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CONSUMER CREDIT LEGISLATION AMENDMENT (ENHANCEMENTS) ACT 2012 (NO. 130, 2012) - SCHEDULE 5

Consumer leases

   

National Consumer Credit Protection Act 2009

1  Subsection 5(1) (definition of lessor )

Omit "means the lessor under a consumer lease", substitute "has the same meaning as in section 204 of the National Credit Code".

2  Subsection 5(1) (definition of value of a credit contract, mortgage, guarantee or consumer lease )

Repeal the definition.

3  Subsection 5(1)

Insert:

"value" of a credit contract, mortgage, guarantee or consumer lease: see section 199.

4  Paragraph 147(7)(b)

Omit "sections 72 and 94", substitute "sections 177B and 179H".

5  Subsection 147(7) (note 1)

Omit "Note 1", substitute "Note".

6  Subsection 147(7) (note 2)

Repeal the note.

7  Subsection 199(2) (table items 2, 3, 6, 7, 9 and 12)

Omit ", guarantee or consumer lease", substitute "or guarantee".

8  Subsection 199(2) (at the end of the table)

Add:

14

Section 175F of the National Credit Code

the value of the consumer lease to which the order relates is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations--that higher amount.

15

Subsection 175G(6) of the National Credit Code

the value of the consumer lease to which the order relates is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations--that higher amount.

16

Section 177D of the National Credit Code

not applicable.

17

Section 177E of the National Credit Code

not applicable.

18

Section 177F of the National Credit Code

the value of the consumer lease to which the order relates is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations--that higher amount.

19

Section 179K of the National Credit Code

not applicable.

20

Section 179Q of the National Credit Code

the value of the consumer lease to which the order relates is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations--that higher amount.

21

Subsection 179R(3) of the National Credit Code

the order is for an amount that is not more than:

(a) $40,000; or

(b) if a higher amount is prescribed by the regulations--that higher amount.

9  Subsection 199(3)

Omit " of a credit contract, mortgage, guarantee or consumer lease ", substitute "of a credit contract, mortgage, guarantee or consumer lease".

10  Paragraph 200(1)(b)

Omit "or 96", substitute ", 96, 177D or 179K".

11  Subsection 76(8) of the National Credit Code

Repeal the subsection.

12  Subsection 87(6) of the National Credit Code

Repeal the subsection.

13  Section 92 of the National Credit Code

Repeal the section.

14  Subsection 173(1) of the National Credit Code

Repeal the subsection, substitute:

             (1)  A consumer lease must be in the form of a written lease document:

                     (a)  signed by the lessor and the lessee; and

                     (b)  containing the information required by this Division.

          (1A)  Subject to subsection (2), a consumer lease may consist of one or more separate documents.

15  After subsection 173(2) of the National Credit Code

Insert:

          (2A)  In the case of a lease document consisting of more than one document, it is sufficient compliance with this section if one of the documents is duly signed and the other documents are referred to in the signed document.

16  After section 173 of the National Credit Code

Insert:

173A   Other forms of consumer lease

             (1)  The regulations may authorise other ways of making a consumer lease that do not involve a written document.

             (2)  In that case, the provisions of this Division apply with such modifications as are prescribed by the regulations.

17  After section 174 of the National Credit Code

Insert:

174A   Alteration of consumer lease document

             (1)  An alteration of (including an addition to) a new consumer lease document by the lessor after it is signed by the lessee is ineffective unless the lessee has agreed in writing to the alteration.

             (2)  This section does not apply to an alteration having the effect of reducing the lessee's liabilities under the consumer lease.

18  After section 175 of the National Credit Code

Insert:

Division 4 -- Fees and charges

175A   Prohibited consumer lease fees or charges

                   The regulations may specify:

                     (a)  consumer lease fees or charges; or

                     (b)  classes of consumer lease fees or charges;

that are prohibited for the purposes of this Code.

175B   Fees or charges in relation to third parties

When this section applies

             (1)  This section applies if a fee or charge is payable by a lessee to the lessor for an amount (the third party amount ) payable or paid by the lessor to another person, body or agency.

Third party amount ascertainable at time of lessee payment

             (2)  If, when the fee or charge is paid by the lessee to the lessor, the third party amount is ascertainable, then the amount of the fee or charge must not exceed the third party amount.

Third party amount not ascertainable at time of lessee payment

             (3)  If:

                     (a)  when the fee or charge is paid by the lessee to the lessor, the third party amount is not ascertainable; and

                     (b)  after the fee or charge is paid, the lessor ascertains the third party amount; and

                     (c)  the third party amount is less than the amount of the fee or charge paid;

then the lessor must refund or credit the difference to the lessee.

Determining third party amount

             (4)  The third party amount is to be determined by:

                     (a)  taking into account any discount, rebate or other allowance that is received or receivable by the lessor or a related body corporate (within the meaning of the Corporations Act 2001 ); and

                     (b)  disregarding any rebate on tax payable by the lessor or a related body corporate (within the meaning of that Act).

Division 5 -- Lessor's obligation to account

Subdivision A -- Ongoing statements of account

175C   Statements of account

             (1)  A lessor must give to the lessee, or arrange for the lessee to be given, periodic statements of account in accordance with this Subdivision.

Criminal penalty:    100 penalty units.

             (2)  The maximum period for a statement of account is 12 months.

