applies to any book or document produced to, or taken by, an authorised officer. A book or document to which the section applies may be retained for the purpose of enabling the book or document to be inspected and for enabling copies of, or extracts or notes from, the book or document to be made or taken by or on behalf of the Commissioner. A book or document required by the Commissioner for the purpose of legal proceedings may be retained until the proceedings are finally determined.

39—Amendment of section 79—Assurances

Under section 79 as amended by this clause, the Commissioner will be authorised to accept an assurance given by a trader or a person who is a director of a body corporate that is a trader. The assurance must be in connection with a matter in relation to which the Commissioner has a power or function.

An assurance must be in writing and may be withdrawn or varied with the consent of the Commissioner.

40—Amendment of section 81—Offence

Under section 81, it is an offence for a person who has given an assurance accepted by the Commissioner to act contrary to the assurance The maximum penalty for the offence is currently a fine of $5,000. This clause amends the section by increasing the maximum fine to $10,000.

41—Amendment of section 82—Enforcement orders

The amendment made by this clause is consequential on amendments made to section 79 and, in particular, the fact that under that section as amended the Commissioner will be able to accept assurances from directors of body corporates as well as traders.

42—Amendment of section 93—Hindering an authorised officer

The maximum penalty for the offence of hindering an authorised officer is currently a fine of $2,500. This clause amends section 93 by increasing the maximum to $5,000.

43—Insertion of section 93A

This clause inserts a new section. Proposed section 93A makes it an offence for a person to persuade another person, or to attempt to persuade another person, by threat or intimidation—

to fail to co-operate with an authorised officer in the performance or exercise of powers or functions; or

to fail to provide information or give evidence to an authorised officer as authorised or required; or

to provide information or give evidence that is false or misleading in a material particular, or to provide information or give evidence in a manner that will make the information or evidence false or misleading in a material particular, to an authorised officer.

44—Amendment of section 94—Impersonating a police officer

The amendment made by this clause increases the maximum penalty for impersonating an authorised officer from $2,500 to $5,000.

45—Amendment of section 97—Regulations

Under section 97, regulations under the Act may impose penalties not exceeding $1,250 for contravention of, or failure to comply with, a regulation. Under the section as amended by this clause, the maximum penalty will be $2,500.

The section as amended will also allow for the making of regulations that make different provision according to the classes of persons, or the matters or circumstances, to which they are expressed to apply.

Part 6—Amendment of Land Agents Act 1994

46—Amendment of section 8—Entitlement to be registered as agent

This clause updates section 8 of the Land Agents Act 1994 by substituting the correct reference to insolvency.

47—Amendment of section 52—Register

Section 52 of the Land Agents Act 1994 as amended by this clause will authorise the Commissioner to include on the register of persons registered under the Act a note of the occurrence of any of the following events in relation to a licensed or registered person or a director of a body corporate that is a registered person:

the person is convicted of an offence of dishonesty;

the person is suspended or disqualified from practising or carrying on an occupation, trade or business under a law of South Australia, the Commonwealth, another State or a Territory of the Commonwealth;

the person becomes an insolvent under administration within the meaning of the Corporations Act 2001 of the Commonwealth;

a body corporate is wound up for the benefit of creditors and the person was a director of the body corporate—

when the body corporate was being so wound up; or

within the period of 12 months preceding the commencement of the winding up;

the person, being a body corporate, is being wound up or is under official management or in receivership.

Part 7—Amendment of Plumbers, Gas Fitters and Electricians Act 1995

48—Amendment of section 9—Entitlement to be licensed

This clause updates section 9 of the Plumbers, Gas Fitters and Electricians Act 1995 by substituting the correct reference to insolvent persons.

49—Insertion of Part 3A

This clause inserts a new Part into the Plumbers, Gas Fitters and Electricians Act 1995.

Section 18A in Part 3A gives the Commissioner the power to suspend the licence of a contractor if the Commissioner is of the opinion that—

there are reasonable grounds to believe that the contractor has engaged in conduct that constitutes grounds for disciplinary action; and

it is likely that the contractor will continue to engage in that conduct; and

there is a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of the contractor's conduct unless action is taken urgently.

The Commissioner is required to serve a notice of the suspension on the contractor. The Commissioner may not suspend the licence for a period of more than 6 months.

A contractor whose licence is suspended is required to surrender the licence to the Commissioner within seven days of being notified of the suspension.

If, during the period of the suspension, the Commissioner becomes satisfied that the facts and circumstances that gave rise to the suspension have so altered that the suspension should be terminated, the Commissioner is required to terminate the suspension without delay. The section also gives a person whose licence has been suspended a right of appeal to the Administrative and Disciplinary Division of the District Court. The Court is required to hear and determine the appeal as expeditiously as possible.

50—Amendment of section 30—Registers

Section 30 of the Plumbers, Gas Fitters and Electricians Act 1995 as amended by this clause will authorise the Commissioner to include on the register of persons licensed under the Act a note of the occurrence of any of the following events in relation to a licensed person or a director of a body corporate that is a licensed person:

the person is suspended or disqualified from practising or carrying on an occupation, trade or business under a law of this State, the Commonwealth, another State or a Territory of the Commonwealth;

the person becomes an insolvent under administration within the meaning of the Corporations Act 2001 of the Commonwealth;

a body corporate is wound up for the benefit of creditors and the person was a director of the body corporate—

when the body corporate was being so wound up; or

within the period of 12 months preceding the commencement of the winding up;

the person, being a body corporate, is being wound up or is under official management or in receivership.

