Bills Digest no. 7 2015–16
PDF version [590KB]
WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Paula Pyburne
Law and Bills Digest Section
12 August 2015
Contents
Purpose
of the Bill
Structure of the Bill
Background
Commitment to the Bill
Unfair contract provisions
Committee consideration
Statement of Compatibility with Human Rights
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Key provisions
Key issues
Concluding comments
Date introduced: 24
June 2015
House: House of
Representatives
Portfolio: Treasury
Commencement: Sections
1–3 on Royal Assent; Schedule 1, six months after Royal Assent.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
The purpose of the Treasury Legislation Amendment (Small
Business and Unfair Contract Terms) Bill 2015 (the Bill) is to amend the Australian
Securities and Investments Commission Act 2001[1]
and the Competition and Consumer Act 2010[2]
to extend the unfair contract term protections that are currently available to
consumers, to those businesses with less than 20 employees. The protections
relate to the terms of standard form contracts valued at less than a prescribed
threshold.
The Bill comprises a single Schedule which contains
amendments to the Australian Securities and Investments Commission Act
and the Competition and Consumer Act.
On 11 December 2006, the Treasurer, Peter Costello,
requested that the Productivity Commission undertake an inquiry into
Australia’s consumer policy framework.[3]
The final report of the Productivity Commission,
published on 30 April 2008, recommended the introduction of a single national
generic consumer law.[4] In particular, it stated that ‘the new law should
include a provision voiding “unfair” contract terms that have caused consumer
detriment’.[5]
The Productivity Commission was satisfied that:
Small businesses have a dual role in consumer policy: as well
as being suppliers of goods and services, they are consumers in their own
right. Indeed, in their dealings with larger businesses, small businesses can
face many of the same issues as individual consumers, particularly relating to
unequal bargaining power and the lack of resources to effectively negotiate
contracts.[6]
That being the case, a consultation paper on the draft
consumer law stated, amongst other things:
The draft provisions on unfair contract terms will apply
to business-to-business transactions in the same way as other key
provisions in the TPA do, such as those dealing with unconscionable conduct and
misleading and deceptive conduct.[7]
[emphasis added]
However, by the time the Trade Practices Amendment
(Australian Consumer Law) Bill 2009 (Australian Consumer Law Bill No. 1) was
introduced into the Parliament on 24 June 2009, the unfair contract provisions
had been framed so that they would apply only to business to consumer
transactions.[8]
The Government of the day argued that the question of whether
business-to-business contracts—and particularly those involving small businesses—should
be included under the unfair contract terms provisions, was subject to the
outcome of reviews of both the unconscionable conduct provisions of the Trade
Practices Act and also the Franchising Code of Conduct and that it would ‘further consider this issue when these reviews are completed’.[9]
In the lead up to the September 2013 Federal election, then
Shadow Minister for Small Business, Competition Policy and Consumer Affairs, Bruce
Billson, articulated the Coalition’s commitment, if elected, to extend the
unfair contract protections to small business.[10]
Following that election, as Minister for Small Business,
Mr Billson outlined the Government’s plans to extend the protections, already in
place for consumers under the Australian Consumer Law, to the small business
sector:
Small businesses often receive standard form contracts from
business on a “take it or leave it” basis, and encounter the same disadvantage
as individual consumers when it comes to negotiating contracts.
For example, we understand that primary producers are
increasingly contracting directly with the large supermarkets, and that in many
instances, supermarkets insist on standard form contracts.
We agree that many benefits flow from using standard form
contracts — they save time and keep costs down. But they can also be used to
shield a business from risk unfairly ...
In extending these protections, we recognise though that
there may be several issues to work through. A thorough consultation process is
going to be essential if we all want to get this reform right.[11]
Consistent with this commitment, on 23 May 2014 the
Government released a discussion paper inviting public comment on the proposed
extension of the unfair contract terms protections to small businesses.[12]
Announcing the release of the discussion paper, the Minister stressed the
importance of ‘getting the balance right between protecting small businesses
against unfair contract terms, while at the same time not imposing
unnecessary burden on business’.[13]
Having settled on a model for the amendments, the
Government issued an Exposure Draft for comment from stakeholders.[14]
The Bill reflects the outcome of that consultation process. Whilst the text of
the Bill introduced into the Parliament differs slightly to that of the Exposure
Draft, in substance, the Bill and the Exposure Draft are of equivalent effect.
