2008-2009 The Parliament of the Commonwealth of Australia HOUSE OF REPRESENTATIVES Presented and read a first time Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 (Treasury) A Bill for an Act to amend the Trade Practices Act 1974 and the Australian Securities and Investments Commission Act 2001, and for other purposes [Page Break] 1 Short title ............................................................................................ 1 2 Commencement .................................................................................. 1 3 Schedule(s) ......................................................................................... 3 Schedule 1--The Australian Cons umer Law 4 Part 1--Unfair and prohibited contract terms 4 Trade Practices Act 1974 4 Part 2--Application of the Australian Consumer Law 11 Trade Practices Act 1974 11 Schedule 2--Enforcement and re medies under the Trade Practices Act 1974 20 Part 1--Pecuniary penalties 20 Trade Practices Act 1974 20 Part 2--Disqualification orders 25 Trade Practices Act 1974 25 Part 3--Substantiation notices 26 Trade Practices Act 1974 26 Part 4--Orders to redress loss or damage suffered by non-party consumers etc. 30 Trade Practices Act 1974 30 Part 5--Infringement notices 35 Trade Practices Act 1974 35 Part 6--Public warning notices 42 Trade Practices Act 1974 42 Part 7--Enforcement and remedies relating to the Australian Consumer Law 44 Trade Practices Act 1974 44 Schedule 3--Amendme nt of corporations legislation 51 Part 1--Unfair and prohibited contract terms 51 i Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Part 2--Pecuniary penalties 58 Australian Securities and Investments Commission Act 2001 58 Part 3--Disqualification orders 63 Australian Securities and Investments Commission Act 2001 63 Corporations Act 2001 63 Part 4--Substantiation notices 65 Australian Securities and Investments Commission Act 2001 65 Part 5--Orders to redress loss or damage suffered by non-party consumers etc. 68 Australian Securities and Investments Commission Act 2001 68 Part 6--Infringement notices 72 Australian Securities and Investments Commission Act 2001 72 Part 7--Public warning notices 78 Australian Securities and Investments Commission Act 2001 78 Part 8--Enforcement and remedies relating to unfair and prohibited contract terms 79 Australian Securities and Investments Commission Act 2001 79 Part 9--Miscellaneous 83 Australian Securities and Investments Commission Act 2001 83 Schedule 4--Miscellaneous 84 Administrative Decisions (Judicial Review) Act 1977 84 Telecommunications (Interception and Access) Act 1979 84 Trade Practices Act 1974 84 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 ii [Page Break] 2 1974 and the Australian Securities and Investments 3 Commission Act 2001, and for other purposes 4 The Parliament of Australia enacts: 5 1 Short title 6 This Act may be cited as the Trade Practices Amendment 7 (Australian Consumer Law) Act 2009. 8 2 Commence ment 9 (1) Each provision of this Act specified in column 1 of the table 10 commences, or is taken to have commenced, in accordance with 11 column 2 of the table. Any other statement in column 2 has effect 12 according to its terms. 13 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 1 [Page Break] Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 3 The day on which this Act receives the and anything in Royal Assent. this Act not elsewhere covered by this table 2. Schedule 1 A single day to be fixed by Proclamat ion. However, if any of the provision(s) do not commence with in the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period. 3. Schedule 2, The day after this Act receives the Royal Parts 1 to 6 Assent. 4. Schedule 2, At the same time as the provision(s) covered items 27 to 39 by table item 2. 5. Schedule 2, At the same time as the provision(s) covered item 40 by table item 2. However, if Schedule 1 to the Statute Stocktake (Regulatory and Other Laws) Act 2009 commences before that time, the provision(s) do not commence at all. 6. Schedule 2, The later of: item 41 (a) the same time as the provision(s) covered by table item 2; and (b) immed iately after the commencement of Schedule 1 to the Statute Stocktake (Regulatory and Other Laws) Act 2009. However, the provision(s) do not commence at all if the event mentioned in paragraph (b ) does not occur. 7. Schedule 2, At the same time as the provision(s) covered items 42 to 75 by table item 2. 8. Schedule 3, At the same time as the provision(s) covered Part 1 by table item 2. 9. Schedule 3, The day after this Act receives the Royal Parts 2 to 7 Assent. 2 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 10. Schedule 3, At the same time as the provision(s) covered Part 8 by table item 2. 11. Schedule 3, The day after this Act receives the Royal Part 9 Assent. 12. Schedule 4, At the same time as the provision(s) covered items 1 and 2 by table item 2. 13. Schedule 4, The day after this Act receives the Royal item 3 Assent. 14. Schedule 4, At the same time as the provision(s) covered items 4 and 5 by table item 2. 1 Note: This table relates only to the provisions of this Act as originally 2 passed by both Houses of the Parliament and assented to. It will not be 3 expanded to deal with provisions inserted in this Act after assent. 4 (2) Column 3 of the table contains additional information that is not 5 part of this Act. Information in this column may be added to or 6 edited in any published version of this Act. 7 3 Schedule(s) 8 Each Act that is specified in a Schedule to this Act is amended or 9 repealed as set out in the applicable items in the Schedule 10 concerned, and any other item in a Schedule to this Act has effect 11 according to its terms. 12 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 3 [Page Break] Part 1 Un fair and prohibited contract terms 1 Schedule 1--The Australian Consumer Law 2 Part 1--Unfair and prohibited contract terms 3 Trade Practices Act 1974 4 1 At the end of the Act 5 Add: 6 Schedule 2--The Australian Consumer Law 7 Note: See section 130. 8 Part 1--Preliminary 9 10 1 Definitions 11 In this Schedule: 12 constitution has the meaning given by the Corporations Act 2001. 13 consumer contract: see section 2(3). 14 interest, in relation to land, means: 15 (a) a legal or equitable estate or interest in the land; or 16 (b) a right of occupancy of the land, or of a building or part of a 17 building erected on the land, arising by virtue of the holding 18 of shares, or by virtue of a contract to purchase shares, in an 19 incorporated company that owns the land or building; or 20 (c) a right, power or privilege over, or in connection with, the 21 land. 22 prohibited term: see section 6(4). 23 rely on, in relation to a term of a consumer contract, includes the 24 following: 25 (a) attempt to enforce the term; 26 (b) attempt to exercise a right conferred, or purportedly 27 conferred, by the term; 4 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Unfair and prohibited contract terms Part 1 1 (c) assert the existence of a right conferred, or purportedly 2 conferred, by the term. 3 ship has the meaning given by the Admiralty Act 1988. 4 transparent, in relation to a term of a consumer contract: see 5 section 3(3). 6 unfair, in relation to a term of a consumer contract: see 7 section 3(1). 8 upfront price: see section 5(2). 9 Part 2--Unfair and prohibited contract terms 10 Division 1--Unfair terms 11 2 Unfair terms of consumer contracts 12 (1) A term of a consumer contract is void if: 13 (a) the term is unfair; and 14 (b) the contract is a standard form contract. 15 (2) The contract continues to bind the parties if it is capable of 16 operating without the unfair term. 17 (3) A consumer contract is a contract for: 18 (a) a supply of goods or services; or 19 (b) a sale or grant of an interest in land; 20 to an individual whose acquisition of the goods, services or interest 21 is wholly or predominantly for personal, domestic or household use 22 or consumption. 23 3 Meaning of unfair 24 (1) A term of a consumer contract is unfair if: 25 (a) it would cause a significant imbalance in the parties' rights 26 and obligations arising under the contract; and 27 (b) it is not reasonably necessary in order to protect the 28 legitimate interests of the party who would be advantaged by 29 the term. Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 5 [Page Break] Part 1 Un fair and prohibited contract terms 1 (2) In determining whether a term of a consumer contract is unfair 2 under subsection (1), a court may take into account such matters as 3 it thinks relevant, but must take into account the following: 4 (a) the extent to which the term would cause, or there is a 5 substantial likelihood that it would cause, detriment (whether 6 financial or otherwise) to a party if it were to be applied or 7 relied on; 8 (b) the extent to which the term is transparent; 9 (c) the contract as a whole. 10 (3) A term is transparent if the term is: 11 (a) expressed in reasonably plain language; and 12 (b) legible; and 13 (c) presented clearly; and 14 (d) readily available to any party affected by the term. 15 (4) For the purposes of subsection (1)(b), a term of a consumer 16 contract is presumed not to be reasonably necessary in order to 17 protect the legitimate interests of the party who would be 18 advantaged by the term, unless that party proves otherwise. 19 4 Examples of unfair terms 20 Without limiting section 3, the following are examples of the kinds 21 of terms of a consumer contract that may be unfair: 22 (a) a term that permits, or has the effect of permitting, one party 23 (but not another party) to avoid or limit performance of the 24 contract; 25 (b) a term that permits, or has the effect of permitting, one party 26 (but not another party) to terminate the contract; 27 (c) a term that penalises, or has the effect of penalising, one 28 party (but not another party) for a breach or termination of 29 the contract; 30 (d) a term that permits, or has the effect of permitting, one party 31 (but not another party) to vary the terms of the contract; 32 (e) a term that permits, or has the effect of permitting, one party 33 (but not another party) to renew or not renew the contract; 34 (f) a term that permits, or has the effect of permitting, one party 35 to vary the upfront price payable under the contract without 36 the right of another party to terminate the contract; 6 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Unfair and prohibited contract terms Part 1 1 (g) a term that permits, or has the effect of permitting, one party 2 unilaterally to vary the characteristics of the goods or 3 services to be supplied, or the interest in land to be sold or 4 granted, under the contract; 5 (h) a term that permits, or has the effect of permitting, one party 6 unilaterally to determine whether the contract has been 7 breached or to interpret its meaning; 8 (i) a term that limits, or has the effect of limiting, one party's 9 vicarious liability for its agents; 10 (j) a term that permits, or has the effect of permitting, one party 11 to assign the contract to the detriment of another party 12 without that other party's consent; 13 (k) a term that limits, or has the effect of limiting, one party's 14 right to sue another party; 15 (l) a term that limits, or has the effect of limiting, the evidence 16 one party can adduce in proceedings relating to the contract; 17 (m) a term that imposes, or has the effect of imposing, the 18 evidential burden on one party in proceedings relating to the 19 contract; 20 (n) a term of a kind, or a term that has an effect of a kind, 21 prescribed by the regulations. 22 5 Terms that define main subject matte r of consume r contracts etc. 23 are unaffected 24 (1) Section 2 does not apply to a term of a consumer contract to the 25 extent that, but only to the extent that, the term: 26 (a) defines the main subject matter of the contract; or 27 (b) sets the upfront price payable under the contract; or 28 (c) is a term required, or expressly permitted, by a law of the 29 Commonwealth or a State or Territory. 30 (2) The upfront price payable under a consumer contract is the 31 consideration that: 32 (a) is provided, or is to be provided, for the supply, sale or grant 33 under the contract; and 34 (b) is disclosed at or before the time the contract is entered into; 35 but does not include any other consideration that is contingent on 36 the occurrence or non-occurrence of a particular event. Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 7 [Page Break] Part 1 Un fair and prohibited contract terms 1 Division 2--Prohibited terms 2 6 Prohibited terms of cons umer contracts 3 (1) A term of a consumer contract is void if: 4 (a) the term is a prohibited term; and 5 (b) the contract is a standard form contract. 6 (2) A person must not include, or purport to include, a prohibited term 7 in a consumer contract that is a standard form contract. 8 Note: A pecuniary penalty may be imposed for a contravention of this 9 subsection. 10 (3) A person must not apply or rely on, or purport to apply or rely on, 11 a prohibited term of a consumer contract that is a standard form 12 contract. 13 Note: A pecuniary penalty may be imposed for a contravention of this 14 subsection. 15 (4) A prohibited term of a consumer contract is a term of a kind 16 prescribed by the regulations. 17 (5) The contract continues to bind the parties if it is capable of 18 operating without the prohibited term. 19 Division 3--Miscellaneous 20 7 Standard form contracts 21 (1) If a party to a proceeding alleges that a contract is a standard form 22 contract, it is presumed to be a standard form contract unless 23 another party to the proceeding proves otherwise. 24 (2) In determining whether a contract is a standard form contract, a 25 court may take into account such matters as it thinks relevant, but 26 must take into account the following: 27 (a) whether one of the parties has all or most of the bargaining 28 power relating to the transaction; 29 (b) whether the contract was prepared by one party before any 30 discussion relating to the transaction occurred between the 31 parties; 8 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Unfair and prohibited contract terms Part 1 1 (c) whether another party was, in effect, required either to accept 2 or reject the terms of the contract (other than the terms 3 referred to in section 5(1)) in the form in which they were 4 presented; 5 (d) whether another party was given an effective opportunity to 6 negotiate the terms of the contract that were not the terms 7 referred to in section 5(1); 8 (e) whether the terms of the contract (other than the terms 9 referred to in section 5(1)) take into account the specific 10 characteristics of another party or the particular transaction; 11 (f) any other matter prescribed by the regulations. 12 8 Contracts to which this Part does not apply 13 (1) This Part does not apply to: 14 (a) a contract of marine salvage or towage; or 15 (b) a charterparty of a ship; or 16 (c) a contract for the carriage of goods by ship. 17 (2) Without limiting subsection (1)(c), the reference in that subsection 18 to a contract for the carriage of goods by ship includes a reference 19 to any contract covered by a sea carriage document within the 20 meaning of the amended Hague Rules referred to in section 7(1) of 21 the Carriage of Goods by Sea Act 1991. 22 (3) This Part does not apply to a contract that is the constitution of a 23 company, managed investment scheme or other kind of body. 24 2 Application and transitional provisions 25 (1) Part 2 of Schedule 2 to the Trade Practices Act 1974 applies to a 26 contract entered into on or after the commencement of this Schedule. 