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This is a Bill, not an Act. For current law, see the Acts databases.


CONSUMER CREDIT AND CORPORATIONS LEGISLATION AMENDMENT (ENHANCEMENTS) BILL 2011

2010-2011
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Consumer Credit and Corporations
Legislation Amendment (Enhancements)
Bill 2011
No. , 2011
(Treasury)
A Bill for an Act to amend the law relating to
consumer credit and corporations, and for related
purposes
i Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Contents
1 Short
title
...........................................................................................
1
2 Commencement
.................................................................................
1
3 Schedule(s)
........................................................................................
2
Schedule 1--Enhancements
3
Part 1--Protection of debtor in cases of hardship
3
National Consumer Credit Protection Act 2009
3
Part 2--Remedies for unfair or dishonest conduct by credit
service providers
8
National Consumer Credit Protection Act 2009
8
Part 3--Representations about eligibility to enter credit
contracts, consumer leases etc. without assessing
unsuitability
12
National Consumer Credit Protection Act 2009
12
Part 4--Prohibition on certain representations and other
matters
14
National Consumer Credit Protection Act 2009
14
Part 5--Civil remedies for contravention of the National Credit
Code
18
National Consumer Credit Protection Act 2009
18
Part 6--Miscellaneous amendments
19
National Consumer Credit Protection Act 2009
19
Part 7--Technical corrections
23
National Consumer Credit Protection Act 2009
23
Schedule 2--Reverse mortgages
25
Part 1--Definitions
25
Division 1--Definition of reverse mortgage
25
National Consumer Credit Protection Act 2009
25
Division 2--Other definitions
26
National Consumer Credit Protection Act 2009
26
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 ii
Part 2--Provisions applying to licensees
28
National Consumer Credit Protection Act 2009
28
Part 3--Provisions applying to credit providers generally
35
National Consumer Credit Protection Act 2009
35
Schedule 3--Small amount credit contracts
46
National Consumer Credit Protection Act 2009
46
Schedule 4--Caps on costs etc. for credit contracts
53
National Consumer Credit Protection Act 2009
53
Schedule 5--Consumer leases
64
National Consumer Credit Protection Act 2009
64
Schedule 6--Application provisions
97
National Consumer Credit Protection (Transitional and
Consequential Provisions) Act 2009
97
Schedule 7--Voting at AGMs of public companies
102
Corporations Act 2001
102
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 1
A Bill for an Act to amend the law relating to
1
consumer credit and corporations, and for related
2
purposes
3
The Parliament of Australia enacts:
4
1 Short title
5
This Act may be cited as the Consumer Credit and Corporations
6
Legislation Amendment (Enhancements) Act 2011.
7
2 Commencement
8
(1) Each provision of this Act specified in column 1 of the table
9
commences, or is taken to have commenced, in accordance with
10
column 2 of the table. Any other statement in column 2 has effect
11
according to its terms.
12
13
2 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Commencement information
Column 1
Column 2
Column 3
Provision(s)
Commencement
Date/Details
1. Sections 1 to 3
and anything in
this Act not
elsewhere covered
by this table
The day this Act receives the Royal Assent.
2. Schedules 1, 2
and 3
Immediately after the commencement of
Part 2 of Schedule 1 to the National
Consumer Credit Protection Amendment
(Home Loans and Credit Cards) Act 2011.
1 July 2012
3. Schedule 4
1 January 2013.
1 January 2013
4. Schedules 5
and 6
Immediately after the commencement of
Schedule 2 to the National Consumer Credit
Protection Amendment (Home Loans and
Credit Cards) Act 2011.
1 July 2012
5. Schedule 7
The day after this Act receives the Royal
Assent.
Note:
This table relates only to the provisions of this Act as originally
1
enacted. It will not be amended to deal with any later amendments of
2
this Act.
3
(2) Any information in column 3 of the table is not part of this Act.
4
Information may be inserted in this column, or information in it
5
may be edited, in any published version of this Act.
6
3 Schedule(s)
7
Each Act that is specified in a Schedule to this Act is amended or
8
repealed as set out in the applicable items in the Schedule
9
concerned, and any other item in a Schedule to this Act has effect
10
according to its terms.
11
Enhancements Schedule 1
Protection of debtor in cases of hardship Part 1
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 3
Schedule 1--Enhancements
1
Part 1--Protection of debtor in cases of hardship
2
National Consumer Credit Protection Act 2009
3
1 Section 72 of the National Credit Code
4
Repeal the section, substitute:
5
72 Changes on grounds of hardship
6
Hardship notice
7
(1) If a debtor considers that he or she is or will be unable to meet his
8
or her obligations under a credit contract, the debtor may give the
9
credit provider notice (a hardship notice), orally or in writing, of
10
the debtor's inability to meet the obligations.
11
Credit provider's notice in response to hardship notice
12
(2) Within 21 days after the day of receiving the debtor's hardship
13
notice, the credit provider must give the debtor:
14
(a) if the credit provider agrees to negotiate a change to the
15
credit contract--notice, in the form prescribed by the
16
regulations, that the credit provider agrees to negotiate; or
17
(b) if the credit provider does not agree to negotiate a change to
18
the credit contract--a written notice that states:
19
(i) that the credit provider does not agree to negotiate; and
20
(ii) the reasons for not agreeing to negotiate; and
21
(iii) the name of the approved external dispute resolution
22
scheme of which the credit provider is a member; and
23
(iv) the debtor's rights under that scheme.
24
Criminal penalty:
30 penalty units.
25
Note:
If a debtor has given a credit provider a hardship notice, there may be
26
extra requirements that the credit provider must comply with before
27
beginning enforcement proceedings--see section 89A.
28
Schedule 1 Enhancements
Part 1 Protection of debtor in cases of hardship
4 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(3) A credit provider that has given notice under paragraph (2)(a) may,
1
within 21 days after the day of giving that notice, give a notice
2
under paragraph (2)(b).
3
(4) Subsection (2) is an offence of strict liability.
4
Note:
For strict liability, see section 6.1 of the Criminal Code.
5
2 Subsection 73(1) of the National Credit Code
6
Omit "on any such application", substitute "to change the credit
7
contract as a result of a hardship notice by the debtor".
8
3 Subsection 74(1) of the National Credit Code
9
Omit "in accordance with the application", substitute "as a result of a
10
hardship notice by the debtor".
11
4 Subsection 74(2) of the National Credit Code
12
Repeal the subsection, substitute:
13
(2) The court may, after allowing the applicant, the credit provider and
14
any guarantor a reasonable opportunity to be heard:
15
(a) by order change the credit contract (but not so as to reduce
16
the amount ultimately payable by the debtor to the credit
17
provider under the contract), and make such other orders as it
18
thinks fit; or
19
(b) refuse to change the credit contract.
20
5 Subparagraphs 88(3)(f)(i) and (ii) of the National Credit
21
Code
22
Repeal the subparagraphs, substitute:
23
(i) give a hardship notice under section 72; or
24
(ii) give a postponement request under section 94; or
25
6 After section 89 of the National Credit Code
26
Insert:
27
89A Effect of hardship notices on enforcement
28
(1) This section applies if:
29
(a) a credit provider is required to give a default notice under
30
section 88 before beginning enforcement proceedings; and
31
Enhancements Schedule 1
Protection of debtor in cases of hardship Part 1
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 5
(b) before or after the credit provider gives the default notice, the
1
debtor gives the credit provider a hardship notice (the current
2
hardship notice) under section 72; and
3
(c)
either:
4
(i) in the 4 months before the day the current hardship
5
notice is given, the debtor had not given the credit
6
provider another hardship notice; or
7
(ii) in that 4-month period, the debtor had given the credit
8
provider one or more other hardship notices, but the
9
credit provider reasonably believes that the basis on
10
which the current hardship notice was given is
11
materially different from the bases on which the other
12
hardship notices were given.
13
(2) The credit provider must not begin enforcement proceedings
14
against the debtor unless:
15
(a) the credit provider has given the debtor a notice under
16
paragraph 72(2)(b), in response to the current hardship
17
notice, stating that the credit provider does not agree to
18
negotiate a change to the credit contract; and
19
(b) the period of 14 days, starting on the day the lessor gives the
20
notice under paragraph 72(2)(b), has expired.
21
Criminal penalty:
50 penalty units.
22
Note:
The credit provider must allow the debtor at least 30 days from the
23
date of the default notice to remedy the default--see section 88. The
24
14-day period in subsection (2) may end before, at the same time as,
25
or after the end of the period for remedying the default specified in the
26
default notice.
27
(3) However, the credit provider may take possession of mortgaged
28
goods if the credit provider reasonably believes that:
29
(a) the debtor or mortgagor has removed or disposed of the
30
mortgaged goods, or intends to remove or dispose of them,
31
without the credit provider's permission; or
32
(b) urgent action is necessary to protect the goods.
33
(4) Subsection (2) is an offence of strict liability.
34
Note:
For strict liability, see section 6.1 of the Criminal Code.
35
7 Subsection 94(1) of the National Credit Code
36
Repeal the subsection, substitute:
37
Schedule 1 Enhancements
Part 1 Protection of debtor in cases of hardship
6 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Postponement request
1
(1) A debtor, mortgagor or guarantor who has been given a default
2
notice under section 88 or a demand for payment under section 90
3
may, at any time before the end of the period specified in the notice
4
or demand, request (a postponement request), orally or in writing,
5
that the credit provider negotiate a postponement of:
6
(a) the enforcement proceedings; or
7
(b) any action taken under such proceedings; or
8
(c) the operation of any applicable acceleration clause.
9
8 Subsection 94(2) of the National Credit Code
10
Omit "makes the request", substitute "gives the postponement request".
11
9 Subsections 94(3) and (4) of the National Credit Code
12
Repeal the subsections, substitute:
13
Enforcement proceedings
14
(3) If the debtor, mortgagor or guarantor gives the postponement
15
request, the credit provider must not begin enforcement
16
proceedings unless:
17
(a) the credit provider has given the debtor, mortgagor or
18
guarantor a notice under subsection (2) in response to the
19
postponement request; and
20
(b) the period of 14 days, starting on the day the credit provider
21
gives the notice under subsection (2), has expired.
22
Criminal penalty:
50 penalty units.
23
Note:
The credit provider must allow the debtor or mortgagor at least 30
24
days from the date of the default notice to remedy the default--see
25
section 88. The 14-day period in subsection (3) may end before, at the
26
same time as, or after the end of the period for remedying the default
27
specified in the default notice.
28
(4) However, the credit provider may take possession of mortgaged
29
goods if the credit provider reasonably believes that:
30
(a) the debtor or mortgagor has removed or disposed of the
31
mortgaged goods, or intends to remove or dispose of them,
32
without the credit provider's permission; or
33
(b) urgent action is necessary to protect the goods.
34
Enhancements Schedule 1
Protection of debtor in cases of hardship Part 1
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 7
(5) Subsections (2) and (3) are offences of strict liability.
1
Note:
For strict liability, see section 6.1 of the Criminal Code.
2
3
Schedule 1 Enhancements
Part 2 Remedies for unfair or dishonest conduct by credit service providers
8 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Part 2--Remedies for unfair or dishonest conduct by
1
credit service providers
2
National Consumer Credit Protection Act 2009
3
10 After section 180
4
Insert:
5
180A Orders to remedy unfair or dishonest conduct by credit
6
service providers
7
(1) The court may make one or more of the orders described in
8
subsection (2) if the court is satisfied that:
9
(a) a person (the defendant) provided a credit service to a
10
consumer (the plaintiff); and
11
(b) the defendant engaged in conduct that:
12
(i) was connected with the provision of the service; and
13
(ii) was unfair or dishonest; and
14
(c) the conduct had one or more of the following results:
15
(i) the plaintiff entered a credit contract, consumer lease,
16
mortgage or guarantee that the plaintiff would not have
17
entered apart from the conduct;
18
(ii) the plaintiff entered a credit contract, consumer lease,
19
mortgage or guarantee whose terms were different from
20
a credit contract, consumer lease, mortgage or guarantee
21
the plaintiff would have entered apart from the conduct;
22
(iii) the plaintiff became liable to pay fees, costs or charges
23
to the defendant or someone else.
24
(2) The orders are as follows:
25
(a) an order that the defendant take, or refrain from taking,
26
specified action;
27
(b) an order that the defendant pay the plaintiff a specified
28
amount;
29
(c) an order that a specified amount is not due or owing by the
30
plaintiff to the defendant;
31
(d) any other order the court considers appropriate to:
32
(i) redress the unfairness or dishonesty; or
33
Enhancements Schedule 1
Remedies for unfair or dishonest conduct by credit service providers Part 2
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 9
(ii) prevent the defendant from profiting from the plaintiff
1
by engaging in the conduct;
2
except an order that affects a credit contract, consumer lease,
3
mortgage or guarantee to which the conduct related.
4
Determining whether conduct was unfair or dishonest
5
(3) In determining whether conduct was unfair or dishonest, the court:
6
(a) must have regard to the extent (if any) to which one or more
7
of the circumstances described in subsection (4) existed; and
8
(b) must consider it more likely that the conduct was unfair or
9
dishonest the more any of those circumstances existed and
10
the more any of them affected the plaintiff's interests.
11
This does not limit the matters to which the court may have regard.
12
(4) The circumstances are as follows:
13
(a) the plaintiff was at a special disadvantage in dealing with the
14
defendant in relation to the transaction involving:
15
(i) the conduct; and
16
(ii) a credit contract, consumer lease, mortgage or guarantee
17
to which the conduct related; and
18
(iii) any other contract requiring the plaintiff to make
19
payments for the purposes of which it is reasonable to
20
expect the plaintiff would or did enter such a credit
21
contract, consumer lease, mortgage or guarantee;
22
(b) the plaintiff was a member of a class whose members were
23
more likely than people who were not members of the class
24
to be at such a disadvantage;
25
(c) if the plaintiff was a member of a class referred to in
26
paragraph (b)--a reasonable person would consider that the
27
conduct was directed at that class;
28
(d) the plaintiff was unable, or considered himself or herself
29
unable, to make:
30
(i) a credit contract with a credit provider other than the
31
credit provider to which the conduct related; or
32
(ii) a consumer lease with a lessor other than the lessor to
33
which the conduct related; or
34
(iii) a mortgage with a mortgagee other than the mortgagee
35
to which the conduct related; or
36
Schedule 1 Enhancements
Part 2 Remedies for unfair or dishonest conduct by credit service providers
10 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(iv) a guarantee with a beneficiary other than the beneficiary
1
to which the conduct related;
2
(e) the conduct involved a technique that:
3
(i) should not in good conscience have been used; or
4
(ii) manipulated the plaintiff;
5
(f) the defendant could determine or significantly influence the
6
terms of a contract covered by subparagraph (a)(ii) or (iii);
7
(g) the terms of the transaction described in paragraph (a) were
8
less favourable to the plaintiff than the terms of a comparable
9
transaction.
10
When order may be made
11
(5) The court may make the order only if:
12
(a) the plaintiff or ASIC (on behalf of the plaintiff) applies for an
13
order under this section; and
14
(b) the application is made within 6 years of the day the
15
defendant first started engaging in the conduct.
16
Applications for order
17
(6) For the purposes of paragraph (5)(a), ASIC may make an
18
application on behalf of the plaintiff, but only if the plaintiff has
19
given consent in writing before the application is made.
20
Recovery of amount as a debt
21
(7) If the court makes an order that the defendant pay an amount
22
specified in the order to the plaintiff, the plaintiff may recover the
23
amount as a debt due to the plaintiff.
24
When this section does not apply
25
(8) This section does not apply to the provision of credit assistance by
26
a person who is (or after the provision of the assistance becomes):
27
(a) a credit provider under the credit contract to which the
28
assistance relates; or
29
(b) a lessor under the consumer lease to which the assistance
30
relates; or
31
(c) a mortgagee under a mortgage in relation to the credit
32
contract to which the assistance relates; or
33
Enhancements Schedule 1
Remedies for unfair or dishonest conduct by credit service providers Part 2
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 11
(d) a beneficiary of a guarantee in relation to the credit contract
1
to which the assistance relates.
2
11 Section 184
3
Add at the end "or another Act".
4
5
Schedule 1 Enhancements
Part 3 Representations about eligibility to enter credit contracts, consumer leases etc.
without assessing unsuitability
12 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Part 3--Representations about eligibility to enter
1
credit contracts, consumer leases etc.
2
without assessing unsuitability
3
National Consumer Credit Protection Act 2009
4
12 Section 125 (paragraph relating to Division 3)
5
Omit "entering or increasing the credit limit of a credit contract",
6
substitute "doing particular things (such as entering a credit contract)".
7
13 Division 3 of Part 3-2 (heading)
8
Repeal the heading, substitute:
9
Division 3--Obligation to assess unsuitability
10
14 Section 128 (heading)
11
Repeal the heading, substitute:
12
128 Obligation to assess unsuitability
13
15 After paragraph 128(a)
14
Insert:
15
(aa) represent to a consumer that the licensee considers that the
16
consumer is eligible to enter a credit contract with the
17
licensee; or
18
16 After paragraph 128(b)
19
Insert:
20
; or (ba) represent to a consumer that the licensee considers that the
21
credit limit of credit contract between the consumer and the
22
licensee will be able to be increased;
23
17 Section 148 (paragraph relating to Division 3)
24
Omit "entering a consumer lease", substitute "doing particular things
25
(such as entering a consumer lease)".
