CONSUMER AFFAIRS LEGISLATION FURTHER AMENDMENT BILL 2014 Explanatory Memoranda
CONSUMER AFFAIRS LEGISLATION FURTHER AMENDMENT BILL 2014
Consumer Affairs Legislation Further
Amendment Bill 2014
Introduction Print
EXPLANATORY MEMORANDUM
General
The main purpose of the Bill is to make a range of amendments to a number
of Acts within the Consumer Affairs portfolio, in particular to--
· amend the Owners Corporations Act 2006 to implement the
outcomes of a public review of the regulation of owners
corporations managers. In summary, the Bill will--
· improve the regulation of owners corporation managers
by preventing unsuitable persons becoming or
remaining owners corporation managers; and
· remove unreasonable restrictions on the ability of
owners corporations to terminate management
contracts; and
· require managers to disclose conflicts of interest; and
· protect owners corporation's funds by prohibiting
managers from pooling the funds of separate owners
corporations in one bank account, and by allowing
owners corporations to request copies of statements for
bank accounts that contain trust money; and
· make particular provisions for retirement villages with
owners corporations; and
571523 1 BILL LC INTRODUCTION 18/8/2014
· amend the Retirement Villages Act 1986 to make a range of
technical amendments to improve its operation and reduce
regulatory burden. In summary, the Bill will--
· clarify that the purchase price for a freehold unit in a
retirement village is an ingoing contribution as is a
deferred obligation to pay an ingoing contribution; and
· clarify that recurrent capital charges are maintenance
charges; and
· clarify that the provisions of the Retirement Villages
Act 1986 relating to an owner and to retirement village
land refer to the owner of the retirement village and to
the retirement village rather than to owner residents and
their units; and
· clarify when the Retirement Villages Act 1986 ceases
to apply to a retirement village; and
· remove duplicated obligations as between retirement
village owners and managers; and
· provide for early release of pre-payments made by
non-owner residents, to match that for owner residents
under the Sale of Land Act 1962; and
· improve the procedures for annual meetings; and
· clarify and rationalise the various provisions for
removing retirement village notices and charges; and
· amend the Sale of Land Act 1962 to address stakeholder
concerns that the current definition of terms contract no longer
catches all forms of terms contracts by amending this
definition; and
· amend the Veterans Act 2005 to aid the administration of
patriotic funds in Victoria by--
· simplifying the process for transfers out of patriotic
funds; and
· enabling the Director of Consumer Affairs Victoria to
consent to minor changes to trust deeds for patriotic
funds where the deed itself lacks a power of
amendment; and
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· providing for a mechanism to enable two or more
patriotic funds to amalgamate; and
· amend the Australian Consumer Law and Fair Trading Act
2012 to clarify that it is not a prohibited debt collection
practice for a creditor to contact a debtor for the purposes of
complying with the requirements of the National Credit Code.
Clause Notes
PART 1--PRELIMINARY
Clause 1 sets out the main purposes of the Bill. These are to amend the
Owners Corporations Act 2006, Retirement Villages Act
1986, Sale of Land Act 1962, Veterans Act 2005 and the
Australian Consumer Law and Fair Trading Act 2012.
Clause 2 provides Part 1, sections 15 and 16, Part 3 (other than
sections 23, 24 and 28), Part 4, Part 5, Part 6 and Part 7 come into
operation on the day after the day of on which the Act receives
the Royal Assent.
The remaining provisions of the Act come into operation on
proclamation or, if not proclaimed earlier, will come into
operation on 1 April 2015.
PART 2--AMENDMENT OF OWNERS CORPORATIONS
ACT 2006
Clause 3 amends section 68 (3) of the Owners Corporations Act 2006 by
substituting "the majority of the lots" for "a lot to which is, or lots
to which are, attached the majority of the lot entitlements of the
lots". The change will provide that the initial owner's obligations
apply if it owns a lot or lots to which is/are attached the majority
of lot entitlements, rather than if it owns a majority of the lots
(it is lot entitlement rather than the number of lots owned that
determines voting control); and that the obligations apply for
10 years from the registration of the plan subdivision, rather
than 5.
Clause 4 inserts new paragraph (1A) into section 119 of the Owners
Corporations Act 2006 which limits the appointment of a
manager for a period not exceeding 3 years and gives provision
for exceptions to be prescribed by regulation.
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Clause 5 inserts new section 119A (Contract of appointment of manager)
into the Owners Corporations Act 2006.
New section 119A(1) provides that a contract of appointment of a
manager of an owners corporation must not include any term that
requires the owners corporation to--
· pass a special resolution, a unanimous resolution or any
other resolution requiring more than a simple majority;
or
· convene a general meeting of the owners corporation; or
· take any other prescribed step--
to revoke the appointment of the manager.