27 (2) That Part does not apply to a contract entered into before the 28 commencement of this Schedule. However: 29 (a) if the contract is renewed on or after that commencement, 30 and paragraph (b) has not already applied in relation to the 31 contract--that Part applies to the contract as renewed, on and 32 from the day (the renewal day) on which the renewal takes 33 effect, in relation to conduct that occurs on or after the 34 renewal day; or Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 9 [Page Break] Part 1 Un fair and prohibited contract terms 1 (b) if a term of the contract is varied on or after that 2 commencement, and paragraph (a) has not already applied in 3 relation to the contract--that Part applies to the contract as 4 varied, on and from the day (the variation day) on which the 5 variation takes effect, in relation to conduct that occurs on or 6 after the variation day. 7 (3) Despite paragraphs (2)(a) and (b), that Part does not apply to a contract 8 to the extent that the operation of that Part would result in an acquisition 9 of property (within the meaning of paragraph 51(xxxi) of the 10 Constitution) from a person otherwise than on just terms (within the 11 meaning of that paragraph of the Constitution). 12 10 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Application of the Australian Consumer Law Part 2 1 Part 2--Application of the Australian Consumer Law 2 Trade Practices Act 1974 3 3 Subsection 4(1) 4 Insert: 5 Australian Consumer Law means Schedule 2. 6 4 Subsection 4(1) 7 Insert: 8 provision, of the Australian Consumer Law, has the meaning given 9 by section 4KB. 10 5 After section 4KA 11 Insert: 12 4KB References to the Australian Consume r Law etc. 13 (1) A reference in this Act (other than the provisions referred to in 14 subsection (2)) to the Australian Consumer Law is a reference to 15 the Australian Consumer Law as applied under Division 1 of 16 Part XI. 17 (2) Subsection (1) does not apply in relation to the following 18 provisions: 19 (a) the definitions of Australian Consumer Law and provision 20 in subsection 4(1); 21 (b) this section; 22 (c) Part XI; 23 (d) Schedule 2. 24 (3) A reference in this Act (other than in Part XI and Schedule 2) to 25 one or more provisions of the Australian Consumer Law is a 26 reference to that provision or those provisions as applied under 27 Division 1 of Part XI. Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 11 [Page Break] Part 2 Application of the Australian Consumer Law 1 4KC Contraventions of the Australian Consume r Law 2 Conduct is not taken, for the purposes of this Act, to contravene the 3 Australian Consumer Law merely because of subsection 2(1) or 4 6(1) of the Australian Consumer Law. 5 6 After paragraph 5(1)(e) 6 Insert: 7 (ea) the Australian Consumer Law; 8 Note: The heading to section 5 is replaced by the heading " Extended application of this Act 9 to conduct outside Australia". 10 7 Paragraph 5(1)(f) 11 Omit "or (e)", substitute ", (e) or (ea)". 12 8 At the end of subparagraphs 6(2)(a)(i) and (ii), (2)(b)(i) and 13 (ii) and (2)(c)(i) 14 Add "or". 15 Note: The heading to section 6 is replaced by the heading " Extended application of this Act 16 to persons who are not corporations". 17 9 After paragraph 6(2)(c) 18 Insert: 19 (ca) any reference in Part 2 of the Australian Consumer Law to a 20 contract were, by express provision, confined to a contract 21 made: 22 (i) in the course of, or in relation to, trade or commerce 23 between Australia and places outside Australia; or 24 (ii) in the course of, or in relation to, trade or commerce 25 among the States; or 26 (iii) in the course of, or in relation to, trade or commerce 27 within a Territory, between a State and a Territory or 28 between two Territories; and 29 10 After subsection 6(3) 30 Insert: 31 (3A) In addition to the effect that this Act, other than Parts IIIA, VIIA 32 and X, has as provided by subsection (2), the provisions of Part 2 12 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Application of the Australian Consumer Law Part 2 1 of the Australian Consumer Law have, by force of this subsection, 2 the effect they would have if: 3 (a) those provisions were, by express provision, confined in their 4 operation to contracts for or relating to: 5 (i) the use of postal, telegraphic or telephonic services; or 6 (ii) radio or television broadcasts; and 7 (b) a reference in the provisions of Part XI to a corporation 8 included a reference to a person not being a corporation. 9 11 After Part X 10 Insert: 11 Part XI--The Australian Consumer Law 12 Division 1--Application of the Australian Consumer Law 13 as a law of the Commonwealth 14 130 Application of the Australian Consume r Law in relation to 15 corporations 16 (1) The Australian Consumer Law applies as a law of the 17 Commonwealth to the conduct of corporations. 18 (2) Without limiting subsection (1), Part 2 of the Australian Consumer 19 Law also applies to, and in relation to, a consumer contract to 20 which a corporation is a party. 21 131 Division does not apply to financial services 22 (1) Despite section 130, this Division does not apply to the supply, or 23 possible supply, of services that are financial services. 24 (2) Despite section 130, Part 2 of the Australian Consumer Law does 25 not apply to, or in relation to, contracts for the supply, or possible 26 supply, of services that are financial services. 27 132 Saving of other laws and re medies 28 This Division is not intended to exclude or limit the concurrent 29 operation of any law of a State or Territory. Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 13 [Page Break] Part 2 Application of the Australian Consumer Law 1 Division 2--Application of the Australian Consumer Law 2 as a law of a State or Territory 3 133 Definitions 4 In this Division: 5 application law means: 6 (a) a law of a participating jurisdiction that applies the applied 7 Australian Consumer Law, either with or without 8 modifications, as a law of the participating jurisdiction; or 9 (b) any regulations or other legislative instrument made under a 10 law described in paragraph (a); or 11 (c) the applied Australian Consumer Law, applying as a law of 12 the participating jurisdiction, either with or without 13 modifications. 14 applied Australian Consumer Law means (according to the 15 context): 16 (a) the text described in section 135; or 17 (b) that text, applying as a law of a participating jurisdiction, 18 either with or without modifications. 19 apply, in relation to the applied Australian Consumer Law, means 20 apply the applied Australian Consumer Law by reference: 21 (a) as in force from time to time; or 22 (b) as in force at a particular time. 23 Commonwealth entity means: 24 (a) an authority of the Commonwealth; or 25 (b) an officer of the Commonwealth. 26 imposes a duty has the meaning given by section 140. 27 modifications includes additions, omissions and substitutions. 28 officer, in relation to the Commonwealth, includes the following: 29 (a) a Minister; 30 (b) a person who holds: 31 (i) an office established by or under an Act; or 32 (ii) an appointment made under an Act; or 14 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Application of the Australian Consumer Law Part 2 1 (iii) an appointment made by the Governor-General or a 2 Minister but not under an Act; 3 (c) a person who is a member or officer of an authority of the 4 Commonwealth; 5 (d) a person who is: 6 (i) in the service or employment of the Commonwealth, or 7 of an authority of the Commonwealth; or 8 (ii) employed or engaged under an Act. 9 participating jurisdiction means a participating State or 10 participating Territory. 11 participating State means a State that is a party to the 12 Intergovernmental Agreement for the Australian Consumer Law 13 and applies the applied Australian Consumer Law as a law of the 14 State, either with or without modifications. 15 participating Territory means a Territory that is a party to the 16 Intergovernmental Agreement for the Australian Consumer Law 17 and applies the applied Australian Consumer Law as a law of the 18 Territory, either with or without modifications. 19 Territory means the Australian Capital Territory or the Northern 20 Territory. 21 134 Object of this Division 22 The object of this Division is to facilitate the application of the 23 Australian Consumer Law by participating States and participating 24 Territories. 25 135 The applied Australian Consumer Law 26 (1) The applied Australian Consumer Law consists of: 27 (a) Schedule 2; and 28 (b) the remaining provisions of this Act (except sections 2A, 29 4KB, 5, 6 and 172), so far as they relate to Schedule 2; and 30 (c) the regulations under this Act, so far as they relate to any 31 provision covered by paragraph (a) or (b). 32 (2) For the purpose of forming part of the applied Australian 33 Consumer Law, the provisions referred to in paragraphs (1)(b) and Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 15 [Page Break] Part 2 Application of the Australian Consumer Law 1 (c) are to be modified as necessary to fit in with Schedule 2. In 2 particular, references to corporations are to include references to 3 persons who are not corporations. 4 136 Federal Court may exercise jurisdiction under application laws 5 of Territories 6 The Federal Court may exercise jurisdiction (whether original or 7 appellate) conferred on that Court by an application law of a 8 Territory with respect to matters arising under the applied 9 Australian Consumer Law. 10 137 Exercise of jurisdiction under cross-vesting provisions 11 This Division does not affect the operation of any other law of the 12 Commonwealth, or any law of a State or Territory, relating to 13 cross-vesting of jurisdiction. 14 138 Commonwealth consent to conferral of functions etc. on 15 Commonwealth e ntities 16 (1) An application law may confer functions or powers, or impose 17 duties, on a Commonwealth entity for the purposes of the applied 18 Australian Consumer Law. 19 Note: Section 140 sets out when such a law imposes a duty on a 20 Commonwealth entity. 21 (2) Subsection (1) does not authorise the conferral of a function or 22 power, or the imposition of a duty, by an application law to the 23 extent to which: 24 (a) the conferral or imposition, or the authorisation, would 25 contravene any constitutional doctrines restricting the duties 26 that may be imposed on the Commonwealth entity; or 27 (b) the authorisation would otherwise exceed the legislative 28 power of the Commonwealth. 29 (3) The Commonwealth entity cannot perform a duty or function, or 30 exercise a power, under an application law unless the conferral of 31 the function or power, or the imposition of the duty, is in 32 accordance with an agreement between the Commonwealth and the 33 State or Territory concerned. 16 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Application of the Australian Consumer Law Part 2 1 139 How duty is imposed 2 Application 3 (1) This section applies if an application law purports to impose a duty 4 on a Commonwealth entity. 5 Note: Section 140 sets out when such a law imposes a duty on a 6 Commonwealth entity. 7 State or Territory legislative power sufficient to support duty 8 (2) The duty is taken not to be imposed by this Act (or any other law 9 of the Commonwealth) to the extent to which: 10 (a) imposing the duty is within the legislative powers of the State 11 or Territory concerned; and 12 (b) imposing the duty by the law of the State or Territory is 13 consistent with the constitutional doctrines restricting the 14 duties that may be imposed on the entity. 15 Note: If this subsection applies, the duty will be taken to be imposed by 16 force of the law of the State or Territory (the Commonwealth having 17 consented under section 138 to the imposition of the duty by that law). 18 Commonwealth legislative power sufficient to support duty but 19 State or Territory legislative powers are not 20 (3) If, to ensure the validity of the purported imposition of the duty, it 21 is necessary that the duty be imposed by a law of the 22 Commonwealth (rather than by the law of the State or Territory), 23 the duty is taken to be imposed by this Act to the extent necessary 24 to ensure that validity. 25 (4) If, because of subsection (3), this Act is taken to impose the duty, it 26 is the intention of the Parliament to rely on all powers available to 27 it under the Constitution to support the imposition of the duty by 28 this Act. 29 (5) The duty is taken to be imposed by this Act in accordance with 30 subsection (3) only to the extent to which imposing the duty: 31 (a) is within the legislative powers of the Commonwealth; and 32 (b) is consistent with the constitutional doctrines restricting the 33 duties that may be imposed on the entity. 34 (6) Subsections (1) to (5) do not limit section 138. Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 17 [Page Break] Part 2 Application of the Australian Consumer Law 1 140 When an application law imposes a duty 2 For the purposes of this Division, an application law imposes a 3 duty on a Commonwealth entity if: 4 (a) the law confers a function or power on the entity; and 5 (b) the circumstances in which the function or power is conferred 6 give rise to an obligation on the entity to perform the function 7 or to exercise the power. 8 141 Application laws may operate concurrently with this Act 9 This Act is not intended to exclude the operation of any application 10 law, to the extent that the application law is capable of operating 11 concurrently with this Act. 12 142 No doubling-up of liabilities 13 (1) If: 14 (a) an act or omission is an offence against this Act and is also 15 an offence against an application law; and 16 (b) the offender has been punished for the offence under the 17 application law; 18 the offender is not liable to be punished for the offence against this 19 Act. 20 (2) If a person has been ordered to pay a pecuniary penalty under an 21 application law, the person is not liable to a pecuniary penalty 22 under this Act in respect of the same conduct. 23 Division 3--Miscellaneous 24 143 References in instruments to the Australian Consume r Law 25 (1) A reference in any instrument to the Australian Consumer Law is a 26 reference to: 27 (a) the Australian Consumer Law as applied under Division 1; 28 and 29 (b) the applied Australian Consumer Laws of any or all of the 30 participating jurisdictions. 18 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Application of the Australian Consumer Law Part 2 1 (2) Subsection (1) has effect except so far as the contrary intention 2 appears in the instrument or the context of the reference otherwise 3 requires. 4 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 19 [Page Break] Part 1 Pecuniary penalties 1 Schedule 2--Enforcement and remedies 2 under the Trade Practices Act 1974 3 Part 1--Pecuniary penalties 4 Trade Practices Act 1974 5 1 Before section 77 6 Insert: 7 76E Pecuniary penalties--consumer protection etc. 8 (1) If the Court is satisfied that a person: 9 (a) has contravened any of the following provisions: 10 (i) a provision of Part IVA; 11 (ii) a provision of Division 1 or 1AAA of Part V (other than 12 section 52); 13 (iii) subsection 65C(1) or (3), 65D(1) or 65F(8), section 65G 14 or subsection 65Q(9), (9C) or (10) or 65R(1); 15 (iv) section 87ZN or 87ZO; or 16 (b) has attempted to contravene such a provision; or 17 (c) has aided, abetted, counselled or procured a person to 18 contravene such a provision; or 19 (d) has induced, or attempted to induce, a person, whether by 20 threats or promises or otherwise, to contravene such a 21 provision; or 22 (e) has been in any way, directly or indirectly, knowingly 23 concerned in, or party to, the contravention by a person of 24 such a provision; or 25 (f) has conspired with others to contravene such a provision; 26 the Court may order the person to pay to the Commonwealth such 27 pecuniary penalty, in respect of each act or omission by the person 28 to which this section applies, as the Court determines to be 29 appropriate. 