TRADE PRACTICES AMENDMENT (AUSTRALIAN CONSUMER LAW) BILL (NO. 1) 2010

i Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Contents

Short title ............................................................................................ 1

Commencement .................................................................................. 1

Schedule(s) ......................................................................................... 3

Schedule 1--The Australian Consumer Law

Part 1--Unfair and prohibited contract terms

Trade Practices Act 1974

Part 2--Application of the Australian Consumer Law

Trade Practices Act 1974

Schedule 2--Enforcement and re medies under the Trade

Practices Act 1974

Part 1--Pecuniary penalties

Trade Practices Act 1974

Part 2--Disqualification orders

Trade Practices Act 1974

Part 3--Substantiation notices

Trade Practices Act 1974

Part 4--Orders to redress loss or damage suffered by non-party

consumers etc.

Trade Practices Act 1974

Part 5--Infringement notices

Trade Practices Act 1974

Part 6--Public warning notices

Trade Practices Act 1974

Part 7--Enforcement and remedies relating to the Australian

Consumer Law

Trade Practices Act 1974

Schedule 3--Amendme nt of corporations legislation

Part 1--Unfair and prohibited contract terms

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 ii

Australian Securities and Investments Commission Act 2001

Part 2--Pecuniary penalties

Australian Securities and Investments Commission Act 2001

Part 3--Disqualification orders

Australian Securities and Investments Commission Act 2001

Corporations Act 2001

Part 4--Substantiation notices

Australian Securities and Investments Commission Act 2001

Part 5--Orders to redress loss or damage suffered by non-party

consumers etc.

Australian Securities and Investments Commission Act 2001

Part 6--Infringement notices

Australian Securities and Investments Commission Act 2001

Part 7--Public warning notices

Australian Securities and Investments Commission Act 2001

Part 8--Enforcement and remedies relating to unfair and

prohibited contract terms

Australian Securities and Investments Commission Act 2001

Part 9--Miscellaneous

Australian Securities and Investments Commission Act 2001

Schedule 4--Miscellaneous

Administrative Decisions (Judicial Review) Act 1977

Telecommunications (Interception and Access) Act 1979

Trade Practices Act 1974

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 1

A Bill for an Act to amend the Trade Practices Act

1974 and the Australian Securities and Investments

Commission Act 2001, and for other purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Trade Practices Amendment

(Australian Consumer Law) Act 2009.

2 Commence ment

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

2 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day on which this Act receives the

Royal Assent.

2. Schedule 1

A single day to be fixed by Proclamation.

However, if any of the provision(s) do not

commence with in the period of 6 months

beginning on the day on which this Act

receives the Royal Assent, they commence

on the first day after the end of that period.

3. Schedule 2,

Parts 1 to 6

The day after this Act receives the Royal

Assent.

4. Schedule 2,

items 27 to 39

At the same time as the provision(s) covered

by table item 2.

5. Schedule 2,

item 40

At the same time as the provision(s) covered

by table item 2.

However, if Schedule 1 to the Statute

Stocktake (Regulatory and Other Laws) Act

2009 commences before that time, the

provision(s) do not commence at all.

6. Schedule 2,

item 41

The later of:

(a) the same time as the provision(s) covered

by table item 2; and

(b) immed iately after the commencement of

Schedule 1 to the Statute Stocktake

(Regulatory and Other Laws) Act 2009.

However, the provision(s) do not commence

at all if the event mentioned in paragraph (b )

does not occur.

7. Schedule 2,

items 42 to 75

At the same time as the provision(s) covered

by table item 2.

8. Schedule 3,

Part 1

At the same time as the provision(s) covered

by table item 2.

9. Schedule 3,

Parts 2 to 7

The day after this Act receives the Royal

Assent.

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 3

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

10. Schedule 3,

Part 8

At the same time as the provision(s) covered

by table item 2.

11. Schedule 3,

Part 9

The day after this Act receives the Royal

Assent.

12. Schedule 4,

items 1 and 2

At the same time as the provision(s) covered

by table item 2.

13. Schedule 4,

item 3

The day after this Act receives the Royal

Assent.

14. Schedule 4,

items 4 and 5

At the same time as the provision(s) covered

by table item 2.

Note:

This table relates only to the provisions of this Act as originally

passed by both Houses of the Parliament and assented to. It will not be

expanded to deal with provisions inserted in this Act after assent.

(2) Column 3 of the table contains additional information that is not

part of this Act. Information in this column may be added to or

edited in any published version of this Act.

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or

repealed as set out in the applicable items in the Schedule

concerned, and any other item in a Schedule to this Act has effect

according to its terms.

Schedule 1 The Australian Consumer Law

Part 1 Un fair and prohibited contract terms

4 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Schedule 1

The Australian Consumer Law

Part 1

Unfair and prohibited contract terms

Trade Practices Act 1974

1 At the end of the Act

Add:

Schedule 2--The Australian Consumer Law

Note:

See section 130.

Part 1--Preliminary

1 Definitions

In this Schedule:

constitution has the meaning given by the Corporations Act 2001.

consumer contract: see section 2(3).

interest, in relation to land, means:

(a) a legal or equitable estate or interest in the land; or

(b) a right of occupancy of the land, or of a building or part of a

building erected on the land, arising by virtue of the holding

of shares, or by virtue of a contract to purchase shares, in an

incorporated company that owns the land or building; or

land.

prohibited term: see section 6(4).

rely on, in relation to a term of a consumer contract, includes the

following:

(a) attempt to enforce the term;

(b) attempt to exercise a right conferred, or purportedly

conferred, by the term;

The Australian Consumer Law Schedule 1

Unfair and prohibited contract terms Part 1

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 5

conferred, by the term.

ship has the meaning given by the Admiralty Act 1988.

transparent, in relation to a term of a consumer contract: see

section 3(3).

unfair, in relation to a term of a consumer contract: see

section 3(1).

upfront price: see section 5(2).

Part 2--Unfair and prohibited contract terms

Division 1--Unfair terms

2 Unfair terms of consumer contracts

(1) A term of a consumer contract is void if:

(a) the term is unfair; and

(b) the contract is a standard form contract.

(2) The contract continues to bind the parties if it is capable of

operating without the unfair term.

(3) A consumer contract is a contract for:

(a) a supply of goods or services; or

(b) a sale or grant of an interest in land;

to an individual whose acquisition of the goods, services or interest

is wholly or predominantly for personal, domestic or household use

or consumption.

3 Meaning of unfair

(1) A term of a consumer contract is unfair if:

(a) it would cause a significant imbalance in the parties' rights

and obligations arising under the contract; and

(b) it is not reasonably necessary in order to protect the

legitimate interests of the party who would be advantaged by

the term.

Schedule 1 The Australian Consumer Law

Part 1 Un fair and prohibited contract terms

6 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

(2) In determining whether a term of a consumer contract is unfair

under subsection (1), a court may take into account such matters as

it thinks relevant, but must take into account the following:

(a) the extent to which the term would cause, or there is a

substantial likelihood that it would cause, detriment (whether

financial or otherwise) to a party if it were to be applied or

relied on;

(b) the extent to which the term is transparent;

(3) A term is transparent if the term is:

(a) expressed in reasonably plain language; and

(b) legible; and

(d) readily available to any party affected by the term.

(4) For the purposes of subsection (1)(b), a term of a consumer

contract is presumed not to be reasonably necessary in order to

protect the legitimate interests of the party who would be

advantaged by the term, unless that party proves otherwise.

4 Examples of unfair terms

Without limiting section 3, the following are examples of the kinds

of terms of a consumer contract that may be unfair:

(a) a term that permits, or has the effect of permitting, one party

(but not another party) to avoid or limit performance of the

contract;

(b) a term that permits, or has the effect of permitting, one party

(but not another party) to terminate the contract;

party (but not another party) for a breach or termination of

the contract;

(d) a term that permits, or has the effect of permitting, one party

(but not another party) to vary the terms of the contract;

(e) a term that permits, or has the effect of permitting, one party

(but not another party) to renew or not renew the contract;

(f) a term that permits, or has the effect of permitting, one party

to vary the upfront price payable under the contract without

the right of another party to terminate the contract;

The Australian Consumer Law Schedule 1

Unfair and prohibited contract terms Part 1

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 7

(g) a term that permits, or has the effect of permitting, one party

unilaterally to vary the characteristics of the goods or

services to be supplied, or the interest in land to be sold or

granted, under the contract;

(h) a term that permits, or has the effect of permitting, one party

unilaterally to determine whether the contract has been

breached or to interpret its meaning;

(i) a term that limits, or has the effect of limiting, one party's

vicarious liability for its agents;

(j) a term that permits, or has the effect of permitting, one party

to assign the contract to the detriment of another party

without that other party's consent;

(k) a term that limits, or has the effect of limiting, one party's

right to sue another party;

(l) a term that limits, or has the effect of limiting, the evidence

one party can adduce in proceedings relating to the contract;

(m) a term that imposes, or has the effect of imposing, the

evidential burden on one party in proceedings relating to the

contract;

(n) a term of a kind, or a term that has an effect of a kind,

prescribed by the regulations.

5 Terms that define main subject matte r of consume r contracts etc.

are unaffected

(1) Section 2 does not apply to a term of a consumer contract to the

extent that, but only to the extent that, the term:

(a) defines the main subject matter of the contract; or

(b) sets the upfront price payable under the contract; or

Commonwealth or a State or Territory.

(2) The upfront price payable under a consumer contract is the

consideration that:

(a) is provided, or is to be provided, for the supply, sale or grant

under the contract; and

(b) is disclosed at or before the time the contract is entered into;

but does not include any other consideration that is contingent on

the occurrence or non-occurrence of a particular event.

Schedule 1 The Australian Consumer Law

Part 1 Un fair and prohibited contract terms

8 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Division 2--Prohibited terms

6 Prohibited terms of consumer contracts

(1) A term of a consumer contract is void if:

(a) the term is a prohibited term; and

(b) the contract is a standard form contract.

(2) A person must not include, or purport to include, a prohibited term

in a consumer contract that is a standard form contract.

Note:

A pecuniary penalty may be imposed for a contravention of this

subsection.

(3) A person must not apply or rely on, or purport to apply or rely on,

a prohibited term of a consumer contract that is a standard form

contract.

Note:

A pecuniary penalty may be imposed for a contravention of this

subsection.

(4) A prohibited term of a consumer contract is a term of a kind

prescribed by the regulations.

(5) The contract continues to bind the parties if it is capable of

operating without the prohibited term.

Division 3--Miscellaneous

7 Standard form contracts

(1) If a party to a proceeding alleges that a contract is a standard form

contract, it is presumed to be a standard form contract unless

another party to the proceeding proves otherwise.

(2) In determining whether a contract is a standard form contract, a

court may take into account such matters as it thinks relevant, but

must take into account the following:

(a) whether one of the parties has all or most of the bargaining

power relating to the transaction;

(b) whether the contract was prepared by one party before any

discussion relating to the transaction occurred between the

parties;

The Australian Consumer Law Schedule 1

Unfair and prohibited contract terms Part 1

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 9

or reject the terms of the contract (other than the terms

referred to in section 5(1)) in the form in which they were

presented;

(d) whether another party was given an effective opportunity to

negotiate the terms of the contract that were not the terms

referred to in section 5(1);

(e) whether the terms of the contract (other than the terms

referred to in section 5(1)) take into account the specific

characteristics of another party or the particular transaction;

(f) any other matter prescribed by the regulations.

8 Contracts to which this Part does not apply

(1) This Part does not apply to:

(a) a contract of marine salvage or towage; or

(b) a charterparty of a ship; or

(2) Without limiting subsection (1)(c), the reference in that subsection

to a contract for the carriage of goods by ship includes a reference

to any contract covered by a sea carriage document within the

meaning of the amended Hague Rules referred to in section 7(1) of

the Carriage of Goods by Sea Act 1991.

(3) This Part does not apply to a contract that is the constitution of a

company, managed investment scheme or other kind of body.

2 Application and transitional provisions

(1)

Part 2 of Schedule 2 to the Trade Practices Act 1974 applies to a

contract entered into on or after the commencement of this Schedule.