The Australian Securities and Investments Commission
Act and the Competition and Consumer Act contain unfair contract
provisions which are in broadly equivalent terms which came into effect on 1
July 2010.
The relevant provisions in the Australian Securities
and Investments Commission Act apply to a financial
product or
to a contract for the supply, or possible supply, of services that are
financial services. The unfair contract protections attach to a consumer contract to which at
least one of the parties is an individual whose acquisition under the contract
is wholly or predominantly an acquisition for personal, domestic or household use or consumption.[15]
The relevant provisions in the Competition and Consumer
Act apply to a consumer contract for a supply of goods or services or a sale or
grant of an interest in land to an individual whose acquisition of the goods,
services or interest is wholly or predominantly for personal, domestic or
household use or consumption.[16]
A term of a consumer contract
is void if the term is unfair[17]
and the contract is a standard form contract.[18]
The unfair contract term protections operate as follows:
- an
unfair term is one which would cause a significant imbalance in
the parties’ rights and obligations arising under the contract, is not
reasonably necessary in order to protect the legitimate interests of the party
who would be advantaged by the term and would cause detriment (whether
financial or otherwise) to a party if it were to be applied or relied on[19]
- in
deciding whether a contract is unfair a court must take into account the transparency
of the term—that is, whether it is expressed in reasonably plain
language, is legible, is presented clearly and is readily available to any
party affected by the term[20]
- the
exceptions to the unfair contract term provisions are terms that:
- define
the main subject matter of the contract
- set
the upfront price payable under the contract or
- are
required, or expressly permitted, by a law of the Commonwealth, a state or a territory.[21]
The upfront price payable is the amount that
is provided for the supply or sale under the contract. It is disclosed at, or
before, the contract is entered into. It does not include any other
consideration that is contingent on the occurrence or non-occurrence of a
particular event.[22]
If a party to a proceeding alleges that a contract is a
standard form contract, it is presumed to be a standard form contract unless
another party to the proceeding proves otherwise.[23]
The relevant Acts list a number of matters which a court may take into account
in determining whether a contract is a standard form contract.[24]
Court decisions
Although the unfair contract provisions have been in
operation since 1 July 2010, it was not until July 2013 that a case relating to
those provisions was the subject of determination by the Federal Court. Upon
application by the Australian Competition and Consumer Commission (ACCC), the Federal Court declared, by consent, that various clauses of
ByteCard’s (also known as NetSpeed Internet Communications) standard terms and
conditions were unfair contract terms. The unfair contract terms:
- enabled ByteCard to unilaterally vary the price under an existing
contract without providing the customer with a right to terminate the contract
- required the consumer to indemnify ByteCard in any circumstance, even
where the contract has not been breached and the liability, loss or damage may
have been caused by ByteCard’s breach of the contract and
- enabled ByteCard to unilaterally terminate the contract at any time
with or without cause or reason.
The terms were considered unfair as they:
- created a significant imbalance in the parties’ rights and obligations
- were not reasonably necessary to protect ByteCard’s legitimate
interests and
- if applied or relied upon by ByteCard, would cause detriment to a
customer.[25]
The Federal Court affirmed that within the particular
internet services contract in question, the terms enforced by ByteCard were
‘deemed unfair and therefore void’.[26]
ACCC industry review
In March 2013, the ACCC published the results of its review
of standard form consumer contracts in the airline, telecommunications, fitness
and vehicle rental industries, as well as some contracts commonly used by
online traders. A select number of standard form contracts used by prominent
travel agents were also examined.[27]
The ACCC identified eight key issues during the industry
reviews, being:
- contract
terms that allow the business to change the contract without consent from the
consumer
- terms
that cause confusion about the agency arrangement that apply and seek to
unfairly absolve the agent from any liability
- terms
that unfairly restrict the consumer’s right to terminate the contract
- terms
that suspend or terminate the services being provided to the consumer under the
contract
- terms
that make the consumer liable for things that would ordinarily be outside of
their control
- terms
that prevent the consumer from relying on representations made by the business
or its agents
- terms
seeking to limit consumer guarantee rights and
- terms
that seek to remove the consumer’s right to a credit card chargeback facility
when buying the service through an agent.[28]
The ACCC report indicates that many of the reviewed
businesses chose to make improvements to their standard form contract terms by
amending or deleting the problematic terms raised during the review.[29]
However, it is clear from the issues highlighted during the review that the use
of standard form contracts could disadvantage small businesses in the same way
that it disadvantages consumers.
