Andrew Murray (WA, Australian Democrats) Share this | Hansard source

I appreciate the response from both the minister and the shadow minister. The minister’s response is that the government is of the view that the act as it is presently constituted, if I understand his answer correctly, does take into account creeping acquisitions. However, my view from the evidence I have received over time both in the Senate and prior to my coming into the Senate is that those who are most aggrieved by creeping acquisitions have found themselves unable to pick the timing or the circumstance which would entail them bringing a case before the courts—is it 100 stores minus one or 100 stores plus one at which you finally make the move? I am pleased that Labor are willing if elected to address this issue. I have freely confessed how difficult this is to design and I am pleased that they intend to consult and take further advice on this matter before settling on the way in which this should be done.

Question negatived.

The running sheet suggests I move amendments (7) to (9) on sheet 5324 revised together. But I seek leave to move amendments (7) and (8) together, and then (9), but I am happy to speak to all three amendments in the debate.

Leave granted.

I move:

(7)    Schedule 2, page 6 (after line 12), after item 3, insert:

3D After subsection 51AAB

Insert:

51AAC Unfair contract terms

        (1)    A corporation must not, in trade or commerce, in connection with:

             (a)    the supply or possible supply of goods or services to a person (other than a listed public company); or

             (b)    the acquisition or possible acquisition of goods or services from a person (other than a listed public company);

include in a contract, arrangement or understanding, or proposed contract, arrangement or understanding, an unfair term.

        (2)    A person must not, in trade or commerce, in connection with:

             (a)    the supply or possible supply of goods or services to a corporation (other than a listed public company); or

             (b)    the acquisition or possible acquisition of goods or services from a corporation (other than a listed public company);

include in a contract, arrangement or understanding, or proposed contract, arrangement or understanding, an unfair term.

        (3)    A term is to be regarded as unfair for the purposes of subsections (1) and (2) if, contrary to the requirements of good faith and in all the circumstances, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, arrangement, or understanding, or the proposed contract, arrangement or understanding, to the detriment of the consumer or small business.

        (4)    An unfair term is void.

        (5)    The contract will continue to bind the parties if it is capable of existing without the unfair term.

        (6)    This section only applies to a contract, arrangement or understanding, or proposed contract, arrangement or understanding entered, or proposed to be entered into, on or after the commencement of this section.

(8)    Schedule 2, page 6 (after line 12), after item 3, insert:

3E After subsection 51AC(1)

Insert:

     (1A)    For the purposes of this section unconscionable conduct includes any action in relation to a contract or to the terms of a contract that is unfair, unreasonable, harsh or oppressive, or is contrary to the concepts of fair dealing, fair-trading, fair play, good faith and good conscience.

Item (7) refers to unfair contract terms with respect to 51AAC. This amendment is based on the unfair contract terms legislation which operates in Victoria. Under that legislation consumers have a private right of action in the courts. It appears from what I am told that it has worked fairly effectively in Victoria—there have been no floodgates opened for litigation and the legislation has had the effect that was intended when it was constructed. The amendment utilises both the Victorian and United Kingdom legislation to define ‘unfair’, and the courts have had no problems interpreting the concept in a way that does not undermine the certainty of contracts. Since courts now routinely deal with the word ‘fair’ I cannot see why they would have any difficulty dealing with the word ‘unfair’. The United Kingdom legislation has been operating for over 10 years and the Victorian legislation for a few years. As I say, it has been reported to me that there are no problems in those jurisdictions.

With respect to item (8), 3E refers to unconscionable conduct in 51AC(1). The important aspect of this amendment is that it covers any action in relation to a contract which has a broad notion that would cover conduct as well as the actual contract terms. It was deliberately drafted in that manner. As somebody who has dealt with hundreds of contracts in my business life, conduct is a vital area to cover when determining matters such as these.

Item (9) is based on the recommendation from the Senate committee that I outlined earlier—the March 2004 Senate Economics References Committee. I would hope that my Labor Party colleagues would be able to support this in view of the fact that they supported the original recommendation, and I would hope that some government members might reconsider this matter. This is to do with the transaction value. The divestiture power in 3G in this amendment has been drafted to deal with section 46 because that is what the majority Senate report recommended. I think I should leave it at that at present.