FAIR TRADING AMENDMENT BILL 2002

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FAIR TRADING AMENDMENT BILL 2002

New South Wales Fair Trading Amendment Bill 2002 Contents Page 1 Name of Act 2 2 Commencement 2 3 Amendment of Fair Trading Act 1987 No 68 2 4 Repeal of Door-to-Door Sales Act 1967 No 36 2 5 Repeal of Mock Auctions Act 1973 No 17 2 Schedule 1 Amendments 3 b02-105-p03.835

New South Wales Fair Trading Amendment Bill 2002 No , 2002 A Bill for An Act to amend the Fair Trading Act 1987 to make provision with respect to direct commerce practices, product recall orders, express consumer trade warranties, enforcement provisions and other miscellaneous matters; to repeal the Door-to- Door Sales Act 1967 and the Mock Auctions Act 1973; and for other purposes.

Clause 1 Fair Trading Amendment Bill 2002 The Legislature of New South Wales enacts: 1 1 Name of Act 2 This Act is the Fair Trading Amendment Act 2002. 3 2 Commencement 4 This Act commences on a day or days to be appointed by 5 proclamation. 6 3 Amendment of Fair Trading Act 1987 No 68 7 The Fair Trading Act 1987 is amended as set out in Schedule 1. 8 4 Repeal of Door-to-Door Sales Act 1967 No 36 9 The Door-to-Door Sales Act 1967 is repealed. 10 5 Repeal of Mock Auctions Act 1973 No 17 11 The Mock Auctions Act 1973 is repealed. 12 Page 2

Fair Trading Amendment Bill 2002 Amendments Schedule 1 Schedule 1 Amendments 1 (Section 3) 2 [1] Section 4 Definitions 3 Omit "Divisions 58" from the definition of advisory council in section 4 4 (1). 5 Insert instead "Divisions 59". 6 [2] Section 4 (1), definition of "officer" 7 Omit the definition. Insert instead: 8 officer means: 9 (a) the Director-General or any other member of staff 10 (within the meaning of the Public Sector Employment 11 and Management Act 2002) of the Department, or 12 (b) a member of staff of a public sector agency (within the 13 meaning of section 85 of the Public Sector Employment 14 and Management Act 2002) who is transferred to, or 15 who provides services for, the Department, or 16 (c) any person engaged by the Director-General (with the 17 approval of the Minister and on such terms as the 18 Minister thinks fit) to assist in the exercise of the 19 Director-General's functions. 20 [3] Section 5 Meaning of "consumer" 21 Insert "(except for the purposes of section 43)" after "do not" in section 22 5 (2). 23 [4] Section 7 Staff of Department 24 Omit the section. 25 [5] Section 23A Power to require proof of claims and representations 26 Omit "substantiate a" from section 23A (1). 27 Insert instead "provide the Director-General with proof of any". 28 Page 3

Fair Trading Amendment Bill 2002 Schedule 1 Amendments [6] Section 23A (3) and (4) 1 Omit section 23A (3)(5). Insert instead: 2 (3) The notice must: 3 (a) specify the claim or representation to which the notice 4 applies, and 5 (b) specify a time within which the person is required to 6 provide the Director-General with proof of the claim or 7 representation, and 8 (c) indicate that it is an offence to: 9 (i) fail to provide proof sufficient to support the 10 claim or representation, or 11 (ii) fail to provide that proof within the time 12 specified in the notice, or 13 (iii) provide the Director-General with information 14 that is false or misleading in a material 15 particular. 16 (4) The Director-General may, by a further notice in writing served 17 on the person, extend the time within which the person is 18 required to provide the Director-General with proof of the 19 claim or representation concerned. 20 [7] Section 23C Offences in relation to failing to provide proof of claim or 21 representation 22 Omit section 23C (1) and (2). Insert instead: 23 (1) A person on whom a notice under section 23A is served is 24 guilty of an offence if the person: 25 (a) fails to provide proof sufficient to support the claim or 26 representation, or 27 (b) fails to provide that proof within the time specified in 28 the notice, or 29 (c) provides any information to the Director-General that is 30 false or misleading in a material particular. 31 [8] Section 23C (3) 32 Omit "subsection (2)". Insert instead "subsection (1) (c)". 33 Page 4

Fair Trading Amendment Bill 2002 Amendments Schedule 1 [9] Section 23D Self incrimination 1 Omit "in compliance with" wherever occurring. 2 Insert instead "in response to". 3 [10] Section 24 Products Safety Committee 4 Insert after section 24 (1): 5 (1A) Without limiting subsection (1), the Products Safety Committee 6 has the following functions: 7 (a) to provide advice to the Minister on such issues in 8 relation to the operation of Divisions 2 and 3 of Part 3 9 as are referred to it by the Minister, 10 (b) to review recall orders made under Division 3 of Part 3. 11 [11] Section 28 Reference of certain questions to Products Safety Committee 12 Omit section 28 (1). Insert instead: 13 (1) The Minister, or the Director-General with the approval of the 14 Minister, may refer to the Products Safety Committee for 15 consideration the question whether the supply of goods of a 16 kind specified in the reference or any particular goods so 17 specified should: 18 (a) because they are dangerous, or are a possible source of 19 danger, be prohibited, or 20 (b) be allowed only subject to conditions or restrictions to 21 be specified by the Committee. 22 [12] Section 28 (3) 23 Omit the subsection. 24 [13] Section 28 (5) 25 Omit "each". Insert instead "any such". 26 [14] Section 33 Remedy for supply of goods etc in contravention of Act or 27 order 28 Omit the section. 29 Page 5

Fair Trading Amendment Bill 2002 Schedule 1 Amendments [15] Sections 3436F 1 Omit sections 3436. Insert instead: 2 34 Definitions 3 In this Division: 4 defective goods means goods that: 5 (a) do not comply with a product safety standard for the 6 goods, or 7 (b) are the subject of a banning order, or 8 (c) are, in the opinion of the Director-General, of a kind 9 that may cause death or injury to any person. 10 recall order means an order made by the Director-General 11 under section 35. 12 35 Recall orders by Director-General 13 (1) The Director-General may, by order published in the Gazette, 14 require the supplier of defective goods to do any one or more 15 of the following: 16 (a) recall the goods in the manner, and within the period, 17 specified in the order, 18 (b) disclose to the public, or to a class of persons specified 19 in the order, in the manner and within the period so 20 specified, any one or more of the following: 21 (i) the nature of any defect in, or dangerous 22 characteristic of, the goods identified in the 23 order, 24 (ii) the circumstances in which the use of the goods 25 is dangerous, 26 (iii) procedures for disposing of the goods, 27 (c) notify the public, or a class of persons specified in the 28 order, in the manner and within the period so specified, 29 that the supplier undertakes to do whichever of the 30 following the supplier thinks is appropriate: 31 (i) except where the order identifies a dangerous 32 characteristic of the goods--repair the goods, 33 (ii) replace the goods, 34 Page 6

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (iii) refund to a person to whom the goods were 1 supplied (whether by the supplier or by another 2 person) the price of the goods. 3 (2) A recall order ceases to have effect at the end of the period of 4 28 days immediately following the date on which it was 5 published in the Gazette unless the order is, before the end of 6 that 28-day period, confirmed by the Minister by notice 7 published in the Gazette. 8 (3) Subsection (2) does not apply if a request is made under section 9 36 for a review of the recall order. 10 (4) Sections 40 and 41 of the Interpretation Act 1987 apply to a 11 recall order as if it were a statutory rule to which those sections 12 apply. 13 36 Review of recall orders 14 (1) The Minister or the supplier of goods to which a recall order 15 relates may, within 14 days of the date on which the order was 16 published in the Gazette, request the Products Safety 17 Committee to review the order. 18 (2) If any such request is made, the Products Safety Committee is 19 to conduct the review of the order and report to the Minister on 20 the outcome of the review. 21 (3) The provisions of sections 28 (7)(11) and 29 apply to and in 22 respect to the review of a recall order by the Products Safety 23 Committee under this section in the same way as those 24 provisions apply to the consideration of a question that is 25 referred to the Committee under section 28 (1). 26 (4) Accordingly: 27 (a) a reference in those provisions to a question that is 28 referred to the Committee includes a reference to a 29 recall order that the Committee has been requested to 30 review, and 31 (b) a reference in those provisions to the consideration by 32 the Committee of such a question includes a reference 33 to the conducting of a review of a recall order. 34 Page 7