             (3)  A statement of account need not be given if:

                     (a)  the lessee was in default under the consumer lease during the statement period and the lessor has commenced enforcement proceedings; or

                     (b)  the lessee has died or is insolvent and the lessee's personal representative or trustee in bankruptcy has not requested a statement of account.

             (4)  Subsection (1) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

175D   Information to be contained in statements of account

                   A statement of account must contain the information prescribed by the regulations.

175E   Statement of amount owing and other matters

             (1)  A lessor must, at the request of a lessee and within the time specified by this section, provide a statement of all or any of the following:

                     (a)  any amounts credited to the lessee's account during a period specified in the request;

                     (b)  any amounts currently overdue and the date they became due;

                     (c)  any amount currently payable and the date it becomes due;

                     (d)  any other information prescribed by the regulations.

Criminal penalty:    100 penalty units.

             (2)  The statement must be given:

                     (a)  within 14 days, if all information requested relates to a period 1 year or less before the request is given; or

                     (b)  within 30 days, if any information requested relates to a period more than 1 year before the request is given.

             (3)  A statement under this section may be given orally but if the request for the statement is made in writing the statement must be given in writing.

             (4)  In the case of joint lessees, the statement under this section need only be given to a lessee who requests the statement and not, despite section 194, to each joint lessee.

             (5)  A lessor is not required to provide a further written statement under this section if it has, within the 3 months before the request is given, given such a statement to the person requesting it.

             (6)  Subsection (1) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

175F   Court may order statement of account to be provided

                   If a statement of account is not provided within the time required by this Subdivision, the court may, on the application of the lessee, order the lessor to provide the statement or itself determine the amounts in relation to which the statement was sought.

175G   Disputed accounts

             (1)  If:

                     (a)  a liability is entered against a lessee under a consumer lease; and

                     (b)  the lessee, by written notice to the lessor, disputes the liability;

then the lessor must give the lessee a written notice explaining in reasonable detail how the liability arises.

             (2)  A written notice need not be given if the lessor agrees with the lessee as to the disputed amount and gives the lessee a written notice advising of the agreed liability.

             (3)  In the case of a consumer lease for which a statement of account is given, the notice of dispute must be given to the lessor within 30 days after the day the lessee receives the statement of account in which the amount, or part of that amount, is first shown.

             (4)  In the case of a consumer lease in respect of which a statement of account need not be and is not given for the period to which the disputed liability relates, the notice of dispute must be given to the lessor not later than 3 months after the day the lease ends.

             (5)  The lessor must not begin enforcement proceedings on the basis of a default arising from the disputed liability until the period of 30 days, starting on the day the lessor gives the written explanation or advice as to agreement, has expired.

Criminal penalty:    50 penalty units.

             (6)  A lessee or lessor may apply to the court to have the court determine a disputed liability and, if satisfied that a liability is genuinely disputed, the court may determine the matters in dispute and make such consequential orders as it thinks just.

             (7)  If an application is made to the court under this section within 30 days after the day the written explanation is given, the lessor must not, without leave of the court, begin enforcement proceedings on the basis of a default arising from the disputed liability.

Criminal penalty:    50 penalty units.

             (8)  Subsections (5) and (7) are offences of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

             (9)  This section does not affect a dispute not dealt with, or not arising, under this section.

Subdivision B -- End of lease statements

175H   End of lease statement

             (1)  A lessor must arrange for the lessee to be given, not later than 90 days before the end of the fixed term of a consumer lease, a statement containing the information prescribed by the regulations.

Criminal penalty:    100 penalty units.

             (2)  Subsection (1) does not apply in the circumstances (if any) prescribed by the regulations.

             (3)  Subsection (1) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

Division 6 -- Certain transactions not to be treated as new consumer leases

175J   Changes etc. under consumer leases

                   If:

                     (a)  there is:

                              (i)  a change to an existing consumer lease that results in further goods being provided; or

                             (ii)  a deferral or waiver of an amount under an existing consumer lease; or

                            (iii)  a postponement relating to an existing consumer lease; and

                     (b)  the change, deferral, waiver or postponement is made in accordance with this Code or the existing consumer lease;

then the change, deferral, waiver or postponement is not to be treated as creating a new consumer lease or a credit contract for the purposes of this Code.

Division 7 -- Changes to obligations under consumer leases

Subdivision A -- Changes by agreement of parties

177A   Changes by agreement

             (1)  If the parties under an existing consumer lease agree to change its terms, the lessor must, not later than 30 days after the date of the agreement, give to the lessee a written notice setting out:

                     (a)  particulars of the change in the terms of the consumer lease; and

                     (b)  any information required by the regulations.

Criminal penalty:    100 penalty units.

             (2)  Subsection (1) does not apply to a change which defers or otherwise reduces the obligations of the lessee for a period not exceeding 90 days.

             (3)  This section does not apply to a change made under Subdivision B.

             (4)  The lessor may, under subsection (1), give a lessee particulars only of a matter as changed instead of particulars of the change, but only if the lessor:

                     (a)  makes it clear to the lessee that the matter has changed; or

                     (b)  issues to the lessee a new set of terms and conditions relating to the consumer lease.

             (5)  Subsection (1) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

Subdivision B -- Changes on grounds of hardship and unjust transactions

177B   Changes on grounds of hardship

Hardship notice

             (1)  If a lessee considers that he or she is or will be unable to meet his or her obligations under a consumer lease, the lessee may give the lessor notice (a hardship notice ), orally or in writing, of the lessee's inability to meet the obligations.