New section 119A(2) provides that the contract of appointment
of a manager of an owners corporation must not include--
· a term that allows the manager to renew the contract at
its option; or
· a term that requires prescribed owners corporations to
give 3 months' or more notice, or any other owners
corporations to give one month's or more notice, of its
intention to revoke the appointment of the manager; or
· a term that provides for the renewal of the contract if the
owners corporation fails to give notice; or
· a term that fetters the ability of the owners corporation
to refuse consent to an assignment of the contract, other
than a requirement that such consent must not be
withheld unreasonably.
New section 119A(3) provides that a term that is referred to in a
contract of appointment in subsection (1) and (2) is void.
New section 119A(4) provides that where an owners corporation
fails to give notice of its intention to renew a contract of
appointment, the contract is taken to be rolled over on a monthly
basis or a shorter period if one is specified in the contract.
New section 119A(5) provides that if a contract of appointment
requires that consent to the assignment of the contract must not
be withheld unreasonably, the withholding of consent to an
assignment of a contract of appointment to a full member of a
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professional body or association approved by the Director is
presumed to be unreasonable.
Clause 6 subclause (1) inserts new paragraphs (d) and (e) in section 122(1)
of the Owners Corporations Act 2006.
New paragraph (d) provides that any goods and services
procured by the manager on behalf of the owners corporation
must be procured at competitive prices and on competitive terms.
New paragraph (e) prohibits the exertion of power by the
manager on any member of the owners corporation to influence
the outcome of a vote or decision held by the owners corporation.
Subclause (2) inserts new paragraphs (c) and (d) in
section 122(2) of the Owners Corporations Act 2006.
New paragraph (c) requires managers to keep the money held on
trust for separate owners corporations in separate bank accounts.
New paragraph (d) provides the right for owners corporations to
request managers to provide copies of bank statements for
accounts held by the manager containing trust moneys for up to
three years and an obligation on managers to comply with such
requests as soon as practicable.
Subclause (3) inserts new subsection (3) in section 122 of the
Owners Corporations Act 2006.
New section 122(3) creates exceptions to the requirement in new
section 122(2)(c) to hold money held on trust for separate owners
corporations in the same account if the owners corporations are
in the same subdivision and each has consented to the money
being held or if the account is a statutory trust account held by--
· a licensed real estate agent; or
· a legal practitioner; or
· a licensed conveyancer.
Clause 7 inserts new sections 122A and 122B into the Owners
Corporations Act 2006 to require managers to disclose certain
beneficial relationships with a supplier of goods or services.
New section 122A(1) sets out the circumstances, for the purposes
of that section, in which a manager has a beneficial relationship
with a supplier of goods or services.
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New section 122A(2) provides that the manager of an owners
corporation must disclose to the owners corporation any
beneficial relationship with a supplier.
New section 122A(3) requires that disclosure be given by written
notice to the owners corporation immediately upon the manager
being aware of the beneficial relationship and before entering
into the contract.
New section 122A(4) provides that in emergency situations
where it is necessary for the manager to enter into a contract and
it is not reasonably practicable for the manager to make
disclosure in accordance with new section 122A(3), the manager
must make disclosure as soon as practicable after entering into
the contract.
New section 122A(5) provides that a manager who fails to make
a disclosure required under section 122A is presumed to have
breached the duty of a manager under section 122(1)(c), unless
the manager--
· was not, and could not reasonably be expected to be,
aware of the beneficial relationship before entering the
contract; and
· the manager disclosed the relationship to the owners
corporation immediately after becoming aware of it.
New section 122A(6) defines the following terms used in new
section 122A--
· associate, of a person, means--
· an employee of the person; or
· a spouse, domestic partner, parent, brother, sister
or child of the person or the person's
respresentative; or
· a child of the spouse or domestic partner of the
person or the person's representative;
· control has the meaning given by section 50AA of the
Corporations Act 2001 of the Commonwealth; and
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· executive officer means any person, howsoever
described and whether or not the person is a director of
the corporation, who is concerned, or takes part, in the
management of the corporation.
New section 122B applies to a contract for the supply of goods
and services to an owners corporation under which the manager
of the owners corporation is entitled to receive a commission,
payment or other benefit.
New section 122B(2) provides that before a contract to which
that section applies is entered into, the manager must give written
notice to the chairperson of the owners corporation disclosing the
commission, payment or other benefit.
New section 122B(3) provides that if the contract is an insurance
contract and the commission that the manager is entitled to
receive is a percentage of the premium payable under the
contract--
· the manager may disclose the percentage of the
premium rather than the actual amount of the
commission; and
· where the contract is renewed, the manager must make
further disclosures of the commission only if the
percentage of the premium increases.