26
18 Division 3 of Part 3-4 (heading)
27
Repeal the heading, substitute:
28
Enhancements Schedule 1
Representations about eligibility to enter credit contracts, consumer leases etc. without
assessing unsuitability Part 3
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 13
Division 3--Obligation to assess unsuitability
1
19 Section 151
2
Repeal the section, substitute:
3
151 Obligation to assess unsuitability
4
A licensee must not:
5
(a) enter a consumer lease with a consumer who will be the
6
lessee under the lease; or
7
(b) represent to a consumer that the licensee considers that the
8
consumer is eligible to enter a consumer lease with the
9
licensee;
10
on a day (the lease day) unless the licensee has, within 90 days (or
11
other period prescribed by the regulations) before the lease day:
12
(c) made an assessment that:
13
(i) is in accordance with section 152; and
14
(ii) covers a period in which the lease day occurs; and
15
(d) made the inquiries and verification in accordance with
16
section 130.
17
Civil penalty:
2,000 penalty units.
18
20 Section 152
19
Omit "paragraph 151(a)", substitute "paragraph 151(c)".
20
21 Subsection 153(1)
21
Omit "paragraph 151(b)", substitute "paragraph 151(d)".
22
23
Schedule 1 Enhancements
Part 4 Prohibition on certain representations and other matters
14 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Part 4--Prohibition on certain representations and
1
other matters
2
National Consumer Credit Protection Act 2009
3
22 Section 27 (paragraph relating to Division 3)
4
Omit ", charging fees for unlicensed conduct, and giving misleading
5
information", substitute ", and charging fees for unlicensed conduct".
6
23 Division 3 of Part 2-1 (heading)
7
Repeal the heading, substitute:
8
Division 3--Other prohibitions relating to the requirement
9
to be licensed
10
24 Section 33
11
Repeal the section.
12
25 After Part 3-6
13
Insert:
14
Part 3-6A--Miscellaneous rules
15
Division 1--Introduction
16
160A Guide to this Part
17
This Part has a number of miscellaneous rules that require
18
responsible lending conduct when engaging in credit activities or
19
particular types of credit activities. Some of these rules apply to a
20
person even if the person is not required to be licensed.
21
Division 2 prohibits licensees from making particular
22
representations when providing a credit service to a consumer.
23
Enhancements Schedule 1
Prohibition on certain representations and other matters Part 4
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 15
Division 3 prohibits a person (whether licensed or not) from giving
1
false or misleading information in the course of engaging in a
2
credit activity.
3
Division 2--Representations
4
160B "Independent", "impartial" or "unbiased" etc.
5
(1) A licensee must not, in providing or offering to provide a credit
6
service to a consumer, use any of the following terms (either alone
7
or in combination with other words or letters) in a representation to
8
the consumer about the licensee, the service or the licensee's
9
actions in providing the service:
10
(a) the word "independent";
11
(b) the word "impartial";
12
(c) the word "unbiased";
13
(d) another term (whether or not in English) that is of similar
14
import to a word mentioned in paragraph (a), (b) or (c).
15
Civil penalty:
2,000 penalty units.
16
Defences
17
(2) For the purposes of subsection (1), it is a defence if:
18
(a) the licensee does not receive any of the following:
19
(i) commissions (apart from commissions that are rebated
20
in full to the licensee's clients);
21
(ii) other gifts or benefits from a credit provider or a lessor
22
that may reasonably be expected to influence the
23
licensee; and
24
(b) in providing a credit service, the licensee operates free from
25
direct or indirect restrictions relating to the credit contracts
26
and consumer leases to which the service relates (except
27
restrictions imposed on the licensee by this Act or by an
28
Australian credit licence); and
29
(c) in providing a credit service, the licensee operates without
30
any conflicts of interest that might:
31
(i) arise from the licensee's associations or relationships
32
with credit providers and lessors; and
33
Schedule 1 Enhancements
Part 4 Prohibition on certain representations and other matters
16 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(ii) reasonably be expected to influence the licensee in
1
providing the service; and
2
(d) neither of the following persons receives any commission,
3
gift, or benefit, covered by paragraph (a):
4
(i) the licensee's employer (if any);
5
(ii) any other person prescribed (whether by reference to a
6
class of person or otherwise) by the regulations.
7
(3) For the purposes of subsection (1), it is a defence if the
8
representation uses any of the terms in the negative (for example, a
9
representation that the licensee is not independent).
10
160C "Financial counsellor" etc.
11
(1) A licensee must not, in providing or offering to provide a credit
12
service to a consumer, use any of the following terms (either alone
13
or in combination with other words or letters) in a representation to
14
the consumer about the licensee, the service or the licensee's
15
actions in providing the service:
16
(a) the phrase "financial counsellor";
17
(b) the phrase "financial counselling";
18
(c) another term (whether or not in English) that:
19
(i) is of similar import to a phrase mentioned in
20
paragraph (a) or (b); and
21
(ii) is prescribed by the regulations.
22
Civil penalty:
2,000 penalty units.
23
Defences
24
(2) For the purposes of subsection (1), it is a defence if regulations
25
made for the purposes of paragraph 110(a) exempt the licensee
26
from section 29 in relation to a credit activity because the licensee
27
engages in the activity as part of a financial counselling service.
28
(3) For the purposes of subsection (1), it is a defence if:
29
(a) the licensee is providing, or offering to provide, the credit
30
service on behalf of another person (the principal); and
31
(b) the licensee is a representative of the principal; and
32
(c) regulations made for the purposes of paragraph 110(a)
33
exempt the principal from section 29 in relation to a credit
34
Enhancements Schedule 1
Prohibition on certain representations and other matters Part 4
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 17
activity because the principal engages in the activity as part
1
of a financial counselling service; and
2
(d) the licensee's actions in providing or offering to provide the
3
credit service are within the authority of the principal.
4
(4) For the purposes of subsection (1), it is a defence if the
5
representation uses any of the terms in the negative (for example, a
6
representation that the licensee is not a financial counsellor).
7
Division 3--Giving misleading information
8
160D Prohibition on giving misleading information etc.
9
Prohibition on giving misleading information etc.
10
(1) A person (the giver) must not, in the course of engaging in a credit
11
activity, give information or a document to another person if the
12
giver knows, or is reckless as to whether, the information or
13
document is:
14
(a) false in a material particular; or
15
(b)
materially
misleading.
16
Civil penalty:
2,000 penalty units.
17
Offence
18
(2) A person commits an offence if:
19
(a) the person gives information or a document to another
20
person; and
21
(b) the person does so in the course of engaging in a credit
22
activity; and
23
(c) the information or document is false in a material particular
24
or materially misleading.
25
Criminal penalty:
100 penalty units, or 2 years imprisonment, or
26
both.
27
28
Schedule 1 Enhancements
Part 5 Civil remedies for contravention of the National Credit Code
18 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Part 5--Civil remedies for contravention of the
1
National Credit Code
2
National Consumer Credit Protection Act 2009
3
26 Section 124 of the National Credit Code (heading)
4
Repeal the heading, substitute:
5
124 Civil effect of contraventions
6
27 Subsection 124(1) of the National Credit Code
7
Omit "(other than one for which a civil effect is specifically provided by
8
Division 1 or by any other provision of this Code)".
9
28 Subsection 124(2) of the National Credit Code
10
Repeal the subsection, substitute:
11
(2) An application for the exercise of the court's powers under this
12
section may be made by:
13
(a) a person affected by the contravention; or
14
(b) ASIC on behalf of a person affected by the contravention, if
15
the person has consented in writing to ASIC making the
16
application; or
17
(c) ASIC (on its own behalf).
18
19
Enhancements Schedule 1
Miscellaneous amendments Part 6
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 19
Part 6--Miscellaneous amendments
1
National Consumer Credit Protection Act 2009
2
29 Subsection 19(1) of the National Credit Code
3
Omit "a contract document", substitute "a new contract document".
4
30 Section 32 of the National Credit Code
5
Repeal the section, substitute:
6
32 Fees or charges in relation to third parties
7
When this section applies
8
(1) This section applies if a fee or charge is payable by a debtor to the
9
credit provider for an amount (the third party amount) payable or
10
paid by the credit provider to another person, body or agency.
11
Third party amount ascertainable at time of debtor payment
12
(2) If, when the fee or charge is paid by the debtor to the credit
13
provider, the third party amount is ascertainable, then the amount
14
of the fee or charge must not exceed the third party amount.
15
Third party amount not ascertainable at time of debtor payment
16
(3)
If:
17
(a) when the fee or charge is paid by the debtor to the credit
18
provider, the third party amount is not ascertainable; and
19
(b) after the fee or charge is paid, the credit provider ascertains
20
the third party amount; and
21
(c) the third party amount is less than the amount of the fee or
22
charge paid;
23
then the credit provider must refund or credit the difference to the
24
debtor.
25
Determining third party amount
26
(4) The third party amount is to be determined by:
27
(a) taking into account any discount, rebate or other allowance
28
that is received or receivable by the credit provider or a
29
Schedule 1 Enhancements
Part 6 Miscellaneous amendments
20 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
related body corporate (within the meaning of the
1
Corporations Act 2001); and
2
(b) disregarding any rebate on tax payable by the credit provider
3
or a related body corporate (within the meaning of that Act).
4
31 Paragraph 36(1)(c) of the National Credit Code
5
Repeal the paragraph, substitute:
6
(c) any amounts currently overdue and the dates they became
7
due;
8
32 Paragraph 36(1)(d) of the National Credit Code
9
Omit "became due", substitute "becomes due".
10
33 Subsection 38(4) of the National Credit Code
11
Omit "of receiving the statement of account in which the amount, or
12
part of that amount, was first shown", substitute "after the day the
13
debtor receives the statement of account in which the amount, or part of
14
that amount, is first shown".
15
34 Subsection 38(5) of the National Credit Code
16
Omit "after the end of the contract", substitute "after the day the
17
contract ends".
18
35 Subsection 38(6) of the National Credit Code
19
Omit "at least 30 days have elapsed from the time the written
20
explanation or advice as to agreement was given", substitute "the period
21
of 30 days, starting on the day the credit provider gives the written
22
explanation or advice as to agreement, has expired".
23
36 At the end of subsection 38(6) of the National Credit Code
24
Add:
25
Criminal penalty:
50 penalty units.
26
37 Subsection 38(9) of the National Credit Code
27
Omit "Subsection (8) is an offence", substitute "Subsections (6) and (8)
28
are offences".
29
38 Division 6 of Part 2 of the National Credit Code
30
Enhancements Schedule 1
Miscellaneous amendments Part 6
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 21
Repeal the Division, substitute:
1
Division 6--Certain transactions not to be treated as new
2
contracts
3
40 Changes etc. under contracts
4
If:
5
(a)
there
is:
6
(i) a change to an existing credit contract that results in
7
further credit being provided; or
8
(ii) a deferral or waiver of an amount under an existing
9
credit contract; or
10
(iii) a postponement relating to an existing credit contract;
11
and
12
(b) the change, deferral, waiver or postponement is made in
13
accordance with this Code or the existing credit contract;
14
then the change, deferral, waiver or postponement is not to be
15
treated as creating a new credit contract for the purposes of this
16
Code.
17
39 Subsection 71(1) of the National Credit Code
18
Omit "under a credit contract", substitute "under an existing credit
19
contract".
20
40 Subsection 83(1) of the National Credit Code (penalty)
21
Repeal the penalty.
22
41 Subsection 83(3) of the National Credit Code
23
Omit "after the request", substitute "after the day the request".
24
42 Subsection 83(5) of the National Credit Code
25
Repeal the subsection (not including the note), substitute:
26
(5) Subsection (3) is an offence of strict liability.
27
43 Subsection 87(2) of the National Credit Code
28
Omit "direct debit default notice under this section within 10 business
29
days", substitute "notice, complying with this section, within 14 days".
30
Schedule 1 Enhancements
Part 6 Miscellaneous amendments
22 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
44 Subsection 87(3) of the National Credit Code
1
Omit "direct debit default".
2
45 Paragraphs 88(5)(a) and (d) of the National Credit Code
3
Omit "believes on reasonable grounds", substitute "reasonably
4
believes".
5
46 Subsection 88(6) of the National Credit Code
6
Omit "believes on reasonable grounds", substitute "reasonably
7
believes".
8
47 Subsection 89(1) of the National Credit Code
9
After "a default notice", insert "under section 88".
10
48 Paragraphs 93(1)(c), (2)(a) and (2)(d) of the National Credit
11
Code
12
Omit "believes on reasonable grounds", substitute "reasonably
13
believes".
14
49 Subsection 95(1) of the National Credit Code
15
Omit "The default notice or demand for payment", substitute "A default
16
notice under section 88 or a demand for payment under section 90".
17
50 Subsection 98(1) of the National Credit Code
18
Omit "within 7 days", substitute ", within 7 days after the day the notice
19
is given to the mortgagor,".
20
51 Section 206 of the National Credit Code
21
Repeal the section.
22
23
Enhancements Schedule 1
Technical corrections Part 7
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 23
Part 7--Technical corrections
1
National Consumer Credit Protection Act 2009
2
52 Section 129
3
Omit "128(1)(c)", substitute "128(c)".
4
Note:
This item fixes an incorrect cross-reference.
5
53 Subsection 130(1)
6
Omit "128(1)(d)", substitute "128(d)".
7
Note:
This item fixes an incorrect cross-reference.
8
54 Paragraph 181(b)
9
After "order under", insert "section".
10
55 Subparagraph 88(3)(g)(i) of the National Credit Code
11
Omit "or", substitute "and".
12
56 Subsection 127(2) of the National Credit Code
13
Omit "tied continuing credit contract", substitute "tied continuing
14
credit contract".
15
57 Section 129 of the National Credit Code (heading)
16
Repeal the heading, substitute:
17
129 Right to damages under sale contract against both supplier and
18
linked credit provider
19
Note:
This item removes a reference to a repealed provision.
20
58 Section 130 of the National Credit Code (heading)
21
Repeal the heading, substitute:
22
130 Limits on debtor's right of action against linked credit provider
23
Note:
This item removes a reference to a repealed provision.
24
59 Section 131 of the National Credit Code (heading)
25
Repeal the heading, substitute:
26
Schedule 1 Enhancements
Part 7 Technical corrections
24 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
131 Liability of supplier to linked credit provider
1
Note:
This item removes a reference to a repealed provision.
2
60 Section 132 of the National Credit Code (heading)
3
Repeal the heading, substitute:
4
132 Interest may be awarded
5
Note:
This item removes a reference to a repealed provision.
6
61 Section 133 of the National Credit Code (heading)
7
Repeal the heading, substitute:
8
133 Subrogation of credit provider
9
Note:
This item removes a reference to a repealed provision.
10
62 Subsection 204(1) of the National Credit Code (definition
11
of approved external dispute resolution scheme)
12
After "has", insert "the".
13
14
Reverse mortgages Schedule 2
Definitions Part 1
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 25
Schedule 2--Reverse mortgages
1
Part 1--Definitions
2
Division 1--Definition of reverse mortgage
3
National Consumer Credit Protection Act 2009
4
1 Subsection 5(1)
5
Insert:
6
reverse mortgage has the same meaning as in section 13A of the
7
National Credit Code.
8
2 At the end of Part 1 of the National Credit Code
9
Add:
10
13A Reverse mortgages
11
(1) For the purposes of this Code, an arrangement is a reverse
12
mortgage if the arrangement involves a credit contract, except a
13
bridging finance contract, and a mortgage over a dwelling or land
14
securing a debtor's obligations under the contract and either:
15
(a) the conditions in subsections (2) and (3) are met; or
16
(b) the arrangement is of a kind declared by ASIC under
17
subsection (4) and is made on or after the commencement of
18
that declaration.
19
Conditions
20
(2) The first condition is that the debtor's total liability under the credit
21
contract or mortgage may exceed (to a limited or unlimited extent)
22
the maximum amount of credit that may be provided under the
23
contract without the debtor being obliged to reduce that liability to
24
less than that maximum amount.
25
Note:
The debtor's total liability can exceed the maximum amount of credit
26
because interest and some other fees and charges are not included in
27
an amount of credit: see subsection 3(2).
28
Schedule 2 Reverse mortgages
Part 1 Definitions
26 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(3) The second condition is that, if the regulations prescribe any
1
prerequisites for the arrangement to be a reverse mortgage, those
2
prerequisites are met.
3
Declarations by ASIC
4
(4) ASIC may by legislative instrument declare specified kinds of
5
arrangements involving a credit contract and a mortgage over a
6
dwelling or land securing a debtor's obligations under the contract
7
to be reverse mortgages.
8
3 Subsection 204(1) of the National Credit Code
9
Insert:
10
reverse mortgage: see section 13A.
11
Division 2--Other definitions
12
National Consumer Credit Protection Act 2009
13
4 Subsection 5(1)
14
Insert:
15
reverse mortgage information statement means a document
16
relating to reverse mortgages that complies with the regulations.
17
5 Subsection 204(1) of the National Credit Code
18
Insert:
19
bridging finance contract: a credit contract is a bridging finance
20
contract if:
21
(a) when the contract is made, the debtor:
22
(i) reasonably expects to receive a lump sum before the
23
term of the contract ends; and
24
(ii) intends to discharge the debtor's obligations under the
25
contract so far as possible with that sum; and
26
(b) the conditions (if any) prescribed by the regulations are met.