Note:          If the lessee has given the lessor a hardship notice, there may be extra requirements (beyond those in section 179D) that the lessor must comply with before beginning enforcement proceedings--see section 179F.

Further information

             (2)  Within 21 days after the day of receiving the lessee's hardship notice, the lessor may give the lessee notice, orally or in writing, requiring the lessee to give the lessor specified information within 21 days of the date of the notice stated in the notice. The information specified must be relevant to deciding:

                     (a)  whether the lessee is or will be unable to meet the lessee's obligations under the lease; or

                     (b)  how to change the lease if the lessee is or will be unable to meet those obligations.

             (3)  The lessee must comply with the requirement.

Note:          The lessor need not agree to change the consumer lease, especially if the lessor:

(a)    does not believe there is a reasonable cause (such as illness or unemployment) for the lessee's inability to meet his or her obligations; or

(b)    reasonably believes the lessee would not be able to meet his or her obligations under the lease even if it were changed.

Notice of decision on changing consumer lease

             (4)  The lessor must, before the end of the period identified under subsection (5), give the lessee a notice:

                     (a)  that is in the form (if any) prescribed by the regulations and records the fact that the lessor and the lessee have agreed to change the consumer lease; or

                     (b)  that is in the form (if any) prescribed by the regulations and states:

                              (i)  the lessor and the lessee have not agreed to change the consumer lease; and

                             (ii)  the reasons why they have not agreed; and

                            (iii)  the name and contact details of the approved external dispute resolution scheme of which the lessor is a member; and

                            (iv)  the lessee's rights under that scheme.

Civil penalty:          2,000 penalty units.

             (5)  The lessor must give the notice before the end of the period identified using the table.

Period for giving notice

 

If:

The period is:

1

The lessor does not require information under subsection (2)

21 days after the day of receiving the hardship notice

2

The lessor requires information under subsection (2) but does not receive any information in compliance with the requirement

28 days after the stated date of the notice under subsection (2)

3

The lessor requires information under subsection (2) and receives information in compliance with the requirement

21 days after the day of receiving the information

Regulations may prescribe shorter periods for consumer leases

             (6)  The regulations may provide for subsections (2), (3), (4) and (5) to have effect in relation to consumer leases prescribed by the regulations as if a particular reference in subsection (2) or (5) to a number of days were a reference to a lesser number of days prescribed by the regulations.

177C   Notice of change

             (1)  A lessor that enters into an agreement with a lessee to change the consumer lease as a result of a hardship notice by the lessee must, not later than 30 days after the date of the agreement, give to the lessee a written notice setting out:

                     (a)  particulars of the change in the terms of the lease; and

                     (b)  any information required by the regulations.

Criminal penalty:    50 penalty units.

             (2)  The lessor may, under subsection (1), give the lessee particulars only of a matter as changed instead of particulars of the change, but only if the lessor:

                     (a)  makes it clear to the lessee that the matter has changed; or

                     (b)  gives to the lessee a new set of terms and conditions relating to the lease.

             (3)  Subsection (1) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

177D   Changes by court

             (1)  If a lessor does not change a consumer lease as a result of a hardship notice by a lessee, the lessee may apply to the court to change the terms of the lease.

             (2)  The court may, after allowing the applicant and the lessor a reasonable opportunity to be heard:

                     (a)  by order change the lease (but not so as to reduce the amount ultimately payable by the lessee to the lessor under the lease), and make such other orders as it thinks fit; or

                     (b)  refuse to change the lease.

             (3)  The court may, if it thinks it appropriate in the circumstances, stay any enforcement proceedings under the lease, and make such other orders as it thinks fit, until the application has been determined.

177E   Lessor may apply for variation of change

             (1)  A lessor under a consumer lease that has been changed by an order under subsection 177D(2) may apply to the court for an order varying or revoking the order.

             (2)  A lessor subject to a stay of enforcement proceedings or other order under subsection 177D(3) may apply to the court for an order varying or revoking the stay or order.

             (3)  On an application under this section, the court may vary or revoke the order or stay to which the application relates as it thinks fit, or may refuse the application.

177F   Court may reopen unjust transactions

Power to reopen unjust transactions

             (1)  The court may, if satisfied on the application of a lessee that, in the circumstances relating to the relevant consumer lease at the time it was entered into or changed (whether or not by agreement), the lease or change was unjust, reopen the transaction that gave rise to the lease or change.

Matters to be considered by court

             (2)  In determining whether a term of a particular consumer lease is unjust in the circumstances relating to it at the time it was entered into or changed, the court is to have regard to the public interest and to all the circumstances of the case and may have regard to the following:

                     (a)  the consequences of compliance, or noncompliance, with all or any of the provisions of the lease;

                     (b)  the relative bargaining power of the parties;

                     (c)  whether or not, at the time the lease was entered into or changed, its provisions were the subject of negotiation;

                     (d)  whether or not it was reasonably practicable for the applicant to negotiate for the alteration of, or to reject, any of the provisions of the lease or the change;

                     (e)  whether or not any of the provisions of the lease impose conditions that are unreasonably difficult to comply with, or not reasonably necessary for the protection of the legitimate interests of a party to the lease;

                      (f)  whether or not the lessee, or a person who represented the lessee, was reasonably able to protect the interests of the lessee because of his or her age or physical or mental condition;

                     (g)  the form of the lease and the intelligibility of the language in which it is expressed;