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (5) On receiving the Committee's report in relation to a recall 1 order, the Minister may, by order published in the Gazette: 2 (a) confirm the recall order, or 3 (b) amend the recall order in accordance with the terms of 4 the Committee's report, or 5 (c) repeal the order. 6 36A Reduction of refund in certain circumstances 7 If: 8 (a) in accordance with a recall order, a supplier undertakes 9 to refund the price of goods, and 10 (b) a period of more than 12 months has elapsed since a 11 person (whether or not the person to whom the refund 12 is to be made) acquired the goods from the supplier, 13 the amount of the refund may be reduced by an amount, 14 calculated in accordance with the order, that is attributable to 15 the use that a person has had of the goods. 16 36B Undertaking to repair or replace goods 17 (1) If, in accordance with a recall order, a supplier undertakes to 18 repair goods, the supplier must cause the goods to be repaired 19 so that: 20 (a) any defect in the goods as identified in the order is 21 rectified, and 22 (b) if there is a product safety standard for goods of that 23 kind--the goods comply with the standard. 24 (2) If, in accordance with a recall order, a supplier undertakes to 25 replace goods, the supplier must replace the goods with like 26 goods that: 27 (a) if a defect in, or a dangerous characteristic of, the goods 28 to be replaced was identified in the order--do not 29 contain that defect or have that characteristic, and 30 (b) if there is a product safety standard for goods of that 31 kind--comply with the standard. 32 Page 8

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (3) If, in accordance with a recall order, a supplier undertakes to 1 repair or replace goods, the cost of the repair or replacement, 2 including any necessary transportation costs, is to be borne by 3 the supplier. 4 36C Compliance with recall order 5 A supplier of goods to which a recall order relates must not: 6 (a) fail to comply with a requirement of the order, or 7 (b) if the order identifies a defect in, or a dangerous 8 characteristic of, the goods--supply goods of the kind 9 to which the order relates and that contain that defect or 10 have that characteristic, or 11 (c) in any case other than a case referred to in paragraph 12 (b)--supply goods of the kind to which the order 13 relates, or 14 (d) fail to carry out an undertaking given by the supplier 15 under section 35 (1) (c), or 16 (e) having given such an undertaking to repair or replace 17 goods--fail to comply with section 36B. 18 36D Notification of voluntary recall 19 (1) If a supplier takes action to recall goods otherwise than as 20 required by a recall order, the supplier must, within 2 days after 21 the action is taken, give the Director-General a notice in 22 writing: 23 (a) stating that the goods are subject to recall, and 24 (b) if the goods contain a defect or have a dangerous 25 characteristic--stating the nature of the defect or 26 dangerous characteristic, and 27 (c) if the goods do not comply with a product safety 28 standard for the goods--stating the nature of the non- 29 compliance. 30 Maximum penalty: 100 penalty units in the case of a 31 corporation or 20 penalty units in any other case. 32 Page 9

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (2) If a person who would otherwise be required to give notice 1 under subsection (1) has given notice of the matter under 2 section 65R of the Trade Practices Act 1974 of the 3 Commonwealth, the person is not required to give notice under 4 subsection (1). 5 36E Requirement to notify recall of goods to persons outside New 6 South Wales 7 If any goods are recalled in accordance with a recall order or 8 are voluntarily recalled under section 36D, a person who has 9 supplied any of the goods to another person outside New South 10 Wales must, as soon as practicable after the supply of those 11 goods, give a notice in writing to that other person: 12 (a) stating that the goods are subject to recall, and 13 (b) if the goods contain a defect or have a dangerous 14 characteristic--stating the nature of the defect or 15 dangerous characteristic, and 16 (c) if the goods do not comply with a product safety 17 standard for the goods--stating the nature of the non- 18 compliance. 19 Maximum penalty: 100 penalty units in the case of a 20 corporation or 20 penalty units in any other case. 21 36F Certain amounts recoverable as debt or damages 22 (1) If a supplier fails to carry out an undertaking given under 23 section 35 (1) (c) to refund the price of goods, the amount that 24 should have been refunded is recoverable as a debt due by the 25 supplier to the person to whom the undertaking was given. 26 (2) If a supplier fails to carry out an undertaking given under 27 section 35 (1) (c) to repair or replace goods, the supplier is 28 taken to have given instead an undertaking, notified under 29 section 35 (1) (c), to refund the price of the goods within the 30 period specified for the repair or replacement of the goods. 31 (3) If: 32 (a) a person: 33 (i) fails to comply with a requirement of a recall 34 order, or 35 Page 10

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (ii) supplies goods in contravention of a recall order 1 identifying a defect in, or dangerous 2 characteristic of, the goods, and 3 (b) another person suffers loss or damage: 4 (i) because of a defect in, or dangerous 5 characteristic of, the goods, or 6 (ii) by not having particular information as to a 7 characteristic of the goods, 8 the person who suffered the loss or damage is, for the purposes 9 of this Act, taken to have suffered the loss or damage because 10 of the failure or contravention. 11 [16] Part 4, Divisions 35 12 Insert after Division 2: 13 Division 3 Direct commerce 14 40A Definitions 15 (1) In this Division: 16 cooling-off period, in relation to a direct commerce contract, 17 means the period within which the consumer is, under section 18 40E or under the contract, entitled to cancel the contract. 19 dealer means a person who, in the course of direct commerce: 20 (a) enters into negotiations with another person with a view 21 to the making of a contract for the supply of goods or 22 services to that other person, or 23 (b) calls on, or telephones, another person for the purpose 24 of entering into such negotiations, 25 whether or not that person is or is to be the supplier of the 26 goods or services. 27 direct commerce means the practice under which: 28 (a) a person: 29 (i) goes from place to place, or 30 (ii) makes telephone calls, 31 Page 11

Fair Trading Amendment Bill 2002 Schedule 1 Amendments seeking out persons who may be prepared to enter, as 1 consumers, into contracts for the supply of goods or 2 services, and 3 (b) that person (or some other person) enters into 4 negotiations with those prospective consumers with a 5 view to the making of such contracts. 6 direct commerce contract--see section 40B. 7 negotiation includes any discussion or dealing directed 8 towards the making of a contract (whether or not the terms of 9 the contract are open to negotiation). 10 related contract or instrument, in relation to a direct 11 commerce contract, means: 12 (a) a contract of guarantee or indemnity that is related to the 13 contract, or 14 (b) an instrument related to the contract that creates a 15 mortgage or charge in favour of the supplier or dealer 16 (or a person nominated by the supplier or dealer), or 17 (c) another contract or instrument (not being an instrument 18 of the kind referred to in paragraph (b)) that is collateral 19 or related to the contract. 20 (2) In this Division: 21 (a) a reference to the consumer or supplier under a contract 22 for the supply of goods or services extends to any 23 person to whom the rights of the original consumer or 24 supplier under the contract are assigned or transferred, 25 or pass by operation of law, and 26 (b) a reference to negotiation of a direct commerce contract 27 is a reference to negotiation of a contract that would, 28 when made, be a direct commerce contract. 29 (3) For the purposes of this Division, a contract is a contract for the 30 supply of goods or services to a person who is a party to the 31 contract if it provides for the supply of goods or services either 32 to that person or to someone else but on the order of that 33 person. 34 Page 12

Fair Trading Amendment Bill 2002 Amendments Schedule 1 40B Meaning of "direct commerce contract" 1 (1) For the purposes of this Division, a contract is a direct 2 commerce contract if: 3 (a) it is for the supply of goods or services to a consumer 4 who is an individual, and 5 (b) negotiations leading to the making of the contract 6 (whether or not they are the only negotiations that 7 precede the making of the contract) take place between 8 the dealer and the consumer: 9 (i) in each other's presence at a place other than the 10 business or trade premises of the supplier, or 11 (ii) over the telephone, and 12 (c) the dealer has called at that place or made that telephone 13 call in the course of direct commerce, and 14 (d) the consumer did not invite the dealer to call at that 15 place or make that telephone call for the purpose of 16 entering into those negotiations, and 17 (e) the total consideration payable by the consumer under 18 the contract: 19 (i) is not ascertainable at the time of the making of 20 the contract, or 21 (ii) is ascertainable at the time of the making of the 22 contract (but is more than $100 or such other 23 amount as may be prescribed by the regulations 24 for the purposes of this section). 25 (2) Despite subsection (1), a direct commerce contract does not 26 include any contract of a kind that is excluded from the 27 operation of this Division by the regulations. 28 (3) If: 29 (a) 2 or more contracts relate substantially to the same 30 transaction, and 31 (b) the transaction could have been effected by a single 32 contract that would, in that case, have constituted a 33 direct commerce contract, 34 then each of the contracts that would not, if it stood alone, 35 constitute a direct commerce contract becomes a direct 36 commerce contract and, for the purpose of ascertaining the 37 Page 13

