CHAPTER 2
History of the Bill
Origins
2.1
The process that has led to the 2009 Bill commenced in April 2006 with
the release of an options paper, and was followed by a national consultation process.
The department released three further discussion papers, in November 2006,
March 2007 and April 2007.
2.2
The first exposure draft of the bill was released in May 2008.[1]
After significant amendments, a further exposure draft was released in November
2008.[2]
The department also convened a PPS Consultative Group 'to guide the reform
process'. The PPS Consultative Group, which met quarterly, comprises experts
invited from industry, governments, consumer groups, legal practitioners and
academia.'[3]
Exposure draft inquiry
2.3
By letter dated 11 November 2008 the Attorney General, the Hon Robert
McClelland MP, requested that the Senate Legal and Constitutional Affairs
Committee inquire into and report on the proposed Personal Property Securities Bill
2008. On 13 November 2008 the Senate, on the motion of the Chair of the committee
Senator Crossin, referred the exposure draft provisions of the bill to the
committee for inquiry and report by 24 February 2009. The Senate subsequently agreed
to an extension of the tabling date to 19 March 2009. The committee invited
submissions and held public hearings into the exposure draft bill.
2.4
Like the current inquiry, the exposure draft was examined in a short
timeframe, given the complexity of the bill and the importance of the reforms
it foreshadowed. This led to vociferous complaints from a range of submitters
and intending submitters who argued that it was very difficult to come to grips
with the bill in the allotted time. The committee noted in its report:
5.1 A major implication of the relatively short timeframe
for this inquiry was the significant limit on the ability of the committee to
consider all, or even the majority, of the bill in detail. As noted elsewhere
in this report, this is a lengthy and complex bill which is seeking to
implement significant national reform affecting many people, organisations and
industries. It was difficult for even experts in the area who had been involved
from early in the project to feel that they had time to understand the whole of
[the] reform.
2.5
Notwithstanding the timeframe and resulting limitations on the inquiry,
the committee finalised and tabled a report on the exposure draft in March
2009. The committee's report contained 11 recommendations for amendments to the
exposure draft and brought a range of other issues to the government's
attention for consideration.
The committee's recommendations in relation to the exposure draft
2.6
The committee's key findings and recommendations in its March 2009
report were as follows:
Recommendation 1
4.19 The committee strongly recommends that the department
reconsiders the balance between certainty of the law and the accessibility of
the provisions with a view to:
- simplifying the language of the exposure draft bill – for
example, wording provisions clearly and limiting them to deal only with common
circumstances;
- simplifying the structure of the exposure draft bill – to
minimise the cross-referencing needed;
- simplifying the terms used - for example instead of
'tangible goods' use the term 'goods' appropriately defined to ensure the full
meaning needed for the reform is ascribed to the term; and
- using overseas provisions as often as possible to allow
overseas experience to provide guidance for the Australian model.
Recommendation 2
4.27 The committee recommends that the commencement date
for the scheme be extended by at least 12 months to May 2011 for the
committee's recommendations to be implemented and for advice from stakeholders
to be taken into account before the content of the bill is finalised.
Recommendation 3
4.35 The committee recommends that the bill include a
requirement that the operation of the bill be reviewed three years after it
commences in a process that includes extensive consultation with industry,
governments, lawyers, consumers and academics.
Recommendation 4
5.27 The committee recommends that the primary legislation
for the personal property securities reform include the key privacy protections
for individuals, including a prohibition on making the address details of any
individual public.
Recommendation 5
5.33 The committee recommends that either:
(a) a Privacy Impact Assessment be undertaken by a person or
organisation that is independent from the government and who has experience in
undertaking such assessments and the results of the assessment are made public,
or
(b) the department's Privacy Impact Assessment is reviewed by
a person or organisation that is independent from the government and who has
experience in undertaking such assessments, and the results of the review are
made public.