30 (2) In determining the appropriate pecuniary penalty, the Court must 31 have regard to all relevant matters including: 20 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Pecuniary penalties Part 1 1 (a) the nature and extent of the act or omission and of any loss or 2 damage suffered as a result of the act or omission; and 3 (b) the circumstances in which the act or omission took place; 4 and 5 (c) whether the person has previously been found by the Court in 6 proceedings under Part VC or this Part to have engaged in 7 any similar conduct. 8 (3) The pecuniary penalty payable under subsection (1) is not to 9 exceed the number of penalty units worked out using the following 10 table: 11 Number of penalty units Item For each act or omission to the number of penalty which this section applies units is not to exceed ... that rel ates to ... 1 a provision of Part IVA (a) if the person is a body corporate--10,000; o r (b) if the person is not a body corporate--2,000. 2 a provision of Division 1 or (a) if the person is a body 1AAA of Part V (other than corporate--10,000; o r section 52) (b) if the person is not a body corporate--2,000. 3 subsection 65C(1) or (3) or (a) if the person is a body 65D(1) corporate--10,000; o r (b) if the person is not a body corporate--2,000. 4 subsection 65F(8) (a) if the person is a body corporate--150; or (b) if the person is not a body corporate--30. 5 section 65G (a) if the person is a body corporate--10,000; o r (b) if the person is not a body corporate--2,000. 6 subsection 65Q(9) (a) if the person is a body corporate--200; or (b) if the person is not a body corporate--40. Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 21 [Page Break] Part 1 Pecuniary penalties Number of penalty units Item For each act or omission to the number of penalty which this section applies units is not to exceed ... that rel ates to ... 7 subsection 65Q(9C) (a) if the person is a body corporate--300; or (b) if the person is not a body corporate--60. 8 subsection 65Q(10) (a) if the person is a body corporate--600; or (b) if the person is not a body corporate--120. 9 subsection 65R(1) (a) if the person is a body corporate--150; or (b) if the person is not a body corporate--30. 10 section 87ZN (a) if the person is a body corporate--150; or (b) if the person is not a body corporate--30. 11 section 87ZO (a) if the person is a body corporate--250; or (b) if the person is not a body corporate--50. 1 (4) If conduct constitutes a contravention of 2 or more provisions 2 referred to in paragraph (1)(a): 3 (a) a proceeding may be instituted under this Act against a 4 person in relation to the contravention of any one or more of 5 the provisions; but 6 (b) a person is not liable to more than one pecuniary penalty 7 under this section in respect of the same conduct. 8 76F Pecuniary penalties unde r section 76E and offences 9 (1) The Court must not make an order under section 76E against a 10 person in relation to either of the following matters (a consumer 11 protection breach): 12 (a) a contravention of a provision referred to in paragraph 13 76E(1)(a); 22 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Pecuniary penalties Part 1 1 (b) conduct referred to in paragraph 76E(1)(b), (c), (d), (e) or (f) 2 that relates to a contravention of a provision referred to in 3 paragraph 76E(1)(a); 4 if the person has been convicted of an offence constituted by 5 conduct that is substantially the same as the conduct constituting 6 the consumer protection breach. 7 (2) Proceedings for an order under section 76E against a person in 8 relation to a consumer protection breach are stayed if: 9 (a) criminal proceedings are started or have already been started 10 against the person for an offence; and 11 (b) the offence is constituted by conduct that is substantially the 12 same as the conduct alleged to constitute the consumer 13 protection breach. 14 The proceedings for the order may be resumed if the person is not 15 convicted of the offence. Otherwise, the proceedings are dismissed. 16 (3) Criminal proceedings may be started against a person for conduct 17 that is substantially the same as conduct constituting a consumer 18 protection breach regardless of whether an order under section 76E 19 has been made against the person in respect of the breach. 20 (4) Evidence of information given, or evidence of production of 21 documents, by an individual is not admissible in criminal 22 proceedings against the individual if: 23 (a) the individual previously gave the evidence or produced the 24 documents in proceedings for an order under section 76E 25 against the individual in relation to a consumer protection 26 breach (whether or not the order was made); and 27 (b) the conduct alleged to constitute the offence is substantially 28 the same as the conduct that was claimed to constitute the 29 consumer protection breach. 30 However, this does not apply to a criminal proceeding in respect of 31 the falsity of the evidence given by the individual in the 32 proceedings for the order. 33 Note: The heading to section 76 is altered by adding at the end "--restrictive trade practices 34 etc.". 35 2 At the end of subsection 77(1) 36 Add "or 76E". Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 23 [Page Break] Part 1 Pecuniary penalties 1 3 Subsection 77A(3) (at the end of the definition of civil 2 liability) 3 Add ", or a pecuniary penalty under section 76E". 4 4 Subparagraph 79B(a)(i) 5 Omit "section 76", substitute "section 76 or 76E". 6 5 At the end of section 85 7 Add: 8 (7) If, in proceedings under section 76E against a person other than a 9 body corporate, it appears to the Court that the person has, or may 10 have: 11 (a) engaged in conduct in contravention of a provision referred 12 to in paragraph (1)(a) of that section; or 13 (b) engaged in conduct referred to in paragraph (1)(b), (c), (d), 14 (e) or (f) of that section that relates to a contravention of such 15 a provision; 16 but that the person acted honestly and reasonably and, having 17 regard to all the circumstances of the case, ought fairly to be 18 excused, the Court may relieve the person either wholly or partly 19 from liability to a pecuniary penalty under that section. 20 6 Paragraph 86D(1)(a) 21 Omit "section 76", substitute "section 76 or 76E". 22 24 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Disqualificat ion orders Part 2 1 Part 2--Disqualification orders 2 Trade Practices Act 1974 3 7 Before subsection 86E(2) 4 Insert: 5 (1B) On application by the Commission, the Court may make an order 6 disqualifying a person from managing corporations for a period 7 that the Court considers appropriate if: 8 (a) the Court is satisfied that the person has committed, has 9 attempted to commit or has been involved in a contravention 10 of: 11 (i) a provision of Part IVA; or 12 (ii) a provision of Division 1 or 1AAA of Part V (other than 13 section 52); or 14 (iii) subsection 65C(1) or (3), 65D(1) or 65F(8), section 65G 15 or subsection 65Q(9), (9C) or (10) or 65R(1); or 16 (iv) a provision of Part VC; and 17 (b) the Court is satisfied that the disqualification is justified. 18 Note: Section 206EA of the Corporations Act 2001 provides that a person is 19 disqualified from managing corporations if a court order is in force 20 under this section. That Act contains various consequences for persons 21 so disqualified. 22 8 Subsection 86E(2) 23 Omit "or (1A)", substitute ", (1A) or (1B)". 24 9 Subsection 86E(3) 25 After "subsection (1)", insert "or (1B)". 26 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 25 [Page Break] Part 3 Substantiation notices 1 Part 3--Substantiation notices 2 Trade Practices Act 1974 3 10 Subsection 4(1) 4 Insert: 5 substantiation notice means a notice under section 87ZL. 6 11 Subsection 4(1) 7 Insert: 8 substantiation notice compliance period has the meaning given by 9 subsection 87ZN(2). 10 12 Before Part VII 11 Insert: 12 Part VID--Substantiation notices 13 14 87ZL Commission may require claims to be substantiated etc. 15 (1) This section applies if a person has made a claim or representation 16 promoting, or apparently intended to promote: 17 (a) a supply, or possible supply, of goods or services by a 18 corporation; or 19 (b) a sale or grant, or possible sale or grant, of an interest in land 20 (within the meaning of section 53A) by a corporation; or 21 (c) employment that is to be, or may be, offered by a 22 corporation; 23 including any such claim or representation made by the 24 corporation. 25 (2) The Commission may give the person who has made the claim or 26 representation a written notice that requires the person to do one or 27 more of the following: 28 (a) give information and/or produce documents to the 29 Commission that could be capable of substantiating or 30 supporting the claim or representation; 26 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Substantiation notices Part 3 1 (b) if the claim or representation relates to a supply, or possible 2 supply, of goods or services by a corporation--give 3 information and/or produce documents to the Commission 4 that could be capable of substantiating: 5 (i) the quantities in which; and 6 (ii) the period for which; 7 the corporation is or will be able to make such a supply 8 (whether or not the claim or representation relates to those 9 quantities or that period); 10 (c) give information and/or produce documents to the 11 Commission that are of a kind specified in the notice; 12 within 21 days after the notice is given to the person. 13 (3) Any kind of information or documents that the Commission 14 specifies under paragraph (2)(c) must be a kind that the 15 Commission is satisfied is relevant to: 16 (a) substantiating or supporting the claim or representation; or 17 (b) if the claim or representation relates to a supply, or possible 18 supply, of goods or services by a corporation--substantiating 19 the quantities in which, or the period for which, the 20 corporation is or will be able to make such a supply. 21 (4) The notice must: 22 (a) name the person to whom it is given; and 23 (b) specify the claim or representation to which it relates; and 24 (c) explain the effect of sections 87ZM, 87ZN and 87ZO. 25 (5) The notice may relate to more than one claim or representation that 26 the person has made. 27 (6) This section does not apply to a person in relation to a claim or 28 representation made by the person if the person: 29 (a) is a prescribed information provider within the meaning of 30 section 65A; and 31 (b) made the claim or representation by publishing it on behalf of 32 another person in the course of carrying on a business of 33 providing information; and 34 (c) does not have a commercial relationship with the other 35 person other than for the purpose of: Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 27 [Page Break] Part 3 Substantiation notices 1 (i) publishing claims or representations promoting, or 2 apparently intended to promote, the other person's 3 business or other activities; or 4 (ii) the other person supplying goods or services, or selling 5 or granting interests in land (within the meaning of 6 section 53A), to the person. 7 87ZM Extending periods for complying with substantiation notices 8 (1) A person who has been given a substantiation notice may, at any 9 time within 21 days after the notice was given to the person, apply 10 in writing to the Commission for an extension of the period for 11 complying with the notice. 12 (2) The Commission may, by written notice given to the person, 13 extend the period within which the person must comply with the 14 notice. 15 87ZN Compliance with substantiation notices 16 (1) A person who is given a substantiation notice must comply with it 17 within the substantiation notice compliance period for the notice. 18 (2) The substantiation notice compliance period for a substantiation 19 notice is: 20 (a) the period of 21 days specified in the notice; or 21 (b) if the period for complying with the notice has been extended 22 under section 87ZM--the period as so extended. 23 (3) Despite subsection (1), an individual may refuse or fail to give 24 particular information or produce a particular document in 25 compliance with a substantiation notice on the ground that the 26 information or production of the document might tend to 27 incriminate the individual or to expose the individual to a penalty. 28 87ZO False or misleading information etc. 29 (1) A person must not, in compliance or purported compliance with a 30 substantiation notice: 31 (a) give to the Commission false or misleading information; or 32 (b) produce to the Commission documents that contain false or 33 misleading information. 28 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Substantiation notices Part 3 1 (2) This section does not apply to: 2 (a) information that the person could not have known was false 3 or misleading; or 4 (b) the production to the Commission of a document containing 5 false or misleading information if the document is 6 accompanied by a statement of the person that the 7 information is false or misleading. 8 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 29 [Page Break] Part 4 Orders to redress loss or damage suffered by non-party consumers etc. 1 Part 4--Orders to redress loss or damage suffered 2 by non-party consumers etc. 3 Trade Practices Act 1974 4 13 Subsection 4(1) 5 Insert: 6 enforcement proceeding means: 7 (a) a proceeding for an offence against Part VC; or 8 (b) a proceeding instituted under Part VI (other than 9 section 87AAA). 10 14 Subsection 4(1) 11 Insert: 12 non-party consumer, in relation to conduct, means a person who is 13 not, or has not been, a party to an enforcement proceeding in 14 relation to the conduct. 15 15 Section 4L 16 After "section 87", insert ", 87AAA". 17 16 Section 83 18 After "subsection 87(1A)", insert "or 87AAA(1)". 19 17 Subsection 87(1A) 20 After "section 80", insert "or 87AAA". 21 18 After section 87 22 Insert: 23 87AAA Orders to redress loss or damage suffered by non-party 24 consume rs etc. 25 Orders 26 (1) Without limiting the generality of section 80, if: 30 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Orders to redress loss or damage suffered by non-party consumers etc. Part 4 1 (a) a person engaged in conduct (the contravening conduct) in 2 contravention of a provision of Part IVA, of Division 1 or 3 1AAA of Part V or of Part VC; and 4 (b) the contravening conduct caused, or is likely to cause, a class 5 of persons to suffer loss or damage; and 6 (c) the class includes persons who are non-party consumers in 7 relation to the contravening conduct; 8 the Court may, on the application of the Commission, make such 9 order or orders (other than an award of damages) as the Court 10 thinks appropriate against a person referred to in subsection (2) of 11 this section. 12 Note: The orders that the Court may make include all or any of the orders set 13 out in section 87AAB. 14 (2) An order under subsection (1) may be made against the person who 15 engaged in the contravening conduct or a person involved in that 16 conduct. 17 (3) The Court must not make an order under subsection (1) unless the 18 Court considers that the order will: 19 (a) redress, in whole or in part, the loss or damage suffered by 20 the non-party consumers in relation to the contravening 21 conduct; or 22 (b) prevent or reduce the loss or damage suffered, or likely to be 23 suffered, by the non-party consumers in relation to the 24 contravening conduct. 