Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018



Download PDFDownload PDF

ISSN 1328-8091

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

BILLS DIGEST NO. 133, 2017-18 27 JUNE 2018

Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 David Markham Law and Bills Digest Section

Contents

Purpose of the Bill ........................................................... 3

Structure of the Bill ......................................................... 3

Background ..................................................................... 3

Committee consideration ................................................ 5

Standing Committee for the Selection of Bills ............ 5 Senate Standing Committee for the Scrutiny of Bills .............................................................................. 5

Policy position of non-government parties/independents...................................................... 5

Position of major interest groups..................................... 5

Financial implications ...................................................... 5

Statement of Compatibility with Human Rights................ 5

Parliamentary Joint Committee on Human Rights ..... 5 Key issues and provisions ................................................ 6

Schedule 1—admissions of fact .................................. 6

Current law ................................................................ 6

What the Bill does ..................................................... 6

Schedule 2—listed public companies ......................... 6

Current law ................................................................ 6

What the Bill does ..................................................... 7

Schedule 3—unsolicited supplies................................ 7

Current law ................................................................ 7

What the Bill does ..................................................... 7

Schedule 4—unsolicited consumer agreements ........ 7 Current law ................................................................ 7

Date introduced: 28 March 2018

House: House of Representatives

Portfolio: Treasury

Commencement: The day after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at June 2018.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 2

What the Bill does ..................................................... 8

Schedule 5—pricing .................................................... 8

Current law ................................................................ 8

What the Bill does ..................................................... 8

Schedule 6—disclosure notices................................... 8

Current law ................................................................ 8

What the Bill does ..................................................... 9

Schedule 7—power to obtain information, documents and evidence ............................................ 9

Current law ................................................................ 9

What the Bill does ..................................................... 9

Schedule 8—non-punitive orders ............................. 10

Current law .............................................................. 10

What the Bill does ................................................... 10

Schedule 9—guarantees relating to the supply of services ...................................................................... 10

Current law .............................................................. 10

What the Bill does ................................................... 10

Schedule 10—consumer protection ......................... 10

Current law .............................................................. 10

What the Bill does ................................................... 11

Schedule 11—consumer protections in relation to financial products ................................................. 11

Current law .............................................................. 11

What the Bill does ................................................... 11

Other provisions ........................................................... 11

Concluding comments ................................................... 12

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 3

Purpose of the Bill The principal purpose of the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 (the Bill) is to amend the Competition and Consumer Act 2010 (the CCA), which includes at Schedule 2 the Australian Consumer Law (ACL), and the Australian Securities and Investments Commission Act 2001 (the ASIC Act) to give effect to a number of proposals recommended in the Australian Consumer Law Review - Final Report.1 The amendments clarify and strengthen consumer protections relating to consumer guarantees, unsolicited consumer agreements, product safety, false billing, unconscionable conduct, pricing and unfair contract terms.

It should be noted that this Digest refers to ‘clauses’ in the ACL, whereas the Bill’s Explanatory Memorandum refers to ‘sections’. This is not intended to convey a different meaning.

Structure of the Bill The amendments in the Bill are set out in 12 Schedules, with each Schedule relating to a different subject, as follows:

• Schedule 1: admissions of fact

• Schedule 2: listed public companies

• Schedule 3: unsolicited supplies

• Schedule 4: unsolicited consumer agreements

• Schedule 5: pricing

• Schedule 6: disclosure notices relating to the safety of goods or services

• Schedule 7: power to obtain information, documents and evidence

• Schedule 8: non-punitive orders

• Schedule 9: guarantees relating to the supply of services

• Schedule 10: consumer protection

• Schedule 11: consumer protections in relation to financial products and

• Schedule 12: application provisions.

Background For many years consumer protection laws were applied through a mixture of Commonwealth and, principally, state and territory legislation. In Commonwealth law the since renamed Trade Practices Act 1974 provided such protections, as did state/territory laws of fair trading, or similar nomenclature.

With effect from 1 January 2011 a nation-wide consumer protection regime, the Australian Consumer Law (ACL), took effect. This appears in legislation as Schedule 2 of the CCA, as well as being applied in each state and territory through each jurisdiction’s applied legislation. Similar consumer protections in relation to financial products are contained in the ASIC Act.