27
6 Subsection 204(1) of the National Credit Code
28
Insert:
29
Reverse mortgages Schedule 2
Definitions Part 1
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 27
engage in conduct means:
1
(a) do an act; or
2
(b) omit to perform an act.
3
7 Subsection 204(1) of the National Credit Code
4
Insert:
5
practising lawyer means a person who is admitted to the legal
6
profession by a federal court or a Supreme Court of a State or
7
Territory and holds a practising certificate (however described)
8
entitling the person to practise that profession.
9
8 Subsection 204(1) of the National Credit Code
10
Insert:
11
reverse mortgaged property, in relation to a credit contract for a
12
reverse mortgage, means a dwelling or land that has been
13
mortgaged to secure a debtor's obligations under the contract.
14
15
Schedule 2 Reverse mortgages
Part 2 Provisions applying to licensees
28 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Part 2--Provisions applying to licensees
1
National Consumer Credit Protection Act 2009
2
9 At the end of section 133
3
Add:
4
Note:
Sections 178 and 179 provide for remedies for anyone who suffers, or
5
is likely to suffer, loss or damage because of a breach of this section.
6
For example, if a consumer makes an unsuitable credit contract with a
7
licensee, rather than making a not unsuitable credit contract for a
8
reverse mortgage, a person who suffered, or is likely to suffer, loss as
9
a result may be able to get court orders under section 178 or 179 to put
10
the person in a position like the one they would have been in had the
11
consumer entered into the contract for the reverse mortgage.
12
10 Before Part 3-3
13
Insert:
14
Part 3-2D--Licensees and reverse mortgages
15
16
133DA Guide to this Part
17
This Part has rules that apply to licensees that provide credit
18
services or are credit providers.
19
Before providing credit assistance, or entering into a credit
20
contract, for a reverse mortgage, licensees must provide projections
21
of the debtor's equity in the property that may be covered by the
22
reverse mortgage.
23
Licensees must also make reverse mortgage information statements
24
available on their websites and on request.
25
Licensees must not inaccurately use terms like "reverse mortgage"
26
in making representations about credit contracts and mortgages.
27
Reverse mortgages Schedule 2
Provisions applying to licensees Part 2
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 29
133DB Giving projections of equity before providing credit
1
assistance or entering credit contract
2
Requirement to give projections
3
(1) Before a licensee makes a preliminary assessment for the purposes
4
of paragraph 115(1)(c) or (2)(a), or an assessment for the purposes
5
of paragraph 128(c), in connection with a credit contract with a
6
consumer for a reverse mortgage, the licensee must:
7
(a) show the consumer in person projections that:
8
(i) relate to the value of the dwelling or land that may
9
become reverse mortgaged property, and the consumer's
10
indebtedness, over time if the consumer were to enter
11
into a contract for a reverse mortgage; and
12
(ii) are made in accordance with the regulations by using a
13
website approved by ASIC; and
14
(b) give the consumer a printed copy of the projections; and
15
(c) tell the consumer in person the things (if any) that relate to
16
reverse mortgages and are prescribed by the regulations; and
17
(d) give the consumer a reverse mortgage information statement.
18
Civil penalty:
2,000 penalty units.
19
Offence
20
(2) A person commits an offence if:
21
(a) the person is subject to a requirement under subsection (1);
22
and
23
(b) the person engages in conduct; and
24
(c) the person's conduct breaches the requirement.
25
Criminal penalty:
50 penalty units.
26
Defences for not giving projections
27
(3) For the purposes of paragraphs (1)(a) and (b), and of subsection (2)
28
so far as it relates to either of those paragraphs, it is a defence if the
29
licensee reasonably believes that:
30
(a) another person has:
31
(i) shown the consumer in person projections described in
32
paragraph (1)(a); and
33
Schedule 2 Reverse mortgages
Part 2 Provisions applying to licensees
30 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(ii) given the consumer a printed copy of the projections;
1
and
2
(b) the projections are the same, or substantially the same, as
3
those paragraph (1)(a) requires the licensee to show the
4
consumer.
5
Note:
For the purposes of subsection (2), a defendant bears an evidential
6
burden in relation to the matter in subsection (3) (see subsection
7
13.3(3) of the Criminal Code).
8
(4) For the purposes of paragraphs (1)(a) and (b), and of subsection (2)
9
so far as it relates to either of those paragraphs, it is a defence if the
10
circumstances prescribed by the regulations exist.
11
Note:
For the purposes of subsection (2), a defendant bears an evidential
12
burden in relation to the matter in subsection (4) (see subsection
13
13.3(3) of the Criminal Code).
14
Defence for not giving reverse mortgage information statement
15
(5) For the purposes of paragraph (1)(d), and of subsection (2) so far
16
as it relates to that paragraph, it is a defence if the licensee
17
reasonably believes that another person has given the consumer a
18
reverse mortgage information statement in the last 90 days.
19
Note:
For the purposes of subsection (2), a defendant bears an evidential
20
burden in relation to the matter in subsection (5) (see subsection
21
13.3(3) of the Criminal Code).
22
133DC Making reverse mortgage information statement available
23
on website of credit provider or credit assistance provider
24
When this section applies
25
(1) This section applies if a licensee:
26
(a)
is:
27
(i) a person who provides, or holds himself or herself out
28
as able to provide, credit assistance relating to credit
29
contracts for reverse mortgages; or
30
(ii) a credit provider under one or more credit contracts for
31
a reverse mortgages; and
32
(b) has a website that provides information about such contracts.
33
Reverse mortgages Schedule 2
Provisions applying to licensees Part 2
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 31
Requirement
1
(2) The licensee must make available through the website a reverse
2
mortgage information statement.
3
Civil penalty:
2,000 penalty units.
4
Offence
5
(3) A person commits an offence if:
6
(a) the person is subject to a requirement under subsection (2);
7
and
8
(b) the person engages in conduct; and
9
(c) the person's conduct breaches the requirement.
10
Criminal penalty:
50 penalty units.
11
133DD Making reverse mortgage information statement available in
12
other situations
13
When this section applies
14
(1) This section applies if:
15
(a) a licensee is:
16
(i) a person who provides, or holds himself or herself out
17
as able to provide, credit assistance relating to credit
18
contracts for reverse mortgages; or
19
(ii) a credit provider under one or more credit contracts for
20
reverse mortgages; and
21
(b)
either:
22
(i) a consumer asks the licensee (otherwise than by using a
23
website of the licensee) for a reverse mortgage
24
information statement; or
25
(ii) the regulations require a consumer, in circumstances
26
prescribed by the regulations, to be given a reverse
27
mortgage information statement; and
28
(c) the consumer gives the licensee the consumer's name, and
29
the contact details required by the regulations.
30
Schedule 2 Reverse mortgages
Part 2 Provisions applying to licensees
32 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Requirement
1
(2) The licensee must, in accordance with any requirements prescribed
2
by the regulations, give the consumer a reverse mortgage
3
information statement.
4
Civil penalty:
2,000 penalty units.
5
Offence
6
(3) A person commits an offence if:
7
(a) the person is subject to a requirement under subsection (2);
8
and
9
(b) the person engages in conduct; and
10
(c) the conduct contravenes the requirement.
11
Criminal penalty:
50 penalty units.
12
Defences
13
(4) For the purposes of subsections (2) and (3), it is a defence if:
14
(a) the licensee has given the consumer, or reasonably believes
15
that someone else has given the consumer, a reverse
16
mortgage information statement; or
17
(b)
the
licensee:
18
(i) is a credit provider under one or more credit contracts
19
for reverse mortgages; and
20
(ii) reasonably believes that the consumer would not be
21
eligible to make a credit contract with the licensee for a
22
reverse mortgage; or
23
(c) there exist circumstances prescribed by regulations as
24
circumstances in which the licensee is not required to give
25
the consumer a reverse mortgage information statement.
26
Note:
For the purposes of subsection (3), a defendant bears an evidential
27
burden in relation to the matter in subsection (4) (see subsection
28
13.3(3) of the Criminal Code).
29
Reverse mortgages Schedule 2
Provisions applying to licensees Part 2
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 33
133DE Representations that use the term "reverse mortgage" etc.
1
Credit service providers
2
(1) A licensee must not, in providing or offering to provide a credit
3
service to a consumer, use either of the following terms (either
4
alone or in combination with other words or letters) in a
5
representation to the consumer about an actual or proposed credit
6
contract or mortgage:
7
(a) the phrase "reverse mortgage";
8
(b) another term (whether or not in English) of similar import to
9
the phrase "reverse mortgage".
10
Civil penalty:
2,000 penalty units.
11
Credit providers
12
(2) A licensee that is a credit provider must not use either of the
13
following terms (either alone or in combination with other words
14
or letters) in a representation to a consumer about an actual or
15
proposed credit contract or mortgage:
16
(a) the phrase "reverse mortgage";
17
(b) another term (whether or not in English) of similar import to
18
the phrase "reverse mortgage".
19
Civil penalty:
2,000 penalty units.
20
Defence
21
(3) For the purposes of subsections (1) and (2), it is a defence if:
22
(a) the representation truly represents that a credit contract:
23
(i) is or will be a credit contract for a reverse mortgage; or
24
(ii) is not or will not be a credit contract for a reverse
25
mortgage; or
26
(b) the representation truly represents that a mortgage:
27
(i) is or will be part of a reverse mortgage; or
28
(ii) is not or will not be part of a reverse mortgage.
29
11 At the end of section 179
30
Add:
31
Schedule 2 Reverse mortgages
Part 2 Provisions applying to licensees
34 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Presumption in favour of certain orders
1
(6) Subsection (7) applies if:
2
(a) the defendant is a credit provider who has contravened
3
section 133 by entering into, or increasing the credit limit of,
4
a credit contract (the illegal contract) that is not a credit
5
contract for a reverse mortgage; and
6
(b) the debtor's obligations under the illegal contract are secured
7
by a mortgage over the debtor's principal place of residence;
8
and
9
(c) the court is satisfied that, at any time in the period in which
10
an assessment needed to be made to comply with section 128
11
in relation to the illegal contract:
12
(i) there was a credit provider (whether the defendant or
13
not) offering credit through a reverse mortgage (whether
14
or not the credit provider actually made such an offer to
15
the debtor); and
16
(ii) the debtor would have been eligible to enter into a credit
17
contract for the reverse mortgage; and
18
(iii) the credit contract for the reverse mortgage would not
19
have been unsuitable for the debtor under section 133;
20
and
21
(d) the plaintiff, or ASIC on behalf of the plaintiff, applies for an
22
order under this section to let the plaintiff reside in the place
23
to prevent or reduce loss or damage suffered or likely to be
24
suffered by the plaintiff vacating the place.
25
(7) The court must consider the order appropriate to prevent or reduce
26
the loss or damage and make the order unless the court is satisfied
27
that the order would adversely affect a person other than the debtor
28
and the defendant.
29
30
Reverse mortgages Schedule 2
Provisions applying to credit providers generally Part 3
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 35
Part 3--Provisions applying to credit providers
1
generally
2
National Consumer Credit Protection Act 2009
3
12 After subsection 17(15) of the National Credit Code
4
Insert:
5
Provisions for person other than debtor to occupy reverse
6
mortgaged property
7
(15A) If the credit contract for a reverse mortgage is to make provision
8
for a person other than the debtor to occupy the reverse mortgaged
9
property, the contract document must contain provisions that have
10
the following effect (whether or not the document also contains
11
other provisions relating to such occupation by such a person):
12
(a) the debtor may at any time (before, when or after the contract
13
is made):
14
(i) nominate to the credit provider a person who is to be
15
allowed to occupy the property (whether alone or with
16
other persons); and
17
(ii) revoke such a nomination by notice given to the credit
18
provider;
19
(b) while a nomination described in paragraph (a) is in force, the
20
nominated person has the same rights (against the credit
21
provider) to occupy the property as the debtor has or would
22
have apart from the death of the debtor or vacation of the
23
property by the debtor.
24
Note:
Other provisions contained in the contract document may, for
25
example, limit the kinds of persons whom the debtor may nominate to
26
the credit provider as persons who are to be allowed to occupy the
27
property.
28
13 After section 18 of the National Credit Code
29
Insert:
30
Schedule 2 Reverse mortgages
Part 3 Provisions applying to credit providers generally
36 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
18A Provisions that must not be included in credit contract for
1
reverse mortgage
2
(1) A credit provider must not enter into a credit contract for a reverse
3
mortgage that provides a basis for beginning enforcement
4
proceedings relating to the contract for an event described in
5
subsection (3).
6
(2) A credit provider must not agree to change, or unilaterally change,
7
a credit contract for a reverse mortgage so that it provides a basis
8
for beginning enforcement proceedings relating to the contract for
9
an event described in subsection (3).
10
(3) For the purposes of subsections (1) and (2), the events are as
11
follows:
12
(a) the debtor failing to inform the credit provider that another
13
person occupies the reverse mortgaged property;
14
(b) the debtor failing to give the credit provider evidence that the
15
debtor, or another person nominated by the debtor to the
16
credit provider, occupies or occupied the reverse mortgaged
17
property;
18
(c) the debtor leaving the reverse mortgaged property
19
unoccupied while it is the debtor's principal place of
20
residence;
21
(d) the debtor failing to pay a cost to a person other than the
22
credit provider;
23
(e) the debtor failing to comply with a provision of the credit
24
contract if the contract does not make it clear how the debtor
25
is to comply with the provision;
26
(f) the debtor breaching another credit contract with the credit
27
provider;
28
(g) an event that involves an act or omission by the debtor and is
29
prescribed by the regulations.
30
18B Disclosure if credit contract for reverse mortgage does not
31
protect tenancy of person other than debtor
32
(1) This section applies if a proposed credit contract for a reverse
33
mortgage does not include a provision (a tenancy protection
34
provision) for a person other than the debtor to have a right against
35
the credit provider to occupy the reverse mortgaged property.
36
Reverse mortgages Schedule 2
Provisions applying to credit providers generally Part 3
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 37
(2) A person must not provide a credit service relating to the contract
1
unless the person has told the debtor, in writing in the form (if any)
2
prescribed by the regulations, that the contract does not include a
3
tenancy protection provision.
4
Criminal penalty:
50 penalty units.
5
(3) Subsection (2) does not apply if the person is or will be the credit
6
provider under the contract.
7
(4) The credit provider must not enter into the contract unless the
8
credit provider has told the debtor, in writing in the form (if any)
9
prescribed by the regulations, that the contract does not include a
10
tenancy protection provision.
11
Criminal penalty:
50 penalty units.
12
(5) An offence against subsection (2) or (4) is an offence of strict
13
liability.
14
Note:
For strict liability, see section 6.1 of the Criminal Code.
15
18C Independent legal advice before entry into credit contract for
16
reverse mortgage
17
(1) The regulations may regulate or prohibit the entry by a credit
18
provider into a credit contract for a reverse mortgage if the debtor
19
has not obtained legal advice, in accordance with the regulations,
20
about the contract or reverse mortgage.
21
(2) The regulations may provide for offences and civil penalties for
22
contraventions of regulations made for the purposes of
23
subsection (1).
24
(3) The penalties for offences described in subsection (2) must not be
25
more than 50 penalty units for an individual or 250 penalty units
26
for a body corporate.
27
(4) The civil penalties described in subsection (2) must not be more
28
than 500 penalty units for an individual or 2,500 penalty units for a
29
body corporate.
30
14 At the end of section 22 of the National Credit Code
31
Add:
32
Schedule 2 Reverse mortgages
Part 3 Provisions applying to credit providers generally
38 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(3) Subsection (1) does not apply to a contravention of a requirement
1
of section 18B.
2
15 At the end of section 26 of the National Credit Code
3
Add:
4
(6) A credit contract for a reverse mortgage may not prohibit an early
5
payment that:
6
(a) is made in the circumstances described in paragraph
7
86A(1)(a); and
8
(b) is of the amount described in paragraph 86A(1)(b).
9
16 After paragraph 33(2)(a) of the National Credit Code
10
Insert:
11
(aa) in the case of a continuing credit contract for a reverse
12
mortgage--12 months; or
13
17 After paragraph 33(2)(b) of the National Credit Code
14
Insert:
15
(ba) in the case of a reverse mortgage not involving a continuing
16
credit contract--12 months; or
17
18 After section 67 of the National Credit Code
18
Insert:
19
67A Changes to tenancy protection in credit contracts for reverse
20
mortgages
21
A purported change to a credit contract for a reverse mortgage that
22
makes provision for a person other than the debtor to occupy the
23
reverse mortgaged property is void so far as the change purports to:
24
(a) remove a provision required by subsection 17(15A) to be
25
contained in the contract document; or
26
(b) vary the contract so as to limit:
27
(i) the ability of the debtor to nominate to the credit
28
provider a person who is to be allowed to occupy the
29
reverse mortgaged property (whether alone or with other
30
persons); or
31
Reverse mortgages Schedule 2
Provisions applying to credit providers generally Part 3
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 39
(ii) the rights of a person nominated by the debtor to the
1
credit provider to occupy the property.
2
19 Division 1 of Part 5 of the National Credit Code (heading)
3
Repeal the heading, substitute:
4
Division 1--Ending of credit contract by debtor etc.
5
Subdivision A--Paying out contract etc.