Selection of Bills Committee
At its meeting of 25 June 2015, the Standing Committee for
the Selection of Bills resolved to recommend that the Bill not be referred to
Committee for inquiry and report.[30]
Senate Standing Committee for the
Scrutiny of Bills
At the time of writing this Bills Digest the Standing
Committee for the Scrutiny of Bills had not published any comments in relation
to the Bill.
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed
the Bill’s compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[31]
The Parliamentary Joint Committee on Human Rights considers
that the Bill does not raise human rights concerns.[32]
At the time of writing this Bills Digest, the Bill had been introduced
into the House of Representatives but had not been the subject of a second
reading debate.
The Franchise Council of Australia has expressed concern
that the Exposure Draft (and thus the final form of the Bill as introduced to
the Parliament) does not deliver on stated policy objectives, and that it:
- will
not provide sufficient mechanisms for business parties to contract with
certainty. Without additional exemptions the party to a contract with a small
business will always have a potential claim hanging over its head
- will
make lenders less willing to deal with small business either directly, as loan
documentation will be included, or indirectly when financing transactions
- does
not take into consideration the fact that third parties frequently rely on, or
are affected by, business contracts. Third parties can include financiers,
landlords, suppliers, franchisees, contractors and employees
- will
create additional disputation and steer parties towards the courts rather than
towards mediation and other less costly alternative dispute resolution
mechanisms and
- will
see small business excluded from business opportunities, including
opportunities such as tenders and major projects which typically operate on a
standard form contract basis.[33]
Arguments for extending the
protection
Arguing in favour of the Bill, the Queensland Law Society has
said:
... it is self-evident that the majority of small businesses do
not have the same level of bargaining power as larger businesses ... extending
the unfair contract terms protections to small businesses merely improves
access to justice for another group that has been identified as being at risk,
or alternatively marginalised as a result of diminished access to justice.[34]
Arguments against extending the
protection
The case against extending the unfair contract term
protections to small business is put succinctly by the Business Council of
Australia:
We remain concerned about the additional regulatory burden on
business from new compliance costs, regulatory uncertainty, the increased risk
of litigation, and disincentives to use standard form contracts. Conversely,
while there may be benefits to some small businesses from the changes, these
are unquantified and the decision Regulation Impact Statement (RIS) does not
demonstrate that these benefits offset the costs of the new legislation.[35]
According to the Explanatory Memorandum:
The Australian Competition and Consumer Commission was provided
$1.4 million in the 2014-15 Budget to support the implementation of this Bill.
The enforcement of the unfair contract terms law may require regulatory
resources, including use of the court system, however it is expected that the
majority of complaints will be resolved administratively and not through
litigation.[36]
Australian Securities and
Investments Commission Act
Items 1–18 of the Bill amend the Australian
Securities and Investments Commission Act.
The function of the Australian Securities and Investments
Commission (ASIC) is to monitor and promote market integrity and consumer
protection in the Australian financial system.[37]
Part 2 of the Australian Securities and Investments Commission Act sets
out ASIC’s consumer protection role in relation to financial services. As
stated above, the unfair contract provisions attach to a consumer contract for a financial product or to a
contract for the supply, or possible supply, of services that are financial
services.
Nature of a small business contract
The Bill amends Part 2 of the Australian Securities and
Investments Commission Act by adding a new class of contract; a small
business contract.[38]
A contact is a small business contract if:
- at
the time the contract is entered into, at least one party to the contract is a
business that employs fewer than 20 persons and either:
- the
upfront price payable under the contract does not exceed $100,000
or
- the
contract has a duration of more than 12 months and the upfront price payable
under the contract does not exceed $250,000.[39]
In determining whether the number of persons employed by a
business is fewer than 20, a casual employee is not to be counted unless he or
she is employed by the business on a regular and systematic basis.[40]
Where the contract is a contract under which credit is to
be provided the upfront price payable does not include any interest
payable under the contract.[41]
Exclusions
The unfair contract protections will not apply to a
contract in specified circumstances. These are:
- where
the contract is the constitution of a company, managed investment scheme or
other kind of body[42]
and
- where
a prescribed law of the Commonwealth, a state or a territory applies to the
small business contract.[43]
The Bill stipulates that before the making of a regulation
prescribing a law, the Minister must be satisfied that the law provides
enforceable protections for businesses employing fewer than 20 persons that are
equivalent to the protections provided by the Bill. In doing so, the Minister
must consider any detriment to businesses of that kind resulting from
prescribing the law, the impact on business generally resulting from
prescribing the law and the public interest.[44]
Declarations by the Court
The Bill provides that a Court may declare that a term of
a small business contract that is a standard form contract for a
financial product, or for the supply of financial services, is an unfair term, upon
application from a party to the contract, or ASIC.[45]
A party to the relevant contract may only make such an application if, at the
time that the contract was entered into, the party was a business that employed
fewer than 20 persons.