(2)

That Part does not apply to a contract entered into before the

commencement of this Schedule. However:

(a) if the contract is renewed on or after that commencement,

and paragraph (b) has not already applied in relation to the

contract--that Part applies to the contract as renewed, on and

from the day (the renewal day) on which the renewal takes

effect, in relation to conduct that occurs on or after the

renewal day; or

Schedule 1 The Australian Consumer Law

Part 1 Un fair and prohibited contract terms

10 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

(b) if a term of the contract is varied on or after that

commencement, and paragraph (a) has not already applied in

relation to the contract--that Part applies to the contract as

varied, on and from the day (the variation day) on which the

variation takes effect, in relation to conduct that occurs on or

after the variation day.

(3)

Despite paragraphs (2)(a) and (b), that Part does not apply to a contract

to the extent that the operation of that Part would result in an acquisition

of property (within the meaning of paragraph 51(xxxi) of the

Constitution) from a person otherwise than on just terms (within the

meaning of that paragraph of the Constitution).

The Australian Consumer Law Schedule 1

Application of the Australian Consumer Law Part 2

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 11

Part 2

Application of the Australian Consumer Law

Trade Practices Act 1974

3 Subsection 4(1)

Insert:

Australian Consumer Law means Schedule 2.

4 Subsection 4(1)

Insert:

provision, of the Australian Consumer Law, has the meaning given

by section 4KB.

5 After section 4KA

Insert:

4KB References to the Australian Consume r Law etc.

(1) A reference in this Act (other than the provisions referred to in

subsection (2)) to the Australian Consumer Law is a reference to

the Australian Consumer Law as applied under Division 1 of

Part XI.

(2) Subsection (1) does not apply in relation to the following

provisions:

(a) the definitions of Australian Consumer Law and provision

in subsection 4(1);

(b) this section;

(d) Schedule 2.

(3) A reference in this Act (other than in Part XI and Schedule 2) to

one or more provisions of the Australian Consumer Law is a

reference to that provision or those provisions as applied under

Division 1 of Part XI.

Schedule 1 The Australian Consumer Law

Part 2 Application of the Australian Consumer Law

12 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

4KC Contraventions of the Australian Consume r Law

Conduct is not taken, for the purposes of this Act, to contravene the

Australian Consumer Law merely because of subsection 2(1) or

6(1) of the Australian Consumer Law.

6 After paragraph 5(1)(e)

Insert:

(ea) the Australian Consumer Law;

Note:

The heading to section 5 is replaced by the heading " Extended application of this Act

to conduct outside Australia".

7 Paragraph 5(1)(f)

Omit "or (e)", substitute ", (e) or (ea)".

8 At the end of subparagraphs 6(2)(a)(i) and (ii), (2)(b)(i) and

(ii) and (2)(c)(i)

Add "or".

Note:

The heading to section 6 is replaced by the heading " Extended application of this Act

to persons who are not corporations".

9 After paragraph 6(2)(c)

Insert:

(ca) any reference in Part 2 of the Australian Consumer Law to a

contract were, by express provision, confined to a contract

made:

(i) in the course of, or in relation to, trade or commerce

between Australia and places outside Australia; or

(ii) in the course of, or in relation to, trade or commerce

among the States; or

(iii) in the course of, or in relation to, trade or commerce

within a Territory, between a State and a Territory or

between two Territories; and

10 After subsection 6(3)

Insert:

(3A) In addition to the effect that this Act, other than Parts IIIA, VIIA

and X, has as provided by subsection (2), the provisions of Part 2

The Australian Consumer Law Schedule 1

Application of the Australian Consumer Law Part 2

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 13

of the Australian Consumer Law have, by force of this subsection,

the effect they would have if:

(a) those provisions were, by express provision, confined in their

operation to contracts for or relating to:

(i) the use of postal, telegraphic or telephonic services; or

(ii) radio or television broadcasts; and

(b) a reference in the provisions of Part XI to a corporation

included a reference to a person not being a corporation.

11 After Part X

Insert:

Part XI--The Australian Consumer Law

Division 1--Application of the Australian Consumer Law

as a law of the Commonwealth

130 Application of the Australian Consume r Law in relation to

corporations

(1) The Australian Consumer Law applies as a law of the

Commonwealth to the conduct of corporations.

(2) Without limiting subsection (1), Part 2 of the Australian Consumer

Law also applies to, and in relation to, a consumer contract to

which a corporation is a party.

131 Division does not apply to financial services

(1) Despite section 130, this Division does not apply to the supply, or

possible supply, of services that are financial services.

(2) Despite section 130, Part 2 of the Australian Consumer Law does

not apply to, or in relation to, contracts for the supply, or possible

supply, of services that are financial services.

132 Saving of other laws and re medies

This Division is not intended to exclude or limit the concurrent

operation of any law of a State or Territory.

Schedule 1 The Australian Consumer Law

Part 2 Application of the Australian Consumer Law

14 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Division 2--Application of the Australian Consumer Law

as a law of a State or Territory

133 Definitions

In this Division:

application law means:

(a) a law of a participating jurisdiction that applies the applied

Australian Consumer Law, either with or without

modifications, as a law of the participating jurisdiction; or

(b) any regulations or other legislative instrument made under a

law described in paragraph (a); or

the participating jurisdiction, either with or without

modifications.

applied Australian Consumer Law means (according to the

context):

(a) the text described in section 135; or

(b) that text, applying as a law of a participating jurisdiction,

either with or without modifications.

apply, in relation to the applied Australian Consumer Law, means

apply the applied Australian Consumer Law by reference:

(a) as in force from time to time; or

(b) as in force at a particular time.

Commonwealth entity means:

(a) an authority of the Commonwealth; or

(b) an officer of the Commonwealth.

imposes a duty has the meaning given by section 140.

modifications includes additions, omissions and substitutions.

officer, in relation to the Commonwealth, includes the following:

(a) a Minister;

(b) a person who holds:

(i) an office established by or under an Act; or

(ii) an appointment made under an Act; or

The Australian Consumer Law Schedule 1

Application of the Australian Consumer Law Part 2

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 15

(iii) an appointment made by the Governor-General or a

Minister but not under an Act;

Commonwealth;

(d) a person who is:

(i) in the service or employment of the Commonwealth, or

of an authority of the Commonwealth; or

(ii) employed or engaged under an Act.

participating jurisdiction means a participating State or

participating Territory.

participating State means a State that is a party to the

Intergovernmental Agreement for the Australian Consumer Law

and applies the applied Australian Consumer Law as a law of the

State, either with or without modifications.

participating Territory means a Territory that is a party to the

Intergovernmental Agreement for the Australian Consumer Law

and applies the applied Australian Consumer Law as a law of the

Territory, either with or without modifications.

Territory means the Australian Capital Territory or the Northern

Territory.

134 Object of this Division

The object of this Division is to facilitate the application of the

Australian Consumer Law by participating States and participating

Territories.

135 The applied Australian Consumer Law

(1) The applied Australian Consumer Law consists of:

(a) Schedule 2; and

(b) the remaining provisions of this Act (except sections 2A,

4KB, 5, 6 and 172), so far as they relate to Schedule 2; and

provision covered by paragraph (a) or (b).

(2) For the purpose of forming part of the applied Australian

Consumer Law, the provisions referred to in paragraphs (1)(b) and

Schedule 1 The Australian Consumer Law

Part 2 Application of the Australian Consumer Law

16 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

particular, references to corporations are to include references to

persons who are not corporations.

136 Federal Court may exercise jurisdiction under application laws

of Territories

The Federal Court may exercise jurisdiction (whether original or

appellate) conferred on that Court by an application law of a

Territory with respect to matters arising under the applied

Australian Consumer Law.

137 Exercise of jurisdiction under cross-vesting provisions

This Division does not affect the operation of any other law of the

Commonwealth, or any law of a State or Territory, relating to

cross-vesting of jurisdiction.

138 Commonwealth consent to conferral of functions etc. on

Commonwealth e ntities

(1) An application law may confer functions or powers, or impose

duties, on a Commonwealth entity for the purposes of the applied

Australian Consumer Law.

Note:

Section 140 sets out when such a law imposes a duty on a

Commonwealth entity.

(2) Subsection (1) does not authorise the conferral of a function or

power, or the imposition of a duty, by an application law to the

extent to which:

(a) the conferral or imposition, or the authorisation, would

contravene any constitutional doctrines restricting the duties

that may be imposed on the Commonwealth entity; or

(b) the authorisation would otherwise exceed the legislative

power of the Commonwealth.

(3) The Commonwealth entity cannot perform a duty or function, or

exercise a power, under an application law unless the conferral of

the function or power, or the imposition of the duty, is in

accordance with an agreement between the Commonwealth and the

State or Territory concerned.

The Australian Consumer Law Schedule 1

Application of the Australian Consumer Law Part 2

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 17

139 How duty is imposed

Application

(1) This section applies if an application law purports to impose a duty

on a Commonwealth entity.

Note:

Section 140 sets out when such a law imposes a duty on a

Commonwealth entity.

State or Territory legislative power sufficient to support duty

(2) The duty is taken not to be imposed by this Act (or any other law

of the Commonwealth) to the extent to which:

(a) imposing the duty is within the legislative powers of the State

or Territory concerned; and

(b) imposing the duty by the law of the State or Territory is

consistent with the constitutional doctrines restricting the

duties that may be imposed on the entity.

Note:

If this subsection applies, the duty will be taken to be imposed by

force of the law of the State or Territory (the Commonwealth having

consented under section 138 to the imposition of the duty by that law).

Commonwealth legislative power sufficient to support duty but

State or Territory legislative powers are not

(3) If, to ensure the validity of the purported imposition of the duty, it

is necessary that the duty be imposed by a law of the

Commonwealth (rather than by the law of the State or Territory),

the duty is taken to be imposed by this Act to the extent necessary

to ensure that validity.

(4) If, because of subsection (3), this Act is taken to impose the duty, it

is the intention of the Parliament to rely on all powers available to

it under the Constitution to support the imposition of the duty by

this Act.

(5) The duty is taken to be imposed by this Act in accordance with

subsection (3) only to the extent to which imposing the duty:

(a) is within the legislative powers of the Commonwealth; and

(b) is consistent with the constitutional doctrines restricting the

duties that may be imposed on the entity.

(6) Subsections (1) to (5) do not limit section 138.

Schedule 1 The Australian Consumer Law

Part 2 Application of the Australian Consumer Law

18 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

140 When an application law imposes a duty

For the purposes of this Division, an application law imposes a

duty on a Commonwealth entity if:

(a) the law confers a function or power on the entity; and

(b) the circumstances in which the function or power is conferred

give rise to an obligation on the entity to perform the function

or to exercise the power.

141 Application laws may operate concurrently with this Act

This Act is not intended to exclude the operation of any application

law, to the extent that the application law is capable of operating

concurrently with this Act.

142 No doubling-up of liabilities

(1) If:

(a) an act or omission is an offence against this Act and is also

an offence against an application law; and

(b) the offender has been punished for the offence under the

application law;

the offender is not liable to be punished for the offence against this

Act.

(2) If a person has been ordered to pay a pecuniary penalty under an

application law, the person is not liable to a pecuniary penalty

under this Act in respect of the same conduct.

Division 3--Miscellaneous

143 References in instruments to the Australian Consume r Law

(1) A reference in any instrument to the Australian Consumer Law is a

reference to:

(a) the Australian Consumer Law as applied under Division 1;

and

(b) the applied Australian Consumer Laws of any or all of the

participating jurisdictions.

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 1 Pecuniary penalties

20 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Schedule 2

Enforcement and remedies

under the Trade Practices Act 1974

Part 1

Pecuniary penalties

Trade Practices Act 1974

1 Before section 77

Insert:

76E Pecuniary penalties--consumer protection etc.

(1) If the Court is satisfied that a person:

(a) has contravened any of the following provisions:

(i) a provision of Part IVA;

(ii) a provision of Division 1 or 1AAA of Part V (other than

section 52);

(iii) subsection 65C(1) or (3), 65D(1) or 65F(8), section 65G

or subsection 65Q(9), (9C) or (10) or 65R(1);

(iv) section 87ZN or 87ZO; or

(b) has attempted to contravene such a provision; or

contravene such a provision; or

(d) has induced, or attempted to induce, a person, whether by

threats or promises or otherwise, to contravene such a

provision; or

(e) has been in any way, directly or indirectly, knowingly

concerned in, or party to, the contravention by a person of

such a provision; or

(f) has conspired with others to contravene such a provision;

the Court may order the person to pay to the Commonwealth such

pecuniary penalty, in respect of each act or omission by the person

to which this section applies, as the Court determines to be

appropriate.