6
20 After section 86 of the National Credit Code
7
Insert:
8
Subdivision B--Ending of reverse mortgage by credit provider
9
receiving value of reverse mortgaged property
10
86A Application of this Subdivision
11
(1) This Subdivision applies in relation to a credit contract for a
12
reverse mortgage and a mortgage securing the debtor's obligations
13
under the contract if:
14
(a) the debtor's accrued liability (whether or not due and
15
payable) under the contract is more than the amount (the
16
adjusted market value) worked out under subsection (2) for
17
the reverse mortgaged property; and
18
(b) the credit provider receives an amount at least equal to the
19
adjusted market value for the reverse mortgaged property
20
either:
21
(i) as a payment accepted from the debtor under the credit
22
contract; or
23
(ii) as proceeds of the sale by the credit provider of the
24
reverse mortgaged property.
25
(2) The adjusted market value for the reverse mortgaged property is
26
the amount worked out by:
27
(a) working out the market value of the property in accordance
28
with the regulations (if any); and
29
(b) adjusting that value in accordance with the regulations (if
30
any).
31
Schedule 2 Reverse mortgages
Part 3 Provisions applying to credit providers generally
40 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Regulations for the purposes of paragraph (b) may prescribe
1
different adjustments to be made in different circumstances.
2
86B Discharge of debtor's obligations under credit contract and
3
discharge of mortgage
4
(1) The debtor's obligations under the credit contract are discharged
5
by force of this subsection.
6
(2) The mortgage securing those obligations is discharged by force of
7
this subsection.
8
Note:
This section does not apply in some cases: see section 86E.
9
86C Credit provider must pay debtor excess of receipt over adjusted
10
market value for reverse mortgaged property
11
If the amount received by the credit provider exceeds the adjusted
12
market value for the reverse mortgaged property, the credit
13
provider must pay the excess to the debtor.
14
Note 1:
If the credit provider contravenes this requirement, the court may
15
order the credit provider to compensate anyone affected by the
16
contravention: see section 124.
17
Note 2:
This section does not apply in some cases: see section 86E.
18
86D Credit provider must not demand or accept further payments
19
(1) The credit provider must not:
20
(a) purport to require payment under the credit contract; or
21
(b) accept a payment purportedly under the credit contract.
22
Note 1:
If the credit provider contravenes this requirement, the court may
23
order the credit provider to compensate anyone affected by the
24
contravention: see section 124.
25
Note 2:
This section does not apply in some cases: see section 86E.
26
(2) To avoid doubt, subsection (1) does not apply to the payment (if
27
any) that is described in subparagraph 86A(1)(b)(i) and caused this
28
Subdivision to apply.
29
86E Cases in which sections 86B, 86C and 86D do not apply
30
Sections 86B, 86C and 86D do not apply if:
31
Reverse mortgages Schedule 2
Provisions applying to credit providers generally Part 3
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 41
(a) the market value of the reverse mortgaged property was
1
reduced by deliberate damage to the property caused by the
2
debtor or a person who occupied the property with the
3
debtor's consent; or
4
(b) the debtor engaged in fraud, or made a misrepresentation,
5
relating to the reverse mortgage before, at or after the time
6
the credit contract was made; or
7
(c) circumstances prescribed by the regulations exist.
8
86F Relationship between this Subdivision and other provisions
9
This Subdivision does not limit any of the other provisions of this
10
Division.
11
Subdivision C--Notice of first direct debit default
12
21 Subsections 88(1) and (2) of the National Credit Code
13
Repeal the subsections, substitute:
14
Enforcement of credit contract
15
(1) A credit provider must not begin enforcement proceedings against
16
a debtor in relation to a credit contract unless:
17
(a) the debtor is in default under the credit contract; and
18
(b) the credit provider has given the debtor, and any guarantor, a
19
default notice, complying with this section, allowing the
20
debtor a period of at least 30 days from the date of the notice
21
to remedy the default; and
22
(c) the default has not been remedied within that period; and
23
(d) if the credit contract is for a reverse mortgage, the credit
24
provider has spoken to one of the following persons by
25
telephone or in person in that period and has thus both
26
confirmed that the debtor received the default notice and
27
informed the person of the consequences of failure to remedy
28
the default, or has made reasonable efforts to do so:
29
(i)
the
debtor;
30
(ii) a practising lawyer representing the debtor;
31
(iii) a person with a power of attorney relating to the
32
debtor's financial affairs.
33
Schedule 2 Reverse mortgages
Part 3 Provisions applying to credit providers generally
42 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Criminal penalty:
50 penalty units.
1
Note:
If a debtor or guarantor has given a credit provider a hardship notice
2
or a postponement request there may be extra requirements that the
3
credit provider must comply with before beginning enforcement
4
proceedings: see sections 89A and 94.
5
Enforcement of mortgage
6
(2) A credit provider must not begin enforcement proceedings against
7
a mortgagor to recover payment of money due or take possession
8
of, sell, appoint a receiver for or foreclose in relation to property
9
subject to a mortgage, unless:
10
(a) the mortgagor is in default under the mortgage; and
11
(b) the credit provider has given the mortgagor a default notice,
12
complying with this section, allowing the mortgagor a period
13
of at least 30 days from the date of the notice to remedy the
14
default; and
15
(c) the default has not been remedied within that period.
16
(d) if the mortgage secures an obligation under a credit contract
17
for a reverse mortgage, the credit provider has spoken to one
18
of the following persons by telephone or in person in that
19
period and has thus both confirmed that the mortgagor
20
received the default notice and informed the person of the
21
consequences of failure to remedy the default, or has made
22
reasonable efforts to do so:
23
(i)
the
mortgagor;
24
(ii) a practising lawyer representing the mortgagor;
25
(iii) a person with a power of attorney relating to the
26
mortgagor's financial affairs.
27
Criminal penalty:
50 penalty units.
28
Note:
If a mortgagor has given a credit provider a postponement request
29
there may be extra requirements that the credit provider must comply
30
with before beginning enforcement proceedings: see section 94.
31
22 After subsection 88(7) of the National Credit Code
32
Insert:
33
Some defaults are not a basis for a default notice
34
(7A) So far as a notice purporting to be a default notice relates to an
35
alleged default under a credit contract for a reverse mortgage that
36
Reverse mortgages Schedule 2
Provisions applying to credit providers generally Part 3
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 43
is an event described in subsection 18A(3), the notice is not a
1
default notice for the purposes of any of the following provisions:
2
(a) subsections (1) and (2) of this section;
3
(b)
section
93.
4
Note:
This has the effect that:
5
(a) if the credit provider begins enforcement proceedings relating to
6
the alleged default the credit provider will contravene
7
subsection (1) or (2) of this section (unless subsection (5) of this
8
section applies); and
9
(b) section 93 will affect the operation of an acceleration clause on
10
the basis of the alleged default.
11
(7B) To avoid doubt, subsection (7A) does not affect the status of the
12
notice as a default notice for the purposes of section 89, 94 or 95.
13
23 At the end of Division 2 of Part 5 of the National Credit
14
Code
15
Add:
16
93A Extra requirements for enforcing reverse mortgage if debtor's
17
liability exceeded value of reverse mortgaged property
18
(1) This section applies in relation to a credit contract for a reverse
19
mortgage and a mortgage securing the debtor's obligations under
20
the contract if:
21
(a) Subdivision B of Division 1 applies in relation to the contract
22
and the mortgage (see section 86A); and
23
(b) just before the amount was received by the credit provider as
24
described in paragraph 86A(1)(b), the debtor's accrued
25
liability described in paragraph 86A(1)(a) exceeded that
26
amount; and
27
(c) one or more of the conditions in section 86E are met (so that
28
sections 86B, 86C and 86D do not apply).
29
(2) If section 88 requires the credit provider to give the debtor or
30
mortgagor a default notice before beginning enforcement
31
proceedings to recover any of the excess, the credit provider must
32
not begin them unless:
33
(a) the default notice given to the debtor or mortgagor specifies:
34
(i) the amount received by the credit provider; and
35
Schedule 2 Reverse mortgages
Part 3 Provisions applying to credit providers generally
44 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(ii) the debtor's accrued liability just before that amount
1
was received; and
2
(iii) the conditions in section 86E that are met; and
3
(b) if the credit provider knows of a practising lawyer acting for
4
the debtor or mortgagor and the credit provider gave the
5
debtor or mortgagor the default notice by means other than
6
giving it to the lawyer--the credit provider has given the
7
lawyer a copy of the default notice at the same time as, or as
8
soon as practicable after, giving the debtor or mortgagor the
9
notice.
10
Criminal penalty:
50 penalty units.
11
24 After paragraph 111(1)(h) of the National Credit Code
12
Insert:
13
(ha)
subsection
17(15A);
14
25 After paragraph 111(2)(e) of the National Credit Code
15
Insert:
16
(ea)
subsection
17(15A);
17
26 After section 185 of the National Credit Code
18
Insert:
19
185A Records of nominations of persons to occupy reverse
20
mortgaged properties
21
(1) A credit provider under a credit contract for a reverse mortgage
22
that provides for the debtor to nominate to the credit provider a
23
person who is to be allowed to occupy the reverse mortgaged
24
property, and to revoke such a nomination, must keep in
25
accordance with the regulations a record of any such nominations
26
and revocations.
27
(2) A person commits an offence if:
28
(a) the person is subject to a requirement under subsection (1);
29
and
30
(b) the person engages in conduct; and
31
(c) the person's conduct contravenes the requirement.
32
Reverse mortgages Schedule 2
Provisions applying to credit providers generally Part 3
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 45
Criminal penalty:
50 penalty units.
1
2
Schedule 3 Small amount credit contracts
46 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Schedule 3--Small amount credit contracts
1
2
National Consumer Credit Protection Act 2009
3
1 Subsection 5(1)
4
Insert:
5
small amount credit contract: a credit contract is a small amount
6
credit contract if:
7
(a) the contract is not a continuing credit contract; and
8
(b) the credit provider under the contract is not an ADI; and
9
(c) the debtor's obligations under the contract are not secured by
10
a mortgage; and
11
(d) the credit limit of the contract is $2,000 (or such other
12
amount as is prescribed by the regulations) or less; and
13
(e) the term of the contract is 2 years (or such other number of
14
years as is prescribed by the regulations) or less; and
15
(f) the contract meets any other requirements prescribed by the
16
regulations.
17
2 At the end of section 111
18
Add:
19
Division 7 imposes requirements in relation to the website of a
20
licensee who provides credit assistance in relation to small amount
21
credit contracts. It also restricts a licensee from providing credit
22
assistance to a consumer who is a debtor under a small amount
23
credit contract.
24
3 At the end of Part 3-1
25
Add:
26
Small amount credit contracts Schedule 3
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 47
Division 7--Small amount credit contracts
1
124A Licensee's website must comply with requirements prescribed
2
by the regulations
3
Requirement
4
(1) If a licensee has a website that represents that the licensee
5
provides, or is able to provide, credit assistance to consumers in
6
relation to small amount credit contracts, the licensee must ensure
7
that the website complies with the requirements prescribed by the
8
regulations.
9
Civil penalty:
2,000 penalty units.
10
Offence
11
(2) A person commits an offence if:
12
(a) the person is subject to a requirement under subsection (1);
13
and
14
(b) the person engages in conduct; and
15
(c) the conduct contravenes the requirement.
16
Criminal penalty:
50 penalty units.
17
124B Prohibition on suggesting, or assisting with, small amount
18
credit contracts
19
Prohibition
20
(1) A licensee must not provide credit assistance to a consumer by
21
suggesting that the consumer apply, or assisting the consumer to
22
apply, for a small amount credit contract with a particular credit
23
provider if the licensee knows, or is reckless as to whether, the
24
consumer is a debtor under another small amount credit contract.
25
Civil penalty:
2,000 penalty units.
26
Offence
27
(2) A licensee commits an offence if:
28
Schedule 3 Small amount credit contracts
48 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(a) the licensee provides credit assistance to a consumer by
1
suggesting that the consumer apply, or assisting the consumer
2
to apply, for a small amount credit contract with a particular
3
credit provider; and
4
(b) the consumer is a debtor under another small amount credit
5
contract.
6
Criminal penalty:
50 penalty units.
7
(3) For the purposes of subsections (1) and (2), it is a defence if the
8
licensee reasonably believes that the consumer is not a debtor
9
under another small amount credit contract.
10
Note:
For the purposes of subsection (2), a defendant bears an evidential
11
burden in relation to the matter in subsection (3) (see subsection
12
13.3(3) of the Criminal Code).
13
124C Prohibition on suggesting, or assisting with, credit limit
14
increases
15
Prohibition
16
(1) A licensee must not provide credit assistance to a consumer who is
17
a debtor under a small amount credit contract by suggesting that
18
the consumer apply, or assisting the consumer to apply, for an
19
increase to the credit limit of the contract.
20
Civil penalty:
2,000 penalty units.
21
Offence
22
(2) A person commits an offence if:
23
(a) the person is subject to a requirement under subsection (1);
24
and
25
(b) the person engages in conduct; and
26
(c) the conduct contravenes the requirement.
27
Criminal penalty:
50 penalty units.
28
4 After Part 3-2B
29
Insert:
30
Small amount credit contracts Schedule 3
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 49
Part 3-2C--Licensees that are credit providers
1
under credit contracts: additional rules
2
relating to small amount credit contracts
3
Division 1--Introduction
4
133C Guide to this Part
5
This Part has rules that apply to licensees that are credit providers
6
under small amount credit contracts. It applies in addition to the
7
general rules in Part 3-2.
8
Division 2 imposes requirements in relation to the websites of
9
credit providers. It also restricts credit providers from entering into,
10
or increasing the credit limit of, small amount credit contracts.
11
Division 2--Small amount credit contracts
12
133CA Credit provider's website must comply with requirements
13
prescribed by the regulations
14
Requirement
15
(1) If a licensee has a website that can be used by a consumer to apply
16
for, or make an inquiry about, a small amount credit contract under
17
which the licensee would be the credit provider, the licensee must
18
ensure that the website complies with the requirements prescribed
19
by the regulations.
20
Civil penalty:
2,000 penalty units.
21
Offence
22
(2) A person commits an offence if:
23
(a) the person is subject to a requirement under subsection (1);
24
and
25
(b) the person engages in conduct; and
26
(c) the conduct contravenes the requirement.
27
Schedule 3 Small amount credit contracts
50 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Criminal penalty:
50 penalty units.
1
133CB Credit providers must not enter into small amount credit
2
contracts in certain circumstances
3
Prohibition
4
(1) A licensee must not enter into, or offer to enter into, a small
5
amount credit contract with a consumer who will be a debtor under
6
the contract if the licensee knows, or is reckless as to whether, the
7
consumer is a debtor under another small amount credit contract.
8
Civil penalty:
2,000 penalty units.
9
Offence
10
(2) A licensee commits an offence if:
11
(a) the licensee enters into, or offers to enter into, a small amount
12
credit contract with a consumer; and
13
(b) the consumer is, or will be, a debtor under that contract; and
14
(c) the consumer is a debtor under another small amount credit
15
contract.
16
Criminal penalty:
50 penalty units.
17
(3) For the purposes of subsections (1) and (2), it is a defence if the
18
licensee reasonably believes that the consumer is not a debtor
19
under another small amount credit contract.
20
Note:
For the purposes of subsection (2), a defendant bears an evidential
21
burden in relation to the matter in subsection (3) (see subsection
22
13.3(3) of the Criminal Code).
23
133CC Credit providers must not refinance credit provided under
24
small amount credit contracts
25
Prohibition
26
(1) A licensee must not enter into, or offer to enter into, a small
27
amount credit contract with a consumer who will be a debtor under
28
the contract if some or all of the credit provided under the contract
29
is to refinance some or all of the credit provided to the consumer
30
under another small amount credit contract.
31
Small amount credit contracts Schedule 3
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 51
Civil penalty:
2,000 penalty units.
1
Offence
2
(2) A person commits an offence if:
3
(a) the person is subject to a requirement under subsection (1);
4
and
5
(b) the person engages in conduct; and
6
(c) the conduct contravenes the requirement.
7
Criminal penalty:
50 penalty units.
8
(3) For the purposes of subsections (1) and (2), it is a defence if the
9
licensee reasonably believes that none of the credit provided under
10
the small amount contract is to refinance any of the credit provided
11
to the consumer under another small amount credit contract.
12
Note:
For the purposes of subsection (2), a defendant bears an evidential
13
burden in relation to the matter in subsection (3) (see subsection
14
13.3(3) of the Criminal Code).
15
133CD Credit providers must not increase the credit limit of small
16
amount credit contracts
17
Prohibition
18
(1) A licensee who is a credit provider under a small amount credit
19
contract must not increase the credit limit of the contract.
20
Civil penalty:
2,000 penalty units.
21
Offence
22
(2) A person commits an offence if:
23
(a) the person is subject to a requirement under subsection (1);
24
and
25
(b) the person engages in conduct; and
26
(c) the conduct contravenes the requirement.
27
Criminal penalty:
50 penalty units.
28
5 Paragraph 180(1)(b)
29
Repeal the paragraph, substitute:
30
Schedule 3 Small amount credit contracts
52 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(b) the engaging in the activity contravenes any of the following:
1
(i) section 29 (which requires the holding of a licence);
2
(ii) section 124B or 124C (which deal with credit assistance
3
in relation to small amount credit contracts);
4
(iii) section 133CB, 133CC or 133CD (which deal with
5
entering into small amount credit contracts etc.);
6
7
Caps on costs etc. for credit contracts Schedule 4
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 53
Schedule 4--Caps on costs etc. for credit
1
contracts
2
3
National Consumer Credit Protection Act 2009
4
1 Subsections 17(4) to (6) of the National Credit Code
5
Omit "The contract", substitute "In the case of a credit contract other
6
than a small amount credit contract, the contract".