To ensure that the consumer protection law remained adequate and up to date, a wide ranging review was initiated in June 2015 by consumer affairs ministers through the Legislative and

1. Consumer Affairs Australia and New Zealand (CAANZ), Australian consumer law review: final report, Commonwealth of Australia, Canberra, March 2017.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 4

Governance Forum on Consumer Affairs (CAF). Consumer Affairs Australia and New Zealand (CAANZ) was asked to initiate a broad-reaching review of the ACL.2

The intent of the review was to assess the effectiveness of the ACL provisions, including the ACL’s flexibility to respond to new and emerging issues, and the extent to which the national consumer policy framework had met the objectives set by the Council of Australian Governments when it established the Intergovernmental Agreement for the Australian Consumer Law in 2009.3

Ministers specified that the review consider the application of ACL provisions that are mirrored in the ASIC Act, and also consider consumer protections in relation to financial products.4

In conducting the review, account was taken of ‘significant public consultation, findings of consumer and business opinion from the Australian Consumer Survey 2016, an examination of relevant overseas developments and a variety of ongoing related reforms at all levels of government’.5

CAANZ issued an interim report in October 20166 and the final report in March 2017.7 Concurrent with the CAANZ review, the Productivity Commission (PC) inquired into consumer law enforcement and administration. The PC’s Final Report was issued on 12 April 2017.8 While the CAANZ review’s aim was to examine the content of the ACL, the PC’s review focussed on administrative structures and enforcement to ensure that the content of the ACL could be given effect to. The Bill addresses issues raised in the CAANZ review, rather than those in the PC’s inquiry.

Following the release of the two reports, the Ministers for Consumer Affairs met on 31 August 2017 and issued a communiqué. The communiqué noted that the Ministers had given consideration to the proposals from the CAANZ review, and classified them into four categories:

• proposals they noted

• proposals they agreed to

• proposals supported for further analysis and

• proposals directed to the CAF strategic agenda.9

The majority of the proposals in the second category (agreed to) have been drafted as legislative amendments and form the basis of the Bill. Proposal 18 of the CAANZ final report,10 which related to increasing maximum financial penalties, has been the subject of other legislation.11 One other agreed proposal, regarding clarifying the mandatory text requirements for warranties against defects, would appear capable of implementation by amending a Regulation in the Competition and Consumer Regulations 2010, and thus does not necessitate inclusion in a Bill.12

2. B Billson (Minister for Small Business), Review to ensure national law continues to protect Australian consumers, media release, 10 July 2015. 3. CAANZ, Australian consumer law review: final report, op. cit., p. 1. 4. Billson (Minister for Small Business), Review to ensure national law continues to protect Australian consumers, op. cit. 5. CAANZ, Australian consumer law review: final report, op. cit. 6. CAANZ, Australian consumer law review: interim report, Commonwealth of Australia, Canberra, October 2016. 7. CAANZ, Australian consumer law review: final report, op. cit. 8. Productivity Commission (PC), Consumer law enforcement and administration, Research report, PC, Canberra, March 2017. 9. Ministers for Consumer Affairs, Joint communique, Legislative and Governance Forum on Consumer Affairs, 31 August 2017. 10. CAANZ, Australian consumer law review: final report, op. cit., p. 87. 11. Parliament of Australia, ‘Treasury Laws Amendment (2018 Measures No. 3) Bill 2018 homepage’, Australian Parliament

website.

12. CAANZ, Australian consumer law review: final report, op. cit., proposal 4, p. 26.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 5

One other proposal, in relation to defining the term ‘voluntary recall’ and increasing associated penalties, does not appear to be the subject of amending legislation at this stage.13

Committee consideration

Standing Committee for the Selection of Bills On 28 March 2018, the Senate Standing Committee for the Selection of Bills decided not to refer the Bill to a committee.14

Senate Standing Committee for the Scrutiny of Bills At the time of writing this Bills Digest the Senate Standing Committee for the Scrutiny of Bills had not commented on the Bill. The committee report number 5 (9 May) raised concerns in relation to the privilege against self-incrimination in item 1 of Schedule 6 (replacing existing subsections 133D(1) and (2)). The Minister’s response is at page 41 of report 6 (20 June)

Policy position of non-government parties/independents As previously noted, this Bill contains a number of amendments to the ACL representing the outcome of an extensive review and the input of Commonwealth, state and territory Ministers of Consumer Affairs from the two major political groupings. There has been no public comment on the specific provisions in the Bill.