(2) In determining the appropriate pecuniary penalty, the Court must

have regard to all relevant matters including:

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Pecuniary penalties Part 1

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 21

(a) the nature and extent of the act or omission and of any loss or

damage suffered as a result of the act or omission; and

(b) the circumstances in which the act or omission took place;

and

proceedings under Part VC or this Part to have engaged in

any similar conduct.

(3) The pecuniary penalty payable under subsection (1) is not to

exceed the number of penalty units worked out using the following

table:

Number of penalty units

Item

For each act or omission to

which this section applies

that relates to ...

the number of penalty

units is not to exceed ...

a provision of Part IVA

(a) if the person is a body

corporate--10,000; o r

(b) if the person is not a

body corporate--2,000.

a provision of Division 1 or

1AAA of Part V (other than

section 52)

(a) if the person is a body

corporate--10,000; o r

(b) if the person is not a

body corporate--2,000.

subsection 65C(1) or (3) or

65D(1)

(a) if the person is a body

corporate--10,000; o r

(b) if the person is not a

body corporate--2,000.

subsection 65F(8)

(a) if the person is a body

corporate--150; or

(b) if the person is not a

body corporate--30.

section 65G

(a) if the person is a body

corporate--10,000; o r

(b) if the person is not a

body corporate--2,000.

subsection 65Q(9)

(a) if the person is a body

corporate--200; or

(b) if the person is not a

body corporate--40.

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 1 Pecuniary penalties

22 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Number of penalty units

Item

For each act or omission to

which this section applies

that relates to ...

the number of penalty

units is not to exceed ...

subsection 65Q(9C)

(a) if the person is a body

corporate--300; or

(b) if the person is not a

body corporate--60.

subsection 65Q(10)

(a) if the person is a body

corporate--600; or

(b) if the person is not a

body corporate--120.

subsection 65R(1)

(a) if the person is a body

corporate--150; or

(b) if the person is not a

body corporate--30.

section 87ZN

(a) if the person is a body

corporate--150; or

(b) if the person is not a

body corporate--30.

section 87ZO

(a) if the person is a body

corporate--250; or

(b) if the person is not a

body corporate--50.

(4) If conduct constitutes a contravention of 2 or more provisions

referred to in paragraph (1)(a):

(a) a proceeding may be instituted under this Act against a

person in relation to the contravention of any one or more of

the provisions; but

(b) a person is not liable to more than one pecuniary penalty

under this section in respect of the same conduct.

76F Pecuniary penalties unde r section 76E and offences

(1) The Court must not make an order under section 76E against a

person in relation to either of the following matters (a consumer

protection breach):

(a) a contravention of a provision referred to in paragraph

76E(1)(a);

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Pecuniary penalties Part 1

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 23

(b) conduct referred to in paragraph 76E(1)(b), (c), (d), (e) or (f)

that relates to a contravention of a provision referred to in

paragraph 76E(1)(a);

if the person has been convicted of an offence constituted by

conduct that is substantially the same as the conduct constituting

the consumer protection breach.

(2) Proceedings for an order under section 76E against a person in

relation to a consumer protection breach are stayed if:

(a) criminal proceedings are started or have already been started

against the person for an offence; and

(b) the offence is constituted by conduct that is substantially the

same as the conduct alleged to constitute the consumer

protection breach.

The proceedings for the order may be resumed if the person is not

convicted of the offence. Otherwise, the proceedings are dismissed.

(3) Criminal proceedings may be started against a person for conduct

that is substantially the same as conduct constituting a consumer

protection breach regardless of whether an order under section 76E

has been made against the person in respect of the breach.

(4) Evidence of information given, or evidence of production of

documents, by an individual is not admissible in criminal

proceedings against the individual if:

(a) the individual previously gave the evidence or produced the

documents in proceedings for an order under section 76E

against the individual in relation to a consumer protection

breach (whether or not the order was made); and

(b) the conduct alleged to constitute the offence is substantially

the same as the conduct that was claimed to constitute the

consumer protection breach.

However, this does not apply to a criminal proceeding in respect of

the falsity of the evidence given by the individual in the

proceedings for the order.

Note:

The heading to section 76 is altered by adding at the end "--restrictive trade practices

etc.".

2 At the end of subsection 77(1)

Add "or 76E".

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 1 Pecuniary penalties

24 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

3 Subsection 77A(3) (at the end of the definition of civil

liability)

Add ", or a pecuniary penalty under section 76E".

4 Subparagraph 79B(a)(i)

Omit "section 76", substitute "section 76 or 76E".

5 At the end of section 85

Add:

(7) If, in proceedings under section 76E against a person other than a

body corporate, it appears to the Court that the person has, or may

have:

(a) engaged in conduct in contravention of a provision referred

to in paragraph (1)(a) of that section; or

(b) engaged in conduct referred to in paragraph (1)(b), (c), (d),

(e) or (f) of that section that relates to a contravention of such

a provision;

but that the person acted honestly and reasonably and, having

regard to all the circumstances of the case, ought fairly to be

excused, the Court may relieve the person either wholly or partly

from liability to a pecuniary penalty under that section.

6 Paragraph 86D(1)(a)

Omit "section 76", substitute "section 76 or 76E".

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Disqualification orders Part 2

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 25

Part 2

Disqualification orders

Trade Practices Act 1974

7 Before subsection 86E(2)

Insert:

(1B) On application by the Commission, the Court may make an order

disqualifying a person from managing corporations for a period

that the Court considers appropriate if:

(a) the Court is satisfied that the person has committed, has

attempted to commit or has been involved in a contravention

of:

(i) a provision of Part IVA; or

(ii) a provision of Division 1 or 1AAA of Part V (other than

section 52); or

(iii) subsection 65C(1) or (3), 65D(1) or 65F(8), section 65G

or subsection 65Q(9), (9C) or (10) or 65R(1); or

(iv) a provision of Part VC; and

(b) the Court is satisfied that the disqualification is justified.

Note:

Section 206EA of the Corporations Act 2001 provides that a person is

disqualified from managing corporations if a court order is in force

under this section. That Act contains various consequences for persons

so disqualified.

8 Subsection 86E(2)

Omit "or (1A)", substitute ", (1A) or (1B)".

9 Subsection 86E(3)

After "subsection (1)", insert "or (1B)".

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 3 Substantiation notices

26 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Part 3

Substantiation notices

Trade Practices Act 1974

10 Subsection 4(1)

Insert:

substantiation notice means a notice under section 87ZL.

11 Subsection 4(1)

Insert:

substantiation notice compliance period has the meaning given by

subsection 87ZN(2).

12 Before Part VII

Insert:

Part VID--Substantiation notices

87ZL Commission may require claims to be substantiated etc.

(1) This section applies if a person has made a claim or representation

promoting, or apparently intended to promote:

(a) a supply, or possible supply, of goods or services by a

corporation; or

(b) a sale or grant, or possible sale or grant, of an interest in land

(within the meaning of section 53A) by a corporation; or

corporation;

including any such claim or representation made by the

corporation.

(2) The Commission may give the person who has made the claim or

representation a written notice that requires the person to do one or

more of the following:

(a) give information and/or produce documents to the

Commission that could be capable of substantiating or

supporting the claim or representation;

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Substantiation notices Part 3

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 27

(b) if the claim or representation relates to a supply, or possible

supply, of goods or services by a corporation--give

information and/or produce documents to the Commission

that could be capable of substantiating:

(i) the quantities in which; and

(ii) the period for which;

the corporation is or will be able to make such a supply

(whether or not the claim or representation relates to those

quantities or that period);

Commission that are of a kind specified in the notice;

within 21 days after the notice is given to the person.

(3) Any kind of information or documents that the Commission

specifies under paragraph (2)(c) must be a kind that the

Commission is satisfied is relevant to:

(a) substantiating or supporting the claim or representation; or

(b) if the claim or representation relates to a supply, or possible

supply, of goods or services by a corporation--substantiating

the quantities in which, or the period for which, the

corporation is or will be able to make such a supply.

(4) The notice must:

(a) name the person to whom it is given; and

(b) specify the claim or representation to which it relates; and

(5) The notice may relate to more than one claim or representation that

the person has made.

(6) This section does not apply to a person in relation to a claim or

representation made by the person if the person:

(a) is a prescribed information provider within the meaning of

section 65A; and

(b) made the claim or representation by publishing it on behalf of

another person in the course of carrying on a business of

providing information; and

person other than for the purpose of:

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 3 Substantiation notices

28 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

(i) publishing claims or representations promoting, or

apparently intended to promote, the other person's

business or other activities; or

(ii) the other person supplying goods or services, or selling

or granting interests in land (within the meaning of

section 53A), to the person.

87ZM Extending periods for complying with substantiation notices

(1) A person who has been given a substantiation notice may, at any

time within 21 days after the notice was given to the person, apply

in writing to the Commission for an extension of the period for

complying with the notice.

(2) The Commission may, by written notice given to the person,

extend the period within which the person must comply with the

notice.

87ZN Compliance with substantiation notices

(1) A person who is given a substantiation notice must comply with it

within the substantiation notice compliance period for the notice.

(2) The substantiation notice compliance period for a substantiation

notice is:

(a) the period of 21 days specified in the notice; or

(b) if the period for complying with the notice has been extended

under section 87ZM--the period as so extended.

(3) Despite subsection (1), an individual may refuse or fail to give

particular information or produce a particular document in

compliance with a substantiation notice on the ground that the

information or production of the document might tend to

incriminate the individual or to expose the individual to a penalty.

87ZO False or misleading information etc.

(1) A person must not, in compliance or purported compliance with a

substantiation notice:

(a) give to the Commission false or misleading information; or

(b) produce to the Commission documents that contain false or

misleading information.

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Substantiation notices Part 3

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 29

(2) This section does not apply to:

(a) information that the person could not have known was false

or misleading; or

(b) the production to the Commission of a document containing

false or misleading information if the document is

accompanied by a statement of the person that the

information is false or misleading.

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 4 Orders to redress loss or damage suffered by non-party consumers etc.

30 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Part 4

Orders to redress loss or damage suffered

by non-party consumers etc.

Trade Practices Act 1974

13 Subsection 4(1)

Insert:

enforcement proceeding means:

(a) a proceeding for an offence against Part VC; or

(b) a proceeding instituted under Part VI (other than

section 87AAA).

14 Subsection 4(1)

Insert:

non-party consumer, in relation to conduct, means a person who is

not, or has not been, a party to an enforcement proceeding in

relation to the conduct.

15 Section 4L

After "section 87", insert ", 87AAA".

16 Section 83

After "subsection 87(1A)", insert "or 87AAA(1)".

17 Subsection 87(1A)

After "section 80", insert "or 87AAA".

18 After section 87

Insert:

87AAA Orders to redress loss or damage suffered by non-party

consume rs etc.

Orders

(1) Without limiting the generality of section 80, if:

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Orders to redress loss or damage suffered by non-party consumers etc. Part 4

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 31

(a) a person engaged in conduct (the contravening conduct) in

contravention of a provision of Part IVA, of Division 1 or

1AAA of Part V or of Part VC; and

(b) the contravening conduct caused, or is likely to cause, a class

of persons to suffer loss or damage; and

relation to the contravening conduct;

the Court may, on the application of the Commission, make such

order or orders (other than an award of damages) as the Court

thinks appropriate against a person referred to in subsection (2) of

this section.

Note:

The orders that the Court may make include all or any of the orders set

out in section 87AAB.

(2) An order under subsection (1) may be made against the person who

engaged in the contravening conduct or a person involved in that

conduct.

(3) The Court must not make an order under subsection (1) unless the

Court considers that the order will:

(a) redress, in whole or in part, the loss or damage suffered by

the non-party consumers in relation to the contravening

conduct; or

(b) prevent or reduce the loss or damage suffered, or likely to be

suffered, by the non-party consumers in relation to the

contravening conduct.

Application for orders

(4) An application may be made under subsection (1) even if an

enforcement proceeding in relation to the contravening conduct has

not been instituted.

(5) An application under subsection (1) may be made at any time

within 6 years after the day on which the cause of action that

relates to the contravening conduct accrues.

Determining whether to make an order

(6) In determining whether to make an order under subsection (1)

against a person referred to in subsection (2), the Court may have

regard to the conduct of the person, and of the non-party

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 4 Orders to redress loss or damage suffered by non-party consumers etc.

32 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

consumers in relation to the contravening conduct, since the

contravention occurred.