Fair Trading Amendment Bill 2002 Schedule 1 Amendments cooling-off period in relation to such a contract, the contract is 1 taken to have been made when the last of the contracts was 2 made. 3 40C Prohibition of certain contractual terms 4 (1) A direct commerce contract must not contain any provision that 5 purports: 6 (a) to exclude, restrict or modify any right conferred on a 7 consumer under this Division, or 8 (b) to provide that the contract, or any proceedings arising 9 from the contract, is governed by the law of a 10 jurisdiction other than New South Wales. 11 (2) If a direct commerce contract contains a provision contrary to 12 subsection (1), the provision is void and the supplier and dealer 13 are each guilty of an offence. 14 Maximum penalty: 100 penalty units. 15 (3) For the purposes of this section, a reference to a direct 16 commerce contract includes a related contract or instrument. 17 40D Consumer must be informed of right to cancel direct commerce 18 contract 19 (1) Before a direct commerce contract is made, the consumer must 20 be given information as to the following: 21 (a) that the consumer has a right to cancel the contract 22 during the cooling-off period, 23 (b) the manner in which that right may be exercised by the 24 consumer, 25 (c) such other matters as may be prescribed by the 26 regulations for the purposes of this section. 27 (2) In the case of a direct commerce contract that is made in the 28 presence of both the dealer and the consumer, the information 29 referred to in subsection (1) must be given to the consumer in 30 writing. 31 (3) In the case of a direct commerce contract that is made over the 32 telephone, the information referred to in subsection (1) must: 33 (a) be given to the consumer over the telephone, and 34 Page 14

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (b) be subsequently given to the consumer in writing. 1 (4) The regulations may make provision for or with respect to the 2 form and manner in which the information referred to in 3 subsection (1) must be given. 4 (5) If this section and any regulation made under subsection (4) are 5 not complied with in relation to a direct commerce contract, the 6 supplier and the dealer are each guilty of an offence. 7 Maximum penalty: 100 penalty units. 8 (6) The supplier under a direct commerce contract cannot enforce 9 the contract against the consumer if this section and any 10 regulation made under subsection (4) are not complied with. 11 40E Right of consumer to cancel direct commerce contract during 12 cooling-off period 13 (1) The consumer under a direct commerce contract may cancel the 14 contract by giving written notice of cancellation to the supplier: 15 (a) within 5 clear business days from the day on which the 16 contract was made, or 17 (b) within such longer period as the contract may provide. 18 (2) A notice of cancellation may be given: 19 (a) by delivering it personally to the supplier, or 20 (b) by delivering it, or sending it by post, in an envelope 21 addressed to the supplier, to the supplier's address, or 22 (c) by faxing it to the supplier's address, or 23 (d) in such other manner as may be prescribed by the 24 regulations. 25 (3) A notice of cancellation sent by post to a supplier is taken to 26 have been given to the supplier at the time of posting. 27 (4) A right of cancellation conferred by this section may be 28 exercised: 29 (a) despite affirmation of the contract by the consumer, and 30 (b) even though the contract has been fully executed. 31 (5) If a direct commerce contract is cancelled by the consumer 32 under this section, any related contract or instrument is void. 33 Page 15

Fair Trading Amendment Bill 2002 Schedule 1 Amendments 40F Consequences of cancellation of direct commerce contract 1 (1) If a direct commerce contract is cancelled by the consumer 2 during the cooling-off period under this Division: 3 (a) the supplier must immediately return or refund to the 4 consumer any consideration (or the value of any 5 consideration) given by the consumer under the contract 6 or a related contract or instrument, and 7 (b) the consumer must immediately: 8 (i) return to the supplier any goods received from 9 the supplier under the contract, or 10 (ii) notify the supplier of the place where the 11 supplier may collect the goods. 12 (2) If: 13 (a) the consumer gives notice to the supplier under 14 subsection (1) (b) (ii), and 15 (b) the supplier does not collect the goods within 28 days 16 after the cancellation of the contract, 17 the goods become the property of the consumer free of any 18 other right or interest. 19 (3) If the consumer returns goods to the supplier under this section 20 but has failed to take reasonable care of the goods, the 21 consumer is liable to pay compensation to the supplier for the 22 damage to or depreciation in the value of the goods. However, 23 the consumer is not liable for any such damage or depreciation 24 attributable to normal use of the goods or circumstances 25 beyond the control of the consumer. 26 (4) The obligations imposed by this section may be enforced by 27 action in any court of competent jurisdiction. 28 (5) A court that convicts a supplier of an offence against this 29 Division may, on the application of the prosecutor, make orders 30 for the enforcement of obligations imposed by this section. 31 (6) A person who fails to comply with an order under subsection 32 (5) is guilty of an offence. 33 Maximum penalty: 100 penalty units. 34 Page 16

Fair Trading Amendment Bill 2002 Amendments Schedule 1 40G Waiver of rights 1 A consumer under a direct commerce contract is not competent 2 to waive any right conferred by this Division. 3 40H Fees for services during cooling-off period prohibited 4 A supplier or dealer must not, in relation to a direct commerce 5 contract or a related contract or instrument, collect any fees 6 during the cooling-off period for services provided by the 7 dealer or supplier during that period. 8 Maximum penalty: 100 penalty units. 9 40I Prohibited hours for direct commerce 10 A dealer must not call on, or telephone, any person: 11 (a) after 8 pm on any day, or 12 (b) before 9 am on any day, 13 for the purpose of negotiating a direct commerce contract (or 14 for an incidental or related purpose) unless the dealer has made 15 an appointment with the person. 16 Maximum penalty: 100 penalty units. 17 40J Other requirements in relation to dealers 18 (1) A dealer who is carrying on negotiations on the telephone with 19 a person (the prospective consumer) for the purpose of making 20 a direct commerce contract (or for an incidental or related 21 purpose) must cease those negotiations immediately on the 22 request of the prospective consumer. 23 (2) If any such request is made by the prospective consumer: 24 (a) the dealer, or 25 (b) if the dealer was acting on behalf of a supplier when 26 carrying on negotiations with the prospective 27 consumer--the supplier or any other person acting on 28 behalf of the supplier, 29 must not contact the prospective consumer for at least 30 days 30 after the prospective consumer made the request. 31 Page 17

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (3) A dealer who calls at any premises for the purpose of 1 negotiating a direct commerce contract (or for an incidental or 2 related purpose) must leave the premises at the request of the 3 occupier of the premises as soon as it is practicable to do so. 4 (4) A dealer who calls on any person for the purpose of negotiating 5 a direct commerce contract (or for an incidental or related 6 purpose) must, as soon as it is practicable to do so: 7 (a) advise the person of the purpose of the call, and 8 (b) produce to the person an identity card setting out: 9 (i) the dealer's full name and address, and 10 (ii) if the dealer is not the supplier--the supplier's 11 full name and address. 12 Maximum penalty: 100 penalty units. 13 40K Prohibition of certain actions 14 (1) If a direct commerce contract has been cancelled (or is capable 15 of being cancelled) by the consumer under this Division, a 16 person must not, for the purpose of recovering an amount 17 alleged to be payable by the consumer under the contract or a 18 related contract or instrument: 19 (a) bring, or assert an intention to bring, legal proceedings 20 against the consumer, or 21 (b) place the name of the consumer, or cause the name of 22 the consumer to be placed, on any list of defaulters or 23 debtors, or assert an intention of placing the name of the 24 consumer, or causing the name of the consumer to be 25 placed, on any such list, or 26 (c) take any other action against the consumer. 27 Maximum penalty: 100 penalty units. 28 (2) Subsection (1) (a) does not prohibit: 29 (a) the bringing of, or the asserting of an intention to bring, 30 legal proceedings to determine whether or not a direct 31 commerce contract has been, or is capable of being, 32 cancelled under this Division, or 33 Page 18

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (b) the continuation of such proceedings (for the purpose of 1 recovering an amount alleged to be payable by the 2 consumer under the contract or a related contract or 3 instrument) where it is determined that the contract has 4 not been, or is not capable of being, so cancelled. 5 (3) If a person is convicted of an offence against subsection (1) (b), 6 the court may order the person responsible for keeping any list 7 on which the name of the consumer has been wrongfully 8 placed to remove the name from that list. 9 (4) A person who fails to comply with an order under subsection 10 (3) is guilty of an offence. 11 Maximum penalty: 100 penalty units. 12 Division 4 Conditions and warranties in consumer 13 transactions 14 40L Interpretation and application (TPA s 66) 15 (1) A reference in this Division to goods or services is a reference 16 to goods or services of a kind ordinarily acquired for personal, 17 domestic or household use or consumption. 18 (2) In this Division: 19 (a) a reference to the quality of goods includes a reference 20 to the state or condition of the goods, and 21 (b) a reference to negotiations in relation to a contract for 22 the supply by a person of goods to a consumer is a 23 reference to any negotiations or arrangements conducted 24 or made with the consumer by another person in the 25 course of a business carried on by the other person in 26 respect of which the consumer was induced to make the 27 contract or that otherwise promoted the transaction to 28 which the contract relates. 29 (3) For the purposes of this Division, goods of any kind are of 30 merchantable quality if they are as fit for the purpose or 31 purposes for which goods of that kind are commonly bought as 32 it is reasonable to expect, having regard to any description 33 applied to them, the price (if relevant) and all other relevant 34 circumstances. 35 Page 19

