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Speeches | February 21, 2017

Consumer Acts Amendment Bill 2016

Victorian Parliament - 21 February 2017 - Ms Kealy - Debate resumed from 23 November 2016; motion of Ms KAIROUZ (Minister for Consumer Affairs, Gaming and Liquor Regulation).

It is a great privilege to rise today to add my contribution to the Consumer Acts Amendment Bill 2016. This is a wideranging bill, which seeks to make minor technical amendments to six acts: the Associations Incorporation Reform Act 2012, the Conveyancers Act 2006, the Motor Car Traders Act 1986, the Sale of Land Act 1962, the Second‑Hand Dealers and Pawnbrokers Act 1989 and the Veterans Act 2005.

Of course it is essential that we do have a robust legislative framework to protect consumers. It is important that we have that level of protection so that people are not misled, deceived or taken advantage of, and we need to make sure that we have got appropriate investigative bodies to ensure compliance with the acts and legislation. The bill makes minor technical changes that act to improve and close off some of the loopholes that are available. However, I do have concerns that while we might be covering a great number of acts in the amendments contained in the bill, we do not actually perhaps go to the level of improvements and amendments that we need to see. It may actually be a missed opportunity in some regards with the elements of the changes that have been put forward.

Firstly, I would like to address the amendments in relation to the Sale of Land Act 1962. The main purpose of this element of the amendment is to clarify that a person wishing to exercise their right to withdraw from a contract to purchase land may serve the termination notice on the estate agent engaged by the vendor to sell the land. This is in relation to an interesting case that was heard just last year, Tan v. Russell [2016] VSC 93, whereby somebody had put forward an offer to purchase a residential property. However, they gave notice, as is their legal right to do so, to pull out of that sale during the three‑day cooling‑off period. Of course this right to call off a residential contract is a statutory right, which was created in 1982.

However, as has been outlined and covered very well by the Law Institute of Victoria (LIV), there are elements of the Sale of Land Act, specifically in relation to section 31, whereby the notice of the cooling‑off period or notice to service a cooling‑off period is to be provided on the vendor or his agent. Interestingly the agent, in terms of the common‑law sense of agency, does not include a real estate agent. So of course what has happened in this case is that somebody has given notice that they wish to exercise their right to withdraw from their offer of sale during this cooling‑off period. It was given to the real estate agent, as is a longstanding practice within the real estate framework. Then what happened was the sale fell through and the vendor took legal action to say that that was not actually the appropriate mechanism to notify that you were going to withdraw from the sale during the cooling‑off period.

A legal case did eventuate from that, and the finding was in favour of the vendor. I refer to a paper that was written by the Law Institute of Victoria, which was published in May 2016, entitled Property: Cooling Off. It is very clear in here that while the purchaser had three days to act, there was no address for the vendor in the contract to provide notice of the cooling‑off period. There was a conveyancer listed, but perhaps the same argument would apply to the conveyancer, in that notice could not be given because of their lack of address.

This makes a nonsense of this section. With respect, the decision is wrong. This is sound advice. It was appealed, and I do note that there has been a further appeal to the initial ruling, whereby the decision was overturned. However, the first case as it was heard did result in a financial penalty to the individual who did try to exert their cooling‑off rights. They were given a legal charge of the difference of cost between what they had offered and what the vendor eventually sold the house for. It is very, very good to see that this element of the legislation appears to have been closed — in that there is greater security and understanding around cooling‑off periods — that there is specific terminology around how you can give notice during the cooling‑off period and that it does specifically include a real estate agent. However, I have got concerns about other elements of this amendment.