Application of the Bill
The amendments to the Australian Securities and
Investments Commission Act which are contained in the Bill apply to
contracts that are entered into on, or after, the commencement of those
provisions.[46]
However, the amendments will apply to a contract which was entered into before
that date if the contract is renewed or varied on or after the date that the provisions
commence. In that case, the unfair contract protections will apply on and from
the date of the renewal or variation.[47]
Competition and Consumer Act
Items 19–47 of the Bill amend the Competition and
Consumer Act. The amendments extend to both the body of the Act and to Schedule
2 to the Act which contains the Australian Consumer Law.
The amendments to the Competition and Consumer Act are
in near equivalent terms to those in the Australian Securities and
Investments Act, so that:
- a
new class of contract, being a small business contract, is
inserted into Part 2-3 of the Australian Consumer Law which relates to unfair
contracts.[48]
As with the definition of small business contract to be inserted
into the Australian Securities and Investments Act, it specifies that at
the time the contract is entered into, at least one party to the contract is a
business that employs fewer than 20 persons. The amount limits for the upfront
price payable under the contract are also the same. However, for a
small business contract under the Competition and Consumer Act the
amount of the upfront price payable will include any interest payable
under the contract
- the
unfair contract protections will not apply where a prescribed law of the
Commonwealth, a state or a territory applies to the small business contract[49]
- before
a regulation is made so prescribing a law , the Commonwealth Minister must be
satisfied that the law provides enforceable protections for businesses
employing fewer than 20 persons equivalent to those provided by the Bill. In
doing so, the Commonwealth Minister[50]
must consider any detriment to businesses of that kind resulting from
prescribing the law, the impact on business generally resulting from
prescribing the law and the public interest[51]
and
- a
court may declare that a term of a small business contract that
is a standard form contract is an unfair term upon application from a party to
the contract or the regulator, the Australian Competition and Consumer
Commission.[52]
A party to relevant contract may only make such an application if, at the time
that the contract was entered into, the party was a business that employed
fewer than 20 persons.
Application of the Bill
The amendments by the Bill to the Competition and
Consumer Act apply to contracts that are entered into on or after the
commencement of those provisions.[53]
However, the amendments will apply to a contract which was entered into before
that date if the contract is renewed or varied on or after the date that the
provisions commence. In that case, the unfair contract protections will apply
on and from the date of the renewal or variation.[54]
Key issue—what constitutes a small
business transaction
Number of employees
There are a number of definitions used in current
Commonwealth legislation to describe a ‘small business’. The key definition of small
business used by the Australian Bureau of Statistics (ABS) is largely
based on the number of employees, with a small business defined as an ‘actively
trading business with 0–19 employees’.[55]
The Bill is consistent with that definition.
The Australian Securities and Investments Commission
Act currently defines a small business as a business
employing fewer than 100 people if the business is, or includes, the
manufacture of goods, or a business employing fewer than 20 people
otherwise.[56]
The definition of small business in the Corporations Act 2001
is in equivalent terms.[57]
The terms of reference for the Financial Ombudsman Service and the operation of
the Code of Banking Practice are based on that definition.
However, the Bill’s definition of small business contract
is narrower in its application. The Financial Ombudsman Service recommends
that, to ensure that the protections afforded to small business are applied
consistently, the Bill should use the existing definition.[58]
Section 152AGA of the Competition and Consumer Act defines
a small business customer as a customer
who is a small business employer (within the meaning of the Fair Work
Act 2009, being an employer with fewer than 15 employees).[59]
However this definition is used only in relation to the telecommunications
access regime in Part XIC of the Competition and Consumer Act.