                     (h)  whether or not, and if so when, independent legal or other expert advice was obtained by the lessee;

                      (i)  the extent to which the provisions of the lease or change and their legal and practical effect were accurately explained to the lessee and whether or not the lessee understood those provisions and their effect;

                      (j)  whether the lessor or any other person exerted or used unfair pressure, undue influence or unfair tactics on the lessee and, if so, the nature and extent of that unfair pressure, undue influence or unfair tactics;

                     (k)  whether the lessor took measures to ensure that the lessee understood the nature and implications of the transaction and, if so, the adequacy of those measures;

                      (l)  whether at the time the lease was entered into or changed, the lessor knew, or could have ascertained by reasonable inquiry at the time, that the lessee could not pay in accordance with its terms or not without substantial hardship;

                    (m)  whether the terms of the transaction or the conduct of the lessor is justified in the light of the risks undertaken by the lessor;

                     (n)  the terms of other comparable transactions involving other lessors and, if the injustice is alleged to result from excessive costs, the costs payable in comparable cases;

                     (o)  any other relevant factor.

Representing lessee

             (3)  For the purposes of paragraph (2)(f), a person is taken to have represented a lessee if the person represented the lessee, or assisted the lessee to a significant degree, in the negotiations process prior to, or at, the time the consumer lease was entered into or changed.

Unforeseen circumstances

             (4)  In determining whether a consumer lease is unjust, the court is not to have regard to any injustice arising from circumstances that were not reasonably foreseeable when the lease was entered into or changed.

Conduct

             (5)  In determining whether to grant relief in respect of a consumer lease that it finds to be unjust, the court may have regard to the conduct of the parties to the proceedings in relation to the lease since it was entered into or changed.

Application

             (6)  This section does not apply to a change to a consumer lease under this Subdivision.

177G   Orders on reopening of transactions

                   The court may, if it reopens a transaction under this Subdivision, do any one or more of the following, despite any settlement of accounts or any agreement purporting to close previous dealings and create a new obligation:

                     (a)  reopen an account already taken between the parties to the transaction;

                     (b)  relieve the lessee from payment of any amount in excess of such amount as the court, having regard to the risk involved and all other circumstances, considers to be reasonably payable;

                     (c)  set aside either wholly or in part or revise or alter an agreement made in connection with the transaction;

                     (d)  give judgement for or make an order in favour of a party to the transaction of such amount as, having regard to the relief (if any) which the court thinks fit to grant, is justly due to that party under the consumer lease;

                     (e)  give judgement or make an order against a person for delivery of goods to which the lease relates and which are in the possession of that person;

                      (f)  make ancillary or consequential orders.

177H   Applications by ASIC

             (1)  This section applies if ASIC considers that it is in the public interest to make an application under this Subdivision.

             (2)  ASIC may make an application under this Subdivision and has standing to represent the public interest.

             (3)  The application:

                     (a)  may apply to any one or more consumer leases; and

                     (b)  may apply to all or any class of consumer leases entered into by a lessor during a specified period (for example, all leases entered into during a specified period that are affected by a specified matter for which relief is sought).

177J   Time limit

                   An application may not be brought under this Subdivision more than 2 years after the relevant consumer lease is terminated, discharged or otherwise comes to an end.

177K   Joinder of parties

             (1)  If it appears to the court that a person other than a lessor (a third party ) has shared in the profits of, or has a beneficial interest prospectively or otherwise in, a consumer lease that the court holds to be unjust, the court may make an order about the third party that the court considers appropriate.

             (2)  However, before making an order about the third party, the court must:

                     (a)  join the third party as a party to the proceedings; and

                     (b)  give the third party an opportunity to appear and be heard in the proceedings.

19  Section 176 of the National Credit Code

Repeal the section.

20  Division 3 of Part 11 of the National Credit Code (heading)

Repeal the heading, substitute:

Division 8 -- Repossession, termination and enforcement of consumer leases

Subdivision A -- Repossession of goods under consumer lease

21  Section 177 of the National Credit Code

Repeal the section.

22  After section 178 of the National Credit Code

Insert:

Subdivision B -- Termination of consumer lease by lessee

178A   Termination before goods have been provided

             (1)  If:

                     (a)  a consumer lease has been entered into; and

                     (b)  the goods hired under the lease have not been provided;

then the lessee may, by written notice to the lessor, terminate the lease.

             (2)  Nothing in subsection (1) prevents the lessor from retaining or requiring payment of fees or charges incurred before the termination and which would have been payable under the consumer lease.

23  Section 179 of the National Credit Code (heading)

Repeal the heading, substitute:

179   Termination after goods have been provided

24  After section 179 of the National Credit Code

Insert:

179A   Statement of amount payable on termination

             (1)  A lessor must, at the written request of a lessee, provide a written statement of the amount required to terminate a consumer lease as at such date as the lessee specifies. If so requested, the lessor must also provide details of the items which make up that amount.

             (2)  The statement must also contain:

                     (a)  a statement to the effect that the amount payable to terminate the lease may change according to the date on which it is paid; and

                     (b)  a statement to the effect that the lessee has no right to own the goods if the lease is terminated; and

                     (c)  a statement to the effect that the lessee must return the goods to the lessor by a specified date; and

                     (d)  any other matters prescribed by the regulations.

             (3)  A lessor must give a statement, complying with this section, within 7 days after the day the request is given to the lessor.