Something that I have raised is around the notification of the interest of the purchaser to activate their withdrawal from sale during the cooling‑off period. It does specify within the legislation that this notice must be given to an address. It does not specify what this address might be, and in modern practice we all know that an address can take many different forms. It may be a residential address, an address of the agent or an address of the vendor, which may or may not be known. Of course we have also got web addresses and other electronic addresses, so I think that in some ways there is a missed opportunity to further look at the definitions that are outlined within this legislation to ensure it does reflect modern practices and to further take steps to ensure that loopholes that may occur within legislation cannot be exploited and removed from the intent of the legislation, which is of course around protection for consumers to give them that opportunity to have some thinking time after they have made a major purchase, to ensure that it is the right thing for them, to ensure that they have put all of their checks and balances in place and to give them the right to withdraw from that, relating back to that statutory right to cool off from a residential contract which was created back in 1982.

It is interesting to note that this recommendation, on the back of the Tan v. Russell case, was made via the Law Institute of Victoria Consumer Property Acts Review Issues Paper No. 3 on the back of a general review of Victoria’s real estate and related legislation initiated by the former Minister for Consumer Affairs, Gaming and Liquor Regulation. There are a number of recommendations which are made by the Law Institute of Victoria in their submission. Of course it is very positive to see that there has been this amendment to the legislation to close the loophole around cooling‑off periods and the definition of an agent to include real estate agents specifically within the legislation. However, there are other recommendations contained within this paper that have not been addressed which are specifically related to the Sale of Land Act.

I would put to the minister: why have not all recommendations that have been put forward by the Law Institute of Victoria been incorporated into the Sale of Land Act amendment? Some of these recommendations seem to be quite non‑controversial; they seem to be related to things such as definitions. I refer to part E of the issues paper, ‘Modernisation of the Sale of Land Act’, and to question 65, which asks: ‘How can the current definitions be improved’. LIV recommends:

… the definitions of ‘land’ and ‘mortgage’ need to be updated to reflect a more contemporary meaning; and

… the term ‘prescribed contract of sale’ should be revisited because it does not describe the type of contract to be entered into. Consideration should be given to using the term ‘off‑the‑plan contract’ which is now a recognised term in practice.

So perhaps rather than focusing on seven different acts and updating them to reflect modern practices, it may have been an opportunity for the government to look at other amendments, more technical amendments, that could be made so that we could look at updating all of the legislation at once.

Another recommendation made by LIV that I would ask the minister to provide input as to why it has not been incorporated into this review of the Sale of Land Act is around recognition of the fact that different concepts are required for different types of land subdivision, so we could look at that concept of greenfield subdivisions, for example, small building or townhouse subdivisions and larger building or tower subdivisions. This is also in response to question 65 of the document. I would ask that the minister look at considering those before the bill passes to the other house, which I assume that it will. It is an opportunity to make all of these minor technical amendments.

If we are going to look at one element of the legislation, then surely we should take this opportunity to get it right. My father would always say to me, ‘Do it once and do it right’. It would be good to see that the government did a thorough job of this, rather than just amending small sections.

Another main provision of this bill is around changes to the Associations Incorporation Reform Act 2012 and the Australian Consumer Law and Fair Trading Act 2012. This is really based around trying to remove some red tape for organisations, specifically charity and not‑for‑profit organisations in Victoria. I note that I have got a number of charity not‑for‑profit organisations or incorporated associations in my electorate of Lowan in western Victoria. Whether it is the Apex and Lions clubs, the sporting clubs or the RSLs, they all do an absolutely fantastic job. They are manned largely by volunteers, whether it be for fundraising, whether it be in support of people or whether it be for the provision of activities, such as sport and recreation activities or other social events to keep people engaged and interested in our area. I would like to make note of the people who are involved in these organisations, because they do an absolutely fantastic job and probably do not get as much recognition as they should. We have had some challenges around this element of the legislation, and I will go to that in greater detail in a moment.