Another concern with the definition of small
business contract arises in relation to ‘the level of due diligence
that contracting parties will be required to undertake to determine whether the
unfair contract terms apply’.[60]
Upfront price payable
When the unfair contract protections were first announced
in 2009, then Minister for Competition Policy and Consumers Affairs, Chris
Bowen, announced that the protections would not extend to ‘a standard-form
contract where the upfront price payable for the services (including financial
services), good or land supplied under the contract exceeds $2 million’.[61]
The amount of the upfront price payable under the Bill is significantly less
than this amount.
The Small and Medium Enterprise Business Law Committee of
the Law Council of Australia has expressed its concern that the price payable criteria
set out in the Bill’s definition of a small business contract
‘only applies to low value contracts for goods’ and that this ‘may result in
the proposed legislation not achieving its objective to balance the playing
field by removing the impact of such unfair terms on small businesses’.[62]
The Competition and Consumer Committee of the Business Law
Section of the Law Council of Australia has raised two issues:
- first,
whether an entire contract will be subject to the unfair terms regime if there
is a supply of multiple goods or services under the contract, one of which is
priced at less than $100,000 or $250,000 (as the case may be). For example an
agency or dealer agreement may provide for a range of payments for different
goods and services under the contract including a licence fee, advertising
support fees and commission payments and
- second,
it is not clear how the upfront price concept is intended to apply in
circumstances where the total value of payments expected to be made under a
contract is dependent upon the level of goods or services supplied or acquired
under that contract. For example, if there is a contract for the supply of
goods for $500 per good and there is no minimum order requirement.[63]
In relation to the second of these matters, the Business
Council of Australia considers that the $100,000 upfront price payable under
the Bill risks inadvertently capturing high-value contracts. This is because
the upfront price of a contract or the unit price of a good or service may be
low, but regular payments made over the contract period may make it a
high-value contract.[64]
Key issue—small business – to – small
business contracts
The rationale for the extension of the unfair contract
protections to small businesses is that they are ’vulnerable to unfair terms in
standard form contracts’ which may be offered on a ‘take it or leave it’ basis.[65]
The Queensland Law Society has questioned ‘whether [those
protections] should apply to a contract with a small business regardless of the
counterparty, or whether [they] should only apply to a contract with a small
business where the counterparty is a corporation (or other business) that is
not a small business’.[66]
The Bill has broad application so that it will apply to contracts between small
businesses. The Competition and Consumer Committee of the Business Law Section
of the Law Council of Australia has suggested that the Bill should stipulate
that the unfair contract protections ‘apply to contracts involving either the
supply of goods or service by a small business, or acquisition of goods or
services by a small business’.[67]
According to the Shopping Centre Council of Australia:
Any notion that small business to small business contracts
should be regulated should be emphatically ruled out. The only justification
for regulating business to business contracts is an assessment that there is
some aspect of market failure, such as an imbalance in bargaining power. We are
unaware of any evidence that suggests that there is a market failure in markets
where small businesses are dealing with small businesses.[68]
The absence of any stakeholder submissions indicating that
there is a problem in small business to small business transactions would
appear to support this view. The Australian Chamber of Commerce and Industry
has also expressed the view that ‘small business to small business contracts
should not be included in the proposed regime’ on the grounds that the
threshold criterion of ‘unequal’ bargaining is ‘unlikely to arise in
contractual negotiations between small businesses’.[69]
From another perspective, it has been suggested that ‘it
is conceivable that a contracting business with fewer than 20 employees with
significant assets or income will potentially be afforded protections for
unfair terms despite having resources to undertake proper risk management, take
legal advice and bear risk under the contract’. [70]
In any event, the extension of the unfair contracts protections in this way may
be an unintended consequence of the Bill.
Key issue—financial products and
services
The amendments to the Australian Securities and
Investments Commission Act in relation to financial products and services
provided to small business were not well received by stakeholders in the
finance industry.[71]
Of concern is that the effect of the Bill will be to give rise to uncertainty
about the enforceability of financial contracts.[72]
The Australian Bankers’ Association has highlighted the
legal tension which may arise should the unfair contract protections be extended
in accordance with the proposed amendments to the Australian Securities and
Investments Commission Act. Because banks are subject to prudential
oversight by the Australian Prudential Regulation Authority (APRA), there are
special terms and conditions which are required to be included in credit
contracts by the regulator. These include ‘events of default by the business
covering insolvency and pre-insolvency events; material adverse changes in its
financial condition; non-compliance with financial covenants; default interest
clauses; changes in a bank’s regulatory capital requirements and increased
costs clauses’.[73]
The Australian Bankers’ Association is concerned that any and all of these
terms could be challengeable under the proposed amendment. However, ‘these
types of clauses are necessary to ensure compliance with the banks’ legal and
prudential obligations and to ensure the agreed return on their investment’.[74]
In order to neutralise this tension, the Australian
Securities and Investments Commission Act may require an additional
amendment to carve out those contract terms which are required by APRA.