Criminal penalty:    50 penalty units.

             (4)  In the case of joint lessees, the statement need only be given to the lessee who requests the statement and not, despite section 194, to each joint lessee.

             (5)  Subsection (3) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

179B   Court may determine amount payable on termination if lessor does not

             (1)  If the lessor does not provide a statement of the amount payable to terminate a consumer lease in accordance with this Subdivision after a request is duly made by a lessee, the court may, on the application of the lessee, determine:

                     (a)  the amount payable on the date of determination; and

                     (b)  the amount by which it increases daily; and

                     (c)  the period for which the determination is applicable.

             (2)  The consumer lease is discharged if:

                     (a)  the goods hired under the lease are returned to the lessor within the applicable period; and

                     (b)  an amount calculated in accordance with the determination is tendered to the lessor within the applicable period.

179C   One-off notice to be given the first time a direct debit default occurs

             (1)  This section applies if:

                     (a)  a lessee authorises payment of an amount for a consumer lease by direct debit; and

                     (b)  default occurs; and

                     (c)  it is the first occasion the default occurs.

             (2)  The lessor must give the lessee a notice, complying with this section, within 14 days of the default occurring.

Criminal penalty:    50 penalty units.

             (3)  The notice must contain the information prescribed by the regulations.

             (4)  Subsection (2) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

             (5)  This section does not affect any other requirement under this Code to give a notice.

Subdivision C -- Enforcement of consumer leases

179D   Requirements to be met before lessor can enforce consumer lease against defaulting lessee

Enforcement of consumer lease

             (1)  A lessor must not begin enforcement proceedings against a lessee in relation to a consumer lease unless:

                     (a)  the lessee is in default under the lease; and

                     (b)  the lessor has given the lessee a default notice, complying with this section, allowing the lessee a period of at least 30 days from the date of the notice to remedy the default; and

                     (c)  the default has not been remedied within that period.

Criminal penalty:    50 penalty units.

Note:          If a lessee has given a lessor a hardship notice or a postponement request there may be extra requirements that the lessor must comply with before beginning enforcement proceedings--see sections 179F and 179H.

Default notice requirements

             (2)  A default notice must contain a prominent heading at its top stating that it is a default notice and specify:

                     (a)  the default; and

                     (b)  the action necessary to remedy the default; and

                     (c)  a period for remedying the default; and

                     (d)  the date after which enforcement proceedings in relation to the default, and, if relevant, repossession of goods hired under the lease may begin if the default has not been remedied; and

                     (e)  the information prescribed by the regulations about the lessee's right to:

                              (i)  give a hardship notice under section 177B; or

                             (ii)  give a postponement request under section 179H; or

                            (iii)  make an application to the court under sections 177D and 179K; and

                      (f)  the information prescribed by the regulations about:

                              (i)  the approved external dispute resolution scheme of which the lessor is a member; and

                             (ii)  the lessee's rights under that scheme; and

                     (g)  that a subsequent default of the same kind that occurs during the period specified for remedying the original default may be the subject of enforcement proceedings without further notice if it is not remedied within the period; and

                     (h)  that, under the Privacy Act 1988 , the debt may be included in a credit reporting agency's credit information file about the lessee if:

                              (i)  the debt remains overdue for 60 days or more; and

                             (ii)  the lessor has taken steps to recover all or part of the debt; and

                      (i)  any other information prescribed by the regulations.

When default notice not required

             (3)  A lessor is not required to give a default notice or to wait until the period specified in the default notice has elapsed, before beginning enforcement proceedings, if:

                     (a)  the lessor reasonably believes that it was induced by fraud on the part of the lessee to enter into the consumer lease; or

                     (b)  the lessor has made reasonable attempts to locate the lessee but without success; or

                     (c)  the court authorises the lessor to begin the enforcement proceedings; or

                     (d)  the lessor reasonably believes that the lessee has disposed of goods hired under the lease, or intends to dispose of such goods, contrary to the terms of the lease; or

                     (e)  the lessee becomes insolvent after entering into the consumer lease.

Non-remedial default

             (4)  If the lessor reasonably believes that a default is not capable of being remedied:

                     (a)  the default notice need only specify the default; and

                     (b)  the lessor may begin the enforcement proceedings after the period of 30 days from the date of the notice.

Strict liability

             (5)  Subsection (1) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

179E   Defaults may be remedied

             (1)  If a default notice under section 179D states that the lessor intends to take action because the lessee is in default under the consumer lease, the lessee may remedy the default within the period specified in the notice, and the lease is then reinstated and any acceleration clause cannot operate.

             (2)  A lessee does not remedy the default if, at the end of the period, the lessee is in default under the consumer lease because of the breach specified in the notice or because of a subsequent breach of the same type.

179F   Effect of hardship notices on enforcement

             (1)  This section applies if:

                     (a)  a lessor is required to give a default notice under section 179D before beginning enforcement proceedings; and

                     (b)  before or after the lessor gives the default notice, the lessee gives the lessor a hardship notice (the current hardship notice ) under section 177B; and

                     (c)  either:

                              (i)  in the 4 months before the current hardship notice is given, the lessee had not given the lessor another hardship notice; or

                             (ii)  in that 4-month period, the lessee had given the lessor one or more other hardship notices, but the lessor reasonably believes that the basis on which the current hardship notice was given is materially different from the bases on which the other hardship notices were given.