25 Application for orders 26 (4) An application may be made under subsection (1) even if an 27 enforcement proceeding in relation to the contravening conduct has 28 not been instituted. 29 (5) An application under subsection (1) may be made at any time 30 within 6 years after the day on which the cause of action that 31 relates to the contravening conduct accrues. 32 Determining whether to make an order 33 (6) In determining whether to make an order under subsection (1) 34 against a person referred to in subsection (2), the Court may have 35 regard to the conduct of the person, and of the non-party Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 31 [Page Break] Part 4 Orders to redress loss or damage suffered by non-party consumers etc. 1 consumers in relation to the contravening conduct, since the 2 contravention occurred. 3 (8) In determining whether to make an order under subsection (1), the 4 Court need not make a finding about either of the following 5 matters: 6 (a) which persons are non-party consumers in relation to the 7 contravening conduct; 8 (b) the nature of the loss or damage suffered, or likely to be 9 suffered, by such persons. 10 When a non-party consumer is bound by an order etc. 11 (9) If: 12 (a) an order is made under subsection (1) against a person; and 13 (b) the loss or damage suffered, or likely to be suffered, by a 14 non-party consumer in relation to the contravening conduct 15 to which the order relates has been redressed, prevented or 16 reduced in accordance with the order; and 17 (c) the non-party consumer has accepted the redress, prevention 18 or reduction; 19 then: 20 (d) the non-party consumer is bound by the order; and 21 (e) any other order made under subsection (1) that relates to that 22 loss or damage has no effect in relation to the non-party 23 consumer; and 24 (f) despite any other provision of this Act or any other law of the 25 Commonwealth, or a State or Territory, no claim, action or 26 demand may be made or taken against the person by the 27 non-party consumer in relation to that loss or damage. 28 Other 29 (10) Subsection (1) has effect subject to section 87AB. 30 Note: Section 87AB may limit the liability, under an order made under 31 subsection (1) of this section, of a person for his or her contravention 32 of section 52 (which is about misleading or deceptive conduct) or 33 involvement in such a contravention. 34 (11) This section does not apply in relation to contravening conduct that 35 occurred before the commencement of this section. 32 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Orders to redress loss or damage suffered by non-party consumers etc. Part 4 1 87AAB Kinds of orders that may be made to redress loss or damage 2 suffered by non-party cons umers etc. 3 Without limiting subsection 87AAA(1), the orders that the Court 4 may make under that subsection against a person (the respondent) 5 include all or any of the following: 6 (a) an order declaring the whole or any part of a contract made 7 between the respondent and a non-party consumer referred to 8 in that subsection, or a collateral arrangement relating to such 9 a contract: 10 (i) to be void; and 11 (ii) if the Court thinks fit--to have been void ab initio or 12 void at all times on and after such date as is specified in 13 the order (which may be a date that is before the date on 14 which the order is made); 15 (b) an order: 16 (i) varying such a contract or arrangement in such manner 17 as is specified in the order; and 18 (ii) if the Court thinks fit--declaring the contract or 19 arrangement to have had effect as so varied on and after 20 such date as is specified in the order (which may be a 21 date that is before the date on which the order is made); 22 (c) an order refusing to enforce any or all of the provisions of 23 such a contract or arrangement; 24 (d) an order directing the respondent to refund money or return 25 property to a non-party consumer referred to in that 26 subsection; 27 (e) an order directing the respondent, at his or her own expense, 28 to repair, or provide parts for, goods that have been supplied 29 under the contract or arrangement to a non-party consumer 30 referred to in that subsection; 31 (f) an order directing the respondent, at his or her own expense, 32 to supply specified services to a non-party consumer referred 33 to in that subsection; 34 (g) an order, in relation to an instrument creating or transferring 35 an interest in land (within the meaning of section 53A), 36 directing the respondent to execute an instrument that: 37 (i) varies, or has the effect of varying, the first-mentioned 38 instrument; or Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 33 [Page Break] Part 4 Orders to redress loss or damage suffered by non-party consumers etc. 1 (ii) terminates or otherwise affects, or has the effect of 2 terminating or otherwise affecting, the operation or 3 effect of the first-mentioned instrument. 4 19 Paragraph 87A(1)(d) 5 After "subsection 87(1A) or (1B)", insert "or 87AAA(1)". 6 20 Paragraph 157(1)(d) 7 After "subsection 87(1A)", insert ", 87AAA(1)". 8 34 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Infringement notices Part 5 1 Part 5--Infringement notices 2 Trade Practices Act 1974 3 21 Subsection 4(1) 4 Insert: 5 infringement notice means an infringement notice issued under 6 section 87ZE. 7 22 Subsection 4(1) 8 Insert: 9 infringement notice compliance period has the meaning given by 10 section 87ZJ. 11 23 Subsection 4(1) 12 Insert: 13 infringement notice provision means: 14 (a) a provision of Part IVA; or 15 (b) a provision of Division 1 or 1AAA of Part V (other than 16 section 52, paragraph 53A(1)(c), section 54, subsection 56(1) 17 or section 58 or 64); or 18 (c) subsection 65C(1) or (3) or 65D(1) or section 65G; or 19 (d) section 87ZN or 87ZO. 20 24 After Part VIB 21 Insert: 22 Part VIC--Infringement notices 23 24 87ZD Purpose and effect of this Part 25 (1) The purpose of this Part is to provide for the issue of an 26 infringement notice to a person for an alleged contravention of an 27 infringement notice provision as an alternative to proceedings for 28 an order under section 76E. 29 (2) This Part does not: Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 35 [Page Break] Part 5 Infringement notices 1 (a) require an infringement notice to be issued to a person for an 2 alleged contravention of an infringement notice provision; or 3 (b) affect the liability of a person to proceedings under Part VC 4 or VI in relation to an alleged contravention of an 5 infringement notice provision if: 6 (i) an infringement notice is not issued to the person for the 7 alleged contravention; or 8 (ii) an infringement notice issued to a person for the alleged 9 contravention is withdrawn under section 87ZK; or 10 (c) prevent a court from imposing a higher penalty than the 11 penalty specified in the infringement notice if the person does 12 not comply with the notice. 13 87ZE Issue of an infringe ment notice 14 (1) If the Commission has reasonable grounds to believe that a person 15 has contravened an infringement notice provision, the Commission 16 may issue an infringement notice to the person. 17 (2) The Commission must not issue more than one infringement notice 18 to the person for the same alleged contravention of the 19 infringement notice provision. 20 (3) The infringement notice does not have any effect if the notice: 21 (a) is issued more than 12 months after the day on which the 22 contravention of the infringement notice provision is alleged 23 to have occurred; or 24 (b) relates to more than one alleged contravention of an 25 infringement notice provision by the person. 26 87ZF Matters to be included in an infringe ment notice 27 An infringement notice must: 28 (a) be identified by a unique number; and 29 (b) state the day on which it is issued; and 30 (c) state the name and address of the person to whom it is issued; 31 and 32 (d) state that it is being issued by the Commission; and 33 (e) state how the Commission may be contacted; and 34 (f) give details of the alleged contravention by the person, 35 including: 36 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Infringement notices Part 5 1 (i) the date of the alleged contravention; and 2 (ii) the particular infringement notice provision that was 3 allegedly contravened; and 4 (g) state the maximum pecuniary penalty that the Court could 5 order the person to pay under section 76E for the alleged 6 contravention; and 7 (h) specify the penalty that is payable in relation to the alleged 8 contravention; and 9 (i) state that the penalty is payable within the infringement 10 notice compliance period for the notice; and 11 (j) state that the penalty is payable to the Commission on behalf 12 of the Commonwealth; and 13 (k) explain how payment of the penalty is to be made; and 14 (l) explain the effect of sections 87ZH, 87ZI, 87ZJ and 87ZK. 15 87ZG Amount of penalty 16 The penalty to be specified in an infringement notice that is to be 17 issued to a person must be a pecuniary penalty equal to the number 18 of penalty units worked out using the following table: 19 Number of penalty units Item If the infringement notice is the number of penalty for an alleged contravention units is ... of ... 1 a provision of Part IVA (a) if the person is a body corporate--60; or (b) if the person is not a body corporate--12. 2 a provision of Division 1 or (a) if the person is a body 1AAA of Part V (other than corporate--60; or section 52, paragraph (b) if the person is not a 53A(1)(c), section 54, body corporate--12. subsection 56(1) or section 58 or 64) 3 subsection 65C(1) or (3) or (a) if the person is a body 65D(1) or section 65G corporate--60; or (b) if the person is not a body corporate--12. 4 section 87ZN (a) if the person is a body Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 37 [Page Break] Part 5 Infringement notices Number of penalty units Item If the infringement notice is the number of penalty for an alleged contravention units is ... of ... corporate--30; or (b) if the person is not a body corporate--6. 5 section 87ZO (a) if the person is a body corporate--50; or (b) if the person is not a body corporate--10. 1 87ZH Effect of compliance with an infringement notice 2 (1) This section applies if: 3 (a) an infringement notice for an alleged contravention of an 4 infringement notice provision is issued to a person; and 5 (b) the person pays the penalty specified in the infringement 6 notice within the infringement notice compliance period and 7 in accordance with the notice; and 8 (c) the infringement notice is not withdrawn under section 87ZK. 9 (2) The person is not, merely because of the payment, regarded as: 10 (a) having contravened the infringement notice provision; or 11 (b) having been convicted of an offence constituted by the same 12 conduct that constituted the alleged contravention of the 13 infringement notice provision. 14 (3) No proceedings (whether criminal or civil) may be started or 15 continued against the person by, or on behalf of, the 16 Commonwealth or the Commission in relation to: 17 (a) the alleged contravention of the infringement notice 18 provision; or 19 (b) an offence constituted by the same conduct that constituted 20 the alleged contravention. 21 87ZI Effect of failure to comply with an infringement notice 22 If: 23 (a) an infringement notice for an alleged contravention of an 24 infringement notice provision is issued to a person; and 38 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Infringement notices Part 5 1 (b) the person fails to pay the penalty specified in the 2 infringement notice within the infringement notice 3 compliance period and in accordance with the notice; and 4 (c) the infringement notice is not withdrawn under 5 section 87ZK; 6 the person is liable to proceedings under Part VC or VI in relation 7 to the alleged contravention of the infringement notice provision. 8 87ZJ Infringement notice compliance period for infringement notice 9 (1) Subject to this section, the infringement notice compliance period 10 for an infringement notice is a period of 28 days beginning on the 11 day after the day on which the infringement notice is issued. 12 (2) The Commission may extend, by notice in writing, the 13 infringement notice compliance period for the notice if the 14 Commission is satisfied that it is appropriate to do so. 15 (3) Only one extension may be given and the extension must not be for 16 longer than 28 days. 17 (4) Notice of the extension must be given to the person who was 18 issued the infringement notice. 19 (5) A failure to comply with subsection (4) does not affect the validity 20 of the extension. 21 (6) If the Commission extends the infringement notice compliance 22 period for an infringement notice, a reference in this Act to the 23 infringement notice compliance period for an infringement notice 24 is taken to be a reference to the infringement notice compliance 25 period as so extended. 26 87ZK Withdrawal of an infringe ment notice 27 Representations to the Commission 28 (1) The person to whom an infringement notice has been issued for an 29 alleged contravention of an infringement notice provision may 30 make written representations to the Commission seeking the 31 withdrawal of the infringement notice. 32 (2) Evidence or information that the person, or a representative of the 33 person, gives to the Commission in the course of making Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 39 [Page Break] Part 5 Infringement notices 1 representations under subsection (1) is not admissible in evidence 2 against the person or representative in any proceedings (other than 3 proceedings for an offence based on the evidence or information 4 given being false or misleading). 5 Withdrawal by the Commission 6 (3) The Commission may, by written notice (the withdrawal notice) 7 given to a person who has been issued an infringement notice for 8 an alleged contravention of an infringement notice provision, 9 withdraw the infringement notice if the Commission is satisfied 10 that it is appropriate to do so. 11 (4) Subsection (3) applies whether or not the person has made 12 representations seeking the withdrawal. 13 Content of withdrawal notices 14 (5) The withdrawal notice must state: 15 (a) the name and address of the person; and 16 (b) the day on which the infringement notice was issued to the 17 person; and 18 (c) that the infringement notice is withdrawn; and 19 (d) that proceedings under Part VC or VI may be started or 20 continued against the person in relation to: 21 (i) the alleged contravention of the infringement notice 22 provision; or 23 (ii) an offence constituted by the same conduct that 24 constituted the alleged contravention. 25 Time limit for giving withdrawal notices 26 (6) To be effective, the withdrawal notice must be given to the person 27 within the infringement notice compliance period for the 28 infringement notice. 29 Refunds 30 (7) If the infringement notice is withdrawn after the person has paid 31 the penalty specified in the infringement notice, the Commission 32 must refund to the person an amount equal to the amount paid. 33 25 Section 87ZD 40 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Infringement notices Part 5 1 Renumber as section 87ZP. 2 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 41 [Page Break] Part 6 Public warn ing notices 1 Part 6--Public warning notices 2 Trade Practices Act 1974 3 26 After section 86D 4 Insert: 5 86DA Commission may issue a public warning notice 6 Contraventions 7 (1) The Commission may issue to the public a written notice 8 containing a warning about the conduct of a corporation if: 9 (a) the Commission has reasonable grounds to suspect that the 10 conduct may constitute a contravention of a provision of 11 Part IVA, V or VC; and 12 (b) the Commission is satisfied that one or more persons has 13 suffered, or is likely to suffer, detriment as a result of the 14 conduct; and 15 (c) the Commission is satisfied that it is in the public interest to 16 issue the notice. 