(8) In determining whether to make an order under subsection (1), the

Court need not make a finding about either of the following

matters:

(a) which persons are non-party consumers in relation to the

contravening conduct;

(b) the nature of the loss or damage suffered, or likely to be

suffered, by such persons.

When a non-party consumer is bound by an order etc.

(9) If:

(a) an order is made under subsection (1) against a person; and

(b) the loss or damage suffered, or likely to be suffered, by a

non-party consumer in relation to the contravening conduct

to which the order relates has been redressed, prevented or

reduced in accordance with the order; and

or reduction;

then:

(d) the non-party consumer is bound by the order; and

(e) any other order made under subsection (1) that relates to that

loss or damage has no effect in relation to the non-party

consumer; and

(f) despite any other provision of this Act or any other law of the

Commonwealth, or a State or Territory, no claim, action or

demand may be made or taken against the person by the

non-party consumer in relation to that loss or damage.

Other

(10) Subsection (1) has effect subject to section 87AB.

Note:

Section 87AB may limit the liability, under an order made under

subsection (1) of this section, of a person for his or her contravention

of section 52 (which is about misleading or deceptive conduct) or

involvement in such a contravention.

(11) This section does not apply in relation to contravening conduct that

occurred before the commencement of this section.

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Orders to redress loss or damage suffered by non-party consumers etc. Part 4

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 33

87AAB Kinds of orders that may be made to redress loss or damage

suffered by non-party consumers etc.

Without limiting subsection 87AAA(1), the orders that the Court

may make under that subsection against a person (the respondent)

include all or any of the following:

(a) an order declaring the whole or any part of a contract made

between the respondent and a non-party consumer referred to

in that subsection, or a collateral arrangement relating to such

a contract:

(i) to be void; and

(ii) if the Court thinks fit--to have been void ab initio or

void at all times on and after such date as is specified in

the order (which may be a date that is before the date on

which the order is made);

(b) an order:

(i) varying such a contract or arrangement in such manner

as is specified in the order; and

(ii) if the Court thinks fit--declaring the contract or

arrangement to have had effect as so varied on and after

such date as is specified in the order (which may be a

date that is before the date on which the order is made);

such a contract or arrangement;

(d) an order directing the respondent to refund money or return

property to a non-party consumer referred to in that

subsection;

(e) an order directing the respondent, at his or her own expense,

to repair, or provide parts for, goods that have been supplied

under the contract or arrangement to a non-party consumer

referred to in that subsection;

(f) an order directing the respondent, at his or her own expense,

to supply specified services to a non-party consumer referred

to in that subsection;

(g) an order, in relation to an instrument creating or transferring

an interest in land (within the meaning of section 53A),

directing the respondent to execute an instrument that:

(i) varies, or has the effect of varying, the first-mentioned

instrument; or

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 4 Orders to redress loss or damage suffered by non-party consumers etc.

34 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

(ii) terminates or otherwise affects, or has the effect of

terminating or otherwise affecting, the operation or

effect of the first-mentioned instrument.

19 Paragraph 87A(1)(d)

After "subsection 87(1A) or (1B)", insert "or 87AAA(1)".

20 Paragraph 157(1)(d)

After "subsection 87(1A)", insert ", 87AAA(1)".

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Infringement notices Part 5

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 35

Part 5

Infringement notices

Trade Practices Act 1974

21 Subsection 4(1)

Insert:

infringement notice means an infringement notice issued under

section 87ZE.

22 Subsection 4(1)

Insert:

infringement notice compliance period has the meaning given by

section 87ZJ.

23 Subsection 4(1)

Insert:

infringement notice provision means:

(a) a provision of Part IVA; or

(b) a provision of Division 1 or 1AAA of Part V (other than

section 52, paragraph 53A(1)(c), section 54, subsection 56(1)

or section 58 or 64); or

(d) section 87ZN or 87ZO.

24 After Part VIB

Insert:

Part VIC--Infringement notices

87ZD Purpose and effect of this Part

(1) The purpose of this Part is to provide for the issue of an

infringement notice to a person for an alleged contravention of an

infringement notice provision as an alternative to proceedings for

an order under section 76E.

(2) This Part does not:

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 5 Infringement notices

36 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

(a) require an infringement notice to be issued to a person for an

alleged contravention of an infringement notice provision; or

(b) affect the liability of a person to proceedings under Part VC

or VI in relation to an alleged contravention of an

infringement notice provision if:

(i) an infringement notice is not issued to the person for the

alleged contravention; or

(ii) an infringement notice issued to a person for the alleged

contravention is withdrawn under section 87ZK; or

penalty specified in the infringement notice if the person does

not comply with the notice.

87ZE Issue of an infringe ment notice

(1) If the Commission has reasonable grounds to believe that a person

has contravened an infringement notice provision, the Commission

may issue an infringement notice to the person.

(2) The Commission must not issue more than one infringement notice

to the person for the same alleged contravention of the

infringement notice provision.

(3) The infringement notice does not have any effect if the notice:

(a) is issued more than 12 months after the day on which the

contravention of the infringement notice provision is alleged

to have occurred; or

(b) relates to more than one alleged contravention of an

infringement notice provision by the person.

87ZF Matters to be included in an infringe ment notice

An infringement notice must:

(a) be identified by a unique number; and

(b) state the day on which it is issued; and

and

(d) state that it is being issued by the Commission; and

(e) state how the Commission may be contacted; and

(f) give details of the alleged contravention by the person,

including:

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Infringement notices Part 5

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 37

(i) the date of the alleged contravention; and

(ii) the particular infringement notice provision that was

allegedly contravened; and

(g) state the maximum pecuniary penalty that the Court could

order the person to pay under section 76E for the alleged

contravention; and

(h) specify the penalty that is payable in relation to the alleged

contravention; and

(i) state that the penalty is payable within the infringement

notice compliance period for the notice; and

(j) state that the penalty is payable to the Commission on behalf

of the Commonwealth; and

(k) explain how payment of the penalty is to be made; and

(l) explain the effect of sections 87ZH, 87ZI, 87ZJ and 87ZK.

87ZG Amount of penalty

The penalty to be specified in an infringement notice that is to be

issued to a person must be a pecuniary penalty equal to the number

of penalty units worked out using the following table:

Number of penalty units

Item

If the infringement notice is

for an alleged contravention

of ...

the number of penalty

units is ...

a provision of Part IVA

(a) if the person is a body

corporate--60; or

(b) if the person is not a

body corporate--12.

a provision of Division 1 or

1AAA of Part V (other than

section 52, paragraph

53A(1)(c), section 54,

subsection 56(1) or section 58

or 64)

(a) if the person is a body

corporate--60; or

(b) if the person is not a

body corporate--12.

subsection 65C(1) or (3) or

65D(1) or section 65G

(a) if the person is a body

corporate--60; or

(b) if the person is not a

body corporate--12.

section 87ZN

(a) if the person is a body

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 5 Infringement notices

38 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Number of penalty units

Item

If the infringement notice is

for an alleged contravention

of ...

the number of penalty

units is ...

corporate--30; or

(b) if the person is not a

body corporate--6.

section 87ZO

(a) if the person is a body

corporate--50; or

(b) if the person is not a

body corporate--10.

87ZH Effect of compliance with an infringement notice

(1) This section applies if:

(a) an infringement notice for an alleged contravention of an

infringement notice provision is issued to a person; and

(b) the person pays the penalty specified in the infringement

notice within the infringement notice compliance period and

in accordance with the notice; and

(2) The person is not, merely because of the payment, regarded as:

(a) having contravened the infringement notice provision; or

(b) having been convicted of an offence constituted by the same

conduct that constituted the alleged contravention of the

infringement notice provision.

(3) No proceedings (whether criminal or civil) may be started or

continued against the person by, or on behalf of, the

Commonwealth or the Commission in relation to:

(a) the alleged contravention of the infringement notice

provision; or

(b) an offence constituted by the same conduct that constituted

the alleged contravention.

87ZI Effect of failure to comply with an infringement notice

If:

(a) an infringement notice for an alleged contravention of an

infringement notice provision is issued to a person; and

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Infringement notices Part 5

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 39

(b) the person fails to pay the penalty specified in the

infringement notice within the infringement notice

compliance period and in accordance with the notice; and

section 87ZK;

the person is liable to proceedings under Part VC or VI in relation

to the alleged contravention of the infringement notice provision.

87ZJ Infringement notice compliance period for infringement notice

(1) Subject to this section, the infringement notice compliance period

for an infringement notice is a period of 28 days beginning on the

day after the day on which the infringement notice is issued.

(2) The Commission may extend, by notice in writing, the

infringement notice compliance period for the notice if the

Commission is satisfied that it is appropriate to do so.

(3) Only one extension may be given and the extension must not be for

longer than 28 days.

(4) Notice of the extension must be given to the person who was

issued the infringement notice.

(5) A failure to comply with subsection (4) does not affect the validity

of the extension.

(6) If the Commission extends the infringement notice compliance

period for an infringement notice, a reference in this Act to the

infringement notice compliance period for an infringement notice

is taken to be a reference to the infringement notice compliance

period as so extended.

87ZK Withdrawal of an infringe ment notice

Representations to the Commission

(1) The person to whom an infringement notice has been issued for an

alleged contravention of an infringement notice provision may

make written representations to the Commission seeking the

withdrawal of the infringement notice.

(2) Evidence or information that the person, or a representative of the

person, gives to the Commission in the course of making

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 5 Infringement notices

40 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

representations under subsection (1) is not admissible in evidence

against the person or representative in any proceedings (other than

proceedings for an offence based on the evidence or information

given being false or misleading).

Withdrawal by the Commission

(3) The Commission may, by written notice (the withdrawal notice)

given to a person who has been issued an infringement notice for

an alleged contravention of an infringement notice provision,

withdraw the infringement notice if the Commission is satisfied

that it is appropriate to do so.

(4) Subsection (3) applies whether or not the person has made

representations seeking the withdrawal.

Content of withdrawal notices

(5) The withdrawal notice must state:

(a) the name and address of the person; and

(b) the day on which the infringement notice was issued to the

person; and

(d) that proceedings under Part VC or VI may be started or

continued against the person in relation to:

(i) the alleged contravention of the infringement notice

provision; or

(ii) an offence constituted by the same conduct that

constituted the alleged contravention.

Time limit for giving withdrawal notices

(6) To be effective, the withdrawal notice must be given to the person

within the infringement notice compliance period for the

infringement notice.

Refunds

(7) If the infringement notice is withdrawn after the person has paid

the penalty specified in the infringement notice, the Commission

must refund to the person an amount equal to the amount paid.

25 Section 87ZD

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 6 Public warn ing notices

42 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Part 6

Public warning notices

Trade Practices Act 1974

26 After section 86D

Insert:

86DA Commission may issue a public warning notice

Contraventions

(1) The Commission may issue to the public a written notice

containing a warning about the conduct of a corporation if:

(a) the Commission has reasonable grounds to suspect that the

conduct may constitute a contravention of a provision of

Part IVA, V or VC; and

(b) the Commission is satisfied that one or more persons has

suffered, or is likely to suffer, detriment as a result of the

conduct; and

issue the notice.

(2) Subsection (1) does not apply to the supply or possible supply, or

the promotion by any means of the supply or use, of services that

are financial services.

Substantiation notices

(3) Without limiting subsection (1), if:

(a) a person refuses to respond to a substantiation notice given to

the person, or fails to respond to the notice before the end of

the substantiation notice compliance period for the notice;

and

(b) the Commission is satisfied that it is in the public interest to

issue a notice under this subsection;

the Commission may issue to the public a written notice containing

a warning that the person has refused or failed to respond to the

substantiation notice within that period, and specifying the matter

to which the substantiation notice related.

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 7 Enforcement and remed ies relating to the Australian Consumer Law

44 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Part 7

Enforcement and remedies relating to the

Australian Consumer Law

Trade Practices Act 1974

27 Subsection 4(1)

Insert:

consumer contract has the meaning given by the Australian

Consumer Law.

28 Subsection 4(1) (at the end of the definition of

infringement notice provision)

Add:

; or (e) a provision of the Australian Consumer Law.

29 Subsection 4(1) (definition of non-party consumer)

Repeal the definition, substitute:

non-party consumer means:

(a) in relation to conduct referred to in subparagraph

87AAA(1)(a)(i)--a person who is not, or has not been, a

party to an enforcement proceeding in relation to the conduct;

and

(b) in relation to a term of a consumer contract referred to in

subparagraph 87AAA(1)(a)(ii)--a person who is not, or has

not been, a party to an enforcement proceeding in relation to

the term.