             (2)  The lessor must not begin enforcement proceedings against the lessee unless:

                     (a)  the lessor has given the lessee a notice under paragraph 177B(4)(b), in response to the current hardship notice, stating that the lessor and the lessee have not agreed to change the consumer lease; and

                     (b)  the period of 14 days, starting on the day the lessor gave the notice under paragraph 177B(4)(b), has expired.

Criminal penalty:    50 penalty units.

Note:          The lessor must allow the lessee at least 30 days from the date of the default notice to remedy the default--see section 179D. The 14-day period in subsection (2) may end before, at the same time as, or after the end of the period for remedying the default specified in the default notice.

             (3)  However, the lessor may take possession of goods hired under a consumer lease if the lessor reasonably believes that:

                     (a)  the lessee has removed or disposed of the goods, or intends to remove or dispose of them; or

                     (b)  urgent action is necessary to protect the goods.

             (4)  Subsection (2) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

179G   Requirements to be met before lessor can enforce an acceleration clause

             (1)  An acceleration clause of a consumer lease is to operate only if:

                     (a)  the lessee is in default under the lease; and

                     (b)  the lessor has given to the lessee a default notice under section 179D; and

                     (c)  the default notice contains an additional statement of:

                              (i)  the manner in which the liabilities of the lessee under the consumer lease would be affected by the operation of the acceleration clause; and

                             (ii)  the amount required to terminate the lease (as accelerated); and

                     (d)  the default has not been remedied within the period specified in the default notice (unless the lessor reasonably believes that the default is not capable of being remedied).

             (2)  However, a lessor is not required to give a default notice under section 179D or to wait until the period specified in the default notice has elapsed before bringing an acceleration clause into operation, if:

                     (a)  the lessor reasonably believes that it was induced by fraud on the part of the lessee to enter into the consumer lease; or

                     (b)  the lessor has made reasonable attempts to locate the lessee but without success; or

                     (c)  the court authorises the lessor not to do so; or

                     (d)  the lessor reasonably believes that the lessee has removed or disposed of goods hired under a consumer lease, or intends to remove or dispose of goods hired under the lease, or that urgent action is necessary to protect the goods.

Subdivision D -- Postponement of enforcement proceedings

179H   Postponement of exercise of rights

Postponement request

             (1)  A lessee who has been given a default notice under section 179D may, at any time before the end of the period specified in the notice, request (a postponement request ), orally or in writing, that the lessor negotiate a postponement of:

                     (a)  the enforcement proceedings; or

                     (b)  any action taken under such proceedings; or

                     (c)  the operation of any applicable acceleration clause.

Lessor's notice about postponement

             (2)  If the lessee gives the postponement request, the lessor must, within 21 days after the day of receiving the request, give the person a written notice:

                     (a)  that states whether or not the lessor agrees to negotiate a postponement; and

                     (b)  if the lessor does not agree to negotiate--that states:

                              (i)  the name of the approved external dispute resolution scheme of which the lessor is a member; and

                             (ii)  the person's rights under that scheme; and

                            (iii)  the reasons for not agreeing to negotiate.

Criminal penalty:    30 penalty units.

Enforcement proceedings

             (3)  If the lessee gives the postponement request, the lessor must not begin enforcement proceedings unless:

                     (a)  the lessor has given the lessee a notice under subsection (2) in response to the postponement request; and

                     (b)  the period of 14 days, starting on the day the lessor gives the notice under subsection (2), has expired.

Criminal penalty:    50 penalty units.

Note:          The lessor must allow the lessee at least 30 days from the date of the default notice to remedy the default--see section 179D. The 14-day period in subsection (3) may end before, at the same time as, or after the end of the period for remedying the default specified in the default notice.

             (4)  However, the lessor may take possession of goods hired under the consumer lease if the lessor reasonably believes that:

                     (a)  the lessee has removed or disposed of the goods, or intends to remove or dispose of them; or

                     (b)  urgent action is necessary to protect the goods.

Strict liability

             (5)  Subsections (2) and (3) are offences of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

179J   Effect of negotiated postponement

             (1)  A default notice under section 179D is taken, for the purposes of this Code, not to have been given if a postponement is negotiated with the lessor under section 179H and the lessee complies with the conditions of postponement.

             (2)  A lessor must give written notice of the conditions of a postponement referred to in subsection (1) not later than 30 days after agreement is reached on the postponement. The notice must set out the consequences under subsection (5) if the conditions of the postponement are not complied with.

Criminal penalty:    100 penalty units.

             (3)  Subsection (2) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

             (4)  A lessor that is required to give notice under section 177A (which deals with changes to leases by agreement) in relation to a postponement is not required to comply with subsection (2).

             (5)  If any of the conditions of a postponement are not complied with, a lessor is not required to give a further default notice under this Code to the lessee with whom the postponement was negotiated before proceeding with enforcement proceedings.

179K   Postponement by court

             (1)  If the lessee is unable to negotiate a postponement, the lessee may apply to the court for a postponement.

             (2)  After allowing the applicant and the lessor a reasonable opportunity to be heard, the court may:

                     (a)  order the postponement to which the application relates; or

                     (b)  refuse to order the postponement; or

                     (c)  make such other orders as it thinks fit.

             (3)  The court may, if it thinks it appropriate in the circumstances, stay any enforcement proceedings under the consumer lease until the application has been determined.

179L   Lessor may apply for variation of postponement order

             (1)  A lessor that is subject to an order under this Subdivision may apply to the court for variation of the order.