New section 122B(4) provides that a manager who fails to make
a disclosure required under this section is presumed to have
breached the duty of a manager under section 122(1).
Clause 8 subclause (1) substitutes section 126(2) of the Owners
Corporations Act 2006 to make explicit that the report of the
manager's activities must include reporting on--
· details of professional indemnity insurance held by the
manager in compliance with section 119(5); and
· details of receipts and disbursements of trust monies in
the relevant year, unless that information is in the
relevant financial statements prepared under section 34;
and
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· the amounts of commissions, payments and other
benefits received by the manager in relation to contracts
for goods and services supplied to the owners
corporation during the relevant year.
Subclause (2) inserts new section 126(3) to permit a manager to
provide their best estimate of the amount of a commission or
other benefit if the amount cannot be reasonably ascertained.
Clause 9 inserts new Part 8A (Retirement Villages) after section 143 of the
Owners Corporations Act 2006.
New Part 8A sets out particular provisions in relation to owners
corporations incorporated in relation to land used or to be used
for the purposes of a retirement village within the meaning of the
Retirement Villages Act 1996.
New section 143A(1) provides that new Part 8A applies to an
owners corporation incorporated in respect of land used or to be
used for the purposes of a retirement village within the meaning
of the Retirement Villages Act 1996.
New section 143A(2) provides that a term used in new Part 8A
that is defined in section 3(1) of the Retirement Villages Act
1986, has the same meaning given by that section.
New section 143B(1) provides that (despite Division 7 of Part 4,
which relates to decisions of owners corporations), the owner of
the retirement village land, or a close associate of the owner, who
has a majority of lot entitlements of the owners corporation is not
entitled to vote on--
· on a resolution levying fees under section 23; or
· a special resolution levying extraordinary fees under
section 24.
New section 143B(2) provides that in the case of a special
resolution referred to in subsection (1)(b), any reference in
Division 7 of Part 4 to the total lot entitlements of all the lots
affected by the owners corporation is to be read as a reference to
those lot entitlements excluding the lot entitlements of the owner.
New section 143C(1) provides that (despite section 138(1)
and (2), which allows owners corporations to make, amend or
revoke rules in relation to matters set out in Schedule 1 by a
special resolution) the rules of the owners corporation can only
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be made, amended or revoked by special resolution passed in
accordance with the Retirement Villages Act 1986. This means
the special resolution would need to be passed at an annual
general meeting or a special general meeting of the retirement
village.
New section 143C(2) provides that the manager or owner of the
retirement village must not participate in the consideration of the
special resolution or vote on the special resolution referred to in
subsection (1).
New section 143C(3), however, allows the manager or owner of
the retirement village to convene a meeting of the retirement
village to consider making, amending or revoking of rules of the
owners corporation.
Clause 10 subclause (1) inserts new paragraph (d) into section 162 of the
Owners Corporations Act 2006, which provides that VCAT
may hear and determine a dispute or matter relating to a term of
the contract of appointment of a manager, including whether the
term is fair.
Subclause (2) inserts new subsection 162(2), which provides that
for the purpose of subsection (1)(d), in determining a dispute or
matter relating to whether the term of the contract of appointment
is a fair term, VCAT must have regard to Part 2-3 of the
Australian Consumer Law (Victoria) as if a reference in that Part
to a consumer contract were a reference to the contract of
appointment of a manager.
Clause 11 inserts new paragraph (d) into section 179 of the Owners
Corporations Act 2006 to provide that if a person or, if the
person is a corporation, a director of that corporation, has within
the last 10 years been convicted or found guilty of any offence
involving fraud, dishonesty, drug trafficking or violence which
was punishable by imprisonment for 3 months or more, the
person is not eligible to be registered under this Part.
Clause 12 inserts new section 182A into the Owners Corporations Act
2006, similar to section 31C of the Estate Agents Act 1980,
which provides a limited right for a person with a criminal record
to hold an estate agent's licence.
New section 182A(1) provides that an applicant to whom
section 179(d) applies may apply to the Business Licensing
Authority for permission to be registered as a manager.
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New section 182A(2) provides that the application must be--
· in the form approved by the Business Licensing
Authority; and
· contain the information required by the Business
Licensing Authority; and
· be accompanied by the documents required by the
Business Licensing Authority; and
· be accompanied by the prescribed fee (if any).
New section 182A(3) provides that in considering an application
under this section the Business Licensing Authority may do one
or more of the following--
· conduct any inquiries it sees fit;
· require the applicant to provide any further information
that the Authority thinks fit in the manner required by
the Authority;
· seek advice and information on the application from any
other person or body as it thinks fit.