30 Subsection 4(1)

Insert:

prohibited term has the meaning given by the Australian

Consumer Law.

31 Subsection 4(1)

Insert:

rely on, in relation to a term of a consumer contract, includes the

meaning given by the Australian Consumer Law.

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Enforcement and remedies relating to the Aus tralian Consumer Law Part 7

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 45

32 Subsection 4(1)

Insert:

unfair, in relation to a term of a consumer contract, has the

meaning given by the Australian Consumer Law.

33 Subsection 75B(1)

Omit "or" (second occurring).

34 Subsection 75B(1)

After "95AZN", insert "or of the Australian Consumer Law".

35 Subparagraph 76E(1)(a)(iv)

Omit "or" (last occurring).

36 At the end of paragraph 76E(1)(a)

Add:

(v) a provision of the Australian Consumer Law; or

37 Subsection 76E(3) (at the end of the table)

Add:

a provision of the Australian

Consumer Law

(a) if the person is a body

corporate--250; or

(b) if the person is not a

body corporate--50.

38 At the end of paragraph 78(a)

Add:

(iii) a provision of the Australian Consumer Law; or

Note:

The heading to section 78 is altered by adding at the end "or the Australian Consumer

Law".

39 At the end of paragraphs 78(b) to (d)

Add "or".

40 At the end of paragraph 80(1)(a)

Add:

(iii) a provision of the Australian Consumer Law; or

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 7 Enforcement and remed ies relating to the Australian Consumer Law

46 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Note:

This item does not commence at all if Schedule 1 to the Statute Stocktake (Regulatory

and Other Laws) Act 2009 commences before items 27 to 38 of this Schedule. (See

table item 5 in subsection 2(1) of this Act.)

41 Paragraph 80(1)(a)

Repeal the paragraph, substitute:

(a) a contravention of any of the following provisions:

(i) a provision of Part IV, IVA, IVB, V or VC;

(ii) a provision of the Australian Consumer Law; or

Note:

This item does not commence at all if Schedule 1 to the Statute Stocktake (Regulatory

and Other Laws) Act 2009 does not commence. (See table item 6 in subsection 2(1) of

this Act.)

42 At the end of paragraphs 80(1)(b) to (d)

Add "or".

43 After subsection 80(1B)

Insert:

(1C) A reference in paragraph (1)(a) to a contravention of a provision of

the Australian Consumer Law includes a reference to applying or

relying on, or purporting to apply or rely on, a term of a consumer

contract that the Court has declared under section 87AC to be an

unfair term or a prohibited term.

44 Subsection 82(1)

After "or section 51AC", insert ", or a provision of the Australian

Consumer Law,".

45 Section 83

After "or VC", insert ", or of the Australian Consumer Law,".

46 Paragraphs 84(1)(b) and (3)(b)

After "or VC", insert ", or a provision of the Australian Consumer

Law,".

47 At the end of subsection 86(1)

Add "or has been instituted in relation to subsection 2(1) or 6(1) of the

Australian Consumer Law (as applied under Division 1 of Part XI)".

48 Subsection 86(1A)

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Enforcement and re medies relating to the Australian Consumer Law Part 7

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 47

After "or Part VA", insert ", or a provision of the Australian Consumer

Law,".

49 Subsection 86(2)

After "of Part V", insert ", or a provision of the Australian Consumer

Law,".

50 Paragraphs 86A(1)(b), (4)(b) and (5)(b) and 86B(1)(b)

After "of Part V", insert ", or a provision of the Australian Consumer

Law".

51 Subsection 86C(4) (paragraph (a) of the definition of

contravening conduct)

Omit "VC or", substitute "VC,".

52 Subsection 86C(4) (paragraph (a) of the definition of

contravening conduct)

After "95AZN", insert "or a provision of the Australian Consumer

Law".

53 Paragraph 86DA(1)(a)

After "VC", insert "or of the Australian Consumer Law".

54 Subparagraph 86E(1B)(a)(iv)

Omit "and", substitute "or".

55 At the end of paragraph 86E(1B)(a)

Add:

(v) a provision of the Australian Consumer Law; and

56 Subsection 87(1)

After "or VC,", insert "or of the Australian Consumer Law,".

57 Paragraphs 87(1A)(a) and (b) and (1B)(a)

After "or VC", insert ", or a provision of the Australian Consumer

Law".

58 Subsection 87(1C)

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 7 Enforcement and remed ies relating to the Australian Consumer Law

48 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

After "or VC", insert ", or of a provision of the Australian Consumer

Law,".

59 After subsection 87(5)

Insert:

(5A) A reference in this section to a contravention of a provision of the

Australian Consumer Law includes a reference to applying or

relying on, or purporting to apply or rely on, a term of a consumer

contract that the Court has declared under section 87AC to be an

unfair term or a prohibited term.

60 Paragraph 87AAA(1)(a)

Repeal the paragraph, substitute:

(a) a person:

(i) engaged in conduct (the contravening conduct) in

contravention of a provision of Part IVA, of Division 1

or 1AAA of Part V, of Part VC or of the Australian

Consumer Law; or

(ii) is a party to a consumer contract who is advantaged by a

term (the declared term) of the contract in relation to

which the Court has made a declaration under

section 87AC; and

61 Paragraphs 87AAA(1)(b) and (c)

After "contravening conduct", insert "or declared term".

62 Subsection 87AAA(2)

Repeal the subsection, substitute:

(2) An order under subsection (1) may be made against:

(a) if subparagraph (1)(a)(i) applies--the person who engaged in

the contravening conduct, or a person involved in that

conduct; or

(b) if subparagraph (1)(a)(ii) applies--a party to the contract

who is advantaged by the declared term.

63 Paragraphs 87AAA(3)(a) and (b)

After "contravening conduct", insert "or declared term".

Enforcement and remedies under the Trade Practices Act 1974 Schedule 2

Enforcement and remedies relating to the Australian Consumer Law Part 7

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 49

64 Subsection 87AAA(4)

After "contravening conduct", insert "or declared term".

65 Subsection 87AAA(5)

Repeal the subsection, substitute:

(5) An application under subsection (1) may be made at any time

within 6 years after the day on which:

(a) if subparagraph (1)(a)(i) applies--the cause of action that

relates to the contravening conduct accrues; or

(b) if subparagraph (1)(a)(ii) applies--the declaration is made.

66 Subsection 87AAA(6)

Omit "subsection (2)", substitute "paragraph (2)(a)".

67 After subsection 87AAA(6)

Insert:

(7) In determining whether to make an order under subsection (1)

against a person referred to in paragraph (2)(b), the Court may

have regard to the conduct of the person, and of the non-party

consumers in relation to the declared term, since the declaration

was made.

68 Paragraph 87AAA(8)(a)

After "contravening conduct", insert "or declared term".

69 Paragraph 87AAA(9)(b)

After "contravening conduct", insert ", or declared term,".

70 Paragraph 87A(1)(b)

After "or VC", insert ", or of the Australian Consumer Law".

71 Paragraph 87A(1)(c)

After "Part V", insert ", or of the Australian Consumer Law".

72 Paragraph 87A(1)(d)

After "or VC", insert ", or of the Australian Consumer Law".

73 At the end of section 87A

Schedule 2 Enforcement and remed ies under the Trade Practices Act 1974

Part 7 Enforcement and remed ies relating to the Australian Consumer Law

50 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Add:

(9) A reference in paragraph (1)(b) to a contravention of a provision of

the Australian Consumer Law includes a reference to applying or

relying on, or purporting to apply or rely on, a term of a consumer

contract that the Court has declared under section 87AC to be an

unfair term or a prohibited term.

74 After section 87AB

Insert:

87AC Declarations

(1) The Court may, on the application of the Commission, declare that:

(a) a term of a consumer contract is an unfair term; or

(b) a term of a consumer contract is a prohibited term.

(2) Subsection (1) does not limit any other power of the Court to make

declarations.

75 Section 87ZG (at the end of the table)

Add:

a provision of the Australian

Consumer Law

(a) if the person is a body

corporate--50; or

(b) if the person is not a

body corporate--10.

Amend ment of corporations legislation Schedule 3

Unfair and prohibited contract terms Part 1

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 51

Schedule 3

Amendment of corporations

legislation

Part 1

Unfair and prohibited contract terms

Australian Securities and Investments Commission Act 2001

1 Subsection 12BA(1)

Insert:

consumer contract has the meaning given by subsection 12BF(3).

2 Subsection 12BA(1)

Insert:

prohibited term has the meaning given by subsection 12BJ(4).

3 Subsection 12BA(1)

Insert:

rely on, in relation to a term of a consumer contract, includes the

following:

(a) attempt to enforce the term;

(b) attempt to exercise a right conferred, or purportedly

conferred, by the term;

conferred, by the term.

4 Subsection 12BA(1)

Insert:

transparent, in relation to a term of a consumer contract, has the

meaning given by subsection 12BG(3).

5 Subsection 12BA(1)

Insert:

unfair, in relation to a term of a consumer contract, has the

meaning given by subsection 12BG(1).

Schedule 3 A mendment of corporations legislation

Part 1 Un fair and prohibited contract terms

52 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

6 Subsection 12BA(1)

Insert:

upfront price has the meaning given by subsection 12BI(2).

7 After Subdivision B of Division 2 of Part 2

Insert:

Subdivision BA--Unfair and prohibited contract terms

12BF Unfair terms of consume r contracts

(1) A term of a consumer contract is void if:

(a) the term is unfair; and

(b) the contract is a standard form contract; and

(i) a financial product; or

(ii) a contract for the supply, or possible supply, of services

that are financial services.

(2) The contract continues to bind the parties if it is capable of

operating without the unfair term.

(3) A consumer contract is a contract at least one of the parties to

which is an individual whose acquisition of what is supplied under

the contract is wholly or predominantly an acquisition for personal,

domestic or household use or consumption.

12BG Meaning of unfair

(1) A term of a consumer contract referred to in subsection 12BF(1) is

unfair if:

(a) it would cause a significant imbalance in the parties' rights

and obligations arising under the contract; and

(b) it is not reasonably necessary in order to protect the

legitimate interests of the party who would be advantaged by

the term.

(2) In determining whether a term of a consumer contract is unfair

under subsection (1), a court may take into account such matters as

it thinks relevant, but must take into account the following:

Amend ment of corporations legislation Schedule 3

Unfair and prohibited contract terms Part 1

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 53

(a) the extent to which the term would cause, or there is a

substantial likelihood that the term would cause, detriment

(whether financial or otherwise) to a party if it were to be

applied or relied on;

(b) the extent to which the term is transparent;

(3) A term is transparent if the term is:

(a) expressed in reasonably plain language; and

(b) legible; and

(d) readily available to any party affected by the term.

(4) For the purposes of paragraph (1)(b), a term of a consumer contract

is presumed not to be reasonably necessary in order to protect the

legitimate interests of the party who would be advantaged by the

term, unless that party proves otherwise.

12BH Examples of unfair terms

Without limiting section 12BG, the following are examples of the

kinds of terms of a consumer contract referred to in subsection

12BF(1) that may be unfair:

(a) a term that permits, or has the effect of permitting, one party

(but not another party) to avoid or limit performance of the

contract;

(b) a term that permits, or has the effect of permitting, one party

(but not another party) to terminate the contract;

party (but not another party) for a breach or termination of

the contract;

(d) a term that permits, or has the effect of permitting, one party

(but not another party) to vary the terms of the contract;

(e) a term that permits, or has the effect of permitting, one party

(but not another party) to renew or not renew the contract;

(f) a term that permits, or has the effect of permitting, one party

to vary the upfront price payable under the contract without

the right of another party to terminate the contract;

Schedule 3 A mendment of corporations legislation

Part 1 Un fair and prohibited contract terms

54 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

(g) a term that permits, or has the effect of permitting, one party

unilaterally to vary financial services to be supplied under the

contract;

(h) a term that permits, or has the effect of permitting, one party

unilaterally to determine whether the contract has been

breached or to interpret its meaning;

(i) a term that limits, or has the effect of limiting, one party's

vicarious liability for its agents;

(j) a term that permits, or has the effect of permitting, one party

to assign the contract to the detriment of another party

without that other party's consent;

(k) a term that limits, or has the effect of limiting, one party's

right to sue another party;

(l) a term that limits, or has the effect of limiting, the evidence

one party can adduce in proceedings relating to the contract;

(m) a term that imposes, or has the effect of imposing, the

evidential burden on one party in proceedings relating to the

contract;

(n) a term of a kind, or a term that has an effect of a kind,

prescribed by the regulations.