7
2 Section 23 of the National Credit Code (heading)
8
Repeal the heading, substitute:
9
23 Prohibited monetary obligations--general
10
3 Subsection 23(1) of the National Credit Code
11
After "credit contract", insert "(other than a small amount credit
12
contract)".
13
4 After section 23 of the National Credit Code
14
Insert:
15
23A Prohibited monetary obligations--small amount credit
16
contracts
17
(1) A small amount credit contract must not impose a monetary
18
liability on the debtor:
19
(a) in respect of an interest charge (including a default rate of
20
interest) under the contract; or
21
(b) in respect of a fee or charge prohibited by this Code; or
22
(c) in respect of an amount of a fee or charge exceeding the
23
amount that may be charged consistently with this Code.
24
(2) If a provision of a small amount credit contract imposes a
25
monetary liability prohibited by subsection (1) then:
26
(a) each provision (the void provisions) of the contract that
27
imposes a monetary liability of a kind referred to in that
28
subsection (whether or not the liability is imposed
29
Schedule 4 Caps on costs etc. for credit contracts
54 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
consistently with this Code) is void to the extent that the
1
provision relates to the liability; and
2
(b) the debtor may recover as a debt due to the debtor any
3
amount paid to the credit provider under the void provisions
4
to the extent that the amount relates to the liability.
5
5 Section 24 of the National Credit Code (heading)
6
Repeal the heading, substitute:
7
24 Offences related to prohibited monetary obligations--credit
8
providers
9
6 After subsection 24(1) of the National Credit Code
10
Insert:
11
(1A) A credit provider must not:
12
(a) enter into a small amount credit contract on terms imposing a
13
monetary liability prohibited by subsection 23A(1); or
14
(b) require or accept payment of an amount in respect of a
15
monetary liability that cannot be imposed consistently with
16
this Code.
17
Criminal penalty:
100 penalty units.
18
7 Subsection 24(2) of the National Credit Code
19
Omit "Subsection (1) is an offence", substitute "Subsections (1) and
20
(1A) are offences".
21
8 After section 24 of the National Credit Code
22
Insert:
23
24A Offences related to prohibited monetary obligations--credit
24
assistance providers
25
(1) A person must not provide credit assistance to a consumer by:
26
(a) suggesting that the consumer apply for a particular small
27
amount credit contract with a particular credit provider; or
28
(b) assisting the consumer to apply for a particular small amount
29
credit contract with a particular credit provider;
30
Caps on costs etc. for credit contracts Schedule 4
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 55
if the person knows, or is reckless as to whether, the contract will
1
contravene subsection 23A(1).
2
Criminal penalty:
50 penalty units.
3
(2) If a person provides credit assistance to a consumer that is
4
prohibited by subsection (1):
5
(a) the consumer is not liable (and is taken never to have been
6
liable) to pay any fees or charges to the person in relation to:
7
(i) the credit assistance; or
8
(ii) any other services provided by the person in connection
9
with the credit assistance; and
10
(b) the consumer may recover as a debt due to the consumer the
11
amount of any such fees or charges paid by the consumer to
12
the person.
13
9 After section 27 of the National Credit Code
14
Insert:
15
27A Application of this Division
16
This Division does not apply to a small amount credit contract.
17
10 Section 31 of the National Credit Code
18
Before "The regulations", insert "(1)".
19
11 At the end of section 31 of the National Credit Code
20
Add:
21
(2) Subsection (1) does not apply to a small amount credit contract.
22
12 After section 31 of the National Credit Code
23
Insert:
24
31A Restrictions on fees and charges for small amount credit
25
contracts
26
(1) A small amount credit contract must not impose or provide for fees
27
and charges if the fees and charges are not of the following kind:
28
(a) a fee or charge (a permitted establishment fee) that reflects
29
the credit provider's reasonable costs of determining the
30
Schedule 4 Caps on costs etc. for credit contracts
56 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
application for credit and the initial administrative costs of
1
providing the credit under the contract;
2
(b) a fee or charge (a permitted monthly fee) that is payable on a
3
monthly basis starting on the day the contract is entered into;
4
(c) a fee or charge that is payable in the event of a default in
5
payment under the contract;
6
(d) a government fee, charge or duty payable in relation to the
7
contract.
8
Note:
See section 39B for the maximum amount that may be recovered by
9
the credit provider if there is a default in payment under the contract.
10
Maximum amount of permitted establishment fee
11
(2) The amount of a permitted establishment fee that may be imposed
12
or provided for under a small amount credit contract must not
13
exceed 10% of the adjusted credit amount in relation to the
14
contract.
15
Maximum amount of permitted monthly fee
16
(3) The amount of a permitted monthly fee that may be imposed or
17
provided for under a small amount credit contract must not exceed
18
2% of the adjusted credit amount in relation to the contract.
19
13 After Division 4 of Part 2 of the National Credit Code
20
Insert:
21
Division 4A--Annual cost rate of certain credit contracts
22
32A Prohibitions relating to credit contracts if the annual cost rate
23
exceeds 48%
24
Entering into a credit contract
25
(1) A credit provider must not enter into a credit contract if the annual
26
cost rate of the contract exceeds 48%.
27
Criminal penalty:
50 penalty units.
28
Caps on costs etc. for credit contracts Schedule 4
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 57
Provision of credit assistance
1
(2) A person must not provide credit assistance to a consumer by
2
suggesting that the consumer apply, or assisting the consumer to
3
apply, for a particular credit contract with a particular credit
4
provider if the person knows, or is reckless as to whether, the
5
annual cost rate of the contract exceeds 48%.
6
Criminal penalty:
50 penalty units.
7
(3) If a person provides credit assistance to a consumer that is
8
prohibited by subsection (2):
9
(a) the consumer is not liable (and is taken never to have been
10
liable) to pay any fees or charges to the person in relation to:
11
(i) the credit assistance; or
12
(ii) any other services provided by the person in connection
13
with the credit assistance; and
14
(b) the consumer may recover as a debt due to the consumer the
15
amount of any such fees or charges paid by the consumer to
16
the person.
17
Application
18
(4) This section does not apply if:
19
(a) the credit provider is an ADI; or
20
(b) the credit contract is a small amount credit contract or
21
bridging finance contract.
22
32B Calculation of annual cost rate
23
(1) The annual cost rate of a credit contract must be calculated as a
24
nominal rate per annum, together with the compounding frequency,
25
using the formula:
26
n
r
100%
27
where:
28
n is the number of repayments per annum to be made under the
29
credit contract (annualised if the term of the contract is less than 12
30
months), except that:
31
(a) if repayments are to be made weekly--n is 52.18; and
32
(b) if repayments are to be made fortnightly--n is 26.09; and
33
Schedule 4 Caps on costs etc. for credit contracts
58 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(c) if the contract does not provide for a constant interval
1
between repayments--n is to be derived from the interval
2
selected for the purposes of the definition of j in
3
subsection (2).
4
r is the solution of the equation specified in subsection (2).
5
(2) The equation for the purposes of the definition of r in
6
subsection (1) is:
7
( )
( )
t
t
j
j
j
j
j
j = 0
j = 0
A
R
C
1
r
1
r
+
=
+
+
8
where:
9
A
j
is the amount of credit to be provided under the credit contract
10
at time j (the value of j for the provision of the first amount of
11
credit is taken to be zero).
12
C
j
is the credit cost amount (if any) for the credit contract that is
13
payable by the debtor at time j in addition to the repayments R
j
.
14
j is the time, measured as a multiple (not necessary integral) of:
15
(a) if the credit contract does not provide for a constant interval
16
between contractual repayments--an interval of any kind
17
selected by the credit provider as the unit of time; or
18
(b) otherwise--the interval between contractual repayments that
19
will have elapsed since the first amount of credit is provided
20
under the credit contract.
21
R
j
is the repayment to be made at time j.
22
t is the time, measured as a multiple of the interval between
23
contractual repayments (or other interval so selected), that will
24
elapse between:
25
(a) the time when the first amount of credit is provided under the
26
credit contract; and
27
(b) the time when the last repayment is to be made under the
28
contract.
29
Caps on costs etc. for credit contracts Schedule 4
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 59
Credit cost amount
1
(3)
The
credit cost amount for the credit contract is the sum of the
2
following amounts if they are ascertainable:
3
(a) the amount of credit fees and charges payable in relation to
4
the contract;
5
(b) the amount of a fee or charge payable by the debtor (whether
6
or not payable under the contract) to:
7
(i) any person (whether or not associated with the credit
8
provider) for an introduction to the credit provider; or
9
(ii) any person (whether or not associated with the credit
10
provider) for any service if the person has been
11
introduced to the debtor by the credit provider; or
12
(iii) the credit provider for any service relating to the
13
provision of credit, other than a service referred to in
14
subparagraph (ii);
15
(c) any other amount prescribed by the regulations.
16
(4) For the purposes of subsection (3), the amounts referred to in that
17
subsection:
18
(a) include an amount that is payable even if the credit is not
19
provided; but
20
(b) do not include an amount of a government fee, charge or duty
21
payable in relation to the credit contract.
22
Tolerances and assumptions etc.
23
(5) The annual cost rate must be correct to at least the nearest one
24
hundredth of 1% per annum.
25
(6) In calculating the annual cost rate, reasonable approximations may
26
be made if it would be impractical or unreasonably onerous to
27
make a precise calculation.
28
Example: If repayments are to be made on a fixed day each month, it may be
29
assumed that repayments will be made on that day each month even
30
though the credit contract provides for payment on the preceding or
31
succeeding business day when the due date is not a business day.
32
(7) The tolerances and assumptions under sections 180 to 182 apply to
33
the calculation of the annual cost rate
.
34
Schedule 4 Caps on costs etc. for credit contracts
60 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Continuing credit contracts
1
(8) If the credit contract is a continuing credit contract, the following
2
assumptions also apply to the calculation of the annual cost rate of
3
the contract:
4
(a) that the debtor has drawn down the maximum amount of
5
credit that the credit provider has agreed to provide under the
6
contract;
7
(b) that the debtor will pay the minimum repayments specified in
8
the contract;
9
(c) if credit is provided in respect of payment by the credit
10
provider to a third person in relation to goods or services or
11
cash supplied by that third person to the debtor from time to
12
time--that the debtor will not be supplied with any further
13
goods or services or cash;
14
(d) if credit is provided in respect of cash supplied by the credit
15
provider to the debtor from time to time--that the debtor will
16
not be supplied with any further cash.
17
14 Subsection 34(6) of the National Credit Code
18
Omit "A statement", substitute "In the case of a credit contract other
19
than a small amount credit contract, a statement".
20
15 After Division 5 of Part 2 of the National Credit Code
21
Insert:
22
Division 5A--Additional rules relating to small amount
23
credit contracts
24
39A Limit on the application of amount of credit provided under a
25
small amount credit contract
26
(1) No part of the amount of credit provided under a small amount
27
credit contract may be applied to pay an amount (the prohibited
28
credit amount) to:
29
(a) the credit provider; or
30
(b) a person prescribed by the regulations.
31
(2) Subsection (1) does not apply to:
32
Caps on costs etc. for credit contracts Schedule 4
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 61
(a) an amount of a permitted establishment fee, or a permitted
1
monthly fee, payable in relation to the small amount credit
2
contract; or
3
(b) an amount of a government fee, charge or duty payable in
4
relation to the small amount credit contract; or
5
(c) an amount prescribed by the regulations.
6
(3) If subsection (1) is contravened in relation to a small amount credit
7
contract:
8
(a) the debtor is not liable (and is taken never to have been
9
liable) to repay the prohibited credit amount to the credit
10
provider; and
11
(b) the debtor may recover as a debt due to the debtor any
12
amount paid to the credit provider to the extent that it relates
13
to the prohibited credit amount.
14
39B Limit on amount that may be recovered if there is default under
15
a small amount credit contract
16
(1) If there is a default in payment under a small amount credit
17
contract, the maximum amount that may be recovered (whether by
18
repayments under the contract or otherwise) by the credit provider
19
in relation to the contract must not exceed an amount that is twice
20
the adjusted credit amount in relation to the contract.
21
(2) Any provision of the small amount credit contract that confers a
22
greater right is void to the extent that it does so. If an amount is in
23
fact recovered in excess of this limitation, it may be recovered
24
back.
25
(3) This section does not apply to enforcement expenses.
26
16 At the end of subsection 111(1) of the National Credit
27
Code
28
Add:
29
; (j) subsection 32A(1).
30
17 After paragraph 111(2)(f) of the National Credit Code
31
Insert:
32
(fa)
subsection
32A(1);
33
Schedule 4 Caps on costs etc. for credit contracts
62 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
18 Subsection 114(1) of the National Credit Code
1
After "order", insert "in relation to a credit contract other than a small
2
amount credit contract".
3
19 After subsection 114(1) of the National Credit Code
4
Insert:
5
(1A) On application being made by a debtor or a guarantor for an order
6
in relation to a small amount credit contract, the maximum penalty
7
that may be imposed by the court for a contravention of a key
8
requirement is an amount not exceeding the sum of the following
9
amounts:
10
(a) the amount of the permitted establishment fee payable in
11
relation to the contract;
12
(b) the total amount of the permitted monthly fees payable in
13
relation to the contract based on the term of the contract
14
when it was made.
15
20 Subsection 204(1) of the National Credit Code
16
Insert:
17
adjusted credit amount, in relation to a small amount credit
18
contract, means the first amount of credit that is, or is to be,
19
provided under the contract but does not include:
20
(a) the amount of a permitted establishment fee, or a permitted
21
monthly fee, payable in relation to the contract; and
22
(b) if subsection 39A(1) is contravened in relation to the
23
contract--the prohibited credit amount; and
24
(c) any other amount prescribed by the regulations.
25
21 Subsection 204(1) of the National Credit Code
26
Insert:
27
annual cost rate of a credit contract means the annual cost rate of
28
the contract calculated in accordance with section 32B.
29
22 Subsection 204(1) of the National Credit Code
30
Insert:
31
credit cost amount: see subsection 32B(3).
32
Caps on costs etc. for credit contracts Schedule 4
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 63
23 Subsection 204(1) of the National Credit Code
1
Insert:
2
permitted establishment fee: see paragraph 31A(1)(a).
3
24 Subsection 204(1) of the National Credit Code
4
Insert:
5
permitted monthly fee: see paragraph 31A(1)(b).
6
25 Subsection 204(1) of the National Credit Code
7
Insert:
8
prohibited credit amount: see subsection 39A(1).
9
26 Subsection 204(1) of the National Credit Code
10
Insert:
11
small amount credit contract has the same meaning as in section 5
12
of the National Credit Act.
13
14
Schedule 5 Consumer leases
64 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Schedule 5--Consumer leases
1
2
National Consumer Credit Protection Act 2009
3
1 Subsection 5(1) (definition of lessor)
4
Omit "means the lessor under a consumer lease", substitute "has the
5
same meaning as in section 204 of the National Credit Code".
6
2 Subsection 5(1) (definition of value of a credit contract,
7
mortgage, guarantee or consumer lease)
8
Repeal the definition.
9
3 Subsection 5(1)
10
Insert:
11
value of a credit contract, mortgage, guarantee or consumer lease:
12
see section 199.
13
4 Paragraph 147(7)(b)
14
Omit "sections 72 and 94", substitute "sections 177B and 179H".
15
5 Subsection 147(7) (note 1)
16
Omit "Note 1", substitute "Note".
17
6 Subsection 147(7) (note 2)
18
Repeal the note.
19
7 Subsection 199(2) (table items 2, 3, 6, 7, 9 and 12)
20
Omit ", guarantee or consumer lease", substitute "or guarantee".
21
8 Subsection 199(2) (at the end of the table)
22
Add:
23
14
Section 175F of the National Credit
Code
the value of the consumer lease to
which the order relates is not more
than:
(a) $40,000; or
(b) if a higher amount is prescribed
by the regulations--that higher
Consumer leases Schedule 5
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 65
amount.
15
Subsection 175G(6) of the National
Credit Code
the value of the consumer lease to
which the order relates is not more
than:
(a) $40,000; or
(b) if a higher amount is prescribed
by the regulations--that higher
amount.
16
Section 177D of the National Credit
Code
not applicable.
17
Section 177E of the National Credit
Code
not applicable.
18
Section 177F of the National Credit
Code
the value of the consumer lease to
which the order relates is not more
than:
(a) $40,000; or
(b) if a higher amount is prescribed
by the regulations--that higher
amount.
19
Section 179K of the National Credit
Code
not applicable.
20
Section 179Q of the National Credit
Code
the value of the consumer lease to
which the order relates is not more
than:
(a) $40,000; or
(b) if a higher amount is prescribed
by the regulations--that higher
amount.
21
Subsection 179R(3) of the National
Credit Code
the order is for an amount that is not
more than:
(a) $40,000; or
(b) if a higher amount is prescribed
by the regulations--that higher
amount.
9 Subsection 199(3)
1
Omit "of a credit contract, mortgage, guarantee or consumer lease",
2
substitute "of a credit contract, mortgage, guarantee or consumer lease".
3
10 Paragraph 200(1)(b)
4
Schedule 5 Consumer leases
66 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Omit "or 96", substitute ", 96, 177D or 179K".