This part of the legislation will basically mean that the minister has an opportunity to exempt an organisation or a group of organisations from submitting multiple annual reports. For example, the 6000 charities and not‑for‑profit organisations in Victoria have annual reporting requirements to both Consumer Affairs Victoria (CAV) and the Australian Charities and Not‑for‑profits Commission. There is no point in having that duplication. This amendment to legislation will mean that the minister can exempt that body from providing two annual reports. In that example there might be a memorandum of understanding with CAV to provide an annual report just to the Australian Charities and Not‑for‑profits Commission, so that agreement will remove duplication but ensure those reporting requirements are still delivered upon.

We do need to make sure through this change that no reporting requirements are eroded. We have all heard of instances where there may have been some mismanagement within an organisation, and we need to ensure, particularly when finances are involved, that there is a level of transparency for the general community around that. If the minister provides or authorises an exemption from meeting reporting requirements to one regulatory body, and if there is a difference in the level of reporting that is required, then either that exemption should not be authorised or provided by the minister or the higher level of reporting requirements is the one that is defaulted to. We do not want to water down our regulatory system; we want to make sure that our organisations and particularly our not‑for‑profit charity organisations still have that level of requirement so that we have a clean and transparent system. This will save a lot of time and money in some instances for some of our most important bodies.

There are also amendments within this part of the legislation which will allow electronic transfer of information between regulatory bodies to enable sharing of annual reporting information and access to information submitted to CAV via the myCAV system. Essentially this will meet the requirement for public inspection of annual reporting of documents. You will be able to print out a copy from myCAV in a format that looks like a printable document and a final document, rather than a straight copy or print of the submission template with the boxes included. It will be a cleaner version that will be available to the public for inspection.

I would like to refer to some issues that have been raised through my electorate office regarding myCAV. They continue to come in, even though the government has been trying to push towards electronic submission of annual reporting requirements for two years now. I refer to two constituents in particular. One is James Parker, who is linked to the Balmoral and District Lions Club. They do a fantastic job in Balmoral, and you see them at absolutely every event, often raising money through sausage sizzles. They always have a lucky chocolate spinning wheel. They do a lot to support the local community and donate a lot of money to the region. The other one is Jeff Pay of Natimuk Agricultural and Pastoral Society. This is a fantastic group that runs a great annual show every year. It seems to just go from strength to strength. They make a real difference to making sure that we celebrate our agricultural and pastoral strengths in our region and bring people together at a really fun event over and over again. It is great to be able to get along and support that organisation and the great work that they do.

These organisations have very, very similar concerns around accessing myCAV in that often in rural areas there is an inability to access the internet, and there is an older demographic. It is not unusual to hear that an organisation has had the same secretary for 20 or 30 years. We have people who are very, very good at their role as secretary, are very proud of what they do and are volunteers within their organisation and their community, but they might not have access to the internet. They may have never used a computer before. They might not have the computer skills. There is that fear of change, and there is not a lot of training available from the government to get them to be able to use myCAV, or they may just not have a computer. We have people who take a lot of pride and joy in their volunteer roles, but they cannot perform that duty if there is a mandatory requirement to submit online.

I note that there has been some response from the government in saying that these organisations would be able to provide a hard‑copy submission of their annual reporting requirements on a one‑off basis for their first year. I call on the minister to extend that. I think that year on year we are going to have fewer and fewer organisations that will wish to submit something in hard copy. It is not going to be onerous to provide this support for these organisations, so I would ask that permitting hard‑copy submissions of these organisations annual reporting requirements be continued for at least another five years until we have intergenerational change and better access to the internet and computers. We need to ensure that these very small volunteer organisations, which make a big difference to our local community, continue to be supported into the future so they can support our communities in return.