             (2)  On such an application, the court may:

                     (a)  vary the order to which the application relates as it thinks fit; or

                     (b)  refuse to vary the order; or

                     (c)  revoke the order.

Subdivision E -- Enforcement procedures for goods hired under a consumer lease

179M   Information as to location of goods hired under a consumer lease

             (1)  A lessor may, by written notice to a lessee, require the lessee to inform the lessor, within 7 days after the day the notice is given to the lessee, where the goods hired under the consumer lease are and, if the goods are not in the lessee's possession, to give the lessor all information in the lessee's possession that might assist the lessor to trace the goods.

             (2)  A lessee who contravenes a notice under this section commits an offence.

Criminal penalty:    50 penalty units.

             (3)  Subsection (2) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

179N   Entry to residential property to take possession of goods

             (1)  A lessor, or an agent of a lessor, must not enter any part of premises used for residential purposes for the purpose of taking possession of goods hired under a consumer lease unless:

                     (a)  the court has authorised the entry; or

                     (b)  the occupier of the premises has, after being informed in writing of the provisions of this section, consented in writing to the entry.

             (2)  The regulations may provide for procedures for the obtaining and giving of consent for the purposes of this section and may set out the circumstances in which consent is or is not taken to have been given.

             (3)  If premises are entered in contravention of this section by a lessor or an agent of a lessor, the lessor commits an offence.

Criminal penalty:    50 penalty units.

             (4)  Subsection (3) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

179P   Court may order entry

                   The court may, on the application of a lessor that is entitled to take possession of goods hired under a consumer lease, authorise the lessor to enter residential premises for the purpose of taking possession of the goods.

179Q   Order for possession

             (1)  The court may, on the application of a lessor that is entitled to take possession of goods hired under a consumer lease, order a person who has possession of the goods to deliver them to the lessor:

                     (a)  at a specified time or place; or

                     (b)  within a specified period.

             (2)  The court may, on the application of a lessor or other person required to deliver goods to a lessor, by order vary the place at which or time or period within which goods must be delivered to the lessor.

             (3)  A person who contravenes an order under this section commits an offence.

Criminal penalty:    30 penalty units.

             (4)  Subsection (3) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

Subdivision F -- Enforcement expenses

179R    Recovery of enforcement expenses

             (1)  A lessor must not recover or seek to recover enforcement expenses from a lessee in excess of those reasonably incurred by the lessor. Enforcement expenses of a lessor extend to those reasonably incurred by the use of the staff and facilities of the lessor.

             (2)  Any provision of the consumer lease that appears to confer a greater right is void. If enforcement expenses are in fact recovered in excess of this limitation, they may be recovered back.

             (3)  If there is a dispute between the lessor and the lessee about the amount of enforcement expenses that may be recovered by the lessor, the court may, on application by any of the parties to the dispute, determine the amount of that liability.

Division 9 -- Linked lessors and tied consumer leases

Subdivision A -- Interpretation and application

179S   Linked lessors and tied consumer leases

             (1)  For the purposes of this Code, a linked lessor of a supplier means a lessor:

                     (a)  with whom the supplier has a contract, arrangement or understanding relating to:

                              (i)  the supply to the supplier of goods in which the supplier deals; or

                             (ii)  the business carried on by the supplier of supplying goods; or

                            (iii)  the provision to persons of a consumer lease for the hire of goods supplied by the supplier to the lessor; or

                     (b)  to whom the supplier, by arrangement with the lessor, regularly refers persons for the purpose of being provided with a consumer lease; or

                     (c)  whose forms of contract or forms of application or offers for a consumer lease are, by arrangement with the lessor, made available to persons by the supplier; or

                     (d)  with whom the supplier has a contract, arrangement or understanding under which applications for a consumer lease or offers to be provided with a consumer lease from the lessor may be signed by persons at the premises of the supplier.

             (2)  A tied consumer lease is a consumer lease entered into between a lessor and a lessee where:

                     (a)  the lessee enters into the lease to hire goods supplied by the supplier to the lessor; and

                     (b)  at the time the lease is entered into the lessor is a linked lessor of the supplier.

Subdivision B -- Liability of lessors for suppliers' misrepresentations

179T   Lessor liable for supplier's misrepresentations about hired goods

             (1)  If there is a tied consumer lease, any representation, warranty or statement made (whether orally or in writing) by the supplier, or any person acting on behalf of the supplier, to the lessee in relation to:

                     (a)  goods hired under the lease; or

                     (b)  the lease; or

                     (c)  services, supplied or arranged by the lessor, that are incidental to the hire of goods under the lease;

gives the lessee the same rights against the lessor as the lessee would have had if it had been made by the lessor.

             (2)  Without prejudice to any other rights or remedies to which a lessor may be entitled, a lessor is entitled to be indemnified by the person who made the representation, warranty or statement, and any person on whose behalf it was made, against any damage suffered by the lessor through the operation of this section.

Division 10 -- Conduct relating to consumer leases

179U   False or misleading representations

             (1)  A person must not make a false or misleading representation:

                     (a)  in relation to a matter that is material to entry into a consumer lease or a related transaction; or

                     (b)  in attempting to induce another person to enter into a consumer lease or a related transaction.

Criminal penalty:    50 penalty units.

             (2)  It is a defence to prosecution for an offence against this section if a person charged proves that he or she reasonably believed that the representation was not false or misleading.