1
11 Subsection 76(8) of the National Credit Code
2
Repeal the subsection.
3
12 Subsection 87(6) of the National Credit Code
4
Repeal the subsection.
5
13 Section 92 of the National Credit Code
6
Repeal the section.
7
14 Subsection 173(1) of the National Credit Code
8
Repeal the subsection, substitute:
9
(1) A consumer lease must be in the form of a written lease document:
10
(a) signed by the lessor and the lessee; and
11
(b) containing the information required by this Division.
12
(1A) Subject to subsection (2), a consumer lease may consist of one or
13
more separate documents.
14
15 After subsection 173(2) of the National Credit Code
15
Insert:
16
(2A) In the case of a lease document consisting of more than one
17
document, it is sufficient compliance with this section if one of the
18
documents is duly signed and the other documents are referred to
19
in the signed document.
20
16 After section 173 of the National Credit Code
21
Insert:
22
173A Other forms of consumer lease
23
(1) The regulations may authorise other ways of making a consumer
24
lease that do not involve a written document.
25
(2) In that case, the provisions of this Division apply with such
26
modifications as are prescribed by the regulations.
27
17 After section 174 of the National Credit Code
28
Consumer leases Schedule 5
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 67
Insert:
1
174A Alteration of consumer lease document
2
(1) An alteration of (including an addition to) a new consumer lease
3
document by the lessor after it is signed by the lessee is ineffective
4
unless the lessee has agreed in writing to the alteration.
5
(2) This section does not apply to an alteration having the effect of
6
reducing the lessee's liabilities under the consumer lease.
7
18 After section 175 of the National Credit Code
8
Insert:
9
Division 4--Fees and charges
10
175A Prohibited consumer lease fees or charges
11
The regulations may specify:
12
(a) consumer lease fees or charges; or
13
(b) classes of consumer lease fees or charges;
14
that are prohibited for the purposes of this Code.
15
175B Fees or charges in relation to third parties
16
When this section applies
17
(1) This section applies if a fee or charge is payable by a lessee to the
18
lessor for an amount (the third party amount) payable or paid by
19
the lessor to another person, body or agency.
20
Third party amount ascertainable at time of lessee payment
21
(2) If, when the fee or charge is paid by the lessee to the lessor, the
22
third party amount is ascertainable, then the amount of the fee or
23
charge must not exceed the third party amount.
24
Third party amount not ascertainable at time of lessee payment
25
(3)
If:
26
(a) when the fee or charge is paid by the lessee to the lessor, the
27
third party amount is not ascertainable; and
28
Schedule 5 Consumer leases
68 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(b) after the fee or charge is paid, the lessor ascertains the third
1
party amount; and
2
(c) the third party amount is less than the amount of the fee or
3
charge paid;
4
then the lessor must refund or credit the difference to the lessee.
5
Determining third party amount
6
(4) The third party amount is to be determined by:
7
(a) taking into account any discount, rebate or other allowance
8
that is received or receivable by the lessor or a related body
9
corporate (within the meaning of the Corporations Act 2001);
10
and
11
(b) disregarding any rebate on tax payable by the lessor or a
12
related body corporate (within the meaning of that Act).
13
Division 5--Lessor's obligation to account
14
Subdivision A--Ongoing statements of account
15
175C Statements of account
16
(1) A lessor must give to the lessee, or arrange for the lessee to be
17
given, periodic statements of account in accordance with this
18
Subdivision.
19
Criminal penalty:
100 penalty units.
20
(2) The maximum period for a statement of account is 12 months.
21
(3) A statement of account need not be given if:
22
(a) the lessee was in default under the consumer lease during the
23
statement period and the lessor has commenced enforcement
24
proceedings; or
25
(b) the lessee has died or is insolvent and the lessee's personal
26
representative or trustee in bankruptcy has not requested a
27
statement of account.
28
(4) Subsection (1) is an offence of strict liability.
29
Note:
For strict liability, see section 6.1 of the Criminal Code.
30
Consumer leases Schedule 5
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 69
175D Information to be contained in statements of account
1
A statement of account must contain the information prescribed by
2
the regulations.
3
175E Statement of amount owing and other matters
4
(1) A lessor must, at the request of a lessee and within the time
5
specified by this section, provide a statement of all or any of the
6
following:
7
(a) any amounts credited to the lessee's account during a period
8
specified in the request;
9
(b) any amounts currently overdue and the date they became due;
10
(c) any amount currently payable and the date it becomes due;
11
(d) any other information prescribed by the regulations.
12
Criminal penalty:
100 penalty units.
13
(2) The statement must be given:
14
(a) within 14 days, if all information requested relates to a period
15
1 year or less before the request is given; or
16
(b) within 30 days, if any information requested relates to a
17
period more than 1 year before the request is given.
18
(3) A statement under this section may be given orally but if the
19
request for the statement is made in writing the statement must be
20
given in writing.
21
(4) In the case of joint lessees, the statement under this section need
22
only be given to a lessee who requests the statement and not,
23
despite section 194, to each joint lessee.
24
(5) A lessor is not required to provide a further written statement under
25
this section if it has, within the 3 months before the request is
26
given, given such a statement to the person requesting it.
27
(6) Subsection (1) is an offence of strict liability.
28
Note:
For strict liability, see section 6.1 of the Criminal Code.
29
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70 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
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175F Court may order statement of account to be provided
1
If a statement of account is not provided within the time required
2
by this Subdivision, the court may, on the application of the lessee,
3
order the lessor to provide the statement or itself determine the
4
amounts in relation to which the statement was sought.
5
175G Disputed accounts
6
(1)
If:
7
(a) a liability is entered against a lessee under a consumer lease;
8
and
9
(b) the lessee, by written notice to the lessor, disputes the
10
liability;
11
then the lessor must give the lessee a written notice explaining in
12
reasonable detail how the liability arises.
13
(2) A written notice need not be given if the lessor agrees with the
14
lessee as to the disputed amount and gives the lessee a written
15
notice advising of the agreed liability.
16
(3) In the case of a consumer lease for which a statement of account is
17
given, the notice of dispute must be given to the lessor within 30
18
days after the day the lessee receives the statement of account in
19
which the amount, or part of that amount, is first shown.
20
(4) In the case of a consumer lease in respect of which a statement of
21
account need not be and is not given for the period to which the
22
disputed liability relates, the notice of dispute must be given to the
23
lessor not later than 3 months after the day the lease ends.
24
(5) The lessor must not begin enforcement proceedings on the basis of
25
a default arising from the disputed liability until the period of 30
26
days, starting on the day the lessor gives the written explanation or
27
advice as to agreement, has expired.
28
Criminal penalty:
50 penalty units.
29
(6) A lessee or lessor may apply to the court to have the court
30
determine a disputed liability and, if satisfied that a liability is
31
genuinely disputed, the court may determine the matters in dispute
32
and make such consequential orders as it thinks just.
33
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(7) If an application is made to the court under this section within 30
1
days after the day the written explanation is given, the lessor must
2
not, without leave of the court, begin enforcement proceedings on
3
the basis of a default arising from the disputed liability.
4
Criminal penalty:
50 penalty units.
5
(8) Subsections (5) and (7) are offences of strict liability.
6
Note:
For strict liability, see section 6.1 of the Criminal Code.
7
(9) This section does not affect a dispute not dealt with, or not arising,
8
under this section.
9
Subdivision B--End of lease statements
10
175H End of lease statement
11
(1) A lessor must arrange for the lessee to be given, not later than 90
12
days before the end of the fixed term of a consumer lease, a
13
statement containing the information prescribed by the regulations.
14
Criminal penalty:
100 penalty units.
15
(2) Subsection (1) does not apply in the circumstances (if any)
16
prescribed by the regulations.
17
(3) Subsection (1) is an offence of strict liability.
18
Note:
For strict liability, see section 6.1 of the Criminal Code.
19
Division 6--Certain transactions not to be treated as new
20
consumer leases
21
175J Changes etc. under consumer leases
22
If:
23
(a)
there
is:
24
(i) a change to an existing consumer lease that results in
25
further goods being provided; or
26
(ii) a deferral or waiver of an amount under an existing
27
consumer lease; or
28
(iii) a postponement relating to an existing consumer lease;
29
and
30
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72 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
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(b) the change, deferral, waiver or postponement is made in
1
accordance with this Code or the existing consumer lease;
2
then the change, deferral, waiver or postponement is not to be
3
treated as creating a new consumer lease or a credit contract for the
4
purposes of this Code.
5
Division 7--Changes to obligations under consumer leases
6
Subdivision A--Changes by agreement of parties
7
177A Changes by agreement
8
(1) If the parties under an existing consumer lease agree to change its
9
terms, the lessor must, not later than 30 days after the date of the
10
agreement, give to the lessee a written notice setting out:
11
(a) particulars of the change in the terms of the consumer lease;
12
and
13
(b) any information required by the regulations.
14
Criminal penalty:
100 penalty units.
15
(2) Subsection (1) does not apply to a change which defers or
16
otherwise reduces the obligations of the lessee for a period not
17
exceeding 90 days.
18
(3) This section does not apply to a change made under Subdivision B.
19
(4) The lessor may, under subsection (1), give a lessee particulars only
20
of a matter as changed instead of particulars of the change, but
21
only if the lessor:
22
(a) makes it clear to the lessee that the matter has changed; or
23
(b) issues to the lessee a new set of terms and conditions relating
24
to the consumer lease.
25
(5) Subsection (1) is an offence of strict liability.
26
Note:
For strict liability, see section 6.1 of the Criminal Code.
27
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Subdivision B--Changes on grounds of hardship and unjust
1
transactions
2
177B Changes on grounds of hardship
3
Hardship notice
4
(1) If a lessee considers that he or she is or will be unable to meet his
5
or her obligations under a consumer lease, the lessee may give the
6
lessor notice (a hardship notice), orally or in writing, of the
7
lessee's inability to meet the obligations.
8
Lessor's notice in response to hardship notice
9
(2) Within 21 days after the day of receiving the lessee's hardship
10
notice, the lessor must give the lessee:
11
(a) if the lessor agrees to negotiate a change to the lease--notice,
12
in the form prescribed by the regulations, that the lessor
13
agrees to negotiate; or
14
(b) if the lessor does not agree to negotiate a change to the
15
lease--a written notice that states:
16
(i) that the lessor does not agree to negotiate; and
17
(ii) the reasons for not agreeing to negotiate; and
18
(iii) the name of the approved external dispute resolution
19
scheme of which the lessor is a member; and
20
(iv) the lessee's rights under that scheme.
21
Criminal penalty:
30 penalty units.
22
Note:
If a lessee has given a lessor a hardship notice, there may be extra
23
requirements that the lessor must comply with before beginning
24
enforcement proceedings--see section 179F.
25
(3) A lessor that has given notice under paragraph (2)(a) may, within
26
21 days after the day of giving that notice, give a notice under
27
paragraph (2)(b).
28
Strict liability
29
(4) Subsection (2) is an offence of strict liability.
30
Note:
For strict liability, see section 6.1 of the Criminal Code.
31
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74 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
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177C Notice of change
1
(1) A lessor that enters into an agreement with a lessee to change the
2
consumer lease as a result of a hardship notice by the lessee must,
3
not later than 30 days after the date of the agreement, give to the
4
lessee a written notice setting out:
5
(a) particulars of the change in the terms of the lease; and
6
(b) any information required by the regulations.
7
Criminal penalty:
50 penalty units.
8
(2) The lessor may, under subsection (1), give the lessee particulars
9
only of a matter as changed instead of particulars of the change,
10
but only if the lessor:
11
(a) makes it clear to the lessee that the matter has changed; or
12
(b) gives to the lessee a new set of terms and conditions relating
13
to the lease.
14
(3) Subsection (1) is an offence of strict liability.
15
Note:
For strict liability, see section 6.1 of the Criminal Code.
16
177D Changes by court
17
(1) If a lessor does not change a consumer lease as a result of a
18
hardship notice by a lessee, the lessee may apply to the court to
19
change the terms of the lease.
20
(2) The court may, after allowing the applicant and the lessor a
21
reasonable opportunity to be heard:
22
(a) by order change the lease (but not so as to reduce the amount
23
ultimately payable by the lessee to the lessor under the lease),
24
and make such other orders as it thinks fit; or
25
(b) refuse to change the lease.
26
(3) The court may, if it thinks it appropriate in the circumstances, stay
27
any enforcement proceedings under the lease, and make such other
28
orders as it thinks fit, until the application has been determined.
29
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, 2011 75
177E Lessor may apply for variation of change
1
(1) A lessor under a consumer lease that has been changed by an order
2
under subsection 177D(2) may apply to the court for an order
3
varying or revoking the order.
4
(2) A lessor subject to a stay of enforcement proceedings or other
5
order under subsection 177D(3) may apply to the court for an order
6
varying or revoking the stay or order.
7
(3) On an application under this section, the court may vary or revoke
8
the order or stay to which the application relates as it thinks fit, or
9
may refuse the application.
10
177F Court may reopen unjust transactions
11
Power to reopen unjust transactions
12
(1) The court may, if satisfied on the application of a lessee that, in the
13
circumstances relating to the relevant consumer lease at the time it
14
was entered into or changed (whether or not by agreement), the
15
lease or change was unjust, reopen the transaction that gave rise to
16
the lease or change.
17
Matters to be considered by court
18
(2) In determining whether a term of a particular consumer lease is
19
unjust in the circumstances relating to it at the time it was entered
20
into or changed, the court is to have regard to the public interest
21
and to all the circumstances of the case and may have regard to the
22
following:
23
(a) the consequences of compliance, or noncompliance, with all
24
or any of the provisions of the lease;
25
(b) the relative bargaining power of the parties;
26
(c) whether or not, at the time the lease was entered into or
27
changed, its provisions were the subject of negotiation;
28
(d) whether or not it was reasonably practicable for the applicant
29
to negotiate for the alteration of, or to reject, any of the
30
provisions of the lease or the change;
31
(e) whether or not any of the provisions of the lease impose
32
conditions that are unreasonably difficult to comply with, or
33
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76 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
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not reasonably necessary for the protection of the legitimate
1
interests of a party to the lease;
2
(f) whether or not the lessee, or a person who represented the
3
lessee, was reasonably able to protect the interests of the
4
lessee because of his or her age or physical or mental
5
condition;
6
(g) the form of the lease and the intelligibility of the language in
7
which it is expressed;
8
(h) whether or not, and if so when, independent legal or other
9
expert advice was obtained by the lessee;
10
(i) the extent to which the provisions of the lease or change and
11
their legal and practical effect were accurately explained to
12
the lessee and whether or not the lessee understood those
13
provisions and their effect;
14
(j) whether the lessor or any other person exerted or used unfair
15
pressure, undue influence or unfair tactics on the lessee and,
16
if so, the nature and extent of that unfair pressure, undue
17
influence or unfair tactics;
18
(k) whether the lessor took measures to ensure that the lessee
19
understood the nature and implications of the transaction and,
20
if so, the adequacy of those measures;
21
(l) whether at the time the lease was entered into or changed, the
22
lessor knew, or could have ascertained by reasonable inquiry
23
at the time, that the lessee could not pay in accordance with
24
its terms or not without substantial hardship;
25
(m) whether the terms of the transaction or the conduct of the
26
lessor is justified in the light of the risks undertaken by the
27
lessor;
28
(n) the terms of other comparable transactions involving other
29
lessors and, if the injustice is alleged to result from excessive
30
costs, the costs payable in comparable cases;
31
(o) any other relevant factor.
32
Representing lessee
33
(3) For the purposes of paragraph (2)(f), a person is taken to have
34
represented a lessee if the person represented the lessee, or assisted
35
the lessee to a significant degree, in the negotiations process prior
36
to, or at, the time the consumer lease was entered into or changed.
37
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, 2011 77
Unforeseen circumstances
1
(4) In determining whether a consumer lease is unjust, the court is not
2
to have regard to any injustice arising from circumstances that
3
were not reasonably foreseeable when the lease was entered into or
4
changed.
5
Conduct
6
(5) In determining whether to grant relief in respect of a consumer
7
lease that it finds to be unjust, the court may have regard to the
8
conduct of the parties to the proceedings in relation to the lease
9
since it was entered into or changed.
10
Application
11
(6) This section does not apply to a change to a consumer lease under
12
this Subdivision.
13
177G Orders on reopening of transactions
14
The court may, if it reopens a transaction under this Subdivision,
15
do any one or more of the following, despite any settlement of
16
accounts or any agreement purporting to close previous dealings
17
and create a new obligation:
18
(a) reopen an account already taken between the parties to the
19
transaction;
20
(b) relieve the lessee from payment of any amount in excess of
21
such amount as the court, having regard to the risk involved
22
and all other circumstances, considers to be reasonably
23
payable;
24
(c) set aside either wholly or in part or revise or alter an
25
agreement made in connection with the transaction;
26
(d) give judgement for or make an order in favour of a party to
27
the transaction of such amount as, having regard to the relief
28
(if any) which the court thinks fit to grant, is justly due to that
29
party under the consumer lease;
30
(e) give judgement or make an order against a person for
31
delivery of goods to which the lease relates and which are in
32
the possession of that person;
33
(f) make ancillary or consequential orders.
34
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78 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
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177H Applications by ASIC
1
(1) This section applies if ASIC considers that it is in the public
2
interest to make an application under this Subdivision.
