Commonwealth Numbered Acts

TRADE PRACTICES REVISION ACT 1986 No. 17 of 1986 - SECT 37

37. Section 73 of the Principal Act is repealed and the following sections are
substituted:
Liability for loss or damage from breach of certain contracts   "73. (1)
Where-

   (a)  a corporation (in this section referred to as the 'supplier') supplies
        goods, or causes goods to be supplied, to a linked credit provider of
        the supplier and a consumer enters into a contract with the linked
        credit provider for the provision of credit in respect of the supply
        by way of sale, lease, hire or hire-purchase of the goods to the
        consumer; or

   (b)  a consumer enters into a contract with a linked credit provider of a
        corporation (in this section also referred to as the 'supplier') for
        the provision of credit in respect of the supply by the supplier of
        goods or services, or goods and services, to the consumer, and the
        consumer suffers loss or damage as a result of misrepresentation,
        breach of contract, or failure of consideration in relation to the
        contract, or as a result of a breach of a condition that is implied in
        the contract by virtue of section 70, 71 or 72 or of a warranty that
        is implied in the contract by virtue of section 74, the supplier and
        the linked credit provider are, subject to this section, jointly and
        severally liable to the consumer for the amount of the loss or damage,
        and the consumer may recover that amount by action in accordance with
        this section in a court of competent jurisdiction.

"(2) Where-

   (a)  a corporation (in this section also referred to as the 'supplier')
        supplies goods, or causes goods to be supplied, to a credit provider
        who is not a linked credit provider of the supplier;

   (b)  a consumer enters into a contract with the credit provider for the
        provision of credit in respect of the supply by way of sale, lease,
        hire or hire-purchase of the goods to the consumer;

   (c)  antecedent negotiations in relation to the contract were conducted
        with the consumer by or on behalf of the supplier; and

   (d)  the credit provider did not take physical possession of the goods
        before they were delivered to the consumer, or where a consumer enters
        into a contract with a credit provider for the provision of credit in
        respect of the supply of services to the consumer by a corporation (in
        this section also referred to as the 'supplier') of which the credit
        provider is not a linked credit provider, and the consumer suffers
        loss or damage as a result of a breach of a condition that is implied
        in the contract by virtue of section 70, 71 or 72 or of a warranty
        that is implied in the contract by virtue of section 74, the credit
        provider is not under any liability to the consumer for the amount of
        the loss or damage, but the consumer may recover that amount by action
        in a court of competent jurisdiction against the supplier.

"(3) A linked credit provider of a particular supplier is not liable to a
consumer by virtue of sub-section (1) in proceedings arising under that
sub-section if the credit provider establishes-

   (a)  that the credit provided by the credit provider to the consumer was
        the result of an approach made to the credit provider by the consumer
        that was not induced by the supplier;

   (b)  where the proceedings relate to the supply by way of lease, hire or
        hire-purchase of goods by the linked credit provider to the consumer,
        that-

        (i)    after due inquiry before becoming a linked credit provider of
               the supplier, the credit provider was satisfied that the
               reputation of the supplier in respect of the supplier's
               financial standing and business conduct was good; and

        (ii)   after becoming a linked credit provider of the supplier, the
               credit provider had not had cause to suspect that-

   (a)  the consumer might be entitled to recover an amount of loss or damage
        suffered as a result of misrepresentation or breach of a condition or
        warranty referred to in sub-section (1); and

   (b)  the supplier might be unable to meet the supplier's liabilities as and
        when they fall due;

   (c)  where the proceedings relate to a contract of sale with respect to
        which a tied loan contract applies, that-

        (i)    after due inquiry before becoming a linked credit provider of
               the supplier, the credit provider was satisfied that the
               reputation of the supplier in respect of the supplier's
               financial standing and business conduct was good; and

        (ii)   after becoming a linked credit provider of the supplier, but
               before the tied loan contract was entered into, the linked
               credit provider had not had cause to suspect that-

                (A)  the consumer might, if the contract was entered into, be
                     entitled to recover an amount of loss or damage suffered
                     as a result of misrepresentation, breach of contract or
                     failure of consideration in relation to the contract or
                     as a result of a breach of a condition or warranty
                     referred to in sub-section (1); and

                (B)  the supplier might be unable to meet the supplier's
                     liabilities as and when they fall due; or

   (d)  where the proceedings relate to a contract of sale with respect to
        which a tied continuing credit contract entered into by the linked
        credit provider applies, that, having regard to-

        (i)    the nature and volume of business carried on by the linked
               credit provider; and

        (ii)   such other matters as appear to be relevant in the
               circumstances of the case,
the linked credit provider, before becoming aware of the contract of sale or
of proposals for the making of the contract of sale (whichever the linked
credit provider first became aware of), had not had cause to suspect that a
person entering into such a contract with the supplier might be entitled to
claim damages against, or recover a sum of money from, the supplier for
misrepresentation, breach of contract, failure of consideration, breach of a
condition or breach of a warranty as referred to in sub-section (1).

