APPENDIX 3
Exposure draft of the Personal Property Securities Bill 2008 Government
Response
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.
Government response:
Accepted. The Government
will review the structure and language of the Bill.
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.
Government response:
Consider further. The
Government will consider revising the timeframe for commencement of the PPS scheme in consultation with the States and Territories and, following these consultations,
make an announcement about the timing of commencement.
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.
Government response:
Accepted.
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.
Government response:
Accepted in substance.
The Bill will be amended to clarify the information about individuals that may
be included on the register and to better describe the key privacy protections
provided to individuals. The Bill will make it clear that address details of
individual grantors will not be included on the register. Accordingly, a
prohibition on making address details public is not required.
Recommendation 5
5.33
The committee recommends that either:
- 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
- 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.
Government response:
Accepted. A Privacy
Impact Assessment will be undertaken by an appropriately qualified independent
person or organisation. The assessment will be published on the Department’s
website. Having regard to recommendation 4 of the minority report, this will
occur within two months of the completion of the assessment.
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.
Government response:
Accepted. The Privacy
Impact Assessment will consider all issues raised by the Office of the Privacy
Commissioner in its submission to the Committee.
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.
Government response:
Accepted. This Bill will
be amended to make clear that the duty to act in a reasonably commercial manner
applies only in relation to Chapter 4 of the Bill concerning the enforcement of
security interests. The duty to act in a reasonably commercial manner will not
apply to the extent that the parties have contracted out of the enforcement
provisions of the Bill under section 154 of the Bill.
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.
Government response:
Accepted. The Government
accepts that the Bill should include conflict of laws provisions. The New Zealand conflict of laws provisions have been criticised as being uncertain. To avoid
uncertainty in the Bill, the Government will include conflict of laws
provisions in the Bill based on the provisions at Appendix A to the Department’s
submission to the Committee (the revised commentary to the Bill).
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.
Government response:
Accepted. The Bill will
be amended to provide enhanced sanctions for improper use of the register and
to ensure the registrar can monitor and investigate suspicious register
activity. Further consideration will be given to appropriate sanctions for
misusing the register which may include civil and criminal penalties.
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.
Government response:
Accepted. The Government
will, in consultation with stakeholders, consider the appropriate priority
outcomes for unperfected lessors as against unsecured or other unperfected
interests.
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:
Accepted.
Liberal
Senators’ Dissenting Report
Liberal Senators wholly support
recommendations 1, 2, 3 and 10 of the majority report.
Liberal Senators support in
principle the majority recommendations except recommendation 7 (in relation to
the commercially reasonable manner test).
Recommendation 1
1.10 In relation to
consultation and education Liberal senators recommend that:
- the government uses the committee report and the Liberal
senators' additional recommendations to undertake new consultation about the
proposed reform;
- the government should particularly identify stakeholders who
are not yet engaged with the reform and educate them about the scope and
significance of the proposals;
- a considerably revised draft bill should be publicly released
within six months of the date of this report;
- stakeholders should be extensively educated and consulted about
the revised exposure draft for three months from the release of the draft; and
- a final exposure draft bill should be referred to the Senate
within six months of the release of the revised draft bill requesting that the
final exposure draft is referred to this committee for consideration
accompanied by:
- the proposed draft regulations; and
- a report that outlines the key concerns raised with the government by
stakeholders and the government's response to those concerns and that
identifies the differences between the newly referred bill and the November
2008 exposure draft bill.
Government response:
Accepted in part. The
Government will carry out targeted consultation with stakeholders about changes
to the Bill raised in the Committee’s report. However, further examination of
the revised Bill by the Committee would not be consistent with ensuring the
final text of the Bill is settled in time to allow stakeholders an adequate
period to prepare to transition to the new PPS system. In order to provide
certainty to stakeholders, the Government will progress development of the PPS
Bill with a view to its passage through Parliament by the end of 2009 and will
develop the new PPS register so that its main functionality is complete by May
2010.
Recommendation 2
1.12 Liberal senators
recommend that the government table a report in Parliament on the first year of
operation of the reform within 15 months of the commencement of the Act. The
report should include the views of stakeholders, including representatives of
industry, governments, lawyers, consumers and academics and the government's
response to these views.
Government response:
Not accepted. Reviewing
the operation of the reform after only 12 months of operation would not provide
useful data about the new PPS system. The Bill will be amended to require that
the Government review the Bill after the new PPS system has been operating for
three years.
Recommendation 3
1.15 Liberal senators
recommend that the Privacy Impact Assessment identify key privacy protections
which should be contained in the primary legislation.
Government response:
Accepted.
Recommendation 4
1.19 Liberal senators
recommend that:
- 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 Privacy Impact Assessment and the government's response to
it should be tabled in Parliament within 2 months of the date the Assessment is
completed.
Government response:
Accepted in part. A
Privacy Impact Assessment will be undertaken by an appropriately qualified
independent person or organisation. The assessment will be made public within
two months of its completion.
Recommendation 5
1.20 Liberal senators
recommend that any issues considered in accordance with majority recommendation
6 and the government's response to them should be tabled in a report to
Parliament within 2 months of the date that the Privacy Impact Assessment is
completed.
Government response:
Accepted in part. The
Privacy Impact Assessment will consider all issues raised by the Office of the
Privacy Commissioner in its submission to the Committee. The assessment will
be published on the Department’s website within two months of its completion.
Recommendation 6
1.27 Liberal senators
recommend that the requirement to act in a
commercially reasonable
manner be removed from proposed section 235 of the bill and be excluded
from any future version of the reform.
Government response:
Accepted. The Government
acknowledges the concerns expressed in the report about the operation of
section 235 of the Bill as originally drafted. This Bill will be amended to
make clear that the duty to act in a reasonably commercial manner applies only
in relation to Chapter 4 of the Bill concerning the enforcement of security
interests. The duty to act in a reasonably commercial manner will not apply to
the extent that the parties have contracted out of the enforcement provisions
of the Bill under section 154 of the Bill.
Recommendation 7
1.30 Liberal senators
recommend that the government further considers the content of international
conflict of laws provisions and incorporate into the bill either:
- a simple and effective model of conflict of laws provisions
based on an existing international model; or
- the conflict of laws provisions at Appendix A to the Department's
submission.
Government response:
Accepted. The Government
will include conflict of laws provisions in the Bill based on the provisions at
Appendix A to the Department’s submission to the Committee (the revised
commentary to the Bill).
Recommendation 8
1.33 Liberal senators
recommend that the government strengthen the
proposed enforcement provisions
with a focus on:
- comprehensive
and effective sanctions for improper use of the register;
- ensuring the registrar's ability to inquire into suspect
activity; and
- the availability of civil and criminal action with appropriate
penalties.
Government response:
Accepted. The Government
will amend the Bill to provide enhanced sanctions for improper use of the
register and to ensure the registrar can monitor and investigate suspicious
register activity. Further consideration will be given to appropriate sanctions
for misusing the register which may include civil and criminal penalties.
Recommendation 9
1.36 Liberal senators
recommend that the government should identify any outstanding concerns about
the intellectual property provisions of the draft bill and should outline the
concerns and its response in its report to the Senate (as per Liberal senators'
recommendation 1(e)(ii)).
Government response:
Not accepted. See
response to Liberal Senators’ recommendation 1. However, the Government will
seek input from stakeholders about the intellectual property provisions in the
Bill to address any outstanding concerns about the provisions.
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