17 (2) Subsection (1) does not apply to the supply or possible supply, or 18 the promotion by any means of the supply or use, of services that 19 are financial services. 20 Substantiation notices 21 (3) Without limiting subsection (1), if: 22 (a) a person refuses to respond to a substantiation notice given to 23 the person, or fails to respond to the notice before the end of 24 the substantiation notice compliance period for the notice; 25 and 26 (b) the Commission is satisfied that it is in the public interest to 27 issue a notice under this subsection; 28 the Commission may issue to the public a written notice containing 29 a warning that the person has refused or failed to respond to the 30 substantiation notice within that period, and specifying the matter 31 to which the substantiation notice related. 42 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Public warn ing notices Part 6 1 Notice is not a legislative instrument 2 (4) A notice issued under subsection (1) or (3) is not a legislative 3 instrument. 4 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 43 [Page Break] Part 7 Enforcement and remed ies relat ing to the Australian Consumer Law 1 Part 7--Enforcement and remedies relating to the 2 Australian Consumer Law 3 Trade Practices Act 1974 4 27 Subsection 4(1) 5 Insert: 6 consumer contract has the meaning given by the Australian 7 Consumer Law. 8 28 Subsection 4(1) (at the end of the definition of 9 infringement notice provision) 10 Add: 11 ; or (e) a provision of the Australian Consumer Law. 12 29 Subsection 4(1) (definition of non-party consumer) 13 Repeal the definition, substitute: 14 non-party consumer means: 15 (a) in relation to conduct referred to in subparagraph 16 87AAA(1)(a)(i)--a person who is not, or has not been, a 17 party to an enforcement proceeding in relation to the conduct; 18 and 19 (b) in relation to a term of a consumer contract referred to in 20 subparagraph 87AAA(1)(a)(ii)--a person who is not, or has 21 not been, a party to an enforcement proceeding in relation to 22 the term. 23 30 Subsection 4(1) 24 Insert: 25 prohibited term has the meaning given by the Australian 26 Consumer Law. 27 31 Subsection 4(1) 28 Insert: 29 rely on, in relation to a term of a consumer contract, includes the 30 meaning given by the Australian Consumer Law. 44 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Enforcement and remedies relat ing to the Aus tralian Consumer Law Part 7 1 32 Subsection 4(1) 2 Insert: 3 unfair, in relation to a term of a consumer contract, has the 4 meaning given by the Australian Consumer Law. 5 33 Subsection 75B(1) 6 Omit "or" (second occurring). 7 34 Subsection 75B(1) 8 After "95AZN", insert "or of the Australian Consumer Law". 9 35 Subparagraph 76E(1)(a)(iv) 10 Omit "or" (last occurring). 11 36 At the end of paragraph 76E(1)(a) 12 Add: 13 (v) a provision of the Australian Consumer Law; or 14 37 Subsection 76E(3) (at the end of the table) 15 Add: 12 a provision of the Australian (a) if the person is a body Consumer Law corporate--250; or (b) if the person is not a body corporate--50. 16 38 At the end of paragraph 78(a) 17 Add: 18 (iii) a provision of the Australian Consumer Law; or 19 Note: The heading to section 78 is altered by adding at the end "or the Australian Consumer 20 Law". 21 39 At the end of paragraphs 78(b) to (d) 22 Add "or". 23 40 At the end of paragraph 80(1)(a) 24 Add: 25 (iii) a provision of the Australian Consumer Law; or Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 45 [Page Break] Part 7 Enforcement and remed ies relat ing to the Australian Consumer Law 1 Note: This item does not commence at all if Schedule 1 to the Statute Stocktake (Regulatory 2 and Other Laws) Act 2009 commences before items 27 to 38 of this Schedule. (See 3 table item 5 in subsection 2(1) of this Act.) 4 41 Paragraph 80(1)(a) 5 Repeal the paragraph, substitute: 6 (a) a contravention of any of the following provisions: 7 (i) a provision of Part IV, IVA, IVB, V or VC; 8 (ii) a provision of the Australian Consumer Law; or 9 Note: This item does not commence at all if Schedule 1 to the Statute Stocktake (Regulatory 10 and Other Laws) Act 2009 does not commence. (See table item 6 in subsection 2(1) of 11 this Act.) 12 42 At the end of paragraphs 80(1)(b) to (d) 13 Add "or". 14 43 After subsection 80(1B) 15 Insert: 16 (1C) A reference in paragraph (1)(a) to a contravention of a provision of 17 the Australian Consumer Law includes a reference to applying or 18 relying on, or purporting to apply or rely on, a term of a consumer 19 contract that the Court has declared under section 87AC to be an 20 unfair term or a prohibited term. 21 44 Subsection 82(1) 22 After "or section 51AC", insert ", or a provision of the Australian 23 Consumer Law,". 24 45 Section 83 25 After "or VC", insert ", or of the Australian Consumer Law,". 26 46 Paragraphs 84(1)(b) and (3)(b) 27 After "or VC", insert ", or a provision of the Australian Consumer 28 Law,". 29 47 At the end of subsection 86(1) 30 Add "or has been instituted in relation to subsection 2(1) or 6(1) of the 31 Australian Consumer Law (as applied under Division 1 of Part XI)". 32 48 Subsection 86(1A) 46 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Enforcement and re medies relat ing to the Australian Consumer Law Part 7 1 After "or Part VA", insert ", or a provision of the Australian Consumer 2 Law,". 3 49 Subsection 86(2) 4 After "of Part V", insert ", or a provision of the Australian Consumer 5 Law,". 6 50 Paragraphs 86A(1)(b), (4)(b) and (5)(b) and 86B(1)(b) 7 After "of Part V", insert ", or a provision of the Australian Consumer 8 Law". 9 51 Subsection 86C(4) (paragraph (a) of the definition of 10 contravening conduct) 11 Omit "VC or", substitute "VC,". 12 52 Subsection 86C(4) (paragraph (a) of the definition of 13 contravening conduct) 14 After "95AZN", insert "or a provision of the Australian Consumer 15 Law". 16 53 Paragraph 86DA(1)(a) 17 After "VC", insert "or of the Australian Consumer Law". 18 54 Subparagraph 86E(1B)(a)(iv) 19 Omit "and", substitute "or". 20 55 At the end of paragraph 86E(1B)(a) 21 Add: 22 (v) a provision of the Australian Consumer Law; and 23 56 Subsection 87(1) 24 After "or VC,", insert "or of the Australian Consumer Law,". 25 57 Paragraphs 87(1A)(a) and (b) and (1B)(a) 26 After "or VC", insert ", or a provision of the Australian Consumer 27 Law". 28 58 Subsection 87(1C) Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 47 [Page Break] Part 7 Enforcement and remed ies relat ing to the Australian Consumer Law 1 After "or VC", insert ", or of a provision of the Australian Consumer 2 Law,". 3 59 After subsection 87(5) 4 Insert: 5 (5A) A reference in this section to a contravention of a provision of the 6 Australian Consumer Law includes a reference to applying or 7 relying on, or purporting to apply or rely on, a term of a consumer 8 contract that the Court has declared under section 87AC to be an 9 unfair term or a prohibited term. 10 60 Paragraph 87AAA(1)(a) 11 Repeal the paragraph, substitute: 12 (a) a person: 13 (i) engaged in conduct (the contravening conduct) in 14 contravention of a provision of Part IVA, of Division 1 15 or 1AAA of Part V, of Part VC or of the Australian 16 Consumer Law; or 17 (ii) is a party to a consumer contract who is advantaged by a 18 term (the declared term) of the contract in relation to 19 which the Court has made a declaration under 20 section 87AC; and 21 61 Paragraphs 87AAA(1)(b) and (c) 22 After "contravening conduct", insert "or declared term". 23 62 Subsection 87AAA(2) 24 Repeal the subsection, substitute: 25 (2) An order under subsection (1) may be made against: 26 (a) if subparagraph (1)(a)(i) applies--the person who engaged in 27 the contravening conduct, or a person involved in that 28 conduct; or 29 (b) if subparagraph (1)(a)(ii) applies--a party to the contract 30 who is advantaged by the declared term. 31 63 Paragraphs 87AAA(3)(a) and (b) 32 After "contravening conduct", insert "or declared term". 48 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Enforcement and remedies relat ing to the Australian Consumer Law Part 7 1 64 Subsection 87AAA(4) 2 After "contravening conduct", insert "or declared term". 3 65 Subsection 87AAA(5) 4 Repeal the subsection, substitute: 5 (5) An application under subsection (1) may be made at any time 6 within 6 years after the day on which: 7 (a) if subparagraph (1)(a)(i) applies--the cause of action that 8 relates to the contravening conduct accrues; or 9 (b) if subparagraph (1)(a)(ii) applies--the declaration is made. 10 66 Subsection 87AAA(6) 11 Omit "subsection (2)", substitute "paragraph (2)(a)". 12 67 After subsection 87AAA(6) 13 Insert: 14 (7) In determining whether to make an order under subsection (1) 15 against a person referred to in paragraph (2)(b), the Court may 16 have regard to the conduct of the person, and of the non-party 17 consumers in relation to the declared term, since the declaration 18 was made. 19 68 Paragraph 87AAA(8)(a) 20 After "contravening conduct", insert "or declared term". 21 69 Paragraph 87AAA(9)(b) 22 After "contravening conduct", insert ", or declared term,". 23 70 Paragraph 87A(1)(b) 24 After "or VC", insert ", or of the Australian Consumer Law". 25 71 Paragraph 87A(1)(c) 26 After "Part V", insert ", or of the Australian Consumer Law". 27 72 Paragraph 87A(1)(d) 28 After "or VC", insert ", or of the Australian Consumer Law". 29 73 At the end of section 87A Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 49 [Page Break] Part 7 Enforcement and remed ies relat ing to the Australian Consumer Law 1 Add: 2 (9) A reference in paragraph (1)(b) to a contravention of a provision of 3 the Australian Consumer Law includes a reference to applying or 4 relying on, or purporting to apply or rely on, a term of a consumer 5 contract that the Court has declared under section 87AC to be an 6 unfair term or a prohibited term. 7 74 After section 87AB 8 Insert: 9 87AC Declarations 10 (1) The Court may, on the application of the Commission, declare that: 11 (a) a term of a consumer contract is an unfair term; or 12 (b) a term of a consumer contract is a prohibited term. 13 (2) Subsection (1) does not limit any other power of the Court to make 14 declarations. 15 75 Section 87ZG (at the end of the table) 16 Add: 6 a provision of the Australian (a) if the person is a body Consumer Law corporate--50; or (b) if the person is not a body corporate--10. 17 50 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Unfair and prohibited contract terms Part 1 1 Schedule 3--Amendment of corporations 2 legislation 3 Part 1--Unfair and prohibited contract terms 4 Australian Securities and Investments Commission Act 2001 5 1 Subsection 12BA(1) 6 Insert: 7 consumer contract has the meaning given by subsection 12BF(3). 8 2 Subsection 12BA(1) 9 Insert: 10 prohibited term has the meaning given by subsection 12BJ(4). 11 3 Subsection 12BA(1) 12 Insert: 13 rely on, in relation to a term of a consumer contract, includes the 14 following: 15 (a) attempt to enforce the term; 16 (b) attempt to exercise a right conferred, or purportedly 17 conferred, by the term; 18 (c) assert the existence of a right conferred, or purportedly 19 conferred, by the term. 20 4 Subsection 12BA(1) 21 Insert: 22 transparent, in relation to a term of a consumer contract, has the 23 meaning given by subsection 12BG(3). 24 5 Subsection 12BA(1) 25 Insert: 26 unfair, in relation to a term of a consumer contract, has the 27 meaning given by subsection 12BG(1). Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 51 [Page Break] Part 1 Un fair and prohibited contract terms 1 6 Subsection 12BA(1) 2 Insert: 3 upfront price has the meaning given by subsection 12BI(2). 4 7 After Subdivision B of Division 2 of Part 2 5 Insert: 6 Subdivision BA--Unfair and prohibited contract terms 7 12BF Unfair terms of consume r contracts 8 (1) A term of a consumer contract is void if: 9 (a) the term is unfair; and 10 (b) the contract is a standard form contract; and 11 (c) the contract is: 12 (i) a financial product; or 13 (ii) a contract for the supply, or possible supply, of services 14 that are financial services. 15 (2) The contract continues to bind the parties if it is capable of 16 operating without the unfair term. 17 (3) A consumer contract is a contract at least one of the parties to 18 which is an individual whose acquisition of what is supplied under 19 the contract is wholly or predominantly an acquisition for personal, 20 domestic or household use or consumption. 21 12BG Meaning of unfair 22 (1) A term of a consumer contract referred to in subsection 12BF(1) is 23 unfair if: 24 (a) it would cause a significant imbalance in the parties' rights 25 and obligations arising under the contract; and 26 (b) it is not reasonably necessary in order to protect the 27 legitimate interests of the party who would be advantaged by 28 the term. 29 (2) In determining whether a term of a consumer contract is unfair 30 under subsection (1), a court may take into account such matters as 31 it thinks relevant, but must take into account the following: 52 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Unfair and prohibited contract terms Part 1 1 (a) the extent to which the term would cause, or there is a 2 substantial likelihood that the term would cause, detriment 3 (whether financial or otherwise) to a party if it were to be 4 applied or relied on; 5 (b) the extent to which the term is transparent; 6 (c) the contract as a whole. 7 (3) A term is transparent if the term is: 8 (a) expressed in reasonably plain language; and 9 (b) legible; and 10 (c) presented clearly; and 11 (d) readily available to any party affected by the term. 12 (4) For the purposes of paragraph (1)(b), a term of a consumer contract 13 is presumed not to be reasonably necessary in order to protect the 14 legitimate interests of the party who would be advantaged by the 15 term, unless that party proves otherwise. 16 12BH Examples of unfair terms 17 Without limiting section 12BG, the following are examples of the 18 kinds of terms of a consumer contract referred to in subsection 19 12BF(1) that may be unfair: 20 (a) a term that permits, or has the effect of permitting, one party 21 (but not another party) to avoid or limit performance of the 22 contract; 23 (b) a term that permits, or has the effect of permitting, one party 24 (but not another party) to terminate the contract; 25 (c) a term that penalises, or has the effect of penalising, one 26 party (but not another party) for a breach or termination of 27 the contract; 28 (d) a term that permits, or has the effect of permitting, one party 29 (but not another party) to vary the terms of the contract; 30 (e) a term that permits, or has the effect of permitting, one party 31 (but not another party) to renew or not renew the contract; 32 (f) a term that permits, or has the effect of permitting, one party 33 to vary the upfront price payable under the contract without 34 the right of another party to terminate the contract; Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 53 [Page Break] Part 1 Un fair and prohibited contract terms 1 (g) a term that permits, or has the effect of permitting, one party 2 unilaterally to vary financial services to be supplied under the 3 contract; 4 (h) a term that permits, or has the effect of permitting, one party 5 unilaterally to determine whether the contract has been 6 breached or to interpret its meaning; 7 (i) a term that limits, or has the effect of limiting, one party's 8 vicarious liability for its agents; 9 (j) a term that permits, or has the effect of permitting, one party 10 to assign the contract to the detriment of another party 11 without that other party's consent; 12 (k) a term that limits, or has the effect of limiting, one party's 13 right to sue another party; 14 (l) a term that limits, or has the effect of limiting, the evidence 15 one party can adduce in proceedings relating to the contract; 16 (m) a term that imposes, or has the effect of imposing, the 17 evidential burden on one party in proceedings relating to the 18 contract; 19 (n) a term of a kind, or a term that has an effect of a kind, 20 prescribed by the regulations. 