Motor Car Traders Amendment Bill 2007

Motor Car Traders Amendment Bill 2007

Introduction Print

EXPLANATORY MEMORANDUM

561088

BILL LA INTRODUCTION 31/10/2007

General

The Bill amends the Motor Car Traders Act 1986 to improve the operation of that Act. The objective of these proposed amendments is to implement legislative recommendations from the Report on the Motor Car Traders Act Consultations by NoelPullen that were supported by the Government in its response to the Report to achieve more effective and less burdensome regulatory arrangements for licensed motor car traders. The Bill also amends the Interpretation of Legislation Act 1984 to insert a new definition of insolvent under administration and makes consequential amendments to other Acts (listed in the Schedule to the Bill).

Clause Notes

Clause 1sets out the main purposes of the proposed Act. The main purposes of the Act are to amend the Motor Car Traders Act 1986 to improve the operation of that Act, to amend the Interpretation of Legislation Act 1984 to insert a new definition of insolvent under administration and to make consequential amendments to other Acts.

Clause 2provides that the proposed Act will come into operation on a day or days to be proclaimed, with a default commencement date of 1December 2008.

Clause 3provides for the Motor Car Traders Act 1986 to be called the Principal Act in this proposed Act.

Clause 4extends the purpose of the Principal Act, in recognition of the fact that its provisions are now wider than when first enacted.

Clause 5provides for changes to definitions used in the Principal Act.
The name of a Committee defined in the Principal Act has been changed. The definition of insolvent under administration in the Principal Act is repealed as the Interpretation of Legislation Act 1984 is being amended in this proposed Act to provide a new definition of insolvent under administration and it is no longer necessary to define this term in the Motor Car Traders Act1986.

Clause 6clarifies that electronic and online advertising are included as an offer to sell for the purposes of the Principal Act.

Clause 7provides that the Business Licensing Authority ("the Authority") is not required to conduct an oral hearing when determining licence applications, requires the Authority to refuse an application made by certain natural persons and bodies corporate and allows the Authority to consider certain associates when considering licence applications.

Clause 8provides for the Authority to impose, vary or revoke conditions of licence on the request of the Motor Car Traders Claims Committee ("the Committee"), including a condition to provide the Committee with a guarantee.

Clause 9provides for suspension of a licence following certain claims on the Motor Car Traders Guarantee Fund ("the Fund"), in order to ensure, in relation to claims on the Fund, that the Principal Act applies to directors of bodies corporate and partners in partnerships or a person concerned in the management of a body corporate or partnership in the same way that it applies to individual motor car traders.

Clause 10provides for application for and grant of permission in connection with the suspension of licence referred to in clause 9, including that the Authority may grant certain applications by a partnership or body corporate if the Authority is satisfied that it is not contrary to the public interest.

Clause 11inserts a penalty in the Principal Act creating an offence for breach of the requirement in the Principal Act to keep a dealings book, with the new penalty set at the level of the lesser of the existing penalties for failing to enter prescribed details and for the making of false entries in the book.

Clause 12adds a new category of persons whom a motor car trader is prohibited from employing in any customer service position, requires motor car traders to check that potential employees are not prohibited prior to employing them and provides for a form to be prescribed for declarations by applicants of whether or not they are prohibited from being employed in such positions.

Clause 13provides that a motor car trader cannot knowingly enter into dealings with a person under the age of 18 years in relation to new or used cars.

Clause 14amends section 43 of the Principal Act to provide for cooling-off periods for car sales that in all instances will terminate three clear days after the purchaser signs the agreement for the sale of a motor car or sooner if the purchaser during the cooling-off period signs a waiver. The clause provides for the waiver to be a prescribed form that sets out the purchaser's rights and explains the effect of a waiver and requires that a motor car trader retain a copy of the prescribed form if the purchaser signs a waiver of the purchaser's rights. The clause enables the vendor to retain $400 or 2 per cent of the purchase price (whichever is greater) if a purchaser terminates an agreement for the sale of a new car where this is not an off-trade-premises sale, in which case, or in the case of a used car, the vendor may retain $100 or 1 per cent of the purchase price under the agreement (whichever is greater). Nothing in this clause requires a motor car trader to place an order for a new car with the manufacturer before the cooling-off period has expired.

Clause 15inserts a penalty of 60 penalty units for breach of section50A(1). The subsection provides that it is an offence to aid or abet, or cause or permit a person to carry on business as a motor car trader without a licence.

Clause 16inserts a new Part 3A in the Principal Act to prohibit dummy bidding at auctions of motor cars. New Part 3A also creates offences by auctioneers and by persons relating to bidding, provides for permissible vendor bids and requires auctioneers to keep records of the names and addresses of owners and purchasers of motor cars at auctions that are open to the public.

