Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Hansard source

Clearly, if the government thought a problem had emerged in terms of court interpretation, we would have a look at that and whether or not a response is required. That is very much a hypothetical but we are always alert to court decisions on important matters and whether or not they have implications for legislative intent. Obviously in this case the normal approach would apply. I am still recovering from the fact that Senator Xenophon is a Greek who does not bet. I am a bit shocked. He is the first Greek I have met who does not have a bet! It is a point well made. As I said, I think it is a hypothetical but obviously the government would monitor any court decisions which impact on the legislation.

Question negatived.

by leave—I move government amendments (8) to (10) and (44) to (46):

(8)    Schedule 1, item 1, page 5 (line 29), omit “term.”, substitute “term; and”.

(9)    Schedule 1, item 1, page 5 (after line 29), at the end of subsection 3(1), add:

             (c)    it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

(10)  Schedule 1, item 1, page 6 (lines 4 to 7), omit paragraph 3(2)(a).

(44)  Schedule 3, item 7, page 52 (line 28), omit “term.”, substitute “term; and”.

(45)  Schedule 3, item 7, page 52 (after line 28), at the end of subsection 12BG(1), add:

             (c)    it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

(46)  Schedule 3, item 7, page 53 (lines 1 to 4), omit paragraph 12BG(2)(a).

At present, the bill requires that, when considering whether a term is unfair a court must take into account the extent to which a term would cause or there is a substantial likelihood that it would cause detriment, whether financial or otherwise, to a party it relied on. Although this is a factor the court must take into account, detriment is not part of the test for unfairness.

The current test for unfairness in the bill has two limbs, both of which must be satisfied. A term will be found to be unfair where there is a significant imbalance in the parties’ rights and obligations arising under the contract and the term is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term. The bill would be amended to remove consideration of detriment from the factors the court must take into account and instead include detriment, whether financial or non-financial, as part of the test for an unfair term. This would make detriment a necessary condition for a term to be found unfair.

Specifically the amendments would add a third limb to the test to require that, in order to be unfair, a term would cause detriment, whether financial or otherwise, to a party that would be applied or relied upon. Consequently, the reference to substantial likelihood of detriment is a factor the court must take into account. In considering whether a term is unfair, it would be removed as it would be redundant. This amendment would more closely align the operation of the bill to the definition of ‘unfairness’ in the current Victorian Fair Trading Act on which the unfair contract and provisions are based.

The concept of detriment, financial or otherwise, is relevant to the determination of whether a remedy could be applied under the unfair contract terms law. Contrary to concerns expressed that a term could only be found to be unfair if actual consumer detriment is established, the amended unfairness test requires the court to consider whether application or reliance on the term were to cause detriment to the party disadvantaged by the term if the term were to be relied upon.

Progress reported.