New section 182A(4) provides that the Business Licensing
Authority may refuse to consider an application if the applicant
does not provide any further information required, or does not
given consent to the Authority to obtain that information within a
reasonable time after the requirement is made.
New section 182A(5) provides that the Business Licensing
Authority may permit the applicant to be registered under this
Part if it is satisfied that it is not contrary to the public interest to
do so.
Clause 13 inserts new subsections (2), (3) and (4) into section 186 of the
Owners Corporations Act 2006.
New section 186(2) provides that a person's registration as a
manager is automatically cancelled 30 days after the person, or if
the person is a corporation, a director of the corporation, is
convicted or found guilty of--
· an offence involving fraud, dishonesty, drug trafficking
or violence punishable by a term of imprisonment of 3
months or more; or
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· an offence that, if committed in Victoria, would
constitute an offence referred to in paragraph (a).
New section 186(3) provides that for the purposes of subsection
(2), the conviction or finding of guilt of the person takes effect on
the later of--
· if the person appeals against the conviction or finding--
the day on which the conviction or finding is upheld or
confirmed, or the day on which leave to appeal is
refused; or
· in any other case--at the end of the period during which
the person may appeal against the conviction or finding
of guilt.
New section 186(4) provides that if a person whose registration
would otherwise by cancelled by subsection (2) applies for
permission for registration under section 186A within the 30 day
period referred to in subsection (2), the person's registration is
only automatically cancelled if the application is withdrawn or is
refused by the Business Licensing Authority.
Clause 14 inserts new sections 186A and 186B into the Owners
Corporations Act 2006.
New section 186A allows a person who is otherwise disqualified
from being registered as a manager because of a criminal record
to apply for permission to continue to be registered as a manager.
The process is similar to that in new section 182A inserted by
clause 12 which applies to someone wishing to become a
manager.
New section 186A(1) provides that a person to whom
section 186(2) applies may, within the 30 day period referred
to in that section, apply to the Business Licensing Authority for
permission to continue to be registered as a manager.
New section 186A(2) sets out requirements for an application
under subsection (1).
New section 186A(3) sets out what the Business Licensing
Authority may do in considering an application under this
section.
New section 186A(4) sets out when the Authority may refuse to
consider an application.
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New section 186A(5) provides that the Authority may permit the
applicant to continue being registered under this Part if it is
satisfied that it is not against the public interest for it to do so.
New section 186B provides for conditions to be imposed on
permission given under new sections 182A and 186A to be
registered, or continue to be registered, as a manager despite a
criminal record.
New section 186B(1) provides that in giving permission under
sections 182A or 186A, the Business Licensing Authority may
impose any conditions it considers appropriate to ensure the
ongoing protection of the public interest.
New section 186B(2) provides that the Business Licensing
Authority may at any time impose, vary, or revoke any
conditions in respect of the permission.
New section 186B(3) provides that a person must comply with
any conditions imposed in respect of the permission, and imposes
a penalty of 25 penalty units for failure to do so.
New section 186B(5) provides that before taking action under
this section, the Business Licensing Authority may seek and use
information and advice from any person or body or other sources
as it thinks fit.
Clause 15 repeals section 199 of the Owners Corporations Act 2006 to
allow for its relocation to Part 13 of the Act under clause 16.
Clause 16 relocates section 199, which relates to the application of the
Australian Consumer Law and Fair Trading Act 2012, from
Part 12 to Part 13 of the Owners Corporations Act 2006 and
applies the inspection and remedy provisions of the Australian
Consumer Law and Fair Trading Act 2012 to all offence
provisions of the Owners Corporations Act 2006.
PART 3--AMENDMENT OF RETIREMENT VILLAGES ACT
1986
Clause 17 amends section 3 of the Retirement Villages Act 1986 by
substituting new definitions of annual meeting, close associate,
committee, in-going contribution, maintenance charge, owner,
prescribed period, resident and retirement village land, inserting
a definition of residents meeting, and amending the definitions of
residence documents and residence right.
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The new definitions of annual meeting, committee and
prescribed period no longer differentiate between retirement
villages with and without owners corporations because new
Part 8A of the Owners Corporations Act 2006 now addresses
the issues arising from the presence of owners corporations in
retirement villages.
The new definition of close associate applies to "persons" rather
than merely to managers and arises from the insertion of
section 143B(1) into the Owners Corporations Act 2006 by
clause 9 of this Bill.
The new definition of in-going contribution clarifies that it
includes the purchase price paid for the fee simple in a unit in a
retirement village and any wholly deferred obligation of a non-
owner resident to pay an in-going contribution.