Position of major interest groups Views of major interest groups on various issues were taken into account by CAANZ in conducting their review of the ACL.15 The amendments proposed by the Bill have not attracted any specific comment.

Financial implications The Explanatory Memorandum notes that there are no financial implications.16

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.17

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights found that the Bill did not raise any human rights concerns.18

13. Ibid., proposal 7, p. 42. 14. Senate Standing Committee for the Selection of Bills, Report, 5, 2018, The Senate, Canberra, 10 May 2018. 15. CAANZ, Australian consumer law review: issues paper, (including submissions received), Commonwealth of Australia, Canberra, March 2016; CAANZ, Australian consumer law review: interim report, (including submissions received),

Commonwealth of Australia, Canberra, October 2016. 16. Explanatory Memorandum, Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018, p. 3. 17. The Statement of Compatibility with Human Rights can be found at page 19 of the Explanatory Memorandum to the Bill. 18. Parliamentary Joint Committee on Human Rights, Report, 4, 2018, Canberra, 8 May 2018, p. 97.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 6

Key issues and provisions

Schedule 1—admissions of fact

Current law Clause 236 of the ACL allows any person who has suffered loss or damage because of the conduct of another person in contravention of clause 18 (misleading and deceptive conduct) or any of the ACL’s other prohibitions to recover for that loss or damage.

Section 137H of the CCA, ‘is designed to make it easier for individual applicants to prove their case against a respondent against whom the Australian Competition and Consumer Commission (ACCC) or some other party has successfully brought proceedings’.19 Accordingly, section 137H of the CCA provides that certain findings of fact by a court are prima facie evidence of that fact.20

The final report of the CAANZ review noted:

A recurring issue raised in the review was the difficulty that consumers and small businesses face in accessing remedies. Many of the issues relate to evidentiary rules and broader processes in civil justice systems and are beyond the scope of the consumer law and this review process.

Nevertheless, the ACL could help ease the evidentiary burden for litigants if claimants could use admissions made by traders in previous court cases as evidence in their own cases. 21

What the Bill does Item 2 in Schedule 1 to the Bill repeals and replaces subsections 137H(1) and (2) to expand the range of previously elicited evidence that can be used in an action under the ACL.

Proposed subsections 137(1) and (2) of the CCA extend the provision so that admissions of fact made in an original case can also be used as evidence of that fact in later proceedings, without the need for further proof. As with other amendments proposed by the Bill, this change is not retrospective—that is, it will only apply to admissions of fact made after the proposed provision takes effect.22

Schedule 2—listed public companies

Current law In the Amadio case, Chief Justice Mason explained that a transaction (contract) will be set aside as being ‘unconscionable’ wherever one party by reason of some condition or circumstance is placed at a ‘special disadvantage’ vis a vis another and unfair or unconscientious advantage is then taken of the opportunity which has been created by the ‘special disadvantage’.23

This is now reflected in clause 21 of the ACL which prohibits a person, in the supply or acquisition of goods in trade or commerce, from engaging in conduct that is unconscionable. Section 12CB of the ASIC Act sets out in equivalent form a prohibition in connection with the supply or acquisition of financial services.

19. RV Miller, Millers Australian Competition and Consumer Law Annotated, Thomson Reuters, Sydney, 2018, p. 929. 20. CCA, subsections 137H(1)-(3). 21. CAANZ, Australian consumer law review: final report, op. cit., p. 80. 22. Item 4 of Schedule 1 to the Bill. 23. Commercial Bank of Australia Ltd v Amadio, [1983] HCA 14.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 7

In both cases, listed public companies are excluded from the protection. When the unconscionable conduct provisions were inserted into the CCA, the relevant Explanatory Memorandum set out the rationale for the exclusion stating that ‘(listed public) companies do not require the protection of the unconscionable conduct provisions…’.24 This was based on an assumption that publicly listed companies had the size and ability to protect their own interests from such conduct.