Key issue—operation of the
exclusions
The exclusion of the unfair contract protections from
small business contracts to which a prescribed law of the Commonwealth, a state
or a territory applies is particularly relevant to the Competition and
Consumer Act.
Currently Part IVB of that Act contains the definitions of industry
code[75]
and mandatory industry code.[76]
Essentially, a corporation must not, in trade or commerce, contravene an
applicable industry code.[77]
A number of stakeholders have argued that the existing mandatory
industry codes should be prescribed.[78]
According to the Law Council of Australia:
While each of the ... Codes is stated to be for the purpose of
regulating "conduct" between participants in the applicable
industries, what they in fact regulate is the dealings between parties to
specified contracts. For example, the Franchising Code and the Oil Code each
stipulate requirements or restrictions on the terms of (respectively) franchise
agreements and fuel re-selling agreements in relation to conditions affecting
assignment, termination, dispute resolution, limitations of liability and the
conduct of marketing or cooperative funds; the Horticulture Code stipulates
specific requirements for the terms of trade offered by traders and the
provisions of horticulture produce agreements.[79]
In relation to the amendments to the Australian
Securities and Investments Commission Act proposed by the Bill, the
Insurance Council of Australia has stated that whilst it considers that
insurance contracts will be excluded from the unfair contract protections
proposed by the Bill in accordance with section 15 of the Insurance
Contracts Act 1984,[80]
it believes that for the avoidance of doubt the exclusion should be stated
explicitly.[81]
Many stakeholders have expressed concern about the factors
that make up a small business contract under the Bill. The Small
Business Commissioner for Western Australia has suggested that the Federal
Government:
... undertake a post-implementation review of the legislation
(and any associated case law) within two years to ensure that protections are
operating effectively and not leading to uncertainty, increased litigation and
higher costs to small businesses. This is particularly the case in areas that
cross-over with other regulated contractual relationships, most notably in the
case of retail leases and franchise agreements.[82]
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Australian
Securities and Investments Commission Act 2001, accessed 30 July 2015.
[2]. Competition
and Consumer Act 2010, accessed 30 July 2015.
[3]. P
Costello, Productivity
Commission inquiry into Australia’s consumer policy framework, media
release, 132, 11 December 2006, accessed 3 August 2015.
[4]. Productivity
Commission, Review
of Australia’s consumer policy framework, Inquiry report, 45, Productivity
Commission, Melbourne, 30 April 2008, volume 1, p. 18, accessed
3 August 2015.
[5]. Ibid.,
volume 1, p. 2.
[6]. Ibid.,
volume 2, p. 318.
[7]. Treasury, The
Australian Consumer Law: consultation on draft provisions on unfair contract
terms, Commonwealth of Australia, 11 May 2009,
p. 8, accessed 30 July 2015.
[8]. Parliament
of Australia, ‘Trade
Practices Amendment (Australian Consumer Law) Bill (No. 1) 2009 homepage’,
Australian Parliament website, accessed 30 July 2015.
[9]. C
Emerson (Minister for Small Business, Independent Contractors and the Service
Economy, Minister Assisting the Finance Minister on Deregulation and Minister
for Competition Policy and Consumer Affairs), ‘Second
reading speech: Trade Practices Amendment (Australian Consumer Law) Bill 2009’,
House of Representatives, Debates, 24 June 2009, p. 6981, accessed 3
August 2015.
[10]. B
Billson, Change
of PM doesn’t change the game for small business as carbon tax goes up,
media release, 1 July 2013; B Billson, The
nation can’t afford Rudd’s cash splash on borrowed money, media
release, 1 September 2013, accessed 30 July 2015.
[11]. B
Billson (Minister for Small Business), Address
to the Australian Food and Grocery Council Industry Leaders Forum,
speech, Canberra, 30 October 2013, accessed 30 July 2015.
[12]. Department
of the Treasury, Extending
unfair contract terms protections to small businesses, consultation
paper, Treasury, Canberra, 23 May 2014, accessed 30 July 2015.