The new definition of maintenance charge clarifies that it
includes a recurring charge for capital purposes and charges paid
for access to facilities provided by owners corporations outside
the retirement village but part of the same development.
The new definitions of owner and retirement village land clarify
that they refer, respectively, to the retirement village owner and
land owned by the retirement village owner, and not to an owner
resident or to an owner resident's unit.
The new definition of resident arises because the special
definitions previously in paragraphs (a) and (b) of the definition
have been incorporated into new sections 27 and 32(2A) inserted,
respectively, by clauses 25 and 26 of this Bill.
The new definition of residents meeting replaces the various and
inconsistent references in the Retirement Villages Act 1986 to
meetings of residents.
The amendment to paragraph (e) of the definition of residence
documents enables a manager as well as an owner to sign the
disclosure statement.
The amendment to the definition of residence right clarifies that
it refers to residential accommodation and hostel
accommodation.
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Clause 18 inserts new section 8(1A) into the Retirement Villages Act 1986
to clarify that the offence under section 8(1) only arises if a
retirement village notice is not lodged in relation to the sale of
land owned by a retirement village owner and does not arise if a
notice is not lodged in relation to the sale of a unit owned by an
owner resident.
Clause 19 inserts new section 10 into the Retirement Villages Act 1986
which clarifies that subject to section 46, the Act applies to a
retirement village unless and until the retirement village notice is
cancelled under section 39 even if the land to which the notice
relates is no longer used as a retirement village.
Clause 20 repeals section 12 of the Retirement Villages Act 1986 which is
redundant because of the new definition of retirement village
land.
Clause 21 amends section 19(2)(d) of the Retirement Villages Act 1986 to
clarify that the manager need not provide documents to an
incoming resident that are provided by the owner.
Clause 22 amends section 24(4) of the Retirement Villages Act 1986 to
clarify that it applies to rescission under section 24(2) and not to
rescission under section 24(6) which is governed by section 42 of
the Act.
Clause 23 amends section 25(1) of the Retirement Villages Act 1986 to
insert paragraph (b) which clarifies that payments of the balance
of the purchase price of vacant land in a retirement village are not
required to be held in trust pending the construction of the unit on
that land.
Clause 24 inserts new section 25A into the Retirement Villages Act 1986
which enables owners to obtain early release of deposits and part
payments of ingoing contributions payable by non-owner
residents.
Clause 25 substitutes a new section 27 in the Retirement Villages Act
1986. The old section has been made redundant by the new
definition of retirement village land and the new section
incorporates the provisions of repealed paragraph (a) of the
definition of resident.
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Clause 26 subclause (1) inserts new sections 32(2A) and (2B) into the
Retirement Villages Act 1986.
New subsection (2A) clarifies the residents and former residents
on whom the notice of application under section 32(2) must be
served.
New section 32(2B) incorporates and clarifies the notice
requirements previously contained in section 32(3)(b)(ii).
Subclause (2) substitutes a new section 32(3)(b)(ii) of the
Retirement Villages Act 1986 to require the owner to serve the
notice of application in accordance with new sections 32(2A)
and (2B).
Subclause (3) inserts new section 32(4A) into the Retirement
Villages Act 1986 which allows the Director of Consumer
Affairs Victoria to waive all or some of the requirements under
section 32(3) in relation to an application arising from an election
under section 209(4) of the Supported Residential Services
(Private Proprietors) Act 2010 by the proprietor of a supported
residential service for the premises to cease to be recorded in the
register kept under section 38J of the Retirement Villages Act
1986.
Subclause (4) amends section 32(6)(b) of the Retirement
Villages Act 1986 to clarify that the notice of application must
have been served in accordance with new sections 32(2A)
and (2B).
Clause 27 inserts new section 32E(2A) into the Retirement Villages Act
1986 which requires owner residents who are selling their unit to
include a notice on the front page of the contract of sale alerting
the purchaser to the requirement to enter into a management
contract.
Clause 28 inserts new section 33(2) into the Retirement Villages Act 1986
which requires the manager to give residents at least 14 days'
notice of the annual meeting, specifying the date, time and place
of the meeting, and the general nature of each business item to be
considered at the meeting and, if requested by the resident, to
include copies of the statements to be presented at the meeting.
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Clause 29 subclause (1) amends section 34(1) of the Retirement Villages
Act 1986 to enable the manager to prepare, sign and present the
statement required under section 34 while retaining the primary
obligation with the owner to ensure that the statement is prepared
and presented to the annual meeting. Subclause (1) also amends
section 34(1)(a) of the Retirement Villages Act 1986 arising
from the new definition of resident to clarify that the statement
relates to refundable in-going contributions owed to any resident.