12BI Terms that define main subject matte r of consume r contracts

etc. are unaffected

(1) Section 12BF does not apply to a term of a consumer contract

referred to in subsection (1) of that section to the extent that, but

only to the extent that, the term:

(a) defines the main subject matter of the contract; or

(b) sets the upfront price payable under the contract; or

Commonwealth or a State or Territory.

(2) The upfront price payable under a consumer contract referred to in

subsection 12BF(1) is the consideration that:

(a) is provided, or is to be provided, for the supply under the

contract; and

(b) is disclosed at or before the time the contract is entered into;

but does not include any other consideration that is contingent on

the occurrence or non-occurrence of a particular event.

Amend ment of corporations legislation Schedule 3

Unfair and prohibited contract terms Part 1

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 55

(3) To avoid doubt, if a consumer contract referred to in subsection

12BF(1) is a contract under which credit is provided or is to be

provided, the consideration referred to in subsection (2) of this

section includes the total amount of principal that is owed under

the contract.

12BJ Prohibited terms of consume r contracts

(1) A term of a consumer contract is void if:

(a) the term is a prohibited term; and

(b) the contract is a standard form contract; and

(i) a financial product; or

(ii) a contract for the supply, or possible supply, of services

that are financial services.

(2) A person must not include, or purport to include, a prohibited term

in a consumer contract of such a kind.

Note:

A pecuniary penalty may be imposed for a contravention of this

subsection.

(3) A person must not apply or rely on, or purport to apply or rely on,

a prohibited term of a consumer contract of such a kind.

Note:

A pecuniary penalty may be imposed for a contravention of this

subsection.

(4) A prohibited term of a consumer contract of such a kind is a term

of a kind prescribed by the regulations.

(5) The contract continues to bind the parties if it is capable of

operating without the prohibited term.

12BK Standard form contracts

(1) If a party to a proceeding alleges that a contract is a standard form

contract, it is presumed to be a standard form contract unless

another party to the proceeding proves otherwise.

(2) In determining whether a contract is a standard form contract, a

court may take into account such matters as it thinks relevant, but

must take into account the following:

Schedule 3 A mendment of corporations legislation

Part 1 Un fair and prohibited contract terms

56 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

(a) whether one of the parties has all or most of the bargaining

power relating to the transaction;

(b) whether the contract was prepared by one party before any

discussion relating to the transaction occurred between the

parties;

or reject the terms of the contract (other than the terms

referred to in subsection 12BI(1)) in the form in which they

were presented;

(d) whether another party was given an effective opportunity to

negotiate the terms of the contract that were not the terms

referred to in subsection 12BI(1);

(e) whether the terms of the contract (other than the terms

referred to in subsection 12BI(1)) take into account the

specific characteristics of another party or the particular

transaction;

(f) any other matter prescribed by the regulations.

12BL Contracts to which this Part does not apply

This Part does not apply to a consumer contract that is the

constitution of a company, managed investment scheme or other

kind of body.

12BM Contraventions of this Subdivision etc.

Conduct is not taken, for the purposes of this Act, to contravene

this Subdivision (or this Division) merely because of subsection

12BF(1) or 12BJ(1).

8 Application and transitional provisions

(1)

Subdivision BA of Division 2 of Part 2 of the Australian Securities and

Investments Commission Act 2001 applies to a contract entered into on

or after the commencement of this Part of this Schedule.

(2)

That Subdivision does not apply to a contract entered into before the

commencement of this Part of this Schedule. However:

(a) if the contract is renewed on or after that commencement,

and paragraph (b) has not already applied in relation to the

contract--that Subdivision applies to the contract as

renewed, on and from the day (the renewal day) on which the

Amend ment of corporations legislation Schedule 3

Unfair and prohibited contract terms Part 1

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 57

renewal takes effect, in relation to conduct that occurs on or

after the renewal day; or

(b) if a term of the contract is varied on or after that

commencement, and paragraph (a) has not already applied in

relation to the contract--that Subdivision applies to the

contract as varied, on and from the day (the variation day) on

which the variation takes effect, in relation to conduct that

occurs on or after the variation day.

(3)

Despite paragraphs (2)(a) and (b), that Subdivision does not apply to a

contract to the extent that the operation of that Subdivision would result

in an acquisition of property (within the meaning of paragraph 51(xxxi)

of the Constitution) from a person otherwise than on just terms (within

the meaning of that paragraph of the Constitution).

Schedule 3 A mendment of corporations legislation

Part 2 Pecuniary penalties

58 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Part 2

Pecuniary penalties

Australian Securities and Investments Commission Act 2001

9 After section 12GB

Insert:

12GBA Pecuniary penalties

(1) If the Court is satisfied that a person:

(a) has contravened a provision of Subdivision C, D or GC

(other than section 12DA); or

(b) has attempted to contravene such a provision; or

contravene such a provision; or

(d) has induced, or attempted to induce, a person, whether by

threats or promises or otherwise, to contravene such a

provision; or

(e) has been in any way, directly or indirectly, knowingly

concerned in, or party to, the contravention by a person of

such a provision; or

(f) has conspired with others to contravene such a provision;

the Court may order the person to pay to the Commonwealth such

pecuniary penalty, in respect of each act or omission by the person

to which this section applies, as the Court determines to be

appropriate.

(2) In determining the appropriate pecuniary penalty, the Court must

have regard to all relevant matters including:

(a) the nature and extent of the act or omission and of any loss or

damage suffered as a result of the act or omission; and

(b) the circumstances in which the act or omission took place;

and

proceedings under this Subdivision to have engaged in any

similar conduct.

(3) The pecuniary penalty payable under subsection (1) is not to

exceed the number of penalty units worked out using the following

table:

Amend ment of corporations legislation Schedule 3

Pecuniary penalties Part 2

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 59

Number of penalty units

Item

For each act or omission to

which this section applies

that relates to ...

the number of penalty

units is not to exceed ...

a provision of Subdivision C

or D (other than

section 12DA)

(a) if the person is a body

corporate--10,000; o r

(b) if the person is not a

body corporate--2,000.

section 12GYB

(a) if the person is a body

corporate--150; or

(b) if the person is not a

body corporate--30.

section 12GYC

(a) if the person is a body

corporate--250; or

(b) if the person is not a

body corporate--50.

(4) If conduct constitutes a contravention of 2 or more provisions

referred to in paragraph (1)(a):

(a) a proceeding may be instituted under this Act against a

person in relation to the contravention of any one or more of

the provisions; but

(b) a person is not liable to more than one pecuniary penalty

under this section in respect of the same conduct.

12GBB Pecuniary penalties and offences

(1) The Court must not make an order under section 12GBA against a

person in relation to either of the following matters (a consumer

protection breach):

(a) a contravention of a provision referred to in paragraph

12GBA(1)(a);

(b) conduct referred to in paragraph 12GBA(1)(b), (c), (d), (e) or

(f) that relates to a contravention of a provision referred to in

paragraph 12GBA(1)(a);

if the person has been convicted of an offence constituted by

conduct that is substantially the same as the conduct constituting

the consumer protection breach.

Schedule 3 A mendment of corporations legislation

Part 2 Pecuniary penalties

60 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

(2) Proceedings for an order under section 12GBA against a person in

relation to a consumer protection breach are stayed if:

(a) criminal proceedings are started or have already been started

against the person for an offence; and

(b) the offence is constituted by conduct that is substantially the

same as the conduct alleged to constitute the consumer

protection breach.

The proceedings for the order may be resumed if the person is not

convicted of the offence. Otherwise, the proceedings are dismissed.

(3) Criminal proceedings may be started against a person for conduct

that is substantially the same as conduct constituting a consumer

protection breach regardless of whether an order under

section 12GBA has been made against the person in respect of the

breach.

(4) Evidence of information given, or evidence of production of

documents, by an individual is not admissible in criminal

proceedings against the individual if:

(a) the individual previously gave the evidence or produced the

documents in proceedings for an order under section 12GBA

against the individual in relation to a consumer protection

breach (whether or not the order was made); and

(b) the conduct alleged to constitute the offence is substantially

the same as the conduct that was claimed to constitute the

consumer protection breach.

However, this does not apply to a criminal proceeding in respect of

the falsity of the evidence given by the individual in the

proceedings for the order.

12GBC Civil action for recovery of pecuniary penalties

(1) ASIC may institute a proceeding in the Court for the recovery on

behalf of the Commonwealth of a pecuniary penalty referred to in

section 12GBA.

(2) A proceeding under subsection (1) may be commenced within 6

years after the contravention.

Amend ment of corporations legislation Schedule 3

Pecuniary penalties Part 2

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 61

12GBD Indemnification of officers

Officers not to be indemnified

(1) A body corporate (the first body), or a body corporate related to the

first body, must not indemnify a person (whether by agreement or

by making a payment and whether directly or through an

interposed entity) against any of the following liabilities incurred

as an officer of the first body:

(a) a liability to pay a pecuniary penalty under section 12GBA;

(b) legal costs incurred in defending or resisting proceedings in

which the person is found to have such a liability.

Penalty: 25 penalty units.

(2) For the purposes of subsection (1), the outcome of proceedings is

the outcome of the proceedings and any appeal in relation to the

proceedings.

(3) Subsection (1) does not authorise anything that would otherwise be

unlawful.

Indemnities are void

(4) Anything that purports to indemnify a person against a liability is

void to the extent that it contravenes subsection (1).

Application of this section to a person other than a body corporate

(5) If, as a result of the operation of Part 2.4 of the Criminal Code, a

person other than a body corporate is:

(a) convicted of an offence (the relevant offence) against

subsection (1) of this section; or

(b) convicted of an offence (the relevant offence) against

section 11.4 of the Criminal Code in relation to an offence

referred to in subsection (1) of this section;

the relevant offence is taken to be punishable on conviction by a

fine not exceeding 5 penalty units.

10 Paragraph 12GCA(a)

Repeal the paragraph, substitute:

(a) the Court considers that it is appropriate:

Schedule 3 A mendment of corporations legislation

Part 2 Pecuniary penalties

62 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

(i) to impose a fine under section 12GB on a person (the

defendant); or

(ii) to order a person (the defendant) to pay a pecuniary

penalty under section 12GBA;

in respect of a contravention, or an involvement in a

contravention, of this Division; and

11 Section 12GG

Omit "section 12GD", substitute "section 12GBC, 12GD".

12 At the end of section 12GI (after the note)

Add:

(5) If, in proceedings under section 12GBA against a person other than

a body corporate, it appears to the Court that the person has, or

may have:

(a) engaged in conduct in contravention of a provision referred

to in paragraph (1)(a) of that section; or

(b) engaged in conduct referred to in paragraph (1)(b), (c), (d),

(e) or (f) of that section that relates to a contravention of such

a provision;

but that the person acted honestly and reasonably and, having

regard to all the circumstances of the case, ought fairly to be

excused, the Court may relieve the person either wholly or partly

from liability to pay a pecuniary penalty under that section.

13 Subsection 12GLB(1)

Repeal the subsection, substitute:

(1) The Court may, on application by ASIC, make an adverse publicity

order in relation to a person who:

(a) has been ordered to pay a pecuniary penalty under

section 12GBA; or

(b) is guilty of an offence under section 12GB.

Amend ment of corporations legislation Schedule 3

Disqualification orders Part 3

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 63

Part 3

Disqualification orders

Australian Securities and Investments Commission Act 2001

14 Before section 12GM

Insert:

12GLD Order disqualifying a person from managing corporations

(1) On application by ASIC, the Court may make an order

disqualifying a person from managing corporations for a period

that the Court considers appropriate if:

(a) the Court is satisfied that the person has committed, has

attempted to commit or has been involved in a contravention

of a provision of Subdivision C or D (other than

section 12DA); and

(b) the Court is satisfied that the disqualification is justified.

Note 1:

Section 206EB of the Corporations Act 2001 provides that a person is

disqualified from managing corporations if a court order is in force

under this section. That Act contains various consequences for persons

so disqualified.

Note 2:

ASIC must keep a register of persons who have been disqualified from

managing corporations (see section 1274AA of the Corporations Act

2001).

(2) In determining under subsection (1) whether the disqualification is

justified, the Court may have regard to:

(a) the person's conduct in relation to the management, business

or property of any corporation; and

(b) any other matters that the Court considers appropriate.