"(4) Subject to sub-section (5), in any proceedings in relation to a contract
referred to in paragraph (1) (a) or (b) in which a credit provider claims
damages or an amount of money from a consumer, the consumer may set up the
liability of the credit provider under sub-section (1) in diminution or
extinction of the consumer's liability.

"(5) Subject to sub-section (6), a consumer may not, in respect of a liability
for which, by reason of this section, a supplier and a linked credit provider
are jointly and severally liable-

   (a)  bring proceedings to recover an amount of loss or damage from the
        credit provider; or

   (b)  where proceedings are brought against the consumer by the credit
        provider, make a counter-claim or exercise the right conferred by
        sub-section (4) against the credit provider, unless the consumer
        brings the action against the supplier and the credit provider jointly
        or, in the case of a counter-claim or right conferred by sub-section
        (4), claims in the proceedings against the supplier in respect of the
        liability by third-party proceedings or otherwise.

"(6) Sub-section (5) and paragraphs (8) (a) and (9) (a) do not apply in
relation to proceedings where-

   (a)  the supplier has been dissolved or is commenced to be wound up; or

   (b)  in the opinion of the court in which the proceedings are taken, it is
        not reasonably likely that a judgment obtained against the supplier
        would be satisfied and the court has, on the application of the
        consumer, declared that sub-section (5) and paragraphs (8) (a) and (9)
        (a) do not apply in relation to the proceedings.

"(7) The liability of a linked credit provider to a consumer for damages or a
sum of money in respect of a contract referred to in sub-section (1) does not
exceed the sum of-

   (a)  the amount financed under the tied loan contract, tied continuing
        credit contract, lease contract, contract of hire or contract of
        hire-purchase;

   (b)  the amount of interest (if any) or damages in the nature of interest
        allowed or awarded against the linked credit provider by the court;
        and

   (c)  the amount of costs (if any) awarded by the court against the linked
        credit provider or supplier or both.

"(8) Where in proceedings arising under sub-section (1), judgment is given
against a supplier and a linked credit provider, the judgment-

   (a)  shall not be enforced against the linked credit provider unless a
        written demand made on the supplier for satisfaction of the judgment
        has remained unsatisfied for not less than 30 days; and

   (b)  may be enforced against the linked credit provider only to the extent
        of-

        (i)    the amount calculated in accordance with sub-section (7); or

        (ii)   so much of the judgment debt as has not been satisfied by the
               supplier,
whichever is the lesser.

"(9) Where in proceedings arising under sub-section (1), a right conferred by
sub-section (4) is established against a linked credit provider, the consumer-

   (a)  shall not receive the benefit of the right unless judgment has been
        given against the supplier and linked credit provider, a written
        demand has been made on the supplier for satisfaction of the judgment
        and the demand has remained unsatisfied for not less than 30 days; and

   (b)  may receive the benefit only to the extent of-

        (i)    the amount calculated in accordance with sub-section (7); or

        (ii)   so much of the judgment debt as has not been satisfied by the
               supplier,
whichever is the lesser.

"(10) Unless the linked credit provider and supplier otherwise agree, the
supplier is liable to the linked credit provider for the amount of a loss
suffered by the linked credit provider, being an amount not exceeding the
maximum amount of the linked credit provider's liability under sub-section (7)
and, unless the court otherwise determines, the amount of costs (if any)
reasonably incurred by the linked credit provider in defending the proceedings
by reason of which the liability was incurred.

"(11) Notwithstanding any other law, where, in proceedings arising under
sub-section (1), judgment is given against a supplier and a linked credit
provider or against a linked credit provider for an amount of loss or damage,
the court in which the proceedings are taken shall, on the application of the
consumer, unless good cause is shown to the contrary, award interest to the
consumer against the supplier and credit provider or against the credit
provider, as the case may be, upon the whole or a part of the amount, from the
time when the consumer became entitled to recover the amount until the date on
which the judgment is given, at whichever of the following rates is the
greater:

   (a)  where the amount payable by the consumer to the credit provider for
        the obtaining of credit in connection with the goods or services to
        which the proceedings relate may be calculated at a percentage rate
        per annum-that rate or, if more than one such rate may be calculated,
        the lower or lowest of those rates;

   (b)  8% or such other rate as is prescribed.