Subclause (2) repeals section 34(2) of the Retirement Villages
Act 1986 which is made redundant by the new definition of
retirement village land.
Subclause (3) amends section 34(3)(d) of the Retirement
Villages Act 1986 to provide that the financial statement
presented to residents of a retirement village at an annual meeting
must include actual increases in maintenance charges as well as
proposed increases.
Subclauses (4) and (5) amend section 34(4) of the Retirement
Villages Act 1986 and insert new section 34(4A). The combined
effect of these amendments is to enable residents to vote to
dispense with the auditing requirements for the financial
statement required under section 34(3) at the annual meeting to
which the statement is presented or at the previous annual
meeting.
Clause 30 subclause (1) substitutes for section 36(1) of the Retirement
Villages Act 1986 a provision that omits reference to villages
without owners corporations because it is no longer necessary to
make special provision for such retirement villages.
Subclause (2) amends section 36 (3) of the Retirement Villages
Act 1986 to accord with the new definition of residents meeting.
Subclause (3) substitutes for section 36(6) of the Retirement
Villages Act 1986 a provision that accords with the new
definition of residents meeting and clarifies that the residents
committee cannot convene the annual meeting under section 33
of the Retirement Villages Act 1986.
Subclause (4) repeals section 36(8) of the Retirement Villages
Act 1986 because it is no longer necessary to make special
provision for retirement villages with owners corporations.
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Clause 31 amends section 37(4) of the Retirement Villages Act 1986 to
accord with the new definition of residents meeting.
Clause 32 subclause (1) amends section 38(1) of the Retirement Villages
Act 1986 to substitute a reference to new section 38AA inserted
by clause 33 of this Bill.
Subclause (2) amends section 38(4) of the Retirement Villages
Act 1986 to accord with the new definition of residents meeting.
Clause 33 inserts new section 38AA into the Retirement Villages Act 1986
which, for ease of reference, incorporates and updates the
formula for adjustments to maintenance charges currently set out
in regulation 8A of the Retirement Villages (Contractual
Arrangements) Regulations 2006.
Clause 34 amends section 38B(3) of the Retirement Villages Act 1986 to
clarify that it refers to non-owner residents.
Clause 35 amends the heading to section 38I of the Retirement Villages
Act 1986 to clarify that the section refers both to owner residents
and non-owner residents.
Clause 36 subclause (1) inserts new subsections (2A) and (2B) into
section 39 of the Retirement Villages Act 1986.
New section 39(2A) clarifies the residents and former residents
on whom the notice of application under section 39(2) must be
served.
New section 39(2B) incorporates and clarifies the notice
requirements previously contained in section 39(3)(b)(ii).
Subclause (2) substitutes a new section 39(3)(b)(ii) of the
Retirement Villages Act 1986 to require the owner to serve the
notice of application in accordance with new sections 39(2A)
and (2B).
Subclause (3) inserts new section 39(4A) into the Retirement
Villages Act 1986 which allows the Director of Consumer
Affairs Victoria to waive all or some of the requirements under
section 39(3) in relation to an application arising from an election
under section 209(4) of the Supported Residential Services
(Private Proprietors) Act 2010 by the proprietor of a supported
residential service for the premises to cease to be recorded in the
register kept under section 38J of the Retirement Villages Act
1986.
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Subclause (4) amends section 39(6)(b) of the Retirement
Villages Act 1986 to clarify that the notice of application must
have been served in accordance with new sections 39(2A)
and (2B).
Clause 37 inserts new section 39A into the Retirement Villages Act 1986.
New section 39A provides for owner residents to apply to the
Registrar of Titles to delete erroneous recordings of notices under
section 9 and of charges under section 29 of the Retirement
Villages Act 1986.
Clause 38 substitutes new sections 47 and 48 of the Retirement Villages
Act 1986 with provisions that omit the 18 month limitation
periods and clarify the residents and former residents on whom
the notice of application must be served.
Clause 39 repeals a redundant heading.
PART 4--AMENDMENT OF SALE OF LAND ACT 1962
Clause 40 amends section 29A of the Sale of Land Act 1962 to clarify the
circumstances in which a terms contract will and will not be
created.
Section 29A(1) sets out two circumstances in which a contract
for the sale of land will be a terms contract for the purposes of
the Act. Broadly, these are where a purchaser under a contract is
required, after execution of the contract, to make multiple
payments to the vendor before the purchaser is entitled to transfer
of the land (paragraph (a)), or where a purchaser is entitled to
possession or occupation of the land before the purchaser is
entitled to a transfer of the land (paragraph (b)).