Corporations Act 2001

15 After section 206EA

Insert:

206EB Disqualification under the ASIC Act

A person is disqualified from managing corporations if a court

order disqualifying the person from managing corporations is in

force under section 12GLD of the ASIC Act.

Amend ment of corporations legislation Schedule 3

Substantiation notices Part 4

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 65

Part 4

Substantiation notices

Australian Securities and Investments Commission Act 2001

18 Subsection 12BA(1)

Insert:

substantiation notice means a notice under section 12GY.

19 Subsection 12BA(1)

Insert:

substantiation notice compliance period for a substantiation notice

has the meaning given by subsection 12GYB(2).

20 Before Subdivision H of Division 2 of Part 2

Insert:

Subdivision GC--Substantiation notices

12GY ASIC may require claims to be substantiated etc.

(1) This section applies if a person has made a claim or representation

promoting, or apparently intended to promote, a supply, or possible

supply, of financial services by that or any other person.

(2) ASIC may give the person who has made the claim or

representation a written notice that requires the person to do one or

more of the following:

(a) give information and/or produce documents to ASIC that

could be capable of substantiating or supporting the claim or

representation;

(b) give information and/or produce documents to ASIC that

could be capable of substantiating:

(i) the quantities in which; and

(ii) the period for which;

the person is or will be able to make a supply to which the

claim or representation relates (whether or not the claim or

representation relates to those quantities or that period);

Schedule 3 A mendment of corporations legislation

Part 4 Substantiation notices

66 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

of a kind specified in the notice;

within 21 days after the notice is given to the person.

(3) Any kind of information or documents that ASIC

specifies under

paragraph (2)(c) must be a kind that ASIC is satisfied is relevant

to:

(a) substantiating or supporting the claim or representation; or

(b) substantiating the quantities in which, or the period for

which, the person is or will be able to make such a supply.

(4) The notice must:

(a) name the person to whom it is given; and

(b) specify the claim or representation to which it relates; and

(5) The notice may relate to more than one claim or representation that

the person has made.

(6) This section does not apply to a person in relation to a claim or

representation made by the person if the person:

(a) is a prescribed information provider within the meaning of

section 12DN; and

(b) made the claim or representation by publishing it on behalf of

another person in the course of carrying on a business of

providing information; and

person other than for the purpose of:

(i) publishing claims or representations promoting, or

apparently intended to promote, the other person's

business or other activities; or

(ii) the other person supplying financial services to the

person.

12GYA Extending periods for complying with substantiation notices

(1) A person who has been given a substantiation notice may, at any

time within 21 days after the notice was given to the person, apply

in writing to ASIC for an extension of the period for complying

with the notice.

Amend ment of corporations legislation Schedule 3

Substantiation notices Part 4

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 67

(2) ASIC may, by written notice given to the person, extend the period

within which the person must comply with the notice.

12GYB Compliance with substantiation notices

(1) A person who is given a substantiation notice must comply with it

within the substantiation notice compliance period for the notice.

(2) The substantiation notice compliance period for a substantiation

notice is:

(a) the period of 21 days specified in the notice; or

(b) if the period for complying with the notice has been extended

under section 12GYA--the period as so extended.

(3) Despite subsection (1), an individual may refuse or fail to give

particular information or produce a particular document in

compliance with a substantiation notice on the ground that the

information or production of the document might tend to

incriminate the individual or to expose the individual to a penalty.

12GYC False or misleading information etc.

(1) A person must not, in compliance or purported compliance with a

substantiation notice:

(a) give to ASIC false or misleading information; or

(b) produce to ASIC documents that contain false or misleading

information.

(2) This section does not apply to:

(a) information that the person could not have known was false

or misleading; or

(b) the production to ASIC of a document containing false or

misleading information if the document is accompanied by a

statement of the person that the information is false or

misleading.

Schedule 3 A mendment of corporations legislation

Part 5 Orders to redress loss or damage suffered by non-party consumers etc.

68 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Part 5

Orders to redress loss or damage suffered

by non-party consumers etc.

Australian Securities and Investments Commission Act 2001

21 Subsection 12BA(1)

Insert:

enforcement proceeding means a proceeding instituted under

Subdivision G of Division 2 of Part 2 (other than section 12GNB).

22 Subsection 12BA(1)

Insert:

non-party consumer, in relation to conduct, means a person who is

not, or has not been, a party to an enforcement proceeding in

relation to the conduct.

23 Section 12GG

After "subsection 12GM(2)", insert "or 12GNB(1)".

24 Subsection 12GM(2)

After "section 12GD", insert "or 12GNB".

25 Paragraph 12GN(1)(d)

After "subsection 12GM(2) or (3)", insert "or 12GNB(1)".

26 After section 12GNA

Insert:

12GNB Orders to redress loss or damage suffered by non-party

consume rs etc.

Orders

(1) Without limiting the generality of section 12GD, if:

(a) a person engaged in conduct (the contravening conduct) in

contravention of a provision of Subdivision C or D; and

(b) the contravening conduct caused, or is likely to cause, a class

of persons to suffer loss or damage; and

Amend ment of corporations legislation Schedule 3

Orders to redress loss or damage suffered by non-party consumers etc. Part 5

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 69

relation to the contravening conduct;

the Court may, on the application of ASIC, make such order or

orders (other than an award of damages) as the Court thinks

appropriate against a person referred to in subsection (2) of this

section.

Note:

The orders that the Court may make include all or any of the orders set

out in section 12GNC.

(2) An order under subsection (1) may be made against the person who

engaged in the contravening conduct or a person involved in that

conduct.

(3) The Court must not make an order under subsection (1) unless the

Court considers that the order will:

(a) redress, in whole or in part, the loss or damage suffered by

the non-party consumers in relation to the contravening

conduct; or

(b) prevent or reduce the loss or damage suffered, or likely to be

suffered, by the non-party consumers in relation to the

contravening conduct.

Application for orders

(4) An application may be made under subsection (1) even if an

enforcement proceeding in relation to the contravening conduct has

not been instituted.

(5) An application under subsection (1) may be made at any time

within 6 years after the day on which the cause of action that

relates to the contravening conduct accrues.

Determining whether to make an order

(6) In determining whether to make an order under subsection (1)

against a person referred to in subsection (2), the Court may have

regard to the conduct of the person, and of the non-party

consumers in relation to the contravening conduct, since the

contravention occurred.

(8) In determining whether to make an order under subsection (1), the

Court need not make a finding about either of the following

matters:

Schedule 3 A mendment of corporations legislation

Part 5 Orders to redress loss or damage suffered by non-party consumers etc.

70 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

(a) which persons are non-party consumers in relation to the

contravening conduct;

(b) the nature of the loss or damage suffered, or likely to be

suffered, by such persons.

When a non-party consumer is bound by an order etc.

(9) If:

(a) an order is made under subsection (1) against a person; and

(b) the loss or damage suffered, or likely to be suffered, by a

non-party consumer in relation to the contravening conduct

to which the order relates has been redressed, prevented or

reduced in accordance with the order; and

or reduction;

then:

(d) the non-party consumer is bound by the order; and

(e) any other order made under subsection (1) that relates to that

loss or damage has no effect in relation to the non-party

consumer; and

(f) despite any other provision of this Act or any other law of the

Commonwealth, or a State or Territory, no claim, action or

demand may be made or taken against the person by the

non-party consumer in relation to that loss or damage.

Other

(10) Subsection (1) has effect subject to section 12GNA.

Note:

Section 12GNA may limit the liability, under an order made under

subsection (1) of this section, of a person for his or her contravention

of section 12DA (which is about misleading or deceptive conduct) or

involvement in such a contravention.

(11) This section does not apply in relation to contravening conduct that

occurred before the commencement of this section.

12GNC Kinds of orders that may be made to redress loss or damage

suffered by non-party consumers etc.

Without limiting subsection 12GNB(1), the orders that the Court

may make under that subsection against a person (the respondent)

include all or any of the following:

Amend ment of corporations legislation Schedule 3

Orders to redress loss or damage suffered by non-party consumers etc. Part 5

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 71

(a) an order declaring the whole or any part of a contract made

between the respondent and a non-party consumer referred to

in that subsection, or a collateral arrangement relating to such

a contract:

(i) to be void; and

(ii) if the Court thinks fit--to have been void ab initio or

void at all times on and after such date as is specified in

the order (which may be a date that is before the date on

which the order is made);

(b) an order:

(i) varying such a contract or arrangement in such manner

as is specified in the order; and

(ii) if the Court thinks fit--declaring the contract or

arrangement to have had effect as so varied on and after

such date as is specified in the order (which may be a

date that is before the date on which the order is made);

such a contract or arrangement;

(d) an order directing the respondent to refund money or return

property to a non-party consumer referred to in that

subsection;

(e) an order directing the respondent, at his or her own expense,

to repair, or provide parts for, goods that have been supplied

under the contract or arrangement to a non-party consumer

referred to in that subsection;

(f) an order directing the respondent, at his or her own expense,

to supply specified services to a non-party consumer referred

to in that subsection;

(g) an order, in relation to an instrument creating or transferring

an interest in land (within the meaning of section 12DC),

directing the respondent to execute an instrument that:

(i) varies, or has the effect of varying, the first-mentioned

instrument; or

(ii) terminates or otherwise affects, or has the effect of

terminating or otherwise affecting, the operation or

effect of the first-mentioned instrument.

27 Paragraph 12HB(1)(b)

Omit "or 12GN(1)", insert ", 12GN(1) or 12GNB(1)".

Schedule 3 A mendment of corporations legislation

Part 6 Infringement notices

72 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Part 6

Infringement notices

Australian Securities and Investments Commission Act 2001

28 Subsection 12BA(1)

Insert:

infringement notice means an infringement notice issued under

section 12GXA.

29 Subsection 12BA(1)

Insert:

infringement notice compliance period for an infringement notice

has the meaning given by section 12GXF.

30 Subsection 12BA(1)

Insert:

infringement notice provision means a provision of Subdivision C,

D or GC (other than section 12DA, subsection 12DC(2),

section 12DE, subsection 12DG(1) or section 12DI or 12DM).

31 After Subdivision GA of Division 2 of Part 2

Insert:

Subdivision GB--Infringement notices

12GX Purpose and effect of this Subdivision

(1) The purpose of this Subdivision is to provide for the issue of an

infringement notice to a person for an alleged contravention of an

infringement notice provision as an alternative to proceedings for

an order under section 12GBA.

(2) This Subdivision does not:

(a) require an infringement notice to be issued to a person for an

alleged contravention of an infringement notice provision; or

(b) affect the liability of a person to proceedings under

Subdivision G (sections 12GA to 12GO) in relation to an

alleged contravention of an infringement notice provision if:

Amend ment of corporations legislation Schedule 3

Infringement notices Part 6

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 73

(i) an infringement notice is not issued to the person for the

alleged contravention; or

(ii) an infringement notice issued to a person for the alleged

contravention is withdrawn under section 12GXG; or

penalty specified in the infringement notice if the person does

not comply with the notice.

12GXA Issue of an infringement notice

(1) If ASIC has reasonable grounds to believe that a person has

contravened an infringement notice provision, ASIC may issue an

infringement notice to the person.

(2) ASIC must not issue more than one infringement notice to the

person for the same alleged contravention of the infringement

notice provision.

(3) The infringement notice does not have any effect if the notice:

(a) is issued more than 12 months after the day on which the

contravention of the infringement notice provision is alleged

to have occurred; or

(b) relates to more than one alleged contravention of an

infringement notice provision by the person.

12GXB Matters to be included in an infringe ment notice

An infringement notice must:

(a) be identified by a unique number; and

(b) state the day on which it is issued; and

and

(d) state that it is being issued by ASIC; and

(e) state how ASIC may be contacted; and

(f) give details of the alleged contravention by the person,

including:

(i) the date of the alleged contravention; and

(ii) the particular infringement notice provision that was

allegedly contravened; and

Schedule 3 A mendment of corporations legislation

Part 6 Infringement notices

74 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

(g) state the maximum pecuniary penalty that the Court could

order the person to pay under section 12GBA for the alleged

contravention; and

(h) specify the penalty that is payable in relation to the alleged

contravention; and

(i) state that the penalty is payable within the infringement

notice compliance period for the notice; and

(j) state that the penalty is payable to ASIC on behalf of the

Commonwealth; and

(k) explain how payment of the penalty is to be made; and

(l) explain the effect of sections 12GXD, 12GXE, 12GXF and

12GXG.