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (4) This Division does not apply to or in respect of a contract made 1 before the commencement of this Division. 2 40M Application of provisions not to be excluded or modified (TPA 3 s 68) 4 (1) A term of a contract (including a term that is not set out in the 5 contract but is incorporated in the contract by another term of 6 the contract) that purports to exclude, restrict or modify or has 7 the effect of excluding, restricting or modifying: 8 (a) the application of all or any of the provisions of this 9 Division, or 10 (b) the exercise of a right conferred by such a provision, or 11 (c) any liability of a person for breach of a condition or 12 warranty implied by such a provision, or 13 (d) the application of section 40N, 14 is void. 15 (2) A term of a contract is not to be considered as excluding, 16 restricting or modifying the application of a provision of this 17 Division or the application of section 40N unless the term does 18 so expressly or is inconsistent with that provision or section. 19 (3) This section is, with respect to a term of a contract for the 20 supply of recreation services within the meaning of section 5N 21 of the Civil Liability Act 2002, subject to that section. 22 40N Rescission of contracts (TPA s 75A) 23 (1) If: 24 (a) a person (the supplier) supplies goods to a consumer in 25 the course of a business, and 26 (b) there is a breach of a condition that is, by reason of a 27 provision of this Division, implied in the contract for the 28 supply of the goods, 29 the consumer is, subject to this section, entitled to rescind the 30 contract by: 31 (c) causing to be served on the supplier a notice in writing 32 signed by the consumer giving particulars of the breach, 33 or 34 Page 20

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (d) causing the goods to be returned to the supplier and 1 giving to the supplier, either orally or in writing, 2 particulars of the breach. 3 (2) If a consumer purports to rescind under this section a contract 4 for the supply of goods by a person, the purported rescission 5 does not have any effect if: 6 (a) the notice is not served or the goods are not returned 7 within a reasonable time after the consumer has had a 8 reasonable opportunity of inspecting the goods, or 9 (b) in the case of a rescission effected by service of a 10 notice--after the delivery of the goods to the consumer 11 but before the notice is served: 12 (i) the goods were disposed of by the consumer, 13 were lost, or were destroyed otherwise than by 14 reason of a defect in the goods, or 15 (ii) the consumer caused the goods to become 16 unmerchantable or failed to take reasonable 17 steps to prevent the goods from becoming 18 unmerchantable, or 19 (iii) the goods were damaged by abnormal use, or 20 (c) in the case of a rescission effected by return of the 21 goods--while the goods were in the possession of the 22 consumer: 23 (i) the consumer caused the goods to become 24 unmerchantable or failed to take reasonable 25 steps to prevent the goods from becoming 26 unmerchantable, or 27 (ii) the goods were damaged by abnormal use. 28 (3) If a contract for the supply of goods by a person (the supplier) 29 to a consumer has been rescinded in accordance with this 30 section: 31 (a) if the property in the goods had passed to the consumer 32 before the notice of rescission was served on, or the 33 goods were returned to, the supplier--the property in 34 the goods re-vests in the supplier on the service of the 35 notice or the return of the goods, and 36 (b) the consumer may recover from the supplier, as a debt, 37 the amount or value of any consideration paid or 38 provided by the consumer for the goods. 39 Page 21

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (4) The right of rescission conferred by this section is in addition 1 to, and not in derogation of, any other right or remedy under 2 this or any other Act or law. 3 40O Implied undertakings as to title, encumbrances and quiet 4 possession (TPA s 69) 5 (1) In a contract for the supply of goods by a person (the supplier) 6 to a consumer (other than a contract to which subsection (3) 7 applies) there is: 8 (a) an implied condition that, in the case of a supply by way 9 of sale, the supplier has a right to sell the goods, and, in 10 the case of an agreement to sell or a hire-purchase 11 agreement, the supplier will have a right to sell the 12 goods at the time when the property is to pass, and 13 (b) an implied warranty that the consumer will enjoy quiet 14 possession of the goods except so far as it may lawfully 15 be disturbed by the supplier or by another person who 16 is entitled to the benefit of any charge or encumbrance 17 disclosed or known to the consumer before the contract 18 is made, and 19 (c) in the case of a contract for the supply of goods under 20 which the property is to pass or may pass to the 21 consumer--an implied warranty that the goods are free, 22 and will remain free until the time when the property 23 passes, from any charge or encumbrance not disclosed 24 or known to the consumer before the contract is made. 25 (2) A person is not, in relation to a contract for the supply of 26 goods, in breach of the implied warranty referred to in 27 subsection (1) (c) by reason only of the existence of a floating 28 charge over assets of the person unless and until the charge 29 becomes fixed and enforceable by the person to whom the 30 charge is given. 31 (3) In a contract for the supply of goods to a consumer in the case 32 of which there appears from the contract or is to be inferred 33 from the circumstances of the contract an intention that the 34 supplier should transfer only such title as the supplier or a third 35 person may have, there is: 36 Page 22

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (a) an implied warranty that all charges or encumbrances 1 known to the supplier and not known to the consumer 2 have been disclosed to the consumer before the contract 3 is made, and 4 (b) an implied warranty that: 5 (i) the supplier, and 6 (ii) in a case where the parties to the contract intend 7 that the supplier should transfer only such title as 8 a third person may have--that person, and 9 (iii) anyone claiming through or under the supplier or 10 that third person otherwise than under a charge 11 or encumbrance disclosed or known to the 12 consumer before the contract is made, 13 will not disturb the consumer's quiet possession of the 14 goods. 15 40P Supply by description (TPA s 70) 16 (1) In a contract for the supply (otherwise than by way of sale by 17 auction or sale by competitive tender) by a person in the course 18 of a business of goods to a consumer by description, there is an 19 implied condition that the goods will correspond with the 20 description and, if the supply is by reference to a sample as 21 well as by description, it is not sufficient that the bulk of the 22 goods corresponds with the sample if the goods do not also 23 correspond with the description. 24 (2) A supply of goods is not prevented from being a supply by 25 description for the purposes of this section by reason only that, 26 being exposed for sale or hire, they are selected by the 27 consumer. 28 40Q Implied undertakings as to quality or fitness (TPA s 71) 29 (1) If a person supplies (otherwise than by way of sale by auction) 30 goods to a consumer in the course of a business, there is an 31 implied condition that the goods supplied under the contract for 32 the supply of the goods are of merchantable quality, except that 33 there is no such condition by reason only of this section: 34 (a) as regards defects specifically drawn to the consumer's 35 attention before the contract is made, or 36 Page 23

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (b) if the consumer examines the goods before the contract 1 is made--as regards any defect that the examination 2 ought to have revealed. 3 (2) If a person (the supplier) supplies (otherwise than by way of 4 sale by auction) goods to a consumer in the course of a 5 business and the consumer, expressly or by implication, makes 6 known: 7 (a) to the supplier, or 8 (b) to the person by whom any negotiations are conducted, 9 any particular purpose for which the goods are being acquired, 10 there is an implied condition that the goods supplied under the 11 contract for the supply of the goods are reasonably fit for that 12 purpose, whether or not that purpose is one for which such 13 goods are commonly supplied, except where the circumstances 14 show that the consumer does not rely, or that it is unreasonable 15 for the consumer to rely, on the skill or judgment of the 16 supplier or the person conducting the negotiations. 17 (3) Subsections (1) and (2) apply to a contract for the supply of 18 goods made by a person who in the course of a business is 19 acting as agent for the supplier in the same way as they apply 20 to a contract for the supply of goods made by a person in the 21 course of a business, except where that person is not supplying 22 in the course of a business and either the consumer knows that 23 fact or reasonable steps are taken to bring it to the notice of the 24 consumer before the contract is made. 25 40R Supply by sample (TPA s 72) 26 If in a contract for the supply (otherwise than by way of sale by 27 auction or sale by competitive tender) by a person in the course 28 of a business of goods to a consumer there is a term in the 29 contract, expressed or implied, to the effect that the goods are 30 supplied by reference to a sample: 31 (a) there is an implied condition that the bulk will 32 correspond with the sample in quality, and 33 (b) there is an implied condition that the consumer will 34 have a reasonable opportunity of comparing the bulk 35 with the sample, and 36 Page 24