"(12) In determining whether good cause is shown against awarding interest
under sub-section (11) on the whole or part of an amount of loss or damage,
the court shall take into account any payment made into court by the supplier
or credit provider.

"(13) Where a judgment given in proceedings arising under sub-section (1) is
enforced against a linked credit provider of a particular supplier, the credit
provider is subrogated to the extent of the judgment so enforced to any rights
that the consumer would have had but for the judgment against the supplier or
any other person.

"(14) In this section-
'credit provider' means a corporation providing, or proposing to provide, in
the course of a business carried on by the corporation, credit to consumers in
relation to the acquisition of goods or services;
'linked credit provider', in relation to a supplier, means a credit provider-

   (a)  with whom the supplier has a contract, arrangement or understanding
        relating to-

        (i)    the supply to the supplier of goods in which the supplier
               deals;

        (ii)   the business carried on by the supplier of supplying goods or
               services; or

        (iii)  the provision to persons to whom goods or services are supplied
               by the supplier of credit in respect of payment for those goods
               or services;

   (b)  to whom the supplier, by arrangement with the credit provider,
        regularly refers persons for the purpose of obtaining credit;

   (c)  whose forms of contract or forms of application or offers for credit
        are, by arrangement with the credit provider, made available to
        persons by the supplier; or

   (d)  with whom the supplier has a contract, arrangement or understanding
        under which contracts or applications or offers for credit from the
        credit provider may be signed by persons at premises of the supplier;
'tied continuing credit contract' means a continuing credit contract under
which a credit provider provides credit in respect of the payment by a
consumer for goods or services supplied by a supplier in relation to whom the
credit provider is a linked credit provider;
'tied loan contract' means a loan contract entered into between a credit
provider and a consumer where-

   (a)  the credit provider knows or ought reasonably to know that the
        consumer enters into the loan contract wholly or partly for the
        purposes of payment for goods or services supplied by a supplier; and

   (b)  at the time the loan contract is entered into the credit provider is a
        linked credit provider of the supplier.
Continuing credit contract   "73A. (1) For the purposes of this section-


   (a)  a reference to an agreement includes a reference to an arrangement,
        understanding or course of dealing; and

   (b)  a person shall be deemed to agree with another person with respect to
        a matter if the first-mentioned person has an agreement, arrangement
        or understanding with the other person, or is engaged in a course of
        dealing with the other person, with respect to the matter.

"(2) Where-

   (a)  a person (in this section referred to as 'the creditor'), in the
        course of a business carried on by the creditor, agrees with a
        consumer to provide credit to the consumer in respect of-

        (i)    payment for goods or services or cash supplied by the creditor
               to the consumer from time to time; or

        (ii)   payment by the creditor to a third person in respect of goods
               or services or cash supplied by that third person to the
               consumer from time to time; and

   (b)  the amounts owing to the creditor from time to time under the
        agreement are or are to be calculated on the basis that all amounts
        owing, and all payments made, by the consumer under or in respect of
        the agreement are entered in one or more accounts kept for the purpose
        of the agreement, the agreement is, for the purposes of section 73, a
        continuing credit contract.

"(3) Where the creditor agrees to make payments to a third person in respect
of goods or services or cash supplied by that third person to the consumer, as
mentioned in sub-paragraph (2) (a) (ii), then, for the purposes of this
section, the creditor shall, in respect of any goods or services or cash so
supplied, be deemed to have provided credit to the consumer to the extent of
any payments made or to be made by the creditor to that third person.
Loan contract   "73B. For the purposes of section 73, 'loan contract' means a
contract under which a person in the course of a business carried on by that
person provides or agrees to provide, whether on one or more occasions, credit
to a consumer in one or more of the following ways:

   (a)  by paying an amount to or in accordance with the instructions of the
        consumer;

   (b)  by applying an amount in satisfaction or reduction of an amount owed
        to the person by the consumer;

   (c)  by varying the terms of a contract under which money owed to the
        person by the consumer is payable;

   (d)  by deferring an obligation of the consumer to pay an amount to the
        person;

   (e)  by taking from the consumer a bill of exchange or other negotiable
        instrument on which the consumer (whether alone or with another person
        or other persons) is liable as drawer, acceptor or endorser.".