21 12BI Terms that define main s ubject matte r of consume r contracts 22 etc. are unaffected 23 (1) Section 12BF does not apply to a term of a consumer contract 24 referred to in subsection (1) of that section to the extent that, but 25 only to the extent that, the term: 26 (a) defines the main subject matter of the contract; or 27 (b) sets the upfront price payable under the contract; or 28 (c) is a term required, or expressly permitted, by a law of the 29 Commonwealth or a State or Territory. 30 (2) The upfront price payable under a consumer contract referred to in 31 subsection 12BF(1) is the consideration that: 32 (a) is provided, or is to be provided, for the supply under the 33 contract; and 34 (b) is disclosed at or before the time the contract is entered into; 35 but does not include any other consideration that is contingent on 36 the occurrence or non-occurrence of a particular event. 54 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Unfair and prohibited contract terms Part 1 1 (3) To avoid doubt, if a consumer contract referred to in subsection 2 12BF(1) is a contract under which credit is provided or is to be 3 provided, the consideration referred to in subsection (2) of this 4 section includes the total amount of principal that is owed under 5 the contract. 6 12BJ Prohibited terms of consume r contracts 7 (1) A term of a consumer contract is void if: 8 (a) the term is a prohibited term; and 9 (b) the contract is a standard form contract; and 10 (c) the contract is: 11 (i) a financial product; or 12 (ii) a contract for the supply, or possible supply, of services 13 that are financial services. 14 (2) A person must not include, or purport to include, a prohibited term 15 in a consumer contract of such a kind. 16 Note: A pecuniary penalty may be imposed for a contravention of this 17 subsection. 18 (3) A person must not apply or rely on, or purport to apply or rely on, 19 a prohibited term of a consumer contract of such a kind. 20 Note: A pecuniary penalty may be imposed for a contravention of this 21 subsection. 22 (4) A prohibited term of a consumer contract of such a kind is a term 23 of a kind prescribed by the regulations. 24 (5) The contract continues to bind the parties if it is capable of 25 operating without the prohibited term. 26 12BK Standard form contracts 27 (1) If a party to a proceeding alleges that a contract is a standard form 28 contract, it is presumed to be a standard form contract unless 29 another party to the proceeding proves otherwise. 30 (2) In determining whether a contract is a standard form contract, a 31 court may take into account such matters as it thinks relevant, but 32 must take into account the following: Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 55 [Page Break] Part 1 Un fair and prohibited contract terms 1 (a) whether one of the parties has all or most of the bargaining 2 power relating to the transaction; 3 (b) whether the contract was prepared by one party before any 4 discussion relating to the transaction occurred between the 5 parties; 6 (c) whether another party was, in effect, required either to accept 7 or reject the terms of the contract (other than the terms 8 referred to in subsection 12BI(1)) in the form in which they 9 were presented; 10 (d) whether another party was given an effective opportunity to 11 negotiate the terms of the contract that were not the terms 12 referred to in subsection 12BI(1); 13 (e) whether the terms of the contract (other than the terms 14 referred to in subsection 12BI(1)) take into account the 15 specific characteristics of another party or the particular 16 transaction; 17 (f) any other matter prescribed by the regulations. 18 12BL Contracts to which this Part does not apply 19 This Part does not apply to a consumer contract that is the 20 constitution of a company, managed investment scheme or other 21 kind of body. 22 12BM Contraventions of this Subdivision etc. 23 Conduct is not taken, for the purposes of this Act, to contravene 24 this Subdivision (or this Division) merely because of subsection 25 12BF(1) or 12BJ(1). 26 8 Application and transitional provisions 27 (1) Subdivision BA of Division 2 of Part 2 of the Australian Securities and 28 Investments Commission Act 2001 applies to a contract entered into on 29 or after the commencement of this Part of this Schedule. 30 (2) That Subdivision does not apply to a contract entered into before the 31 commencement of this Part of this Schedule. However: 32 (a) if the contract is renewed on or after that commencement, 33 and paragraph (b) has not already applied in relation to the 34 contract--that Subdivision applies to the contract as 35 renewed, on and from the day (the renewal day) on which the 56 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Unfair and prohibited contract terms Part 1 1 renewal takes effect, in relation to conduct that occurs on or 2 after the renewal day; or 3 (b) if a term of the contract is varied on or after that 4 commencement, and paragraph (a) has not already applied in 5 relation to the contract--that Subdivision applies to the 6 contract as varied, on and from the day (the variation day) on 7 which the variation takes effect, in relation to conduct that 8 occurs on or after the variation day. 9 (3) Despite paragraphs (2)(a) and (b), that Subdivision does not apply to a 10 contract to the extent that the operation of that Subdivision would result 11 in an acquisition of property (within the meaning of paragraph 51(xxxi) 12 of the Constitution) from a person otherwise than on just terms (within 13 the meaning of that paragraph of the Constitution). 14 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 57 [Page Break] Part 2 Pecuniary penalties 1 Part 2--Pecuniary penalties 2 Australian Securities and Investments Commission Act 2001 3 9 After section 12GB 4 Insert: 5 12GBA Pecuniary penalties 6 (1) If the Court is satisfied that a person: 7 (a) has contravened a provision of Subdivision C, D or GC 8 (other than section 12DA); or 9 (b) has attempted to contravene such a provision; or 10 (c) has aided, abetted, counselled or procured a person to 11 contravene such a provision; or 12 (d) has induced, or attempted to induce, a person, whether by 13 threats or promises or otherwise, to contravene such a 14 provision; or 15 (e) has been in any way, directly or indirectly, knowingly 16 concerned in, or party to, the contravention by a person of 17 such a provision; or 18 (f) has conspired with others to contravene such a provision; 19 the Court may order the person to pay to the Commonwealth such 20 pecuniary penalty, in respect of each act or omission by the person 21 to which this section applies, as the Court determines to be 22 appropriate. 23 (2) In determining the appropriate pecuniary penalty, the Court must 24 have regard to all relevant matters including: 25 (a) the nature and extent of the act or omission and of any loss or 26 damage suffered as a result of the act or omission; and 27 (b) the circumstances in which the act or omission took place; 28 and 29 (c) whether the person has previously been found by the Court in 30 proceedings under this Subdivision to have engaged in any 31 similar conduct. 32 (3) The pecuniary penalty payable under subsection (1) is not to 33 exceed the number of penalty units worked out using the following 34 table: 58 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Pecuniary penalties Part 2 1 Number of penalty units Item For each act or omission to the number of penalty which this section applies units is not to exceed ... that rel ates to ... 2 a provision of Subdivision C (a) if the person is a body or D (other than corporate--10,000; o r section 12DA) (b) if the person is not a body corporate--2,000. 3 section 12GYB (a) if the person is a body corporate--150; or (b) if the person is not a body corporate--30. 4 section 12GYC (a) if the person is a body corporate--250; or (b) if the person is not a body corporate--50. 2 (4) If conduct constitutes a contravention of 2 or more provisions 3 referred to in paragraph (1)(a): 4 (a) a proceeding may be instituted under this Act against a 5 person in relation to the contravention of any one or more of 6 the provisions; but 7 (b) a person is not liable to more than one pecuniary penalty 8 under this section in respect of the same conduct. 9 12GBB Pecuniary penalties and offences 10 (1) The Court must not make an order under section 12GBA against a 11 person in relation to either of the following matters (a consumer 12 protection breach): 13 (a) a contravention of a provision referred to in paragraph 14 12GBA(1)(a); 15 (b) conduct referred to in paragraph 12GBA(1)(b), (c), (d), (e) or 16 (f) that relates to a contravention of a provision referred to in 17 paragraph 12GBA(1)(a); 18 if the person has been convicted of an offence constituted by 19 conduct that is substantially the same as the conduct constituting 20 the consumer protection breach. Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 59 [Page Break] Part 2 Pecuniary penalties 1 (2) Proceedings for an order under section 12GBA against a person in 2 relation to a consumer protection breach are stayed if: 3 (a) criminal proceedings are started or have already been started 4 against the person for an offence; and 5 (b) the offence is constituted by conduct that is substantially the 6 same as the conduct alleged to constitute the consumer 7 protection breach. 8 The proceedings for the order may be resumed if the person is not 9 convicted of the offence. Otherwise, the proceedings are dismissed. 10 (3) Criminal proceedings may be started against a person for conduct 11 that is substantially the same as conduct constituting a consumer 12 protection breach regardless of whether an order under 13 section 12GBA has been made against the person in respect of the 14 breach. 15 (4) Evidence of information given, or evidence of production of 16 documents, by an individual is not admissible in criminal 17 proceedings against the individual if: 18 (a) the individual previously gave the evidence or produced the 19 documents in proceedings for an order under section 12GBA 20 against the individual in relation to a consumer protection 21 breach (whether or not the order was made); and 22 (b) the conduct alleged to constitute the offence is substantially 23 the same as the conduct that was claimed to constitute the 24 consumer protection breach. 25 However, this does not apply to a criminal proceeding in respect of 26 the falsity of the evidence given by the individual in the 27 proceedings for the order. 28 12GBC Civil action for recovery of pecuniary penalties 29 (1) ASIC may institute a proceeding in the Court for the recovery on 30 behalf of the Commonwealth of a pecuniary penalty referred to in 31 section 12GBA. 32 (2) A proceeding under subsection (1) may be commenced within 6 33 years after the contravention. 60 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Pecuniary penalties Part 2 1 12GBD Indemnification of officers 2 Officers not to be indemnified 3 (1) A body corporate (the first body), or a body corporate related to the 4 first body, must not indemnify a person (whether by agreement or 5 by making a payment and whether directly or through an 6 interposed entity) against any of the following liabilities incurred 7 as an officer of the first body: 8 (a) a liability to pay a pecuniary penalty under section 12GBA; 9 (b) legal costs incurred in defending or resisting proceedings in 10 which the person is found to have such a liability. 11 Penalty: 25 penalty units. 12 (2) For the purposes of subsection (1), the outcome of proceedings is 13 the outcome of the proceedings and any appeal in relation to the 14 proceedings. 15 (3) Subsection (1) does not authorise anything that would otherwise be 16 unlawful. 17 Indemnities are void 18 (4) Anything that purports to indemnify a person against a liability is 19 void to the extent that it contravenes subsection (1). 20 Application of this section to a person other than a body corporate 21 (5) If, as a result of the operation of Part 2.4 of the Criminal Code, a 22 person other than a body corporate is: 23 (a) convicted of an offence (the relevant offence) against 24 subsection (1) of this section; or 25 (b) convicted of an offence (the relevant offence) against 26 section 11.4 of the Criminal Code in relation to an offence 27 referred to in subsection (1) of this section; 28 the relevant offence is taken to be punishable on conviction by a 29 fine not exceeding 5 penalty units. 30 10 Paragraph 12GCA(a) 31 Repeal the paragraph, substitute: 32 (a) the Court considers that it is appropriate: Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 61 [Page Break] Part 2 Pecuniary penalties 1 (i) to impose a fine under section 12GB on a person (the 2 defendant); or 3 (ii) to order a person (the defendant) to pay a pecuniary 4 penalty under section 12GBA; 5 in respect of a contravention, or an involvement in a 6 contravention, of this Division; and 7 11 Section 12GG 8 Omit "section 12GD", substitute "section 12GBC, 12GD". 9 12 At the end of section 12GI (after the note) 10 Add: 11 (5) If, in proceedings under section 12GBA against a person other than 12 a body corporate, it appears to the Court that the person has, or 13 may have: 14 (a) engaged in conduct in contravention of a provision referred 15 to in paragraph (1)(a) of that section; or 16 (b) engaged in conduct referred to in paragraph (1)(b), (c), (d), 17 (e) or (f) of that section that relates to a contravention of such 18 a provision; 19 but that the person acted honestly and reasonably and, having 20 regard to all the circumstances of the case, ought fairly to be 21 excused, the Court may relieve the person either wholly or partly 22 from liability to pay a pecuniary penalty under that section. 23 13 Subsection 12GLB(1) 24 Repeal the subsection, substitute: 25 (1) The Court may, on application by ASIC, make an adverse publicity 26 order in relation to a person who: 27 (a) has been ordered to pay a pecuniary penalty under 28 section 12GBA; or 29 (b) is guilty of an offence under section 12GB. 30 62 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Disqualificat ion orders Part 3 1 Part 3--Disqualification orders 2 Australian Securities and Investments Commission Act 2001 3 14 Before section 12GM 4 Insert: 5 12GLD Order disqualifying a person from managing corporations 6 (1) On application by ASIC, the Court may make an order 7 disqualifying a person from managing corporations for a period 8 that the Court considers appropriate if: 9 (a) the Court is satisfied that the person has committed, has 10 attempted to commit or has been involved in a contravention 11 of a provision of Subdivision C or D (other than 12 section 12DA); and 13 (b) the Court is satisfied that the disqualification is justified. 