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (c) there is an implied condition that the goods will be free 1 from any defect, rendering them unmerchantable, that 2 would not be apparent on reasonable examination of the 3 sample. 4 40S Warranties in relation to supply of services (TPA s 74) 5 (1) In every contract for the supply by a person in the course of a 6 business of services to a consumer there is an implied warranty 7 that the services will be rendered with due care and skill and 8 that any materials supplied in connection with those services 9 will be reasonably fit for the purpose for which they are 10 supplied. 11 (2) If a person supplies services (other than services of a 12 professional nature provided by a qualified architect or 13 engineer) to a consumer in the course of a business and the 14 consumer, expressly or by implication, makes known to the 15 person any particular purpose for which the services are 16 required or the result that the consumer desires the services to 17 achieve, there is an implied warranty that the services supplied 18 under the contract for the supply of the services and any 19 materials supplied in connection with those services will be 20 reasonably fit for that purpose or are of such a nature and 21 quality that they might reasonably be expected to achieve that 22 result. 23 (3) Subsection (2) does not apply if the circumstances show: 24 (a) that the consumer does not rely, or 25 (b) that it is unreasonable for the consumer to rely, 26 on the skill or judgment of the person. 27 Division 5 Actions against manufacturers and importers 28 of goods 29 40T Interpretation (TPA s 74A) 30 (1) In this Division: 31 express warranty, in relation to goods, means an undertaking, 32 assertion or representation in relation to: 33 (a) the quality, performance or characteristics of the goods, 34 or 35 Page 25

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (b) the provision of services that are or may at any time be 1 required in respect of the goods, or 2 (c) the supply of parts that are or may at any time be 3 required for the goods, or 4 (d) the future availability of identical goods, or of goods 5 constituting or forming part of a set of which the goods 6 in relation to which the undertaking, assertion or 7 representation is given or made form part, 8 given or made in connection with the supply of the goods or in 9 connection with the promotion by any means of the supply or 10 use of the goods, the natural tendency of which is to induce 11 persons to acquire the goods. 12 manufactured includes grown, extracted, produced, processed 13 and assembled. 14 (2) In this Division: 15 (a) a reference to goods is a reference to goods of a kind 16 ordinarily acquired for personal, domestic or household 17 use or consumption, and 18 (b) a reference to a person who acquires goods from a 19 consumer does not include a reference to a person who 20 acquires goods for the purpose of re-supply, and 21 (c) a reference to the quality of goods includes a reference 22 to the state or condition of the goods, and 23 (d) a reference to negotiations in relation to the acquisition 24 of goods by a consumer is a reference to any 25 negotiations or arrangements conducted or made with 26 the consumer by another person in the course of a 27 business carried on by the other person in respect of 28 which the consumer was induced to acquire the goods 29 or which otherwise promoted the acquisition of the 30 goods by the consumer. 31 (3) If a person: 32 (a) holds himself, herself or itself out to the public as the 33 manufacturer of goods, or 34 (b) causes or permits: 35 (i) the name of the person, or 36 Page 26

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (ii) a name by which the person carries on business, 1 or 2 (iii) a brand or mark of the person, 3 to be applied to goods supplied by the person, or 4 (c) causes or permits another person: 5 (i) in connection with the supply or possible supply 6 of goods by that other person, or 7 (ii) in connection with the promotion by that other 8 person by any means of the supply or use of 9 goods, 10 to hold out the person to the public as the manufacturer 11 of the goods, 12 the person is, for the purposes of this Division, taken to have 13 manufactured the goods. 14 (4) If: 15 (a) goods are imported into this State by a person who was 16 not the manufacturer of the goods, and 17 (b) at the time of the importation the manufacturer of the 18 goods does not have a place of business in this State, 19 the person is, for the purposes of this Division, taken to have 20 manufactured the goods. 21 (5) For the purposes of subsection (3) (b): 22 (a) a name, brand or mark is taken to be applied to goods if 23 it: 24 (i) is woven in, impressed on, worked into or 25 annexed or affixed to the goods, or 26 (ii) is applied to a covering, label, reel or thing in or 27 with which the goods are supplied, and 28 (b) if the name of a person, a name in which a person 29 carries on business or a brand or mark of a person is 30 applied to goods, it is to be presumed, unless the 31 contrary is established, that the person caused or 32 permitted the name, brand or mark to be applied to the 33 goods. 34 Page 27

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (6) The reference in subsection (5) to a covering includes a 1 reference to a stopper, glass, bottle, vessel, box, capsule, case, 2 frame or wrapper and the reference in that subsection to a label 3 includes a reference to a band or ticket. 4 (7) If goods are imported into this State on behalf of a person, the 5 person is, for the purposes of this Division, taken to have 6 imported the goods into this State. 7 (8) For the purposes of this Division, goods are taken to be 8 supplied to a consumer despite the fact that, at the time of the 9 supply, they are affixed to land or premises. 10 40U Actions in respect of unsuitable goods (TPA s 74B) 11 (1) If: 12 (a) a person (the supplier), in trade or commerce, supplies 13 goods manufactured by the supplier to another person 14 who acquires the goods for re-supply, and 15 (b) a person (whether or not the person who acquired the 16 goods from the supplier) supplies the goods (otherwise 17 than by way of sale by auction) to a consumer, and 18 (c) the goods are acquired by the consumer for a particular 19 purpose that was, expressly or by implication, made 20 known to the supplier, either directly, or through the 21 person from whom the consumer acquired the goods or 22 a person by whom any negotiations in connection with 23 the acquisition of the goods were conducted, and 24 (d) the goods are not reasonably fit for that purpose, 25 whether or not that is a purpose for which such goods 26 are commonly supplied, and 27 (e) the consumer or a person who acquires the goods from, 28 or derives title to the goods through or under, the 29 consumer suffers loss or damage by reason that the 30 goods are not reasonably fit for that purpose, 31 the supplier is liable to compensate the consumer or that other 32 person for the loss or damage and the consumer or that other 33 person may recover the amount of the compensation by action 34 against the supplier in a court of competent jurisdiction. 35 Page 28

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (2) Subsection (1) does not apply: 1 (a) if the goods are not reasonably fit for the purpose 2 referred to in that subsection by reason of: 3 (i) an act or default of any person (not being the 4 supplier or an employee or agent of the 5 supplier), or 6 (ii) a cause independent of human control, 7 occurring after the goods have left the control of the 8 supplier, or 9 (b) if the circumstances show that the consumer did not 10 rely, or that it was unreasonable for the consumer to 11 rely, on the skill or judgment of the supplier. 12 40V Actions in respect of false descriptions (TPA s 74C) 13 (1) If: 14 (a) a person (the supplier), in trade or commerce, supplies 15 goods manufactured by the supplier to another person 16 who acquires the goods for re-supply, and 17 (b) a person (whether or not the person who acquired the 18 goods from the supplier) supplies the goods (otherwise 19 than by way of sale by auction) to a consumer by 20 description, and 21 (c) the goods do not correspond with the description, and 22 (d) the consumer or a person who acquires the goods from, 23 or derives title to the goods through or under, the 24 consumer suffers loss or damage by reason that the 25 goods do not correspond with the description, 26 the supplier is liable to compensate the consumer or that other 27 person for the loss or damage and the consumer or that other 28 person may recover the amount of the compensation by action 29 against the supplier in a court of competent jurisdiction. 30 (2) Subsection (1) does not apply if the goods do not correspond 31 with the description referred to in that subsection by reason of: 32 (a) an act or default of any person (not being the supplier or 33 an employee or agent of the supplier), or 34 (b) a cause independent of human control, 35 occurring after the goods have left the control of the supplier. 36 Page 29

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (3) A supplier is not liable to compensate a person for loss or 1 damage suffered by the person by reason that goods do not 2 correspond with a description unless the description was 3 applied to the goods: 4 (a) by or on behalf of the supplier, or 5 (b) with the consent of the supplier, whether express or 6 implied. 7 (4) If the goods referred to in subsection (1) are supplied to the 8 consumer by reference to a sample as well as by description, it 9 is not a defence to an action under this section that the bulk of 10 the goods corresponds with the sample if the goods do not also 11 correspond with the description. 12 (5) A supply of goods is not prevented from being a supply by 13 description for the purposes of subsection (1) by reason only 14 that, being exposed for sale or hire, they are selected by the 15 consumer. 16 40W Actions in respect of goods of unmerchantable quality (TPA 17 s 74D) 18 (1) If: 19 (a) a person (the supplier), in trade or commerce, supplies 20 goods manufactured by the supplier to another person 21 who acquires the goods for re-supply, and 22 (b) a person (whether or not the person who acquired the 23 goods from the supplier) supplies the goods (otherwise 24 than by way of sale by auction) to a consumer, and 25 (c) the goods are not of merchantable quality, and 26 (d) the consumer or a person who acquires the goods from, 27 or derives title to the goods through or under, the 28 consumer suffers loss or damage by reason that the 29 goods are not of merchantable quality, 30 the supplier is liable to compensate the consumer or that other 31 person for the loss or damage and the consumer or that other 32 person may recover the amount of the compensation by action 33 against the supplier in a court of competent jurisdiction. 34 Page 30