12GXC Amount of penalty

The penalty to be specified in an infringement notice that is to be

issued to a person must be a pecuniary penalty equal to the number

of penalty units worked out using the following table:

Number of penalty units

Item

If the infringement notice is

for an alleged contravention

of ...

the number of penalty

units is ...

a provision of Subdivision C

or D (other than

section 12DA, subsection

12DC(2), section 12DE,

subsection 12DG(1) or

section 12DI or 12DM)

(a) if the person is a body

corporate--60; or

(b) if the person is not a

body corporate--12.

section 12GYB

(a) if the person is a body

corporate--30; or

(b) if the person is not a

body corporate--6.

section 12GYC

(a) if the person is a body

corporate--50; or

(b) if the person is not a

body corporate--10.

Amend ment of corporations legislation Schedule 3

Infringement notices Part 6

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 75

12GXD Effect of compliance with an infringe ment notice

(1) This section applies if:

(a) an infringement notice for an alleged contravention of an

infringement notice provision is issued to a person; and

(b) the person pays the penalty specified in the infringement

notice within the infringement notice compliance period and

in accordance with the notice; and

section 12GXG.

(2) The person is not, merely because of the payment, regarded as:

(a) having contravened the infringement notice provision; or

(b) having been convicted of an offence constituted by the same

conduct that constituted the alleged contravention of the

infringement notice provision.

(3) No proceedings (whether criminal or civil) may be started or

continued against the person by, or on behalf of, the

Commonwealth or ASIC in relation to:

(a) the alleged contravention of the infringement notice

provision; or

(b) an offence constituted by the same conduct that constituted

the alleged contravention.

12GXE Effect of failure to comply with an infringement notice

If:

(a) an infringement notice for an alleged contravention of an

infringement notice provision is issued to a person; and

(b) the person fails to pay the penalty specified in the

infringement notice within the infringement notice

compliance period and in accordance with the notice; and

section 12GXG;

the person is liable to proceedings under Subdivision G

(sections 12GA to 12GO) in relation to the alleged contravention

of the infringement notice provision.

Schedule 3 A mendment of corporations legislation

Part 6 Infringement notices

76 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

12GXF Infringement notice compliance period for infringement

notice

(1) Subject to this section, the infringement notice compliance period

for an infringement notice is a period of 28 days beginning on the

day after the day on which the infringement notice is issued.

(2) ASIC may extend, by notice in writing, the infringement notice

compliance period for the infringement notice if ASIC is satisfied

that it is appropriate to do so.

(3) Only one extension may be given and the extension must not be for

longer than 28 days.

(4) Notice of the extension must be given to the person who was

issued the infringement notice.

(5) A failure to comply with subsection (4) does not affect the validity

of the extension.

(6) If ASIC extends the infringement notice compliance period for an

infringement notice, a reference in this Act to the infringement

notice compliance period for an infringement notice is taken to be

a reference to the infringement notice compliance period as so

extended.

12GXG Withdrawal of an infringement notice

Representations to ASIC

(1) The person to whom an infringement notice has been issued for an

alleged contravention of an infringement notice provision may

make written representations to ASIC seeking the withdrawal of

the infringement notice.

(2) Evidence or information that the person, or a representative of the

person, gives to ASIC in the course of making representations

under subsection (1) is not admissible in evidence against the

person or representative in any proceedings (other than

proceedings for an offence based on the evidence or information

given being false or misleading).

Amend ment of corporations legislation Schedule 3

Infringement notices Part 6

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 77

Withdrawal by ASIC

(3) ASIC may, by written notice (the withdrawal notice) given to a

person who has been issued an infringement notice for an alleged

contravention of an infringement notice provision, withdraw the

infringement notice if ASIC is satisfied that it is appropriate to do

so.

(4) Subsection (3) applies whether or not the person has made

representations seeking the withdrawal.

Content of withdrawal notices

(5) The withdrawal notice must state:

(a) the name and address of the person; and

(b) the day on which the infringement notice was issued to the

person; and

(d) that proceedings under Subdivision G (sections 12GA to

12GO) may be started or continued against the person in

relation to:

(i) the alleged contravention of the infringement notice

provision; or

(ii) an offence constituted by the same conduct that

constituted the alleged contravention.

Time limit for giving withdrawal notices

(6) To be effective, the withdrawal notice must be given to the person

within the infringement notice compliance period for the

infringement notice.

Refunds

(7) If the infringement notice is withdrawn after the person has paid

the penalty specified in the infringement notice, ASIC must refund

to the person an amount equal to the amount paid.

Schedule 3 A mendment of corporations legislation

Part 7 Public warn ing notices

78 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Part 7

Public warning notices

Australian Securities and Investments Commission Act 2001

32 After section 12GLB

Insert:

12GLC ASIC may issue a public warning notice

Contraventions

(1) ASIC may issue to the public a written notice containing a warning

about the conduct of a person if:

(a) ASIC has reasonable grounds to suspect that the conduct may

constitute a contravention of a provision of Subdivision C or

D; and

(b) ASIC is satisfied that one or more other persons has suffered,

or is likely to suffer, detriment as a result of the conduct; and

notice.

Substantiation notices

(2) Without limiting subsection (1), if:

(a) a person refuses to respond to a substantiation notice given to

the person, or fails to respond to the notice before the end of

the substantiation notice compliance period for the notice;

and

(b) ASIC is satisfied that it is in the public interest to issue a

notice under this subsection;

ASIC may issue to the public a written notice containing a warning

that the person has refused or failed to respond to the substantiation

notice within that period, and specifying the matter to which the

substantiation notice related.

Notice is not a legislative instrument

(3) A notice issued under subsection (1) or (2) is not a legislative

instrument.

Amend ment of corporations legislation Schedule 3

Enforcement and remedies relating to unfair and prohibited contract terms Part 8

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 79

Part 8

Enforcement and remedies relating to unfair

and prohibited contract terms

Australian Securities and Investments Commission Act 2001

33 Subsection 12BA(1) (definition of infringement notice

provision)

After "Subdivision", insert "BA,".

34 Subsection 12BA(1) (definition of non-party consumer)

Repeal the definition, substitute:

non-party consumer means:

(a) in relation to conduct referred to in subparagraph

12GNB(1)(a)(i)--a person who is not, or has not been, a

party to an enforcement proceeding in relation to the conduct;

and

(b) in relation to a term of a consumer contract referred to in

subparagraph 12GNB(1)(a)(ii)--a person who is not, or has

not been, a party to an enforcement proceeding in relation to

the term.

35 Paragraph 12GBA(1)(a)

After "Subdivision", insert "BA,".

36 Subsection 12GBA(3) (before table item 2)

Insert:

a provision of Subdivision BA (a) if the person is a body

corporate--250; or

(b) if the person is not a

body corporate--50.

37 At the end of section 12GD

Add:

(9) A reference in this section to a contravention of a provision of this

Division includes a reference to applying or relying on, or

purporting to apply or rely on, a term of a consumer contract that

the Court has declared under section 12GND to be an unfair term

or a prohibited term.

Schedule 3 A mendment of corporations legislation

Part 8 Enforcement and remed ies relating to unfair and prohibited contract terms

80 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

38 Subsection 12GF(1)

After "provision of", insert "Subdivision BA (sections 12BF to

12BM),".

39 Subsection 12GLA(4) (before paragraph (a) of the

definition of contravening conduct)

Insert:

(aa) contravenes a provision of Subdivision BA (sections 12BF to

12BM); or

40 Paragraph 12GLC(1)(a)

After "Subdivision", insert "BA,".

41 Paragraph 12GLD(1)(a)

After "Subdivision", insert "BA,".

42 At the end of section 12GM

Add:

(10) A reference in this section to a contravention of a provision of this

Division includes a reference to applying or relying on, or

purporting to apply or rely on, a term of a consumer contract that

the Court has declared under section 12GND to be an unfair term

or a prohibited term.

43 Paragraph 12GN(1)(c)

After "provision of", insert "Subdivision BA (sections 12BF to 12BM)

or".

44 At the end of section 12GN

Add:

(9) A reference in paragraph (1)(b) to a contravention of a provision of

this Division includes a reference to applying or relying on, or

purporting to apply or rely on, a term of a consumer contract that

the Court has declared under section 12GND to be an unfair term

or a prohibited term.

45 Paragraph 12GNB(1)(a)

Repeal the paragraph, substitute:

Amend ment of corporations legislation Schedule 3

Enforcement and remedies relating to unfair and prohibited contract terms Part 8

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 81

(a) a person:

(i) engaged in conduct (the contravening conduct) in

contravention of a provision of Subdivision BA, C or D;

(ii) is a party to a consumer contract who is advantaged by a

term (the declared term) of the contract in relation to

which the Court has made a declaration under

section 12GND; and

46 Paragraphs 12GNB(1)(b) and (c)

After "contravening conduct", insert "or declared term".

47 Subsection 12GNB(2)

Repeal the subsection, substitute:

(2) An order under subsection (1) may be made against:

(a) if subparagraph (1)(a)(i) applies--the person who engaged in

the contravening conduct, or a person involved in that

conduct; or

(b) if subparagraph (1)(a)(ii) applies--a party to the contract

who is advantaged by the declared term.

48 Paragraphs 12GNB(3)(a) and (b)

After "contravening conduct", insert "or declared term".

49 Subsection 12GNB(4)

After "contravening conduct", insert "or declared term".

50 Subsection 12GNB(5)

Repeal the subsection, substitute:

(5) An application under subsection (1) may be made at any time

within 6 years after the day on which:

(a) if subparagraph (1)(a)(i) applies--the cause of action that

relates to the contravening conduct accrues; or

(b) if subparagraph (1)(a)(ii) applies--the declaration is made.

51 Subsection 12GNB(6)

Omit "subsection (2)", substitute "paragraph (2)(a)".

Schedule 3 A mendment of corporations legislation

Part 8 Enforcement and remed ies relating to unfair and prohibited contract terms

82 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

52 After subsection 12GNB(6)

Insert:

(7) In determining whether to make an order under subsection (1)

against a person referred to in paragraph (2)(b), the Court may

have regard to the conduct of the person, and of the non-party

consumers in relation to the declared term, since the declaration

was made.

53 Paragraph 12GNB(8)(a)

After "contravening conduct", insert "or declared term".

54 Paragraph 12GNB(9)(b)

After "contravening conduct", insert ", or declared term,".

55 Before section 12GO

Insert:

12GND Declarations

(1) The Court may, on the application of ASIC, declare that:

(a) a term of a consumer contract that is a financial product is an

unfair term or a prohibited term; or

(b) a term of a consumer contract for the supply, or possible

supply, of services that are financial services is an unfair term

or a prohibited term.

(2) Subsection (1) does not limit any other power of the Court to make

declarations.

56 Section 12GXC (before table item 2)

Insert:

a provision of Subdivision BA (a) if the person is a body

corporate--50; or

(b) if the person is not a

body corporate--10.

Amend ment of corporations legislation Schedule 3

Miscellaneous Part 9

Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009 83

Part 9

Miscellaneous

Australian Securities and Investments Commission Act 2001

57 After subsection 102(2B)

Insert:

(2C) ASIC must not delegate a function or power under section 12GLC,

or under Subdivision GB or GC of Division 2 of Part 2, to a person

other than:

(a) a member of ASIC; or

(b) a member of staff who is an SES employee or an acting SES

employee.

Schedule 4 Miscellaneous

84 Trade Practices Amendment (Australian Consumer Law) Bill 2009 No. , 2009

Schedule 4

Miscellaneous

Administrative Decisions (Judicial Review) Act 1977

1 Paragraphs 2(e) and (f) of Schedule 3

Omit "the Schedule", substitute "Schedule 1".

Telecommunications (Interception and Access) Act 1979

2 Paragraph 5D(5B)(c)

Omit "the Schedule", substitute "Schedule 1".

Trade Practices Act 1974

3 Subsection 6(3)

Omit "1A and 1AA", substitute "1AAA, 1AA and 1A".

4 Section 150A (definition of Schedule version of Part IV)

Omit "the Schedule", substitute "Schedule 1".

5 Schedule (heading)

Omit "Schedule" (first occurring), substitute "Schedule 1".

Commonwealth of Australia Bills

TRADE PRACTICES AMENDMENT (AUSTRALIAN CONSUMER LAW) BILL (NO. 1) 2010