Recommendation 6
5.34 The committee recommends that if any issues raised by
the Office of the Privacy Commission in its submission are not considered as
part of the Privacy Impact Assessment then these matters should be separately
considered by the Attorney-General's Department and a response to the issue be
provided to the Office of the Privacy Commission in writing or made public.
Recommendation 7
5.44 The committee recommends retaining the requirement for
rights and duties to be exercised honestly and in a commercially reasonable
manner. The intended scope of these requirements should be explained in detail
in the bill's explanatory memorandum.
5.45 The explanatory memorandum should particularly explain
that the requirement to act in a commercially reasonable manner should not
fetter or undermine the ability of parties with similar bargaining power to
contractually agree about what constitutes commercially reasonable behaviour.
Recommendation 8
5.55 The committee recommends that the bill adopt existing
international personal property security conflict of laws provisions, such as
the New Zealand conflict of laws model, unless there is a particular reason to
depart from those provisions.
Recommendation 9
5.62 The committee recommends that the scope and content of
the enforcement provisions of the exposure draft bill be reviewed by the department
with particular attention to ensuring that the provisions are comprehensive and
adequate.
Recommendation 10
5.70 The committee recommends that consideration be given
to improving the priority of an unperfected lessor as against unsecured or
other unperfected interests in the goods.
Recommendation 11
5.78 The committee recommends that the explanatory
memorandum and the proposed education campaign adequately explain the purpose
and effect of the draft intellectual property provisions, including
disseminating the information to appropriately targeted international
industries, organisations and stakeholders.
Government response
2.7
The government tabled a response to the committee's report on 8 June, indicating
acceptance of all of the committee's recommendations except recommendation 4,
which related to privacy protection, and which it indicated was accepted in
substance. The government also wholly accepted four of the nine Opposition
recommendations, partially accepted a further three, and rejected two. Appendix
3 contains the details of the government's response to each of the majority and
Opposition recommendations.
The 2009 Bill (the Bill)
2.8
While the government indicated that it accepted most of the committee's
recommendations, including recommendation 2 in which the committee had
recommended that the commencement date for the scheme be extended by at least
12 months to May 2011, the final version of the legislation was introduced
before advice from stakeholders had been taken into account. The committee had
expected that the final draft would be available for a longer period before
being introduced.
2.9
The final version of the 2009 Bill was introduced into the House of
Representatives on 24 June 2009, which is only three months after the committee
had tabled its March report into the Exposure draft. As noted in Chapter 1, the
Bill was referred to the committee the following day, on 25 June, for a short
inquiry, which initially was to report on 7 August.
2.10
In the committee's opinion, this process has been somewhat foreshortened
and has led to the committee still holding a number of unresolved concerns
about the Bill which are discussed in the following chapters. The process has
also led to many further complaints from stakeholders about the haste with
which it is being pursued, including the time that the committee was able to
allow for the preparation of submissions. The Bill was very substantially
restructured and re-written since the exposure draft, and a number of new
sections introduced, and there appears to have been little if any further
consultation initiated by the department with stakeholders on the new draft. A
number of these stakeholders again raised serious concerns about their
capabilities to come to terms with the Bill in the time allowed for
consideration, and have also claimed that there are still errors in the Bill
and unresolved issues.
2.11
There has been no adequate explanation about why the committee's
recommendation to take more time to finalise the Bill was not accepted.
2.12
Notwithstanding concerns about the haste of the process and that advice
from stakeholders may not been taken into account in a wholly exhaustive process,
the committee acknowledges that the Bill is a vast improvement over the
exposure draft. The committee also notes that most witnesses whom the committee
questioned about this were of a similar view.
2.13
The committee congratulates the officers of the Attorney-General's
department who were responsible for its carriage for the enormous effort made
to improve the Bill in the short period since the committee's March report, and
for their spirit of co-operation with the committee's processes.
2.14
The following chapter examines in detail the changes made to the
exposure draft and incorporated into the version of the Bill now before the
Senate.
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