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (2) Subsection (1) does not apply: 1 (a) if the goods are not of merchantable quality by reason 2 of: 3 (i) an act or default of any person (not being the 4 supplier or an employee or agent of the 5 supplier), or 6 (ii) a cause independent of human control, 7 occurring after the goods have left the control of the 8 supplier, or 9 (b) as regards defects specifically drawn to the consumer's 10 attention before the making of the contract for the 11 supply of the goods to the consumer, or 12 (c) if the consumer examines the goods before that contract 13 is made, as regards defects that the examination ought 14 to reveal. 15 (3) For the purposes of this section, goods of any kind are of 16 merchantable quality if they are as fit for the purpose or 17 purposes for which goods of that kind are commonly bought as 18 it is reasonable to expect having regard to: 19 (a) any description applied to the goods by the supplier, and 20 (b) the price received by the supplier for the goods (if 21 relevant), and 22 (c) all the other relevant circumstances. 23 40X Actions in respect of non-correspondence with samples etc (TPA 24 s 74E) 25 (1) If: 26 (a) a person (the supplier), in trade or commerce, supplies 27 goods manufactured by the supplier to another person 28 who acquires the goods for re-supply, and 29 (b) a person (whether or not the person who acquired the 30 goods from the supplier) supplies the goods (otherwise 31 than by way of sale by auction) to a consumer, and 32 (c) the goods are supplied to the consumer by reference to 33 a sample, and 34 Page 31

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (d) the bulk of the goods does not correspond with the 1 sample in quality or the goods have a defect, rendering 2 them unmerchantable, that is not, or would not be, 3 apparent on reasonable examination of the sample, and 4 (e) the consumer or a person who acquires the goods from, 5 or derives title to the goods through or under, the 6 consumer suffers loss or damage by reason that the bulk 7 does not correspond with the sample in quality or by 8 reason that the goods have that defect, 9 the supplier is liable to compensate the consumer or that other 10 person for the loss or damage and the consumer or that other 11 person may recover the amount of the loss or damage by action 12 against the supplier in a court of competent jurisdiction. 13 (2) Subsection (1) does not apply if: 14 (a) the sample is not supplied by the supplier, or 15 (b) the supply by sample is made without the express or 16 implied concurrence of the supplier, or 17 (c) the failure of the bulk of the goods to correspond with 18 the sample in quality or the existence of the defect is 19 due to: 20 (i) an act or default of any person (not being the 21 supplier or an employee or agent of the 22 supplier), or a cause independent of human 23 control, occurring after the goods have left the 24 control of the supplier, or 25 (ii) other circumstances that were beyond the control 26 of the supplier and that it could not reasonably 27 be expected to have foreseen. 28 40Y Actions in respect of failure to provide facilities for repairs or 29 parts (TPA s 74F) 30 (1) If: 31 (a) a person (the supplier), in trade or commerce, supplies 32 goods (otherwise than by way of sale by auction) 33 manufactured by the supplier to a consumer, or 34 Page 32

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (b) a person (the supplier), in trade or commerce, supplies 1 goods manufactured by the supplier to another person 2 who acquires the goods for re-supply and a person 3 (whether or not the person who acquired the goods from 4 the supplier) supplies the goods (otherwise than by way 5 of sale by auction) to a consumer, 6 and: 7 (c) at a time (in this section referred to as the relevant time) 8 after the acquisition of the goods by the consumer: 9 (i) the goods need to be repaired but facilities for 10 their repair are not reasonably available to the 11 consumer or a person who acquires the goods 12 from, or derives title to the goods through or 13 under, the consumer, or 14 (ii) a part is required for the goods but the part is not 15 reasonably available to the consumer or a person 16 who acquires the goods from, or derives title to 17 the goods through or under, the consumer, and 18 (d) the supplier acted unreasonably in failing to ensure that 19 facilities for the repair of the goods were, or that the part 20 was, reasonably available to the consumer or that other 21 person at the relevant time, and 22 (e) the consumer or that other person suffers loss or damage 23 by reason of the failure of the supplier to ensure that 24 facilities for the repair of the goods were, or that the part 25 was, reasonably available to the consumer or that other 26 person at the relevant time, 27 the supplier is liable to compensate the consumer or that other 28 person for the loss or damage and the consumer or that other 29 person may recover the amount of the compensation by action 30 against the supplier in a court of competent jurisdiction. 31 (2) Subsection (1) does not apply if the supplier took reasonable 32 action to ensure that the consumer acquiring the goods would 33 be given notice at or before the time when the consumer 34 acquired the goods that: 35 (a) the supplier did not promise that facilities for the repair 36 of the goods, or that parts for the goods, would be 37 available, or 38 Page 33

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (b) the supplier did not promise that facilities for the repair 1 of the goods, or that parts for the goods, would be 2 available after a specified period, being a period that 3 expired before the relevant time. 4 (3) If the supplier took reasonable action to ensure that the 5 consumer acquiring the goods would be given notice at or 6 before the time when the consumer acquired the goods that the 7 supplier did not promise that: 8 (a) facilities for the repair of the goods, being facilities of a 9 kind specified in the notice, would be available, or 10 (b) parts for the goods, being parts of a kind specified in the 11 notice, would be available, or 12 (c) facilities for the repair of the goods would be available 13 at, or parts for the goods would be available from, a 14 place or places specified in the notice, 15 the supplier is not liable to compensate the consumer or a 16 person who acquires the goods from, or derives title to the 17 goods through or under, the consumer for loss or damage 18 suffered by the consumer or that other person by reason of the 19 failure of the supplier to ensure that facilities of the kind 20 specified in the notice, or parts of the kind specified in the 21 notice, were available, or that facilities for the repair of the 22 goods were available at, or parts for the goods were available 23 from, a place or places specified in the notice, as the case may 24 be. 25 (4) In determining whether a supplier acted unreasonably in failing 26 to ensure that facilities for the repair of goods were, or that a 27 part was, reasonably available to a person at the relevant time, 28 a court is to have regard to all the circumstances of the case, 29 and in particular to the existence, at the relevant time, of 30 circumstances that prevented those facilities or that part being 31 so available, being circumstances beyond the control of the 32 supplier. 33 40Z Actions in respect of non-compliance with express warranty (TPA 34 s 74G) 35 (1) If: 36 (a) a person (the supplier), in trade or commerce: 37 Page 34

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (i) supplies goods (otherwise than by way of sale by 1 auction) manufactured by the supplier to a 2 consumer, or 3 (ii) supplies goods manufactured by the supplier to 4 another person who acquires the goods for 5 re-supply and a person (whether or not the 6 person who acquired the goods from the 7 supplier) supplies the goods (otherwise than by 8 way of sale by auction) to a consumer, and 9 (b) the supplier fails to comply with an express warranty 10 given or made by the supplier in relation to the goods, 11 and 12 (c) the consumer or a person who acquires the goods from, 13 or derives title to the goods through or under, the 14 consumer suffers loss or damage by reason of the 15 failure, 16 the supplier is liable to compensate the consumer or that other 17 person for the loss or damage and the consumer or that other 18 person may recover the amount of the compensation by action 19 against the supplier in a court of competent jurisdiction. 20 (2) For the purposes of any action instituted by a person against a 21 supplier under this section, if: 22 (a) an undertaking, assertion or representation was given or 23 made in connection with the supply of goods or in 24 connection with the promotion by any means of the 25 supply or use of goods, and 26 (b) the undertaking, assertion or representation would, if it 27 had been given or made by the supplier or a person 28 acting on the supplier's behalf, have constituted an 29 express warranty in relation to the goods, 30 it is to be presumed that the undertaking, assertion or 31 representation was given or made by the supplier or a person 32 acting on the supplier's behalf unless the supplier proves that 33 the supplier did not give or make, and did not cause or permit 34 the giving or making of, the undertaking, assertion or 35 representation. 36 Page 35

Fair Trading Amendment Bill 2002 Schedule 1 Amendments 40ZA Right to recover against manufacturer or importer (TPA s 74H) 1 If: 2 (a) a person (the seller) is under a liability to another person 3 (the consumer) in respect of loss or damage suffered by 4 the consumer as a result of a breach of a condition or 5 warranty implied by a provision of Division 4 in a 6 contract for the supply of goods by the seller to the 7 consumer, and 8 (b) a third person (the manufacturer) is liable to 9 compensate the consumer in respect of the same loss or 10 damage by reason of a provision of this Division, 11 the manufacturer is liable to indemnify the seller in respect of 12 the liability of the seller to the consumer and the seller may, in 13 respect of the manufacturer's liability to indemnify the seller, 14 institute an action against the manufacturer in a court of 15 competent jurisdiction for such legal or equitable relief as the 16 seller could have obtained if the liability of the manufacturer to 17 indemnify the seller had arisen under a contract of indemnity 18 made between the manufacturer and the seller. 19 40ZB Time for commencing actions (TPA s 74J) 20 (1) This section does not apply to a cause of action to which 21 Division 6 of Part 2 of the Limitation Act 1969 applies. 22 (2) An action under a provision of this Division may be 23 commenced at any time within 3 years after the day on which 24 the cause of action accrued. 25 (3) For the purposes of this section, a cause of action is taken to 26 have accrued: 27 (a) in the case of an action other than an action under 28 section 40ZA, on the day on which the consumer or a 29 person who acquired the goods from, or derived title to 30 the goods through or under, the consumer first became 31 aware, or ought reasonably to have become aware: 32 (i) in the case of an action under section 40U--that 33 the goods were not reasonably fit for the purpose 34 referred to in that section, or 35 Page 36