[13]. B
Billson (Minister for Small Business), Ministers
agree to push for small business protections, media release, 23 May
2014, accessed 30 July 2015.
[14]. Department
of the Treasury, Treasury
Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015:
Exposure Draft, Treasury website, 28 April 2015, accessed 30 July 2015.
[15]. Australian
Securities and Investments Commission Act, section 12BF.
[16]. Competition
and Consumer Act, schedule 2, clause 23.
[17]. Section
12BH of the Australian Securities and Investments Commission Act and
clause 25 of Schedule 2 to the Competition and Consumer Act list
examples of terms that may be unfair.
[18]. Australian
Securities and Investments Commission Act, section 12BF; Competition and
Consumer Act, schedule 2, clause 23.
[19]. Australian
Securities and Investments Commission Act, subsection 12BG(1); Competition
and Consumer Act, schedule 2, subclause 24(1).
[20]. Australian
Securities and Investments Commission Act, subsection 12BG(3); Competition
and Consumer Act, schedule 2, subclause 24(3).
[21]. Australian
Securities and Investments Commission Act, subsection 12BI(1); Competition
and Consumer Act, schedule 2, subclause 26(1).
[22]. Australian
Securities and Investments Commission Act, subsection 12BI(2); Competition
and Consumer Act, schedule 2, subclause 26(2).
[23]. Australian
Securities and Investments Commission Act, subsection 12BK(1); Competition
and Consumer Act, schedule 2, subclause 27(1).
[24]. Australian
Securities and Investments Commission Act, subsection 12BK(2); Competition
and Consumer Act, schedule 2, subclause 27(2).
[25]. Australian
Competition and Consumer Commission (ACCC), Court
declares consumer contract terms unfair, media release, 30 July 2013,
accessed 12 August 2015.
[26]. P
van Esch, ‘Extending
unfair contract term provisions for standard form contracts to small businesses’,
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August 2015.
[27]. ACCC,
Unfair
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p. 1, accessed 11 August 2015.
[28]. Ibid.,
p. 6.
[29]. Ibid.,
pp. 1–2.
[30]. Selection
of Bills Committee, Report
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2015.
[31]. The
Statement of Compatibility with Human Rights can be found at page 105 of the Explanatory
Memorandum to the Bill.
[32]. Parliamentary
Joint Committee on Human Rights, Twenty-fifth
report of the 44th Parliament, The Senate, Canberra, 11 August 2015, p.
2, accessed 11 August 2015.
[33]. Franchise
Council of Australia, Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, May 2015, p. 1, accessed 11 August 2015.
[34]. Queensland
Law Society, Submission
to Treasury, Extending unfair contract protections to small
business—consultation, 6 August 2014, p. 2, accessed 10 August 2015.
[35]. Business
Council of Australia, Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, May 2015, p. 2, accessed 10 August 2015.
[36]. Explanatory
Memorandum, Treasury Legislation Amendment (Small Business and Unfair
Contract Terms) Bill 2015, p. 4.
[37]. Australian
Securities and Investments Commission Act, section 12A.
[38]. Items
3 and 8 of the Bill.
[39]. Australian
Securities and Investments Commission Act, proposed subsection 12BF(4).
[40]. Australian
Securities and Investments Commission Act, proposed subsection 12BF(5).
[41]. Australian
Securities and Investments Commission Act, proposed subsection 12BF(6).
[42]. Australian
Securities and Investments Commission Act, proposed subsection 12BL(1).
[43]. Australian
Securities and Investments Commission Act, proposed subsection 12BL(2).
[44]. Australian
Securities and Investments Commission Act, proposed subsection 12BL(3).
[45]. Australian
Securities and Investments Commission Act, proposed subsections 12GND(2)
and (3).
[46]. Item
18 of the Bill inserts proposed Part 22 into the Australian
Securities and Investments Commission Act which sets out the application of
the provisions of the Bill once enacted.
[47]. Australian
Securities and Investments Commission Act, proposed subsection 301(2).
[48]. Competition
and Consumer Act, Schedule 2, proposed subclauses 23(4) and (5).
[49]. Competition
and Consumer Act, Schedule 2, proposed subclause 28(4).
[50]. Clause
2 of Schedule 2 of the Competition and Consumer Act defines the term Commonwealth
Minister as the Minister who administers Part XI of the Competition
and Consumer Act.
[51]. Competition
and Consumer Act, proposed subsection 139G(2A).
