Chapter 8
Minor drafting issues
8.1
The chapter identifies some places where Treasury could clarify some of
the definitions and address matters raised about drafting. In the interests of
clarity this should be done using existing legal meanings.
Consumer guarantees
8.2
Dr Stephen Corones asked whether 'due care' in section 60 of the bill
means 'reasonable care', or imposes a new, more 'stringent standard'.[1]
8.3
Mr Lynden Griggs argues that the drafting of the provisions covering
auction sales does not reflect the intent:
A further matter to be raised is the drafting associated with
auction sales. These are excluded from the operation of ss 54-59. Sale by
auction is defined as follows (s 2): ‘sale by auction, in relation to
the supply of goods by a person, means a sale by auction that is conducted by
an agent of the person, (whether that person acts in person or by electronic
means).’ It is clear from the explanatory memorandum that the intent is that
the guarantees do not apply where an auctioneer acts as an agent for a person
to sell goods. ‘They do apply to sales made by businesses on the internet by
way of an online ‘auction’ websites when the website operate does not act as an
agent for the seller.’ Today, there is no doubt that guarantees should apply to
online auctions...[2]
"Grown in" Australia
provisions
8.4
Section 255 provides that where "country of origin" claims are
made consistent with the rules in the provision, they do not amount to
misleading or deceptive conduct under section 218 of the bill. CHOICE submitted
that they support the approach of requiring “grown in...” claims to also satisfy
other tests in the table to ACL s. 255(1) (“made in...” or “product of...”) and to
avoid the protection for the
“grown
in...” claim where the supplier makes multiple origin claims. However, the
drafting in ACL s. 255 is almost incomprehensibly complex, involving a circular
(and negative) crossreference between sub-sections (1) and (2). We would
encourage the Committee to request alternative drafting.[3]
Product Safety
8.5
The Law Council of Australia highlighted the ambiguity of the term 'reasonable
foreseeable use (including misuse)' that has been incorporated into the
threshold tests in relation to product safety. This definition allows the
Minister to, for example, impose an interim or permanent ban for consumer goods;
but it also relates to product related services. The Law Council is concerned
that:
...it is not clear on the face of the legislation what is meant
by "reasonably foreseeable use" and, in particular,
"misuse". The Explanatory Memorandum to the Bill states that
"reasonably foreseeable use" may include use of the good for its
primary, normal or intended purpose, for its unintended purpose, or
misuse of the good. This implies that the legislature intends for the concept
of “reasonably foreseeable use” to capture not only unintended misuse by a user
(for example, due to some design defect), but also any deliberate use of a good
in an unintended manner...The [Trade Practices] Committee [of the Law Council]
believes that the concept of “reasonably foreseeable use” should be clarified
to exclude instances where harm will likely occur only due to deliberate use of
a product, and where that use is not the intended purpose of the good.[4]
8.6
Associate Professor Luke Nottage drew the Committee's attention to an
apparent drafting error in sections 140 and 141:
There appears to be a major drafting error in the Product
Liability provisions in ss 140-1, which the legislative history (including
April 2009 “Guide to Provisions just published) intend to be a restatement of
TPA Part VA:
These private compensation
provisions apply if a product’s “safety defect” (now defined in s9 of the Bill
– cf present TPA s75AC) causes harm to other goods
(i)
“of a kind ordinarily acquired for
personal, domestic or household use or consumption” AND
(ii)
(ii) the person harmed (actually
or planned to have) “used or consumed” such damaged goods for such use or consumption.
In other words, liability only follows if both an objective AND subjective test
are satisfied.
By contrast, current TPA ss 75AF
and 75AG allow claims for loss to other goods if they fulfil only (i) the
objective test (as eg in the EU, which was the template for this Part VA of the
TPA).
And TPA Part V Div 2A (see
s74A(2)(a) and s74D(1)) requires the unsafe goods to be “consumer goods”
satisfying such an objective test, but then claims can be made for
consequential damage to all other goods (even not ordinarily for personal use).
To maintain consumer protection we should retain our
alignment with the EU (and other Asia-Pacific jurisdictions that have also
followed it) by redrafting as in (b). Or, if the legislative intention is
really to narrow the scope for product liability claims (already very few in
Australia, especially after 2002 tort reforms), then this provides further
justification to expand the scope for product safety duties as suggested here
and in my original Submission.[5]
8.7
Mr David Howarth from CHOICE agreed with Associate Professor Nottage's
recommendation in a statement to the Committee.[6]
Other drafting corrections
8.8
The Scrutiny of Bills Committee has examined the legislation. It noted
the following three errors in the explanatory memorandum:
(i)
chapter 16: reference in the chapter to Part 5-2 should be to Part 5‑3
(ii)
Schedule 2, item 133E: this section about self incrimination is
discussed in the EM at paragraph 19.47, but there is no cross reference to the
item number; and
(iii)
Schedule 2, item 137F: the EM at pages 389 and 390 mistakenly refer to
section 137K instead of 137F.
Recommendation 9
8.9
The Committee notes the claim of drafting errors. The Committee
does not believe that these issues are of sufficient magnitude to delay passage
of the bill. Notwithstanding this, the Committee recommends that the Minister
seek further advice and rectifies any drafting errors where warranted.
Senator Annette Hurley
Chair
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