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (ii) in the case of an action under section 40V--that 1 the goods did not correspond with the 2 description referred to in that section, or 3 (iii) in the case of an action under section 40W--that 4 the goods were not of merchantable quality, or 5 (iv) in the case of an action under section 40X--that 6 the bulk of the goods did not correspond with 7 the sample in quality or the goods had the defect 8 referred to in that section, or 9 (v) in the case of an action under section 40Y--that 10 the goods needed to be repaired or that the part 11 was required for the goods, as the case may be, 12 or 13 (vi) in the case of an action under section 40Z--of 14 the failure of the supplier to comply with the 15 express warranty referred to in that section, or 16 (b) in the case of an action under section 40ZA, on: 17 (i) the day, or the first day, as the case may be, on 18 which the seller referred to in that section made 19 a payment in respect of, or otherwise discharged 20 in whole or in part, the liability of that seller to 21 the consumer referred to in that section, or 22 (ii) the day on which a proceeding was instituted by 23 that consumer against that seller in respect of 24 that liability or, if more than one such 25 proceeding was instituted, the day on which the 26 first such proceeding was instituted, 27 whichever was the earlier. 28 (4) In an action under a provision of this Division, it is a defence 29 if the defendant proves that the action was not commenced 30 within 10 years after the time of the first supply to a consumer 31 of the goods to which the action relates. 32 40ZC Application of Division not to be excluded or modified (TPA s 74K) 33 (1) Any term of a contract (including a term that is not set out in 34 the contract but is incorporated in the contract by another term 35 of the contract) that: 36 (a) purports to exclude, restrict or modify, or 37 Page 37

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (b) has the effect of excluding, restricting or modifying, 1 any liability of a person to compensate or indemnify another 2 person that may arise under this Division, is void. 3 (2) A term of a contract is not to be taken to exclude, restrict or 4 modify the application of a provision of this Division unless the 5 term does so expressly or is inconsistent with that provision. 6 [17] Section 43 Unconscionable conduct 7 Omit "customer" wherever occurring. Insert instead "consumer". 8 [18] Section 43 (5) 9 Omit the subsection. 10 [19] Section 43 (6) 11 Omit "does not include". Insert instead "includes". 12 [20] Section 44A 13 Insert after section 44: 14 44A Country of origin representations 15 (1) If: 16 (a) a person makes a representation as to the country of 17 origin of goods, and 18 (b) the goods have been substantially transformed in that 19 country, and 20 (c) 50% or more of the cost of producing or manufacturing 21 the goods is attributable to production or manufacturing 22 processes that occurred in that country, and 23 (d) the representation is not a representation referred to in 24 subsection (2) or (3), 25 the person does not contravene section 42 or 44 (i) by reason 26 only of making the representation. 27 Page 38

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (2) If: 1 (a) a person makes a representation that goods are the 2 produce of a particular country (whether the 3 representation uses the words "product of", "produce 4 of" or any other grammatical variation of the word 5 "produce"), and 6 (b) the country was the country of origin of each significant 7 ingredient or significant component of the goods, and 8 (c) all, or virtually all, processes involved in the production 9 or manufacture occurred in that country, 10 the person does not contravene section 42 or 44 (i) by reason 11 only of making the representation. 12 (3) If: 13 (a) a person makes a representation as to the country of 14 origin of goods by means of a logo specified in the 15 regulations made under subsection (4), and 16 (b) the goods have been substantially transformed in the 17 country represented by the logo as the country of origin 18 of the goods, and 19 (c) the prescribed percentage of the cost of producing or 20 manufacturing the goods is attributable to production or 21 manufacturing processes that occurred in that country, 22 the person does not contravene section 42 or 44 (i) by reason 23 only of making the representation. 24 (4) The regulations may, in relation to a specified logo, prescribe 25 a percentage in the range of 51% to 100% as the percentage 26 applicable to the goods for the purposes of subsection (3) (c). 27 (5) For the purposes of this section, goods are substantially 28 transformed in a country if they undergo a fundamental change 29 in that country in form, appearance or nature such that the 30 goods existing after the change are new and different goods 31 from those existing before the change. 32 (6) Without limiting subsection (5), the regulations may prescribe: 33 (a) changes (whether in relation to particular classes of 34 goods or otherwise) that are not fundamental changes 35 for the purposes of that subsection, and 36 Page 39

Fair Trading Amendment Bill 2002 Schedule 1 Amendments (b) examples (in relation to particular classes of goods or 1 otherwise) of changes that are fundamental changes for 2 the purposes of that subsection. 3 (7) For the purposes of this section, the cost of producing or 4 manufacturing goods is to be determined in accordance with 5 the regulations. 6 (8) If in any proceedings against a person for an offence under 7 section 42 or 44 (i) the person seeks to rely on a provision of 8 this section or the regulations made under this section, the onus 9 is on the person to establish the matters set out in the provision 10 on which the person seeks to rely. 11 [21] Section 51A 12 Insert after section 51: 13 51A Prohibition on mock auctions 14 (1) A person must not promote or conduct or assist in the 15 promotion or conduct of an auction: 16 (a) at which: 17 (i) goods are sold to a person at a price lower than 18 the highest bid for the goods, or 19 (ii) part of the price for the sale of goods to a person 20 is repaid or credited to the person or is stated to 21 be so repaid or credited, or 22 (b) at which the right to bid for goods is restricted or is 23 stated to be restricted to persons who have bought or 24 agreed to buy other goods, or 25 (c) at which any goods or services are given away or 26 offered as gifts. 27 (2) Subsection (1) (a) does not apply if the lower price, repayment 28 or credit is because of: 29 (a) a defect that the person conducting the auction became 30 aware of after the highest bid was made, or 31 (b) damage sustained after the bid was made. 32 Page 40

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (3) For the purposes of this section: 1 (a) any bid stated to have been made at an auction is, in the 2 absence of evidence to the contrary, taken to have been 3 made and to have been a bid of the amount stated, and 4 (b) a reference to the sale of goods to a person who has 5 made a bid for them includes a reference to a purported 6 sale of those goods to a person stated to have made a 7 bid for them (whether or not that person exists), and 8 (c) anything done in or about the place where an auction is 9 held, if done in connection with the auction, is taken to 10 be done at the auction whether or not it is done at the 11 time of the auction or before or after the auction. 12 (4) In this section: 13 auction means any sale of goods at which some or all of the 14 persons present compete for the purchase of goods, whether by 15 way of increasing bids or by the offer of goods to be bid for at 16 successively decreasing prices or otherwise. 17 stated in relation to an auction means stated by or on behalf of 18 the person conducting the auction by way of an announcement 19 made to the persons for the time being present at the auction. 20 [22] Section 62 Offences against this Act 21 Insert after section 62 (2): 22 (2A) A person who is convicted of a second or subsequent offence 23 against Part 5 is, in addition to, or as an alternative to, any 24 monetary penalty that may be imposed in relation to the 25 offence, liable to imprisonment for a term not exceeding 3 26 years. However, the maximum term of imprisonment that a 27 Local Court may impose for any such second or subsequent 28 offence is 2 years. 29 [23] Sections 62 (6), 65 (1) (a), 66 (1) (a) (i), 67, 71 (1) and 72 (1)(4) 30 Insert ", 5C" after "5B" wherever occurring. 31 [24] Section 63 Disposal of proceedings for offences 32 Omit "50 penalty units" from section 63 (5). 33 Insert instead "100 penalty units". 34 Page 41