Subclause (1) amends section 29A(1)(b) to substitute the words
"possession of the land or to the receipt of rents and profits" for
"possession or occupation of the land". Removing the word
"occupation" from paragraph (b) is intended to ensure that a
terms contract is not inadvertently created where the purchaser
under a contract for the sale of land is given permission to access
the land before settlement, for example, to store goods. In case
law, access of this nature has been considered to amount to an
entitlement to occupation of the land, thereby inadvertently
giving rise to a terms contract. Conversely, including a reference
to "the receipt of rents and profits" recognises that where a
vendor of tenanted premises grants a purchaser the right to the
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receipt of rents and profits before settlement, the conferral of that
right should result in the creation of a terms contract equivalent
to conferral of the right to possession.
Subclause (2) inserts new subsection (1A) into section 29A to
clarify that a payment made by a purchaser under a contract for
the sale of land following a default by the purchaser (or agreed to
by the purchaser and vendor in anticipation of a default by the
purchaser) does not count as a payment for the purpose of
section 29A(1)(a). The new subsection is inserted in response to
concerns that an unscrupulous purchaser may deliberately default
on a payment due under a contract and negotiate with the vendor
for an additional payment or payments in order to "convert" a
normal contract for the sale of land into a terms contract, thereby
benefitting from the protections afforded to terms contracts.
Subclause (3) amends the definition of deposit in section 29A(2)
to address concerns about the operation of that definition.
As a result of amendments made to the Sale of Land Act 1962 in
2008, deposit was defined in section 29A(2) as "a payment made
to the vendor or to a person on behalf of the vendor before the
purchaser becomes entitled to possession or to the receipt of rents
and profits under the contract". This definition means that any
payment made by a purchaser prior to the entitlement to
possession or to the receipt of rents and profits arising constitutes
part of the deposit. As a result, the only terms contracts that meet
the requirements of section 29A(1)(a) are contracts where the
purchaser is obliged to make two or more payments to the vendor
after the execution of the contract and before the purchaser is
entitled to a conveyance or transfer of the land, and at least two
of those payments occur after the entitlement to possession or
rents and profits arise under the contract. If the entitlement to
possession or rents and profits does not occur until later in the
contract (i.e. at a point in time where the number of remaining
payments to be made before final payment is either one or zero),
the contract will not be a terms contract for the purposes of
section 29A(1)(a).
To address this issue, subclause (3) substitutes the existing
definition of deposit in section 29A(2) with a new definition of
that term. The new definition provides that a deposit means
"any part of the purchase price that the contract (including the
contract as varied by written agreement between the parties after
initial execution) specifies as being a deposit and provides must
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be paid, whether by one or more payments, within a specified
period, not exceeding 60 days, after the execution of the
contract".
The new definition ensures that, for the purposes of
section 29A(1)(a), the "two or more payments" (other than a
deposit or final payment) that are required to be made after
execution of a terms contract and before the purchaser is entitled
to a conveyance or transfer of the land can be made regardless of
when the right to possession or to the receipt of rents and profits
arises under the contract.
The new definition of deposit also--
· clarifies that instalment payments of a deposit will
not constitute "payments" for the purposes of
section 29A(1)(a), thereby ensuring that a normal
contract whose deposit is paid in a series of consecutive
instalments will not inadvertently trigger the terms
contract provisions; and
· contemplates payment of a deposit under a terms
contract during a period not exceeding 60 days.
Although it is usual practice for deposits to be paid
within 28 days, limiting the timeframe for payment of a
deposit under a terms contract to 28 days could have
disadvantaged some purchasers who would be unable to
complete payment of the deposit within that timeframe.
PART 5--AMENDMENT OF VETERANS ACT 2005
Clause 41 amends section 26 of the Veterans Act 2005 to enable the
Minister to seek the advice of the Victorian Veterans Council
when determining whether to approve the interstate transfer of
patriotic fund assets under section 36(5)(b). Section 36(5)(b) is
inserted by clause 43 of this Bill, and enables the trustees of a
patriotic fund to apply to the Minister for approval for the
interstate transfer of patriotic fund assets in certain
circumstances.
This clause also substitutes a new heading to section 26 that
reflects the amendments to section 26 contained in this clause.
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Clause 42 inserts new sections 33A and 33B into the Veterans Act 2005.
New section 33A(1) enables the Director to approve, on the
written application of the trustee of a patriotic fund, either the
amendment of the trust deed of that patriotic fund or the adoption
of a new trust deed for that patriotic fund.
New section 33A(2) provides that the Director may only approve
the amendment of a trust deed or the adoption of a new trust deed
where the amendment or adoption is consistent with, and does
not alter the objects or purposes of the patriotic fund.