3
(2) ASIC may make an application under this Subdivision and has
4
standing to represent the public interest.
5
(3)
The
application:
6
(a) may apply to any one or more consumer leases; and
7
(b) may apply to all or any class of consumer leases entered into
8
by a lessor during a specified period (for example, all leases
9
entered into during a specified period that are affected by a
10
specified matter for which relief is sought).
11
177J Time limit
12
An application may not be brought under this Subdivision more
13
than 2 years after the relevant consumer lease is terminated,
14
discharged or otherwise comes to an end.
15
177K Joinder of parties
16
(1) If it appears to the court that a person other than a lessor (a third
17
party) has shared in the profits of, or has a beneficial interest
18
prospectively or otherwise in, a consumer lease that the court holds
19
to be unjust, the court may make an order about the third party that
20
the court considers appropriate.
21
(2) However, before making an order about the third party, the court
22
must:
23
(a) join the third party as a party to the proceedings; and
24
(b) give the third party an opportunity to appear and be heard in
25
the proceedings.
26
19 Section 176 of the National Credit Code
27
Repeal the section.
28
20 Division 3 of Part 11 of the National Credit Code (heading)
29
Repeal the heading, substitute:
30
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Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 79
Division 8--Repossession, termination and enforcement of
1
consumer leases
2
Subdivision A--Repossession of goods under consumer lease
3
21 Section 177 of the National Credit Code
4
Repeal the section.
5
22 After section 178 of the National Credit Code
6
Insert:
7
Subdivision B--Termination of consumer lease by lessee
8
178A Termination before goods have been provided
9
(1)
If:
10
(a) a consumer lease has been entered into; and
11
(b) the goods hired under the lease have not been provided;
12
then the lessee may, by written notice to the lessor, terminate the
13
lease.
14
(2) Nothing in subsection (1) prevents the lessor from retaining or
15
requiring payment of fees or charges incurred before the
16
termination and which would have been payable under the
17
consumer lease.
18
23 Section 179 of the National Credit Code (heading)
19
Repeal the heading, substitute:
20
179 Termination after goods have been provided
21
24 After section 179 of the National Credit Code
22
Insert:
23
179A Statement of amount payable on termination
24
(1) A lessor must, at the written request of a lessee, provide a written
25
statement of the amount required to terminate a consumer lease as
26
at such date as the lessee specifies. If so requested, the lessor must
27
also provide details of the items which make up that amount.
28
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80 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(2) The statement must also contain:
1
(a) a statement to the effect that the amount payable to terminate
2
the lease may change according to the date on which it is
3
paid; and
4
(b) a statement to the effect that the lessee has no right to own
5
the goods if the lease is terminated; and
6
(c) a statement to the effect that the lessee must return the goods
7
to the lessor by a specified date; and
8
(d) any other matters prescribed by the regulations.
9
(3) A lessor must give a statement, complying with this section, within
10
7 days after the day the request is given to the lessor.
11
Criminal penalty:
50 penalty units.
12
(4) In the case of joint lessees, the statement need only be given to the
13
lessee who requests the statement and not, despite section 194, to
14
each joint lessee.
15
(5) Subsection (3) is an offence of strict liability.
16
Note:
For strict liability, see section 6.1 of the Criminal Code.
17
179B Court may determine amount payable on termination if lessor
18
does not
19
(1) If the lessor does not provide a statement of the amount payable to
20
terminate a consumer lease in accordance with this Subdivision
21
after a request is duly made by a lessee, the court may, on the
22
application of the lessee, determine:
23
(a) the amount payable on the date of determination; and
24
(b) the amount by which it increases daily; and
25
(c) the period for which the determination is applicable.
26
(2) The consumer lease is discharged if:
27
(a) the goods hired under the lease are returned to the lessor
28
within the applicable period; and
29
(b) an amount calculated in accordance with the determination is
30
tendered to the lessor within the applicable period.
31
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, 2011 81
179C One-off notice to be given the first time a direct debit default
1
occurs
2
(1) This section applies if:
3
(a) a lessee authorises payment of an amount for a consumer
4
lease by direct debit; and
5
(b) default occurs; and
6
(c) it is the first occasion the default occurs.
7
(2) The lessor must give the lessee a notice, complying with this
8
section, within 14 days of the default occurring.
9
Criminal penalty:
50 penalty units.
10
(3) The notice must contain the information prescribed by the
11
regulations.
12
(4) Subsection (2) is an offence of strict liability.
13
Note:
For strict liability, see section 6.1 of the Criminal Code.
14
(5) This section does not affect any other requirement under this Code
15
to give a notice.
16
Subdivision C--Enforcement of consumer leases
17
179D Requirements to be met before lessor can enforce consumer
18
lease against defaulting lessee
19
Enforcement of consumer lease
20
(1) A lessor must not begin enforcement proceedings against a lessee
21
in relation to a consumer lease unless:
22
(a) the lessee is in default under the lease; and
23
(b) the lessor has given the lessee a default notice, complying
24
with this section, allowing the lessee a period of at least 30
25
days from the date of the notice to remedy the default; and
26
(c) the default has not been remedied within that period.
27
Criminal penalty:
50 penalty units.
28
Note:
If a lessee has given a lessor a hardship notice or a postponement
29
request there may be extra requirements that the lessor must comply
30
with before beginning enforcement proceedings--see sections 179F
31
and 179H.
32
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82 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Default notice requirements
1
(2) A default notice must contain a prominent heading at its top stating
2
that it is a default notice and specify:
3
(a) the default; and
4
(b) the action necessary to remedy the default; and
5
(c) a period for remedying the default; and
6
(d) the date after which enforcement proceedings in relation to
7
the default, and, if relevant, repossession of goods hired
8
under the lease may begin if the default has not been
9
remedied; and
10
(e) the information prescribed by the regulations about the
11
lessee's right to:
12
(i) give a hardship notice under section 177B; or
13
(ii) give a postponement request under section 179H; or
14
(iii) make an application to the court under sections 177D
15
and 179K; and
16
(f) the information prescribed by the regulations about:
17
(i) the approved external dispute resolution scheme of
18
which the lessor is a member; and
19
(ii) the lessee's rights under that scheme; and
20
(g) that a subsequent default of the same kind that occurs during
21
the period specified for remedying the original default may
22
be the subject of enforcement proceedings without further
23
notice if it is not remedied within the period; and
24
(h) that, under the Privacy Act 1988, the debt may be included in
25
a credit reporting agency's credit information file about the
26
lessee if:
27
(i) the debt remains overdue for 60 days or more; and
28
(ii) the lessor has taken steps to recover all or part of the
29
debt; and
30
(i) any other information prescribed by the regulations.
31
When default notice not required
32
(3) A lessor is not required to give a default notice or to wait until the
33
period specified in the default notice has elapsed, before beginning
34
enforcement proceedings, if:
35
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, 2011 83
(a) the lessor reasonably believes that it was induced by fraud on
1
the part of the lessee to enter into the consumer lease; or
2
(b) the lessor has made reasonable attempts to locate the lessee
3
but without success; or
4
(c) the court authorises the lessor to begin the enforcement
5
proceedings; or
6
(d) the lessor reasonably believes that the lessee has disposed of
7
goods hired under the lease, or intends to dispose of such
8
goods, contrary to the terms of the lease; or
9
(e) the lessee becomes insolvent after entering into the consumer
10
lease.
11
Non-remedial default
12
(4) If the lessor reasonably believes that a default is not capable of
13
being remedied:
14
(a) the default notice need only specify the default; and
15
(b) the lessor may begin the enforcement proceedings after the
16
period of 30 days from the date of the notice.
17
Strict liability
18
(5) Subsection (1) is an offence of strict liability.
19
Note:
For strict liability, see section 6.1 of the Criminal Code.
20
179E Defaults may be remedied
21
(1) If a default notice under section 179D states that the lessor intends
22
to take action because the lessee is in default under the consumer
23
lease, the lessee may remedy the default within the period specified
24
in the notice, and the lease is then reinstated and any acceleration
25
clause cannot operate.
26
(2) A lessee does not remedy the default if, at the end of the period, the
27
lessee is in default under the consumer lease because of the breach
28
specified in the notice or because of a subsequent breach of the
29
same type.
30
179F Effect of hardship notices on enforcement
31
(1) This section applies if:
32
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84 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(a) a lessor is required to give a default notice under
1
section 179D before beginning enforcement proceedings; and
2
(b) before or after the lessor gives the default notice, the lessee
3
gives the lessor a hardship notice (the current hardship
4
notice) under section 177B; and
5
(c)
either:
6
(i) in the 4 months before the current hardship notice is
7
given, the lessee had not given the lessor another
8
hardship notice; or
9
(ii) in that 4-month period, the lessee had given the lessor
10
one or more other hardship notices, but the lessor
11
reasonably believes that the basis on which the current
12
hardship notice was given is materially different from
13
the bases on which the other hardship notices were
14
given.
15
(2) The lessor must not begin enforcement proceedings against the
16
lessee unless:
17
(a) the lessor has given the lessee a notice under paragraph
18
177B(2)(b), in response to the current hardship notice; stating
19
that the lessor does not agree to negotiate a change to the
20
consumer lease; and
21
(b) the period of 14 days, starting on the day the lessor gave the
22
notice under paragraph 177B(2)(b), has expired.
23
Criminal penalty:
50 penalty units.
24
Note:
The lessor must allow the lessee at least 30 days from the date of the
25
default notice to remedy the default--see section 179D. The 14-day
26
period in subsection (2) may end before, at the same time as, or after
27
the end of the period for remedying the default specified in the default
28
notice.
29
(3) However, the lessor may take possession of goods hired under a
30
consumer lease if the lessor reasonably believes that:
31
(a) the lessee has removed or disposed of the goods, or intends to
32
remove or dispose of them; or
33
(b) urgent action is necessary to protect the goods.
34
(4) Subsection (2) is an offence of strict liability.
35
Note:
For strict liability, see section 6.1 of the Criminal Code.
36
Consumer leases Schedule 5
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 85
179G Requirements to be met before lessor can enforce an
1
acceleration clause
2
(1) An acceleration clause of a consumer lease is to operate only if:
3
(a) the lessee is in default under the lease; and
4
(b) the lessor has given to the lessee a default notice under
5
section 179D; and
6
(c) the default notice contains an additional statement of:
7
(i) the manner in which the liabilities of the lessee under
8
the consumer lease would be affected by the operation
9
of the acceleration clause; and
10
(ii) the amount required to terminate the lease (as
11
accelerated); and
12
(d) the default has not been remedied within the period specified
13
in the default notice (unless the lessor reasonably believes
14
that the default is not capable of being remedied).
15
(2) However, a lessor is not required to give a default notice under
16
section 179D or to wait until the period specified in the default
17
notice has elapsed before bringing an acceleration clause into
18
operation, if:
19
(a) the lessor reasonably believes that it was induced by fraud on
20
the part of the lessee to enter into the consumer lease; or
21
(b) the lessor has made reasonable attempts to locate the lessee
22
but without success; or
23
(c) the court authorises the lessor not to do so; or
24
(d) the lessor reasonably believes that the lessee has removed or
25
disposed of goods hired under a consumer lease, or intends to
26
remove or dispose of goods hired under the lease, or that
27
urgent action is necessary to protect the goods.
28
Subdivision D--Postponement of enforcement proceedings
29
179H Postponement of exercise of rights
30
Postponement request
31
(1) A lessee who has been given a default notice under section 179D
32
may, at any time before the end of the period specified in the
33
Schedule 5 Consumer leases
86 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
notice, request (a postponement request), orally or in writing, that
1
the lessor negotiate a postponement of:
2
(a) the enforcement proceedings; or
3
(b) any action taken under such proceedings; or
4
(c) the operation of any applicable acceleration clause.
5
Lessor's notice about postponement
6
(2) If the lessee gives the postponement request, the lessor must,
7
within 21 days after the day of receiving the request, give the
8
person a written notice:
9
(a) that states whether or not the lessor agrees to negotiate a
10
postponement; and
11
(b) if the lessor does not agree to negotiate--that states:
12
(i) the name of the approved external dispute resolution
13
scheme of which the lessor is a member; and
14
(ii) the person's rights under that scheme; and
15
(iii) the reasons for not agreeing to negotiate.
16
Criminal penalty:
30 penalty units.
17
Enforcement proceedings
18
(3) If the lessee gives the postponement request, the lessor must not
19
begin enforcement proceedings unless:
20
(a) the lessor has given the lessee a notice under subsection (2)
21
in response to the postponement request; and
22
(b) the period of 14 days, starting on the day the lessor gives the
23
notice under subsection (2), has expired.
24
Criminal penalty:
50 penalty units.
25
Note:
The lessor must allow the lessee at least 30 days from the date of the
26
default notice to remedy the default--see section 179D. The 14-day
27
period in subsection (3) may end before, at the same time as, or after
28
the end of the period for remedying the default specified in the default
29
notice.
30
(4) However, the lessor may take possession of goods hired under the
31
consumer lease if the lessor reasonably believes that:
32
(a) the lessee has removed or disposed of the goods, or intends to
33
remove or dispose of them; or
34
(b) urgent action is necessary to protect the goods.
35
Consumer leases Schedule 5
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 87
Strict liability
1
(5) Subsections (2) and (3) are offences of strict liability.
2
Note:
For strict liability, see section 6.1 of the Criminal Code.
3
179J Effect of negotiated postponement
4
(1) A default notice under section 179D is taken, for the purposes of
5
this Code, not to have been given if a postponement is negotiated
6
with the lessor under section 179H and the lessee complies with
7
the conditions of postponement.
8
(2) A lessor must give written notice of the conditions of a
9
postponement referred to in subsection (1) not later than 30 days
10
after agreement is reached on the postponement. The notice must
11
set out the consequences under subsection (5) if the conditions of
12
the postponement are not complied with.
13
Criminal penalty:
100 penalty units.
14
(3) Subsection (2) is an offence of strict liability.
15
Note:
For strict liability, see section 6.1 of the Criminal Code.
16
(4) A lessor that is required to give notice under section 177A (which
17
deals with changes to leases by agreement) in relation to a
18
postponement is not required to comply with subsection (2).
19
(5) If any of the conditions of a postponement are not complied with, a
20
lessor is not required to give a further default notice under this
21
Code to the lessee with whom the postponement was negotiated
22
before proceeding with enforcement proceedings.
23
179K Postponement by court
24
(1) If the lessee is unable to negotiate a postponement, the lessee may
25
apply to the court for a postponement.
26
(2) After allowing the applicant and the lessor a reasonable
27
opportunity to be heard, the court may:
28
(a) order the postponement to which the application relates; or
29
(b) refuse to order the postponement; or
30
(c) make such other orders as it thinks fit.
31
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88 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(3) The court may, if it thinks it appropriate in the circumstances, stay
1
any enforcement proceedings under the consumer lease until the
2
application has been determined.
3
179L Lessor may apply for variation of postponement order
4
(1) A lessor that is subject to an order under this Subdivision may
5
apply to the court for variation of the order.
6
(2) On such an application, the court may:
7
(a) vary the order to which the application relates as it thinks fit;
8
or
9
(b) refuse to vary the order; or
10
(c) revoke the order.
11
Subdivision E--Enforcement procedures for goods hired under
12
a consumer lease
13
179M Information as to location of goods hired under a consumer
14
lease
15
(1) A lessor may, by written notice to a lessee, require the lessee to
16
inform the lessor, within 7 days after the day the notice is given to
17
the lessee, where the goods hired under the consumer lease are and,
18
if the goods are not in the lessee's possession, to give the lessor all
19
information in the lessee's possession that might assist the lessor to
20
trace the goods.
21
(2) A lessee who contravenes a notice under this section commits an
22
offence.
23
Criminal penalty:
50 penalty units.
24
(3) Subsection (2) is an offence of strict liability.
25
Note:
For strict liability, see section 6.1 of the Criminal Code.
26
179N Entry to residential property to take possession of goods
27
(1) A lessor, or an agent of a lessor, must not enter any part of
28
premises used for residential purposes for the purpose of taking
29
possession of goods hired under a consumer lease unless:
30
(a) the court has authorised the entry; or
31
Consumer leases Schedule 5
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 89
(b) the occupier of the premises has, after being informed in
1
writing of the provisions of this section, consented in writing
2
to the entry.
3
(2) The regulations may provide for procedures for the obtaining and
4
giving of consent for the purposes of this section and may set out
5
the circumstances in which consent is or is not taken to have been
6
given.
7
(3) If premises are entered in contravention of this section by a lessor
8
or an agent of a lessor, the lessor commits an offence.
9
Criminal penalty:
50 penalty units.
10
(4) Subsection (3) is an offence of strict liability.
11
Note:
For strict liability, see section 6.1 of the Criminal Code.
12
179P Court may order entry
13
The court may, on the application of a lessor that is entitled to take
14
possession of goods hired under a consumer lease, authorise the
15
lessor to enter residential premises for the purpose of taking
16
possession of the goods.
17
179Q Order for possession
18
(1) The court may, on the application of a lessor that is entitled to take
19
possession of goods hired under a consumer lease, order a person
20
who has possession of the goods to deliver them to the lessor:
21
(a) at a specified time or place; or
22
(b) within a specified period.
23
(2) The court may, on the application of a lessor or other person
24
required to deliver goods to a lessor, by order vary the place at
25
which or time or period within which goods must be delivered to
26
the lessor.
27
(3) A person who contravenes an order under this section commits an
28
offence.