Fair Trading Amendment Bill 2002 Schedule 1 Amendments [25] Section 63A 1 Insert after section 63: 2 63A Compensation orders by Local Court on conviction of person 3 (1) If: 4 (a) a person is convicted by a Local Court of an offence 5 against this Act or the regulations, and 6 (b) the Court is satisfied that another person has sustained 7 loss or damage as a result of the conduct of the 8 convicted person, 9 the Court may, in addition to any penalty it may impose in 10 respect of the offence, order the convicted person to 11 compensate the other person for the loss or damage. 12 (2) The amount of compensation a Local Court may order to be 13 paid under this section is not to exceed $40,000 or such other 14 amount as is specified for the time being in section 12 (1) of 15 the Local Courts (Civil Claims) Act 1970. 16 (3) In this section: 17 (a) a reference to the conviction of a person includes a 18 reference to the making of an order in respect of a 19 person under section 10 of the Crimes (Sentencing 20 Procedure) Act 1999, and 21 (b) a reference to loss or damage does not, if the loss or 22 damage arises from a contravention of Part 5 (section 43 23 excepted), include a reference to: 24 (i) the death of a person, or 25 (ii) personal injury to a person (including any pre- 26 natal injury, any impairment of the person's 27 physical or mental condition and any disease). 28 [26] Section 65 Injunctions 29 Omit "offend against section 27, 32 or 34" from section 65 (10). 30 Insert instead "constitute an offence under Part 3". 31 [27] Section 66 Other injunctions 32 Insert "or" at the end of section 66 (1) (a) (i) and (ia). 33 Page 42

Fair Trading Amendment Bill 2002 Amendments Schedule 1 [28] Section 66 (1) (a) (iii) and (iv) 1 Omit the subparagraphs. 2 [29] Sections 66A and 66B 3 Insert after section 66: 4 66A Show cause action may be taken by Director-General 5 (1) In this section: 6 unlawful conduct means any conduct that constitutes a 7 contravention of a provision of this Act (or would constitute 8 such a contravention if the conduct occurred in New South 9 Wales), whether or not any proceedings have been brought in 10 respect of the contravention. 11 (2) If the Director-General is satisfied that a person has, in trade or 12 commerce, engaged in any unlawful conduct on more than one 13 occasion (whether in New South Wales or in any other place), 14 the Director-General may, by notice in writing served on the 15 person, call on the person to show cause why the person 16 should not, for the reason specified in the notice, be prevented 17 from carrying on a business of supplying goods or services. 18 (3) The notice must specify the period (being at least 14 days after 19 the notice is served) in which the person may show cause. 20 (4) The person on whom a notice to show cause has been served 21 under this section may, within the period specified in the 22 notice, make a written submission in relation to the matters to 23 which the notice relates. 24 (5) The Director-General: 25 (a) is to consider any such submission, and 26 (b) may conduct such inquiries, or make such 27 investigations, in relation to the matters to which the 28 notice relates as the Director-General thinks 29 appropriate. 30 (6) This section does not limit the operation of section 65 or 66. 31 Page 43

Fair Trading Amendment Bill 2002 Schedule 1 Amendments 66B Trading prohibition orders 1 (1) The Director-General may, after issuing a notice under section 2 66A to a person and taking into consideration any submissions 3 made in relation to the matter, apply to the Supreme Court for 4 an order under this section in respect of the person if the 5 Director-General is of the opinion that the person is likely to 6 engage again, or to continue to engage, in any unlawful conduct 7 within the meaning of section 66A. 8 (2) The Supreme Court may, on application by the Director- 9 General under subsection (1), make an order prohibiting the 10 person who is the subject of the application (the relevant 11 person) from carrying on a business of supplying goods or 12 services (whether or not as part of, or incidental to, the carrying 13 on of another business) for an indefinite period or for a period 14 specified in the order. 15 (3) In making any such order, the Supreme Court may, if the Court 16 is satisfied that a person has sustained loss or damage as a 17 result of the unlawful conduct of the relevant person, order the 18 relevant person to compensate the other person for the loss or 19 damage. 20 (4) A reference in subsection (3) to loss or damage does not, if the 21 loss or damage arises from a contravention of Part 5 (section 43 22 excepted), include a reference to: 23 (a) the death of a person, or 24 (b) personal injury to a person (including any pre-natal 25 injury, any impairment of the person's physical or 26 mental condition and any disease). 27 (5) This section does not limit the operation of section 65 or 66. 28 [30] Sections 68 (1) and 69 29 Omit "or 5B" wherever occurring. Insert instead ", 5B or 5C". 30 [31] Section 68 Actions for damages 31 Omit section 68 (2). Insert instead: 32 (2) An action under subsection (1) may be commenced at any time 33 within 6 years after the day on which the cause of action that 34 relates to the conduct accrued. 35 Page 44

Fair Trading Amendment Bill 2002 Amendments Schedule 1 (2A) Subsection (2) does not apply to a cause of action to which 1 Division 6 of Part 2 of the Limitation Act 1969 applies. 2 [32] Section 68A 3 Insert after section 68: 4 68A Remedy for supply of goods in contravention of certain 5 provisions 6 (1) If: 7 (a) goods are supplied to a person in contravention of 8 section 27, or 9 (b) goods are supplied to a person and the supply of the 10 goods is an offence under section 32 (whether or not 11 there has been a conviction for the offence), 12 the person may recover from the supplier as a debt any money 13 paid for the goods. 14 (2) If judgment is given for the plaintiff in an action under 15 subsection (1), the judgment debt may, if the court so directs, 16 be satisfied by repair or modification of the goods in such a 17 manner that: 18 (a) the contravention relied on by the plaintiff would not 19 have occurred if the goods had been supplied as 20 repaired or modified, or 21 (b) the repaired or modified goods are accepted by the 22 plaintiff on or before a day specified in the direction. 23 [33] Section 69 Finding in proceedings to be evidence 24 Omit "In a proceeding against a person under section 68 or in an application 25 under section". 26 Insert instead "In any proceedings under section 68 or 68A or in an 27 application under section 66B or". 28 Page 45

Fair Trading Amendment Bill 2002 Schedule 1 Amendments [34] Section 72 Other orders 1 Omit section 72 (6). Insert instead: 2 (6) An application under subsection (2) may be made at any time 3 within 6 years after the date on which the cause of action that 4 relates to the conduct accrued. 5 (6A) Subsection (6) does not apply to a cause of action to which 6 Division 6 of Part 2 of the Limitation Act 1969 applies. 7 [35] Section 73 Power of Supreme Court to prohibit payment or transfer of 8 money or other property 9 Insert "or" at the end of section 73 (1) (a). 10 [36] Section 73 (1) (b1) 11 Insert at the end of section 73 (1) (b): 12 or 13 (b1) an application for an order under section 66B has been 14 made in relation to a person, or 15 [37] Section 73 (1) (e) 16 Insert "(b1)," after "(b),". 17 [38] Section 73A Enforcement of undertakings 18 Omit "(other than a function in connection with Part 7)" from section 19 73A (1). 20 [39] Part 7 Codes of practice 21 Omit the Part. 22 [40] Schedule 4 Provisions applicable to Products Safety Committee 23 Insert "or in relation to the subject-matter of a review by the Committee 24 under section 36" after "section 28" in clause 3 (1). 25 Page 46

Fair Trading Amendment Bill 2002 Amendments Schedule 1 [41] Schedule 5 Savings and transitional provisions 1 Insert after clause 11C: 2 11D Fair Trading Amendment Act 2002 3 (1) In this clause, amending Act means the Fair Trading 4 Amendment Act 2002. 5 (2) The amendments made to sections 23A and 23C by the 6 amending Act do not apply to or in respect of a notice served 7 on a person under section 23A before the commencement of 8 those amendments, and sections 23A and 23C (as in force 9 immediately before that commencement) apply in relation to a 10 person on whom such a notice has been served as if those 11 amendments had not been made. 12 (3) Division 3 of Part 3, as amended by the amending Act, does 13 not apply to or in respect of an order made under section 34 (as 14 in force immediately before the commencement of the 15 amendments to that Division), and the provisions of that 16 Division (as in force immediately before that commencement) 17 apply to any such order as if those amendments had not been 18 made. 19 (4) Division 3 of Part 4, as inserted by the amending Act, does not 20 apply to or in respect of a credit purchase agreement (within the 21 meaning of the Door-to-Door Sales Act 1967) made before the 22 repeal of that Act by the amending Act, and the repealed Act 23 continues to apply to any such agreement as if the repealed Act 24 had not been repealed. 25 (5) Section 66A, as inserted by the amending Act, extends to 26 unlawful conduct occurring before the commencement of that 27 section. 28 (6) Section 68 (2), as amended by the amending Act, does not 29 apply to a cause of action accruing before the commencement 30 of the amendment to that subsection. 31 (7) Section 68 (2), as in force immediately before the 32 commencement of the amendment to that section by the 33 amending Act, continues to apply to or in respect of a cause of 34 action accruing before that commencement as if the amendment 35 had not been made. 36 Page 47

Fair Trading Amendment Bill 2002 Schedule 1 Amendments [42] Schedule 5, clause 12 (1) 1 Insert at the end of the subclause: 2 Fair Trading Amendment Act 2002 3 Page 48

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