14 Note 1: Section 206EB of the Corporations Act 2001 provides that a person is 15 disqualified from managing corporations if a court order is in force 16 under this section. That Act contains various consequences for persons 17 so disqualified. 18 Note 2: ASIC must keep a register of persons who have been disqualified from 19 managing corporations (see section 1274AA of the Corporations Act 20 2001). 21 (2) In determining under subsection (1) whether the disqualification is 22 justified, the Court may have regard to: 23 (a) the person's conduct in relation to the management, business 24 or property of any corporation; and 25 (b) any other matters that the Court considers appropriate. 26 Corporations Act 2001 27 15 After section 206EA 28 Insert: 29 206EB Disqualification under the ASIC Act 30 A person is disqualified from managing corporations if a court 31 order disqualifying the person from managing corporations is in 32 force under section 12GLD of the ASIC Act. Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 63 [Page Break] Part 3 Disqualification orders 1 16 Paragraph 1274AA(1)(a) 2 Omit "206EA, 206EAA", substitute "206EAA, 206EA, 206EB". 3 17 After paragraph 1274AA(2)(ab) 4 Insert: 5 (ac) every court order referred to in section 206EB; and 6 64 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Substantiation notices Part 4 1 Part 4--Substantiation notices 2 Australian Securities and Investments Commission Act 2001 3 18 Subsection 12BA(1) 4 Insert: 5 substantiation notice means a notice under section 12GY. 6 19 Subsection 12BA(1) 7 Insert: 8 substantiation notice compliance period for a substantiation notice 9 has the meaning given by subsection 12GYB(2). 10 20 Before Subdivision H of Division 2 of Part 2 11 Insert: 12 Subdivision GC--Substantiation notices 13 12GY ASIC may require claims to be substantiated etc. 14 (1) This section applies if a person has made a claim or representation 15 promoting, or apparently intended to promote, a supply, or possible 16 supply, of financial services by that or any other person. 17 (2) ASIC may give the person who has made the claim or 18 representation a written notice that requires the person to do one or 19 more of the following: 20 (a) give information and/or produce documents to ASIC that 21 could be capable of substantiating or supporting the claim or 22 representation; 23 (b) give information and/or produce documents to ASIC that 24 could be capable of substantiating: 25 (i) the quantities in which; and 26 (ii) the period for which; 27 the person is or will be able to make a supply to which the 28 claim or representation relates (whether or not the claim or 29 representation relates to those quantities or that period); Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 65 [Page Break] Part 4 Substantiation notices 1 (c) give information and/or produce documents to ASIC that are 2 of a kind specified in the notice; 3 within 21 days after the notice is given to the person. 4 (3) Any kind of information or documents that ASIC specifies under 5 paragraph (2)(c) must be a kind that ASIC is satisfied is relevant 6 to: 7 (a) substantiating or supporting the claim or representation; or 8 (b) substantiating the quantities in which, or the period for 9 which, the person is or will be able to make such a supply. 10 (4) The notice must: 11 (a) name the person to whom it is given; and 12 (b) specify the claim or representation to which it relates; and 13 (c) explain the effect of sections 12GYA, 12GYB and 12GYC. 14 (5) The notice may relate to more than one claim or representation that 15 the person has made. 16 (6) This section does not apply to a person in relation to a claim or 17 representation made by the person if the person: 18 (a) is a prescribed information provider within the meaning of 19 section 12DN; and 20 (b) made the claim or representation by publishing it on behalf of 21 another person in the course of carrying on a business of 22 providing information; and 23 (c) does not have a commercial relationship with the other 24 person other than for the purpose of: 25 (i) publishing claims or representations promoting, or 26 apparently intended to promote, the other person's 27 business or other activities; or 28 (ii) the other person supplying financial services to the 29 person. 30 12GYA Extending periods for complying with s ubstantiation notices 31 (1) A person who has been given a substantiation notice may, at any 32 time within 21 days after the notice was given to the person, apply 33 in writing to ASIC for an extension of the period for complying 34 with the notice. 66 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Substantiation notices Part 4 1 (2) ASIC may, by written notice given to the person, extend the period 2 within which the person must comply with the notice. 3 12GYB Compliance with substantiation notices 4 (1) A person who is given a substantiation notice must comply with it 5 within the substantiation notice compliance period for the notice. 6 (2) The substantiation notice compliance period for a substantiation 7 notice is: 8 (a) the period of 21 days specified in the notice; or 9 (b) if the period for complying with the notice has been extended 10 under section 12GYA--the period as so extended. 11 (3) Despite subsection (1), an individual may refuse or fail to give 12 particular information or produce a particular document in 13 compliance with a substantiation notice on the ground that the 14 information or production of the document might tend to 15 incriminate the individual or to expose the individual to a penalty. 16 12GYC False or misleading information etc. 17 (1) A person must not, in compliance or purported compliance with a 18 substantiation notice: 19 (a) give to ASIC false or misleading information; or 20 (b) produce to ASIC documents that contain false or misleading 21 information. 22 (2) This section does not apply to: 23 (a) information that the person could not have known was false 24 or misleading; or 25 (b) the production to ASIC of a document containing false or 26 misleading information if the document is accompanied by a 27 statement of the person that the information is false or 28 misleading. 29 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 67 [Page Break] Part 5 Orders to redress loss or damage suffered by non-party consumers etc. 1 Part 5--Orders to redress loss or damage suffered 2 by non-party consumers etc. 3 Australian Securities and Investments Commission Act 2001 4 21 Subsection 12BA(1) 5 Insert: 6 enforcement proceeding means a proceeding instituted under 7 Subdivision G of Division 2 of Part 2 (other than section 12GNB). 8 22 Subsection 12BA(1) 9 Insert: 10 non-party consumer, in relation to conduct, means a person who is 11 not, or has not been, a party to an enforcement proceeding in 12 relation to the conduct. 13 23 Section 12GG 14 After "subsection 12GM(2)", insert "or 12GNB(1)". 15 24 Subsection 12GM(2) 16 After "section 12GD", insert "or 12GNB". 17 25 Paragraph 12GN(1)(d) 18 After "subsection 12GM(2) or (3)", insert "or 12GNB(1)". 19 26 After section 12GNA 20 Insert: 21 12GNB Orders to redress loss or damage suffered by non-party 22 consume rs etc. 23 Orders 24 (1) Without limiting the generality of section 12GD, if: 25 (a) a person engaged in conduct (the contravening conduct) in 26 contravention of a provision of Subdivision C or D; and 27 (b) the contravening conduct caused, or is likely to cause, a class 28 of persons to suffer loss or damage; and 68 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Orders to redress loss or damage suffered by non-party consumers etc. Part 5 1 (c) the class includes persons who are non-party consumers in 2 relation to the contravening conduct; 3 the Court may, on the application of ASIC, make such order or 4 orders (other than an award of damages) as the Court thinks 5 appropriate against a person referred to in subsection (2) of this 6 section. 7 Note: The orders that the Court may make include all or any of the orders set 8 out in section 12GNC. 9 (2) An order under subsection (1) may be made against the person who 10 engaged in the contravening conduct or a person involved in that 11 conduct. 12 (3) The Court must not make an order under subsection (1) unless the 13 Court considers that the order will: 14 (a) redress, in whole or in part, the loss or damage suffered by 15 the non-party consumers in relation to the contravening 16 conduct; or 17 (b) prevent or reduce the loss or damage suffered, or likely to be 18 suffered, by the non-party consumers in relation to the 19 contravening conduct. 20 Application for orders 21 (4) An application may be made under subsection (1) even if an 22 enforcement proceeding in relation to the contravening conduct has 23 not been instituted. 24 (5) An application under subsection (1) may be made at any time 25 within 6 years after the day on which the cause of action that 26 relates to the contravening conduct accrues. 27 Determining whether to make an order 28 (6) In determining whether to make an order under subsection (1) 29 against a person referred to in subsection (2), the Court may have 30 regard to the conduct of the person, and of the non-party 31 consumers in relation to the contravening conduct, since the 32 contravention occurred. 33 (8) In determining whether to make an order under subsection (1), the 34 Court need not make a finding about either of the following 35 matters: Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 69 [Page Break] Part 5 Orders to redress loss or damage suffered by non-party consumers etc. 1 (a) which persons are non-party consumers in relation to the 2 contravening conduct; 3 (b) the nature of the loss or damage suffered, or likely to be 4 suffered, by such persons. 5 When a non-party consumer is bound by an order etc. 6 (9) If: 7 (a) an order is made under subsection (1) against a person; and 8 (b) the loss or damage suffered, or likely to be suffered, by a 9 non-party consumer in relation to the contravening conduct 10 to which the order relates has been redressed, prevented or 11 reduced in accordance with the order; and 12 (c) the non-party consumer has accepted the redress, prevention 13 or reduction; 14 then: 15 (d) the non-party consumer is bound by the order; and 16 (e) any other order made under subsection (1) that relates to that 17 loss or damage has no effect in relation to the non-party 18 consumer; and 19 (f) despite any other provision of this Act or any other law of the 20 Commonwealth, or a State or Territory, no claim, action or 21 demand may be made or taken against the person by the 22 non-party consumer in relation to that loss or damage. 23 Other 24 (10) Subsection (1) has effect subject to section 12GNA. 25 Note: Section 12GNA may limit the liability, under an order made under 26 subsection (1) of this section, of a person for his or her contravention 27 of section 12DA (which is about misleading or deceptive conduct) or 28 involvement in such a contravention. 29 (11) This section does not apply in relation to contravening conduct that 30 occurred before the commencement of this section. 31 12GNC Kinds of orders that may be made to redress loss or damage 32 suffered by non-party cons umers etc. 33 Without limiting subsection 12GNB(1), the orders that the Court 34 may make under that subsection against a person (the respondent) 35 include all or any of the following: 70 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Orders to redress loss or damage suffered by non-party consumers etc. Part 5 1 (a) an order declaring the whole or any part of a contract made 2 between the respondent and a non-party consumer referred to 3 in that subsection, or a collateral arrangement relating to such 4 a contract: 5 (i) to be void; and 6 (ii) if the Court thinks fit--to have been void ab initio or 7 void at all times on and after such date as is specified in 8 the order (which may be a date that is before the date on 9 which the order is made); 10 (b) an order: 11 (i) varying such a contract or arrangement in such manner 12 as is specified in the order; and 13 (ii) if the Court thinks fit--declaring the contract or 14 arrangement to have had effect as so varied on and after 15 such date as is specified in the order (which may be a 16 date that is before the date on which the order is made); 17 (c) an order refusing to enforce any or all of the provisions of 18 such a contract or arrangement; 19 (d) an order directing the respondent to refund money or return 20 property to a non-party consumer referred to in that 21 subsection; 22 (e) an order directing the respondent, at his or her own expense, 23 to repair, or provide parts for, goods that have been supplied 24 under the contract or arrangement to a non-party consumer 25 referred to in that subsection; 26 (f) an order directing the respondent, at his or her own expense, 27 to supply specified services to a non-party consumer referred 28 to in that subsection; 29 (g) an order, in relation to an instrument creating or transferring 30 an interest in land (within the meaning of section 12DC), 31 directing the respondent to execute an instrument that: 32 (i) varies, or has the effect of varying, the first-mentioned 33 instrument; or 34 (ii) terminates or otherwise affects, or has the effect of 35 terminating or otherwise affecting, the operation or 36 effect of the first-mentioned instrument. 37 27 Paragraph 12HB(1)(b) 38 Omit "or 12GN(1)", insert ", 12GN(1) or 12GNB(1)". 39 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 71 [Page Break] Part 6 Infringement notices 1 Part 6--Infringement notices 2 Australian Securities and Investments Commission Act 2001 3 28 Subsection 12BA(1) 4 Insert: 5 infringement notice means an infringement notice issued under 6 section 12GXA. 7 29 Subsection 12BA(1) 8 Insert: 9 infringement notice compliance period for an infringement notice 10 has the meaning given by section 12GXF. 11 30 Subsection 12BA(1) 12 Insert: 13 infringement notice provision means a provision of Subdivision C, 14 D or GC (other than section 12DA, subsection 12DC(2), 15 section 12DE, subsection 12DG(1) or section 12DI or 12DM). 16 31 After Subdivision GA of Division 2 of Part 2 17 Insert: 18 Subdivision GB--Infringement notices 19 12GX Purpose and effect of this Subdivision 20 (1) The purpose of this Subdivision is to provide for the issue of an 21 infringement notice to a person for an alleged contravention of an 22 infringement notice provision as an alternative to proceedings for 23 an order under section 12GBA. 24 (2) This Subdivision does not: 25 (a) require an infringement notice to be issued to a person for an 26 alleged contravention of an infringement notice provision; or 27 (b) affect the liability of a person to proceedings under 28 Subdivision G (sections 12GA to 12GO) in relation to an 29 alleged contravention of an infringement notice provision if: 72 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Infringement notices Part 6 1 (i) an infringement notice is not issued to the person for the 2 alleged contravention; or 3 (ii) an infringement notice issued to a person for the alleged 4 contravention is withdrawn under section 12GXG; or 5 (c) prevent a Court from imposing a higher penalty than the 6 penalty specified in the infringement notice if the person does 7 not comply with the notice. 8 12GXA Issue of an infringement notice 9 (1) If ASIC has reasonable grounds to believe that a person has 10 contravened an infringement notice provision, ASIC may issue an 11 infringement notice to the person. 12 (2) ASIC must not issue more than one infringement notice to the 13 person for the same alleged contravention of the infringement 14 notice provision. 