29
Criminal penalty:
30 penalty units.
30
(4) Subsection (3) is an offence of strict liability.
31
Schedule 5 Consumer leases
90 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Note:
For strict liability, see section 6.1 of the Criminal Code.
1
Subdivision F--Enforcement expenses
2
179R Recovery of enforcement expenses
3
(1) A lessor must not recover or seek to recover enforcement expenses
4
from a lessee in excess of those reasonably incurred by the lessor.
5
Enforcement expenses of a lessor extend to those reasonably
6
incurred by the use of the staff and facilities of the lessor.
7
(2) Any provision of the consumer lease that appears to confer a
8
greater right is void. If enforcement expenses are in fact recovered
9
in excess of this limitation, they may be recovered back.
10
(3) If there is a dispute between the lessor and the lessee about the
11
amount of enforcement expenses that may be recovered by the
12
lessor, the court may, on application by any of the parties to the
13
dispute, determine the amount of that liability.
14
Division 9--Linked lessors and tied consumer leases
15
Subdivision A--Interpretation and application
16
179S Linked lessors and tied consumer leases
17
(1) For the purposes of this Code, a linked lessor of a supplier means a
18
lessor:
19
(a) with whom the supplier has a contract, arrangement or
20
understanding relating to:
21
(i) the supply to the supplier of goods in which the supplier
22
deals; or
23
(ii) the business carried on by the supplier of supplying
24
goods; or
25
(iii) the provision to persons of a consumer lease for the hire
26
of goods supplied by the supplier to the lessor; or
27
(b) to whom the supplier, by arrangement with the lessor,
28
regularly refers persons for the purpose of being provided
29
with a consumer lease; or
30
Consumer leases Schedule 5
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 91
(c) whose forms of contract or forms of application or offers for
1
a consumer lease are, by arrangement with the lessor, made
2
available to persons by the supplier; or
3
(d) with whom the supplier has a contract, arrangement or
4
understanding under which applications for a consumer lease
5
or offers to be provided with a consumer lease from the
6
lessor may be signed by persons at the premises of the
7
supplier.
8
(2)
A
tied consumer lease is a consumer lease entered into between a
9
lessor and a lessee where:
10
(a) the lessee enters into the lease to hire goods supplied by the
11
supplier to the lessor; and
12
(b) at the time the lease is entered into the lessor is a linked
13
lessor of the supplier.
14
Subdivision B--Liability of lessors for suppliers'
15
misrepresentations
16
179T Lessor liable for supplier's misrepresentations about hired
17
goods
18
(1) If there is a tied consumer lease, any representation, warranty or
19
statement made (whether orally or in writing) by the supplier, or
20
any person acting on behalf of the supplier, to the lessee in relation
21
to:
22
(a) goods hired under the lease; or
23
(b) the lease; or
24
(c) services, supplied or arranged by the lessor, that are
25
incidental to the hire of goods under the lease;
26
gives the lessee the same rights against the lessor as the lessee
27
would have had if it had been made by the lessor.
28
(2) Without prejudice to any other rights or remedies to which a lessor
29
may be entitled, a lessor is entitled to be indemnified by the person
30
who made the representation, warranty or statement, and any
31
person on whose behalf it was made, against any damage suffered
32
by the lessor through the operation of this section.
33
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92 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Division 10--Conduct relating to consumer leases
1
179U False or misleading representations
2
(1) A person must not make a false or misleading representation:
3
(a) in relation to a matter that is material to entry into a
4
consumer lease or a related transaction; or
5
(b) in attempting to induce another person to enter into a
6
consumer lease or a related transaction.
7
Criminal penalty:
50 penalty units.
8
(2) It is a defence to prosecution for an offence against this section if a
9
person charged proves that he or she reasonably believed that the
10
representation was not false or misleading.
11
(3) A person who suffers loss as a result of a contravention of this
12
section by another person may recover the amount of the loss from:
13
(a) that other person; or
14
(b) any other person involved in the contravention.
15
179V Harassment
16
A lessor or supplier must not harass a person in attempting to get
17
that person to:
18
(a) apply for a consumer lease; or
19
(b) enter into a consumer lease or a related transaction.
20
Criminal penalty:
100 penalty units.
21
Division 11--Other Code provisions applicable to
22
consumer leases
23
179W Application of certain Code provisions to consumer leases
24
(1) Part 12 (relating to miscellaneous matters) and subsection 204(2)
25
(definition of associated) apply in relation to a consumer lease in
26
the same way as they apply in relation to a credit contract.
27
(2) For the purposes of the application of those provisions:
28
Consumer leases Schedule 5
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 93
(a) references to a credit provider are to be read as references to
1
a lessor; and
2
(b) references to a debtor are to be read as references to a lessee;
3
and
4
(c) references to a credit contract or contract are to be read as
5
references to a consumer lease; and
6
(d) references to a linked credit provider are to be read as
7
references to a linked lessor.
8
25 Subsection 204(1) of the National Credit Code (definition
9
of acceleration clause)
10
Repeal the definition, substitute:
11
acceleration clause means:
12
(a) in relation to a credit contract or mortgage--a term of a credit
13
contract or mortgage providing that:
14
(i) on the occurrence or non-occurrence of a particular
15
event, the credit provider becomes entitled to immediate
16
payment of all, or a part, of an amount under the
17
contract that would not otherwise have been
18
immediately payable; or
19
(ii) whether or not on the occurrence or non-occurrence of a
20
particular event, the credit provider has a discretion to
21
require repayment of the amount of credit otherwise
22
than by repayments fixed, or determined on a basis
23
stated, in the contract;
24
but does not include any such term in a credit contract or
25
mortgage that is an on demand facility; or
26
(b) in relation to a consumer lease--a term of a consumer lease
27
providing that:
28
(i) on the occurrence or non-occurrence of a particular
29
event, the lessor becomes entitled to immediate payment
30
of all, or a part, of an amount under the lease that would
31
not otherwise have been immediately payable; or
32
(ii) whether or not on the occurrence or non-occurrence of a
33
particular event, the lessor has a discretion to require
34
payment of an amount payable under a lease otherwise
35
than by repayments fixed, or determined on a basis
36
stated, in the lease.
37
Schedule 5 Consumer leases
94 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
26 Subsection 204(1) of the National Credit Code
1
Insert:
2
Bulk Electronic Clearing System means the system established by
3
the Australian Payments Clearing Association to manage the
4
conduct of the exchange and settlement of bulk electronic low
5
value transactions and includes any replacement system.
6
27 Subsection 204(1) of the National Credit Code
7
Insert:
8
consumer lease fees or charges means fees or charges payable in
9
connection with a consumer lease, but does not include:
10
(a) enforcement expenses; or
11
(b) government charges, or duties, on receipts or withdrawals.
12
28 Subsection 204(1) of the National Credit Code (definition
13
of default notice)
14
Repeal the definition, substitute:
15
default notice:
16
(a) in relation to credit contracts, mortgages and guarantees--see
17
section 88; and
18
(b) in relation to consumer leases--see section 179D.
19
29 Subsection 204(1) of the National Credit Code
20
Insert:
21
direct debit, in relation to the payment of an amount, means the
22
debiting of an amount against an account with a financial
23
institution that is processed through the Bulk Electronic Clearing
24
System, as specified and authorised in writing by:
25
(a) in relation to the payment by a debtor of an amount for a
26
credit contract--the debtor; and
27
(b) in relation to the payment by a lessee of an amount for a
28
consumer lease--the lessee.
29
30 Subsection 204(1) of the National Credit Code (definition
30
of enforcement proceedings)
31
Repeal the definition, substitute:
32
Consumer leases Schedule 5
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 95
enforcement proceedings means:
1
(a) for a credit contract, consumer lease or guarantee--
2
proceedings in a court to recover a payment due under the
3
contract, lease or guarantee; or
4
(b) for a consumer lease or mortgage--taking possession of
5
property under the lease or mortgage; or
6
(c) for a mortgage--taking any other action to enforce the
7
mortgage.
8
31 Subsection 204(1) of the National Credit Code
9
Insert:
10
hardship notice:
11
(a) in relation to credit contracts--see subsection 72(1); and
12
(b) in relation to consumer leases--see subsection 177B(1).
13
32 Subsection 204(1) of the National Credit Code
14
Insert:
15
lessee means the lessee under a consumer lease to which Part 11
16
applies, and includes a prospective lessee.
17
33 Subsection 204(1) of the National Credit Code
18
Insert:
19
lessor means the lessor under a consumer lease to which Part 11
20
applies, and includes a prospective lessor.
21
34 Subsection 204(1) of the National Credit Code
22
Insert:
23
linked lessor: see subsection 179S(1).
24
35 Subsection 204(1) of the National Credit Code
25
Insert:
26
on demand facility means a credit contract or mortgage under
27
which:
28
(a) the total amount outstanding under the contract or mortgage
29
is repayable at any time on demand by the credit provider;
30
and
31
Schedule 5 Consumer leases
96 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
(b) there is no agreement, arrangement or understanding between
1
the credit provider and the debtor or mortgagor that
2
repayment will only be demanded on the occurrence or
3
non-occurrence of a particular event.
4
36 Subsection 204(1) of the National Credit Code
5
Insert:
6
postponement request:
7
(a) in relation to credit contracts, mortgages or guarantees--see
8
subsection 94(1); and
9
(b) in relation to consumer leases--see subsection 179H(1).
10
37 Subsection 204(1) of the National Credit Code
11
Insert:
12
tied consumer lease: see subsection 179S(2).
13
38 Subsection 204(1) of the National Credit Code
14
Insert:
15
unjust includes unconscionable, harsh or oppressive.
16
17
Application provisions Schedule 6
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 97
Schedule 6--Application provisions
1
2
National Consumer Credit Protection (Transitional and
3
Consequential Provisions) Act 2009
4
1 Schedule 4 (heading)
5
Repeal the heading, substitute:
6
Schedule 4--Application and transitional
7
provisions for the National Consumer
8
Credit Protection Amendment (Home
9
Loans and Credit Cards) Act 2011
10
2 Part 1 of Schedule 4 (heading)
11
Repeal the heading.
12
3 Item 1 of Schedule 4
13
Omit "In this Part", substitute "In this Schedule".
14
4 At the end of the Act
15
Add:
16
Schedule 5--Application provisions for the
17
Consumer Credit and Corporations
18
Legislation Amendment
19
(Enhancements) Act 2011
20
Part 1--Definition
21
1 Definition
22
In this Schedule:
23
amending Act means the Consumer Credit and Corporations
24
Legislation Amendment (Enhancements) Act 2011.
25
Schedule 6 Application provisions
98 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Part 2--Schedule 1 (enhancements) to the amending
1
Act
2
2 Section 128 of the National Credit Act
3
The amendments of section 128 of the National Credit Act made by
4
Schedule 1 to the amending Act apply in relation to representations
5
made on or after the commencement of that Schedule.
6
3 Section 180A of the National Credit Act
7
Section 180A of the National Credit Act, as inserted by Schedule 1 to
8
the amending Act, applies in relation to credit services provided on or
9
after the commencement of that Schedule.
10
4 Sections 32 and 40 of the new Credit Code
11
The amendments of sections 32 and 40 of the new Credit Code made by
12
Schedule 1 to the amending Act apply in relation to credit contracts
13
entered into on or after the commencement of that Schedule.
14
5 Sections 72, 73, 74 and 88 of the new Credit Code
15
The amendments of sections 72, 73, 74 and 88 of the new Credit Code
16
made by Schedule 1 to the amending Act apply in relation to credit
17
contracts made on or after the commencement of that Schedule.
18
6 Section 89A of the new Credit Code
19
Section 89A of the new Credit Code, as inserted by Schedule 1 to the
20
amending Act, applies in relation to credit contracts, mortgages and
21
guarantees entered into on or after the commencement of that Schedule.
22
7 Section 94 of the new Credit Code
23
The amendments of section 94 of the new Credit Code made by
24
Schedule 1 to the amending Act apply in relation to credit contracts,
25
mortgages and guarantees entered into on or after the commencement of
26
that Schedule.
27
8 Section 124 of the new Credit Code
28
The amendments of section 124 of the new Credit Code made by
29
Schedule 1 to the amending Act apply in relation to applications made
30
on or after the commencement of that Schedule, whether the
31
contraventions occurred before, on or after that commencement.
32
Application provisions Schedule 6
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 99
Part 3--Schedule 2 (reverse mortgages) to the
1
amending Act
2
9 Subsections 179(6) and (7) of the National Credit Act
3
Subsections 179(6) and (7) of the National Credit Act, as inserted by
4
Schedule 2 to the amending Act, apply in relation to credit contracts
5
entered into on or after the commencement of that Schedule.
6
10 Subsection 17(15A) of the new Credit Code
7
Subsection 17(15A) of the new Credit Code, as inserted by Schedule 2
8
to the amending Act, applies in relation to credit contracts entered into
9
on or after the commencement of that Schedule.
10
11 Section 18A of the new Credit Code
11
Section 18A of the new Credit Code, as inserted by Schedule 2 to the
12
amending Act, applies to entry into, and changes to, credit contracts on
13
or after the commencement of that Schedule.
14
12 Subsection 26(6) of the new Credit Code
15
Subsection 26(6) of the new Credit Code, as added by Schedule 2 to the
16
amending Act, applies in relation to credit contracts entered into on or
17
after the commencement of that Schedule.
18
13 Section 33 of the new Credit Code
19
The amendments of section 33 of the new Credit Code made by
20
Schedule 2 to the amending Act apply to credit contracts entered into
21
before, on or after the commencement of the Schedule.
22
14 Section 67A of the new Credit Code
23
Section 67A of the new Credit Code, as inserted by Schedule 2 to the
24
amending Act, applies in relation to credit contracts entered into on or
25
after the commencement of that Schedule.
26
15 Subdivision B of Division 1 of Part 5 of the new Credit
27
Code
28
Subdivision B of Division 1 of Part 5 of the new Credit Code, as
29
inserted by Schedule 2 to the amending Act, applies in relation to credit
30
contracts and mortgages entered into on or after the commencement of
31
that Schedule.
32
Schedule 6 Application provisions
100 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
16 Subsections 88(1) and (2) of the new Credit Code
1
The amendment of subsections 88(1) and (2) of the new Credit Code
2
made by Schedule 2 to the amending Act applies to credit contracts and
3
mortgages entered into before, on or after the commencement of that
4
Schedule.
5
17 Subsections 88(7A) and (7B) of the new Credit Code
6
Subsections 88(7A) and (7B) of the new Credit Code, as inserted by
7
Schedule 2 to the amending Act, apply in relation to credit contracts and
8
mortgages entered into on or after the commencement of that Schedule.
9
18 Section 93A of the new Credit Code
10
Section 93A of the new Credit Code, as added by Schedule 2 to the
11
amending Act, applies in relation to credit contracts and mortgages
12
entered into on or after the commencement of that Schedule.
13
19 Section 185A of the new Credit Code
14
Section 185A of the new Credit Code, as inserted by Schedule 2 to the
15
amending Act, applies in relation to credit contracts entered into on or
16
after the commencement of that Schedule.
17
Part 4--Schedule 3 (small amount credit contracts)
18
to the amending Act
19
20 Sections 124C and 133CD of the National Credit Act
20
Sections 124C and 133CD of the National Credit Act, as inserted by
21
Schedule 3 to the amending Act, apply in relation to small amount
22
credit contracts entered into on or after the commencement of that
23
Schedule.
24
Part 5--Schedule 4 (caps on costs etc. for credit
25
contracts) to the amending Act
26
21 Sections 23A, 31A, 39A and 39B and subsection 114(1A)
27
of the new Credit Code
28
Application provisions Schedule 6
Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 No.
, 2011 101
Sections 23A, 31A, 39A and 39B and subsection 114(1A) of the new
1
Credit Code, as inserted by Schedule 4 to the amending Act, apply in
2
relation to small amount credit contracts entered into on or after the
3
commencement of that Schedule.
4
Part 6--Schedule 5 (consumer leases) to the
5
amending Act
6
22 Subsection 199(2) of the National Credit Act
7
The amendments of subsection 199(2) of the National Credit Act made
8
by Schedule 5 to the amending Act apply in relation to consumer leases
9
entered into on or after the commencement of that Schedule.
10
23 Part 11 of the new Credit Code
11
The amendments in relation to Part 11 of the new Credit Code made by
12
Schedule 5 to the amending Act apply in relation to consumer leases
13
entered into on or after the commencement of that Schedule.
14
15
Schedule 7 Voting at AGMs of public companies
102 Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011
No. , 2011
Schedule 7--Voting at AGMs of public
1
companies
2
3
Corporations Act 2001
4
1 Subsection 250R(5)
5
Repeal the subsection, substitute:
6
(5) However, a person (the voter) described in subsection (4) may cast
7
a vote on the resolution as a proxy if the vote is not cast on behalf
8
of a person described in subsection (4) and either:
9
(a) the voter is appointed as a proxy by writing that specifies the
10
way the proxy is to vote on the resolution; or
11
(b) the voter is the chair of the meeting and the appointment of
12
the chair as proxy:
13
(i) does not specify the way the proxy is to vote on the
14
resolution; and
15
(ii) expressly authorises the chair to exercise the proxy even
16
if the resolution is connected directly or indirectly with
17
the remuneration of a member of the key management
18
personnel for the company or, if the company is part of
19
a consolidated entity, for the entity.
20

 


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