Part 8—Amendment of Second-hand Vehicle Dealers Act 1995

51—Amendment of section 9—Entitlement to be licensed

This clause updates section 9 of the Second-hand Vehicle Dealers Act 1995 by substituting the correct reference to insolvent persons.

52—Insertion of Part 4A

This clause inserts a new Part into the Second-hand Vehicles Dealers Act 1995.

Section 25A in Part 4A gives the Commissioner the power to suspend the licence of a dealer if the Commissioner is of the opinion that—

there are reasonable grounds to believe that the dealer has engaged in conduct that constitutes grounds for disciplinary action; and

it is likely that the dealer will continue to engage in that conduct; and

there is a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of the dealer's conduct unless action is taken urgently.

The Commissioner is required to serve a notice of the suspension on the dealer. The Commissioner may not suspend the licence for a period of more than 6 months.

An agent whose licence is suspended is required to surrender the licence to the Commissioner within seven days of being notified of the suspension.

If, during the period of the suspension, the Commissioner becomes satisfied that the facts and circumstances that gave rise to the suspension have so altered that the suspension should be terminated, the Commissioner is required to terminate the suspension without delay. The section also gives a person whose licence has been suspended a right of appeal to the Administrative and Disciplinary Division of the District Court. The Court is required to hear and determine the appeal as expeditiously as possible.

53—Amendment of section 39—Register of dealers and premises

Section 39 of the Second-hand Vehicles Dealers Act 1995 as amended by this clause will authorise the Commissioner to include on the register of persons licensed under the Act a note of the occurrence of any of the following events in relation to a licensed person or a director of a body corporate that is a licensed person:

the person is convicted of an offence of dishonesty;

the person is suspended or disqualified from practising or carrying on an occupation, trade or business under a law of this State, the Commonwealth, another State or a Territory of the Commonwealth;

the person becomes an insolvent under administration within the meaning of the Corporations Act 2001 of the Commonwealth;

a body corporate is wound up for the benefit of creditors and the person was a director of the body corporate—

when the body corporate was being so wound up; or

within the period of 12 months preceding the commencement of the winding up;

the person, being a body corporate, is being wound up or is under official management or in receivership.

Part 9—Amendment of Security and Investigation Agents Act 1995

54—Amendment of section 9—Entitlement to be licensed

This clause updates section 9 of the Security and Investigation Agents Act 1995 by substituting the correct reference to insolvent persons.

55—Amendment of section 34—Register of licensed agents

Section 34 of the Security and Investigation Agents Act 1995 as amended by this clause will authorise the Commissioner to include on the register of persons licensed under the Act a note of the occurrence of any of the following events in relation to a licensed person or a director of a body corporate that is a licensed person:

the person is convicted of an offence of a class specified by regulation for the purposes of section 9(1)(b) of the Act in relation to the functions authorised by his or her licence;

the person is suspended or disqualified from practising or carrying on an occupation, trade or business under a law of this State, the Commonwealth, another State or a Territory of the Commonwealth;

in the case of a person whose licence is not subject to an employee condition or who is a director of a body corporate that is licensed as an agent—a body corporate is wound up for the benefit of creditors and the person was a director of the body corporate—

when the body corporate was being so wound up; or

within the period of 6 months preceding the commencement of the winding up;

in the case of a person whose licence is not subject to an employee condition—the person becomes an insolvent under administration within the meaning of the Corporations Act 2001 of the Commonwealth;

the person, being a body corporate, is being wound up or is under official management or in receivership.

Part 10—Amendment of Travel Agents Act 1986

56—Insertion of Part 2 Division 1A

This clause inserts a new Division into the Part 2 of the Travel Agents Act 1986.

Section 14A in Division 1A gives the Commissioner the power to suspend the licence of a travel agent if the Commissioner is of the opinion that—

there are reasonable grounds to believe that the agent has engaged in conduct that constitutes grounds for disciplinary action; and

it is likely that the agent will continue to engage in that conduct; and

there is a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of the agent's conduct unless action is taken urgently.

The Commissioner is required to serve a notice of the suspension on the agent. The Commissioner may not suspend the licence for a period of more than 6 months.

An agent whose licence is suspended is required to surrender the licence to the Commissioner within seven days of being notified of the suspension.

If, during the period of the suspension, the Commissioner becomes satisfied that the facts and circumstances that gave rise to the suspension have so altered that the suspension should be terminated, the Commissioner is required to terminate the suspension without delay. The section also gives a person whose licence has been suspended a right of appeal to the Administrative and Disciplinary Division of the District Court. The Court is required to hear and determine the appeal as expeditiously as possible.

57—Amendment of section 30—Registers

Under section 30 of the Travel Agents Act 1986 as amended by this clause, if a travel agent's licence is suspended, or a travel agent, or a director of a body corporate that is licensed as a travel agent, is suspended or disqualified under a corresponding law from holding a licence under the corresponding law or being involved in the direction, management or conduct of the business of a travel agent, the Commissioner may record a note of the suspension or disqualification on the register of persons licensed under the Act.

Part 11—Repeal of Consumer Transactions Act 1972

58—Repeal of Consumer Transactions Act 1972

This clause repeals the Consumer Transactions Act 1972.

Part 12—Repeal of Recreational Services (Limitation of Liability) Act 2002

59—Repeal of Recreational Services (Limitation of Liability) Act 2002

This clause repeals the Recreational Services (Limitation of Liability) Act 2002.

Debate adjourned on motion of Hon. S.G. Wade.

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