Commonwealth Consolidated Acts

TRADE PRACTICES ACT 1974 - SECT 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 of this Act or section 12ED of the Australian Securities and Investments Commission Act 2001 , 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 of this Act or section 12ED of the Australian Securities and Investments Commission Act 2001 , 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 subsection (1) in proceedings arising under that subsection 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 subsection (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 subsection (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 subsection (1).

             (4)  Subject to subsection (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 subsection (1) in diminution or extinction of the consumer's liability.

             (5)  Subject to subsection (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 subsection (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 subsection (4), claims in the proceedings against the supplier in respect of the liability by third‑party proceedings or otherwise.

             (6)  Subsection (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 subsection (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 subsection (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 subsection (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 subsection (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 subsection (1), a right conferred by subsection (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 subsection (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 subsection (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 subsection (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 subsection (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 subsection (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.