I would like to move on to the Motor Car Traders Act 1986. This is another significant element of the bill which will close a loophole. The amendments will enable a motor car trader to dispose of a motor car vehicle for the sheriff of Victoria subject to a security interest. At the moment infringement management and enforcement services — that is, the sheriff — can seize a vehicle for unpaid fines. Then the vehicle is sold to a licensed motor car trader to assist to raise funds to pay for those fines. Currently a motor car trader cannot dispose of a vehicle that has a security interest registered against it on the national Personal Property Securities Register (PPSR). Unfortunately there have been a few cases where the sheriff has seized a vehicle for disposal by a licensed motor car trader. However, prior to sale individuals linked to the vehicle owner — it might be a partner, a business associate or a colleague — have registered a security interest on that vehicle, which essentially prevents the motor car trader from selling the vehicle. The amendment contained within this bill will exempt the licensed motor car trader from the requirement to procure the cancellation of a security interest prior to the sale of vehicles they are disposing of on behalf of the sheriff.

It is important to note the sheriff’s office in Victoria can continue to execute a warrant despite a Personal Property Securities Register security interest, but it is a loophole that needs to be closed off and this amendment will seek to do that. We are not quite sure how many instances of abuse of this loophole have occurred. We do know that 421 vehicles were seized by the sheriff’s office last year and 208 were sold at auction. There are a couple of examples that have been disclosed of people who have exploited this loophole, including one where the sheriff’s office was left unable to sell a seized vehicle after seizing a truck owned by a company and valued by RedBook at $15 800 in relation to warrants totalling $21 000. The following day the wife of the company director registered an interest on the Personal Property Securities Register. Despite a number of applications, the registrar of the PPSR refused to remove the interest, so of course the motor car trader was left in a period of limbo where they could not dispose of the vehicle and the sheriff’s office warrant was still there.

There are other examples. There is a second example of the sheriff’s office seizing a vehicle in walking possession. When the officers returned to remove the seized vehicle they identified a new interest on the PPSR. This amendment will seek to remove that loophole and to ensure that we do have a system where the sheriff’s office can seize a vehicle and dispose of it in order to pay off any outstanding fines.

There is a minor amendment within this bill in relation to the Conveyancers Act 2006 which will generally bring the act into alignment with other acts in the consumer affairs portfolio in relation to inspectorate powers and penalties.

There is also an amendment to the Second‑Hand Dealers and Pawnbrokers Act 1989 to enable the registrar of second‑hand dealers and pawnbrokers to waive, refund or reduce fees. This is where they might apply to set up in a certain area, they have paid their fees and for whatever reason — it may be a council rejection — they cannot set up their business in that area, perhaps because there is another nearby business. This will enable the registrar to waive that fee so that they can apply to set up in another area.

The final area of amendment is around the Veterans Act 2005. This is to update some of the changes that were made recently, in 2015. It is also just to update the patriotic funds, which were established nearly 100 years ago. The act does need minor modifications so that smaller RSLs or inactive sub‑branches can be restructured and operate under the umbrella of a larger, more central RSL sub‑branch to facilitate ongoing fund management arrangements. That is something that particularly hits rural Victoria, where we have an older demographic and membership of RSLs is diminishing over time.

Currently there is a requirement for proof and agreement by the Veterans Council for this to occur, for RSLs to go under a larger sub‑branch. This amendment essentially makes the allocation of funds more flexible and transparent and will enable the RSL and Legacy to do their work effectively. They do outstanding work and it is fantastic to see the fundraising efforts by the RSL to support war widows and returned servicemen and women and their partners and families. I think that this amendment will do well to support these people.

There is an amendment to remove the wording of the 2015 amendment. It does not alter the express purpose of the original fund because sometimes the express purpose was not stated. There is also an amendment to provide that financial support is not limited to injury or death related to time of service. This better reflects where the current needs are for partners of servicemen and women. For example, I recently met an elderly widow whose husband had died of old age, but he had been a serviceman. She was not able to access support through the RSL because her husband had died of old age rather than injuries related to his time of service or on the field of battle. These changes were requested by the Returned and Services League, and both the RSL and the Victorian Veterans Council have been consulted and recommended this. We obviously support that in terms of ensuring we have appropriate support and access to funds that our returned servicemen and women deserve.