Clause 17substitutes a new definition of cash price in the Principal Act to ensure that the price is defined to exclude duties and transfer fees.

Clause 18provides for light goods vehicles to be excluded from the definition of commercial vehicle for the purposes of section 52 of the Principal Act and amends the particulars relating to the present and previous owners that are required to be displayed by this section. This clause also amends the requirements in the Principal Act for the name and address of the previous owner to be displayed on used vehicles by providing for an arrangement whereby these details will be available from the trader upon request or, where the vehicle is acquired from a trader or special trader, allow display of a trader or special trader's name instead of the previous owner's details in these cases.

Clause 19creates an offence for failure by a trader to provide the details of the name and address of the last owner upon the request of a prospective purchaser in instances where the previous owner was not a trader or special trader.

Clause 20makes amendments to the Principal Act that are necessary to change the name of the Motor Car Traders Guarantee Fund Claims Committee.

Clause 21enables the Committee to require the parties to a claim to provide information relevant to the determination of the claim and to seek information on a claim from any person. The clause also allows the Committee to request information relevant to the determination of a claim from specified public bodies and to disclose such information to other persons if that is reasonable for the purpose of obtaining information to determine the claim.

Clause 22restricts the persons to whom the Committee must provide its reasons for determination and allows the Committee to provide a copy of its determination to any person.

Clause 23enables the Secretary of the Committee to take legal proceedings on behalf of the Committee and to apply in certain circumstances to set aside a court or Tribunal order made against a motor car trader.

Clause 24restricts the persons who may claim on the Fund and makes certain other amendments to section 76 of the Principal Act to improve the operation of the Fund. The restriction of persons who may claim on the Fund includes restrictions to clarify that the Fund is a fund established to compensate consumers for losses incurred as a result of specified trader actions and is not intended to provide insurance for such bodies as motor car auction houses or to protect Government revenue.
The amendments to improve the operation of the Fund include, for example, amendments to clarify that the loss that has been incurred from a failure of a trader to transfer good title includes the car being a stolen car or subject to a registered security interest registered before the trader sold it, and that loss that has been incurred for the purposes of a claim against the Fund includes loss from a failure of a trader to comply with an agreement to refund a deposit in certain circumstances.

Clause 25amends section 77 to enable the Committee to take the conduct of the parties into account when determining a claim, for example if claimants contributed to their own losses. The clause also enables the Committee to refuse a claim by a financier under section 76 of the Principal Act if the financier has not given the required notice under section 49 of the Principal Act. This clause also provides that the Committee is not required to conduct an oral hearing to determine a claim and that the Committee may defer payment of a claim in certain circumstances.

Clause 26inserts new section 77A, which provides that the Committee may postpone its determination of a claim for such period as it considers reasonable and necessary in certain circumstances.

Clause 27inserts new sections 78(2) and 78(3) that provide that if a claim is refused the claimant cannot make a further claim regarding the same matter unless the Committee is satisfied that there are exceptional circumstances, and that such exceptional circumstances may include information that was not available at the time of the first claim.

Clause 28amends section 82A to provide that the documents that the motor car trader must retain at their office must be those that relate to the previous three years business conducted at that office.

Clause 29inserts new section 121, which provides that the prohibitions on persons who can be employed provided for under clause 12 do not apply to people employed prior to the commencement of thatclause.

Clause 30inserts new section 122, which provides that the Guarantee Fund Claims Committee continues as the Motor Car Traders Claims Committee.

Clause 31amends the Interpretation of Legislation Act 1984 to substitute the definition of insolvent under administration in section 38 of the Act to reflect changes to Part X of the Bankruptcy Act 1966 of the Commonwealth, which now provides for personal insolvency agreements. The definition includes these agreements in addition to the older forms of insolvency "arrangements".

Clause 32provides that the Act set out in the heading of each item of the Schedule is amended as set out in the relevant item.

Clause 33provides that this proposed Act is repealed on 1 December 2009. As suggested by the Scrutiny of Acts and Regulations Committee, all amending Acts now contain an automatic repeal provision, which will save the time and expense of having to repeal amending Acts in statute law revision Bills. The repeal of this Act does not affect in any way the operation of the amendments made by this Act (see section 15(1) of the Interpretation of Legislation Act 1984).

SCHEDULE

The Acts set out in the Schedule are amended to ensure that in each of them a reference to insolvent under administration is a reference to that expression as defined in the new definition inserted into the Interpretation of Legislation Act 1984 by clause 31.

1