             (3)  A person who suffers loss as a result of a contravention of this section by another person may recover the amount of the loss from:

                     (a)  that other person; or

                     (b)  any other person involved in the contravention.

179V   Harassment

                   A lessor or supplier must not harass a person in attempting to get that person to:

                     (a)  apply for a consumer lease; or

                     (b)  enter into a consumer lease or a related transaction.

Criminal penalty:    100 penalty units.

Division 11 -- Other Code provisions applicable to consumer leases

179W   Application of certain Code provisions to consumer leases

             (1)  Part 12 (relating to miscellaneous matters) and subsection 204(2) (definition of associated ) apply in relation to a consumer lease in the same way as they apply in relation to a credit contract.

             (2)  For the purposes of the application of those provisions:

                     (a)  references to a credit provider are to be read as references to a lessor; and

                     (b)  references to a debtor are to be read as references to a lessee; and

                     (c)  references to a credit contract or contract are to be read as references to a consumer lease; and

                     (d)  references to a linked credit provider are to be read as references to a linked lessor.

25  Subsection 204(1) of the National Credit Code (definition of acceleration clause )

Repeal the definition, substitute:

"acceleration clause" means:

                     (a)  in relation to a credit contract or mortgage--a term of a credit contract or mortgage providing that:

                              (i)  on the occurrence or non-occurrence of a particular event, the credit provider becomes entitled to immediate payment of all, or a part, of an amount under the contract that would not otherwise have been immediately payable; or

                             (ii)  whether or not on the occurrence or non-occurrence of a particular event, the credit provider has a discretion to require repayment of the amount of credit otherwise than by repayments fixed, or determined on a basis stated, in the contract;

                            but does not include any such term in a credit contract or mortgage that is an on demand facility; or

                     (b)  in relation to a consumer lease--a term of a consumer lease providing that:

                              (i)  on the occurrence or non-occurrence of a particular event, the lessor becomes entitled to immediate payment of all, or a part, of an amount under the lease that would not otherwise have been immediately payable; or

                             (ii)  whether or not on the occurrence or non-occurrence of a particular event, the lessor has a discretion to require payment of an amount payable under a lease otherwise than by repayments fixed, or determined on a basis stated, in the lease.

26  Subsection 204(1) of the National Credit Code

Insert:

"Bulk Electronic Clearing System" means the system established by the Australian Payments Clearing Association to manage the conduct of the exchange and settlement of bulk electronic low value transactions and includes any replacement system.

27  Subsection 204(1) of the National Credit Code

Insert:

"consumer lease fees or charges" means fees or charges payable in connection with a consumer lease, but does not include:

                     (a)  enforcement expenses; or

                     (b)  government charges, or duties, on receipts or withdrawals.

28  Subsection 204(1) of the National Credit Code (definition of default notice )

Repeal the definition, substitute:

"default notice" :

                     (a)  in relation to credit contracts, mortgages and guarantees--see section 88; and

                     (b)  in relation to consumer leases--see section 179D.

29  Subsection 204(1) of the National Credit Code

Insert:

"direct debit" , in relation to the payment of an amount, means the debiting of an amount against an account with a financial institution that is processed through the Bulk Electronic Clearing System, as specified and authorised in writing by:

                     (a)  in relation to the payment by a debtor of an amount for a credit contract--the debtor; and

                     (b)  in relation to the payment by a lessee of an amount for a consumer lease--the lessee.

30  Subsection 204(1) of the National Credit Code (definition of enforcement proceedings )

Repeal the definition, substitute:

"enforcement proceedings" means:

                     (a)  for a credit contract, consumer lease or guarantee--proceedings in a court to recover a payment due under the contract, lease or guarantee; or

                     (b)  for a consumer lease or mortgage--taking possession of property under the lease or mortgage; or

                     (c)  for a mortgage--taking any other action to enforce the mortgage.

31  Subsection 204(1) of the National Credit Code

Insert:

"hardship notice" :

                     (a)  in relation to credit contracts--see subsection 72(1); and

                     (b)  in relation to consumer leases--see subsection 177B(1).

32  Subsection 204(1) of the National Credit Code

Insert:

"lessee" means the lessee under a consumer lease to which Part 11 applies, and includes a prospective lessee.

33  Subsection 204(1) of the National Credit Code

Insert:

"lessor" means the lessor under a consumer lease to which Part 11 applies, and includes a prospective lessor.

34  Subsection 204(1) of the National Credit Code

Insert:

"linked lessor" : see subsection 179S(1).

35  Subsection 204(1) of the National Credit Code

Insert:

"on demand facility" means a credit contract or mortgage under which:

                     (a)  the total amount outstanding under the contract or mortgage is repayable at any time on demand by the credit provider; and

                     (b)  there is no agreement, arrangement or understanding between the credit provider and the debtor or mortgagor that repayment will only be demanded on the occurrence or non-occurrence of a particular event.

36  Subsection 204(1) of the National Credit Code

Insert:

"postponement request" :

                     (a)  in relation to credit contracts, mortgages or guarantees--see subsection 94(1); and

                     (b)  in relation to consumer leases--see subsection 179H(1).

37  Subsection 204(1) of the National Credit Code

Insert:

"tied consumer lease" : see subsection 179S(2).

38  Subsection 204(1) of the National Credit Code

Insert:

"unjust" includes unconscionable, harsh or oppressive.


 



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