15 (3) The infringement notice does not have any effect if the notice: 16 (a) is issued more than 12 months after the day on which the 17 contravention of the infringement notice provision is alleged 18 to have occurred; or 19 (b) relates to more than one alleged contravention of an 20 infringement notice provision by the person. 21 12GXB Matters to be included in an infringe ment notice 22 An infringement notice must: 23 (a) be identified by a unique number; and 24 (b) state the day on which it is issued; and 25 (c) state the name and address of the person to whom it is issued; 26 and 27 (d) state that it is being issued by ASIC; and 28 (e) state how ASIC may be contacted; and 29 (f) give details of the alleged contravention by the person, 30 including: 31 (i) the date of the alleged contravention; and 32 (ii) the particular infringement notice provision that was 33 allegedly contravened; and Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 73 [Page Break] Part 6 Infringement notices 1 (g) state the maximum pecuniary penalty that the Court could 2 order the person to pay under section 12GBA for the alleged 3 contravention; and 4 (h) specify the penalty that is payable in relation to the alleged 5 contravention; and 6 (i) state that the penalty is payable within the infringement 7 notice compliance period for the notice; and 8 (j) state that the penalty is payable to ASIC on behalf of the 9 Commonwealth; and 10 (k) explain how payment of the penalty is to be made; and 11 (l) explain the effect of sections 12GXD, 12GXE, 12GXF and 12 12GXG. 13 12GXC Amount of penalty 14 The penalty to be specified in an infringement notice that is to be 15 issued to a person must be a pecuniary penalty equal to the number 16 of penalty units worked out using the following table: 17 Number of penalty units Item If the infringement notice is the number of penalty for an alleged contravention units is ... of ... 2 a provision of Subdivision C (a) if the person is a body or D (other than corporate--60; or section 12DA, subsection (b) if the person is not a 12DC(2), section 12DE, body corporate--12. subsection 12DG(1) or section 12DI or 12DM ) 3 section 12GYB (a) if the person is a body corporate--30; or (b) if the person is not a body corporate--6. 4 section 12GYC (a) if the person is a body corporate--50; or (b) if the person is not a body corporate--10. 74 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Infringement notices Part 6 1 12GXD Effect of compliance with an infringe ment notice 2 (1) This section applies if: 3 (a) an infringement notice for an alleged contravention of an 4 infringement notice provision is issued to a person; and 5 (b) the person pays the penalty specified in the infringement 6 notice within the infringement notice compliance period and 7 in accordance with the notice; and 8 (c) the infringement notice is not withdrawn under 9 section 12GXG. 10 (2) The person is not, merely because of the payment, regarded as: 11 (a) having contravened the infringement notice provision; or 12 (b) having been convicted of an offence constituted by the same 13 conduct that constituted the alleged contravention of the 14 infringement notice provision. 15 (3) No proceedings (whether criminal or civil) may be started or 16 continued against the person by, or on behalf of, the 17 Commonwealth or ASIC in relation to: 18 (a) the alleged contravention of the infringement notice 19 provision; or 20 (b) an offence constituted by the same conduct that constituted 21 the alleged contravention. 22 12GXE Effect of failure to comply with an infringement notice 23 If: 24 (a) an infringement notice for an alleged contravention of an 25 infringement notice provision is issued to a person; and 26 (b) the person fails to pay the penalty specified in the 27 infringement notice within the infringement notice 28 compliance period and in accordance with the notice; and 29 (c) the infringement notice is not withdrawn under 30 section 12GXG; 31 the person is liable to proceedings under Subdivision G 32 (sections 12GA to 12GO) in relation to the alleged contravention 33 of the infringement notice provision. Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 75 [Page Break] Part 6 Infringement notices 1 12GXF Infringement notice compliance period for infringement 2 notice 3 (1) Subject to this section, the infringement notice compliance period 4 for an infringement notice is a period of 28 days beginning on the 5 day after the day on which the infringement notice is issued. 6 (2) ASIC may extend, by notice in writing, the infringement notice 7 compliance period for the infringement notice if ASIC is satisfied 8 that it is appropriate to do so. 9 (3) Only one extension may be given and the extension must not be for 10 longer than 28 days. 11 (4) Notice of the extension must be given to the person who was 12 issued the infringement notice. 13 (5) A failure to comply with subsection (4) does not affect the validity 14 of the extension. 15 (6) If ASIC extends the infringement notice compliance period for an 16 infringement notice, a reference in this Act to the infringement 17 notice compliance period for an infringement notice is taken to be 18 a reference to the infringement notice compliance period as so 19 extended. 20 12GXG Withdrawal of an infringement notice 21 Representations to ASIC 22 (1) The person to whom an infringement notice has been issued for an 23 alleged contravention of an infringement notice provision may 24 make written representations to ASIC seeking the withdrawal of 25 the infringement notice. 26 (2) Evidence or information that the person, or a representative of the 27 person, gives to ASIC in the course of making representations 28 under subsection (1) is not admissible in evidence against the 29 person or representative in any proceedings (other than 30 proceedings for an offence based on the evidence or information 31 given being false or misleading). 76 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Infringement notices Part 6 1 Withdrawal by ASIC 2 (3) ASIC may, by written notice (the withdrawal notice) given to a 3 person who has been issued an infringement notice for an alleged 4 contravention of an infringement notice provision, withdraw the 5 infringement notice if ASIC is satisfied that it is appropriate to do 6 so. 7 (4) Subsection (3) applies whether or not the person has made 8 representations seeking the withdrawal. 9 Content of withdrawal notices 10 (5) The withdrawal notice must state: 11 (a) the name and address of the person; and 12 (b) the day on which the infringement notice was issued to the 13 person; and 14 (c) that the infringement notice is withdrawn; and 15 (d) that proceedings under Subdivision G (sections 12GA to 16 12GO) may be started or continued against the person in 17 relation to: 18 (i) the alleged contravention of the infringement notice 19 provision; or 20 (ii) an offence constituted by the same conduct that 21 constituted the alleged contravention. 22 Time limit for giving withdrawal notices 23 (6) To be effective, the withdrawal notice must be given to the person 24 within the infringement notice compliance period for the 25 infringement notice. 26 Refunds 27 (7) If the infringement notice is withdrawn after the person has paid 28 the penalty specified in the infringement notice, ASIC must refund 29 to the person an amount equal to the amount paid. 30 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 77 [Page Break] Part 7 Public warn ing notices 1 Part 7--Public warning notices 2 Australian Securities and Investments Commission Act 2001 3 32 After section 12GLB 4 Insert: 5 12GLC ASIC may issue a public warning notice 6 Contraventions 7 (1) ASIC may issue to the public a written notice containing a warning 8 about the conduct of a person if: 9 (a) ASIC has reasonable grounds to suspect that the conduct may 10 constitute a contravention of a provision of Subdivision C or 11 D; and 12 (b) ASIC is satisfied that one or more other persons has suffered, 13 or is likely to suffer, detriment as a result of the conduct; and 14 (c) ASIC is satisfied that it is in the public interest to issue the 15 notice. 16 Substantiation notices 17 (2) Without limiting subsection (1), if: 18 (a) a person refuses to respond to a substantiation notice given to 19 the person, or fails to respond to the notice before the end of 20 the substantiation notice compliance period for the notice; 21 and 22 (b) ASIC is satisfied that it is in the public interest to issue a 23 notice under this subsection; 24 ASIC may issue to the public a written notice containing a warning 25 that the person has refused or failed to respond to the substantiation 26 notice within that period, and specifying the matter to which the 27 substantiation notice related. 28 Notice is not a legislative instrument 29 (3) A notice issued under subsection (1) or (2) is not a legislative 30 instrument. 31 78 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Enforcement and remedies relat ing to unfair and prohibited contract terms Part 8 1 Part 8--Enforcement and remedies relating to unfair 2 and prohibited contract terms 3 Australian Securities and Investments Commission Act 2001 4 33 Subsection 12BA(1) (definition of infringement notice 5 provision) 6 After "Subdivision", insert "BA,". 7 34 Subsection 12BA(1) (definition of non-party consumer) 8 Repeal the definition, substitute: 9 non-party consumer means: 10 (a) in relation to conduct referred to in subparagraph 11 12GNB(1)(a)(i)--a person who is not, or has not been, a 12 party to an enforcement proceeding in relation to the conduct; 13 and 14 (b) in relation to a term of a consumer contract referred to in 15 subparagraph 12GNB(1)(a)(ii)--a person who is not, or has 16 not been, a party to an enforcement proceeding in relation to 17 the term. 18 35 Paragraph 12GBA(1)(a) 19 After "Subdivision", insert "BA,". 20 36 Subsection 12GBA(3) (before table item 2) 21 Insert: 1 a provision of Subdivision BA (a) if the person is a body corporate--250; or (b) if the person is not a body corporate--50. 22 37 At the end of section 12GD 23 Add: 24 (9) A reference in this section to a contravention of a provision of this 25 Division includes a reference to applying or relying on, or 26 purporting to apply or rely on, a term of a consumer contract that 27 the Court has declared under section 12GND to be an unfair term 28 or a prohibited term. Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 79 [Page Break] Part 8 Enforcement and remed ies relat ing to unfair and prohibited contract terms 1 38 Subsection 12GF(1) 2 After "provision of", insert "Subdivision BA (sections 12BF to 3 12BM),". 4 39 Subsection 12GLA(4) (before paragraph (a) of the 5 definition of contravening conduct) 6 Insert: 7 (aa) contravenes a provision of Subdivision BA (sections 12BF to 8 12BM); or 9 40 Paragraph 12GLC(1)(a) 10 After "Subdivision", insert "BA,". 11 41 Paragraph 12GLD(1)(a) 12 After "Subdivision", insert "BA,". 13 42 At the end of section 12GM 14 Add: 15 (10) A reference in this section to a contravention of a provision of this 16 Division includes a reference to applying or relying on, or 17 purporting to apply or rely on, a term of a consumer contract that 18 the Court has declared under section 12GND to be an unfair term 19 or a prohibited term. 20 43 Paragraph 12GN(1)(c) 21 After "provision of", insert "Subdivision BA (sections 12BF to 12BM) 22 or". 23 44 At the end of section 12GN 24 Add: 25 (9) A reference in paragraph (1)(b) to a contravention of a provision of 26 this Division includes a reference to applying or relying on, or 27 purporting to apply or rely on, a term of a consumer contract that 28 the Court has declared under section 12GND to be an unfair term 29 or a prohibited term. 30 45 Paragraph 12GNB(1)(a) 31 Repeal the paragraph, substitute: 80 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Enforcement and remedies relat ing to unfair and prohibited contract terms Part 8 1 (a) a person: 2 (i) engaged in conduct (the contravening conduct) in 3 contravention of a provision of Subdivision BA, C or D; 4 or 5 (ii) is a party to a consumer contract who is advantaged by a 6 term (the declared term) of the contract in relation to 7 which the Court has made a declaration under 8 section 12GND; and 9 46 Paragraphs 12GNB(1)(b) and (c) 10 After "contravening conduct", insert "or declared term". 11 47 Subsection 12GNB(2) 12 Repeal the subsection, substitute: 13 (2) An order under subsection (1) may be made against: 14 (a) if subparagraph (1)(a)(i) applies--the person who engaged in 15 the contravening conduct, or a person involved in that 16 conduct; or 17 (b) if subparagraph (1)(a)(ii) applies--a party to the contract 18 who is advantaged by the declared term. 19 48 Paragraphs 12GNB(3)(a) and (b) 20 After "contravening conduct", insert "or declared term". 21 49 Subsection 12GNB(4) 22 After "contravening conduct", insert "or declared term". 23 50 Subsection 12GNB(5) 24 Repeal the subsection, substitute: 25 (5) An application under subsection (1) may be made at any time 26 within 6 years after the day on which: 27 (a) if subparagraph (1)(a)(i) applies--the cause of action that 28 relates to the contravening conduct accrues; or 29 (b) if subparagraph (1)(a)(ii) applies--the declaration is made. 30 51 Subsection 12GNB(6) 31 Omit "subsection (2)", substitute "paragraph (2)(a)". Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 81 [Page Break] Part 8 Enforcement and remed ies relat ing to unfair and prohibited contract terms 1 52 After subsection 12GNB(6) 2 Insert: 3 (7) In determining whether to make an order under subsection (1) 4 against a person referred to in paragraph (2)(b), the Court may 5 have regard to the conduct of the person, and of the non-party 6 consumers in relation to the declared term, since the declaration 7 was made. 8 53 Paragraph 12GNB(8)(a) 9 After "contravening conduct", insert "or declared term". 10 54 Paragraph 12GNB(9)(b) 11 After "contravening conduct", insert ", or declared term,". 12 55 Before section 12GO 13 Insert: 14 12GND Declarations 15 (1) The Court may, on the application of ASIC, declare that: 16 (a) a term of a consumer contract that is a financial product is an 17 unfair term or a prohibited term; or 18 (b) a term of a consumer contract for the supply, or possible 19 supply, of services that are financial services is an unfair term 20 or a prohibited term. 21 (2) Subsection (1) does not limit any other power of the Court to make 22 declarations. 23 56 Section 12GXC (before table item 2) 24 Insert: 1 a provision of Subdivision BA (a) if the person is a body corporate--50; or (b) if the person is not a body corporate--10. 25 82 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 [Page Break] Miscellaneous Part 9 1 Part 9--Miscellaneous 2 Australian Securities and Investments Commission Act 2001 3 57 After subsection 102(2B) 4 Insert: 5 (2C) ASIC must not delegate a function or power under section 12GLC, 6 or under Subdivision GB or GC of Division 2 of Part 2, to a person 7 other than: 8 (a) a member of ASIC; or 9 (b) a member of staff who is an SES employee or an acting SES 10 employee. 11 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 83 [Page Break] 1 Schedule 4--Miscellaneous 2 3 Administrative Decisions (Judicial Review) Act 1977 4 1 Paragraphs 2(e) and (f) of Schedule 3 5 Omit "the Schedule", substitute "Schedule 1". 6 Telecommunications (Interception and Access) Act 1979 7 2 Paragraph 5D(5B)(c) 8 Omit "the Schedule", substitute "Schedule 1". 9 Trade Practices Act 1974 10 3 Subsection 6(3) 11 Omit "1A and 1AA", substitute "1AAA, 1AA and 1A". 12 4 Section 150A (definition of Schedule version of Part IV) 13 Omit "the Schedule", substitute "Schedule 1". 14 5 Schedule (heading) 15 Omit "Schedule" (first occurring), substitute "Schedule 1". 84 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009