[52]. Competition
and Consumer Act, Schedule 2, proposed subclauses 250(2) and (3).
[53]. Item
47 of the Bill inserts proposed Part 1A into Chapter 6 of Schedule 2
of the Competition and Consumer Act, which sets out the application of
the provisions of the Bill once enacted.
[54]. Competition
and Consumer Act, proposed subclause 290A(2).
[55]. Australian
Bureau of Statistics (ABS), Small business in
Australia, 2001, cat. no. 1321.0, ABS, Canberra, 23 October 2002, accessed
31 July 2015.
[56]. Australian Securities
and Investments Commission Act 2001, subsection 12BC(2), accessed 31
July 2015.
[57]. Corporations
Act 2001, subsection 761G(12), accessed 10 August 2015.
[58]. Financial
Ombudsman Service, Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, 15 May 2015, p. 2, accessed 10 August 2015.
[59]. Fair Work Act 2009,
section 23, accessed 11 August 2015.
[60]. Baker
and McKenzie, Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, 12 May 2015, p. 3, accessed 10 August 2015.
[61]. C
Bowen (Minister for Competition Policy and Consumer Affairs), The
national unfair contract terms law, media release, 5 June 2009,
accessed 10 August 2015.
[62]. Small
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draft legislation, 12 May 2015, p. 2, accessed 10 August 2015.
[63]. Competition
and Consumer Committee of the Business Law Section of the Law Council of
Australia, Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, 12 May 2015, p. 5, accessed 10 August 2015.
[64]. Business
Council of Australia, Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, op. cit., p. 5.
[65]. Explanatory
Memorandum, Treasury
Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015,
op. cit., p. 7.
[66]. Queensland
Law Society, Submission
to Treasury, Extending unfair contract protections to small
business—consultation, op. cit., p. 2.
[67]. Competition
and Consumer Committee of the Business Law Section of the Law Council of
Australia, Submission
to Treasury, Extending unfair contract protections to small
business—consultation, 5 August 2014, p. 19, accessed 11 August 2015.
[68]. Shopping
Council of Australia, Submission
to Treasury, Extending unfair contract protections to small
business—consultation, 1 August 2014, p. 7, accessed 10 August 2015.
[69]. Australian
Chamber of Commerce and Industry, Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, 12 May 2015, p. 1, accessed 11 August 2015.
[70]. Law
Society of South Australia, Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, 14 May 2015, p. 2, accessed 10 August 2015.
[71]. See
for example, Commercial Asset Finance Brokers Association of Australia Limited,
Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, 12 May 2015, accessed 10 August 2015.
[72]. Arnold
Bloch Leibler, Submission
to Treasury, Extending unfair contract protections to small
business—consultation, 1 August 2014, p. 4, accessed 10 August 2015.
[73]. Australian
Bankers’ Association Inc., Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, 14 May 2015, p. 4, accessed 10 August 2015.
[74]. Ibid.
[75]. The
voluntary industry codes include the Food and Grocery Code of
Conduct, accessed 11 August 2015.
[76]. The
mandatory industry codes are the Franchising Code
of Conduct, the Oil Code, the
Horticulture
Code of Conduct, the Port Terminal
Access (Bulk Wheat) Code and the Retail Unit
Pricing Code, all accessed 11 August 2015.
[77]. Competition
and Consumer Act, section 51ACA.
[78]. The
Queensland Law Society has argued against the extension of the unfair contract
protections to franchise agreements, ‘on the basis that these agreements are
already subject to a mandatory industry code prescribed by the Commonwealth’.
Queensland Law Society, Submission
to Treasury, Extending unfair contract protections to small
business—consultation, op. cit., p. 3. The Franchise Council of Australia
also considered that franchise agreements should be automatically excluded from
the operation of the unfair contract protections. Franchise Council of
Australia, Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, op. cit., p. 1.
[79]. Competition
and Consumer Committee of the Business Law Section of the Law Council of
Australia, Submission
to Treasury, Extending unfair contract protections to small
business—consultation, op. cit., p. 11.
[80]. Insurance Contracts
Act 1984, accessed 11 August 2015.
[81]. Insurance
Council of Australia, Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, 14 May 2015, p. 2, accessed 11 August 2015.
[82]. Small
Business Development Corporation, Submission
to Treasury, Extending unfair contract term protections to small businesses:
draft legislation, 12 May 2015, p. 2, accessed 10 August 2015.
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