New section 33A(3) provides that the amendments to the trust
deed, or the adoption of a new deed, take effect once approved by
the Director.
New section 33B inserts a facility to enable two or more patriotic
funds to apply to the Director for approval to amalgamate.
This process is based on the process for the amalgamation of two
or more incorporated associations set out in Division 2 of Part 2
of the Associations Incorporation Reform Act 2012.
New section 33B(2) details what information must be included in
an application for amalgamation to the Director under this
section.
New section 33B(3) provides that the Director may approve an
application for amalgamation under this section by notice in
writing to the trustees of the patriotic funds that applied for the
amalgamation.
New section 33B(4) sets out the effect of amalgamation of
patriotic funds. On the amalgamation of two or more patriotic
funds under this section, a new patriotic fund is established on
the terms set out in the application for amalgamation and the
amalgamating patriotic funds are incorporated into the new
patriotic fund. In addition, the property of each amalgamating
fund automatically vests in the trustees of the new patriotic fund
without the need for any other conveyance, transfer or
assignment. This property is held by the trustees subject to the
terms of the new patriotic fund.
New section 33B(5) provides that any property vested in the
trustees of an amalgamated patriotic fund by reason of
subsection (4) vests subject to any restriction, limitation,
mortgage, charge, security interest, encumbrance, lien, lease
covenant, contract or liability to which the property was subject
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immediately before it was vested by reason of subsection (4).
However, this does not include any restriction that may have
applied by virtue of the terms of any of the amalgamating
patriotic fund. Per subsection (4), on amalgamation, these
restrictions no longer apply; instead, the property of the
constituent patriotic funds is held by the trustees of the new
patriotic fund subject to the terms of that patriotic fund.
New section 33B(6) provides that a reference in a will to a
patriotic fund that has amalgamated under this section must,
unless the will otherwise provides, be construed as a reference
the amalgamated patriotic fund.
Clause 43 inserts a new subsection (5) into section 36 of the Veterans Act
2005.
Section 36 currently enables the trustees of a patriotic fund. with
the approval of the Governor in Council, on the recommendation
of the Minister, to transfer all or any of the assets of the patriotic
fund to the trustees or a patriotic fund or charitable trust or
charitable corporation located in another State.
New section 36(5) will enable the trustees of a patriotic fund to
transfer patriotic fund assets to trustees or corporations located in
another state without the approval of the Governor in Council
if--
· the value of the assets does not exceed $1000 in any
6 month period, or other prescribed amount, and
approval of the Director is obtained; or
· the value of the assets does not exceed $5000 in any
6 month period, or other prescribed amount, and the
approval of the Minister is obtained.
Clause 44 inserts a new section 36A into the Veterans Act 2005.
New section 36A enables the Governor in Council, Minister or
Director, as appropriate, to validate the transfer of patriotic fund
assets that required the approval of the Governor in Council,
Minister or Director under section 34, 35 or 36, but were made
without that approval being obtained.
The Governor in Council, Minister or Director may only validate
a transfer under this section if they would have granted approval
for that transfer if it had been sought before the transfer was
made.
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The effect of validation under this section is to make the transfer
of assets valid and effectual for all purposes, as if approval had
been given before the transfer was made.
However, validation by the Governor in Council, Minister or
Director under this section does not exempt a trustee from any
civil or criminal liability that the trustee may have incurred as a
result of making transfers of patriotic fund assets without
obtaining the necessary prior approval.
PART 6--AMENDMENT OF AUSTRALIAN CONSUMER
LAW AND FAIR TRADING ACT 2012
Clause 45 amends section 45(2)(m)(iii) of the Australian Consumer Law
and Fair Trading Act 2012.
Section 45 of that Act creates an offence of engaging in a
prohibited debt collection practice. Section 45(2)(2) provides
that contacting a person about a debt after the person advises in
writing that no further communication should be made is a
prohibited debt collection practice. However, section
45(2)(m)(iii) exempts communications with a debtor for the
purpose of complying with section 88 of the National Credit
Code from this prohibition. A communication under section 88
consists of a notice from a credit provider that a person has
defaulted on repayment of their debt, and is a precursor to
commencing enforcement proceedings to recover the debt.
This clause amends section 45(2)(m)(iii) to broaden this
exemption to cover all communications for the purpose of
complying with the National Credit Code.
This will include, for example, notices issued under section 179D
of the National Credit Code relating to the default of a consumer
lease.
PART 7--REPEAL
Clause 46 provides for the automatic repeal of this amending Act on 1 July
2016. The repeal of this Act does not affect in any way the
continuing operation of the amendments made by this Act
(see section 15(1) of the Interpretation of Legislation Act
1984).
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