What the Bill does This view has changed, with the CAANZ Final Report noting that ‘public listing is not necessarily a reflection of a trader’s size, level of resourcing or its ability to withstand unconscionable conduct’.25 Consequently, the Report recommended the protections should be extended to publicly listed companies and this is what the provisions in the Bill do.

Items 1 and 2 of Schedule 2 to the Bill remove the exception for listed public companies from the unconscionable conduct provisions of the ASIC Act. Item 5 of Schedule 2 to the Bill removes the clause excluding ‘listed public companies’ from the unconscionable conduct provisions of the ACL. Consequently there is no longer any need for that phrase to be a defined term in the ACL. Item 4 of Schedule 2 to the Bill the repeals the definition from subclause 2(1) of the ACL.

Schedule 3—unsolicited supplies

Current law Currently the definition of the term unsolicited services in subclause 2(1) of the ACL refers to services provided (emphasis added) to a person without any request by or on behalf of that person.26 However, it has been noted that this definition assumes that some sort of service is actually provided, and may not cover a circumstance where a person is billed without any service being provided—for example, where they are billed for a software update or computer scan that did not in fact occur.

What the Bill does Item 1 of Schedule 3 repeals and replaces the definition of unsolicited services in the ACL. The updated definition includes a service purported to have been supplied, as well as one actually that has actually been supplied. Items 2-5 of Schedule 3 to the Bill make consequential amendments to reflect the expanded definition.

Schedule 4—unsolicited consumer agreements

Current law The ACL contains specific consumer rights and trader obligations for uninvited transactions away from a trader’s premises (such as unsolicited door-to-door and telephone sales). In particular, clause 69 of the ACL defines an agreement as an unsolicited consumer agreement if amongst other things:

• it is for the supply, in trade or commerce, of goods or services to a consumer

• it is made as a result of negotiations between a dealer and the consumer in each other’s presence at a place other than the business or trade premises of the supplier of the goods or services; or by telephone and

24. Explanatory Memorandum, Competition and Consumer Legislation Amendment Bill 2010, paragraph 2.14, p. 22. 25. CAANZ, Australian consumer law review: final report, op. cit., p. 50. 26. ACL, clause 40.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 8

• the consumer did not invite the dealer to come to that place, or to make a telephone call, for the purposes of entering into negotiations relating to the supply of those goods or services.

However, according to the CAANZ Final Report these provisions were intended to apply to suppliers who do not have an established place of business, such as those trading in public places.27

What the Bill does Item 1 in Schedule 4 to the Bill inserts subclause 69(1AA) into the ACL to clarify provisions about unsolicited consumer agreements made in public places.

The amendment responds to a decision in the Federal Court28 which cast doubt on whether the current wording did in fact cover public places. To specify that this is the case, the proposed amendment clarifies that transactions in public places are within the ambit of the unsolicited consumer agreement provisions.

Schedule 5—pricing

Current law Clause 48 of the ACL provides that a person must not state, in connection with the promotion or supply of goods or services, an amount that, if paid would constitute only part of the price—unless the person also specifies the single price as a single figure, in a prominent way.

The basis of the single pricing provision is that the price quoted to a consumer must be the full price to be charged, unless the consumer chooses optional extras.

What the Bill does Item 1 of Schedule 5 to the Bill repeals and replaces paragraph 48(7)(a) of the ACL to address the situation where a consumer is given the so-called optional extras automatically unless he or she takes action to opt out of them. An example would be where a consumer is ordering goods over the internet and some additional good or service will be provided unless the consumer specifically says they do not want it. Currently the trader can quote an original price without the inclusion of that extra. This goes against the spirit of the single price provision.

After the amendment becomes law, the single price quoted will have to include the cost of that good or service until, or unless, the consumer opts out. In recognition of the fact that such a change may necessitate system changes for traders, this provision will take effect 12 months after the Act commences.29

Schedule 6—disclosure notices

Current law The provisions of Part XI of the CCA apply the ACL as a law of the Commonwealth broadly to the conduct of corporations and specifically to contraventions of the ACL protections and offence provisions to corporations. Note the comments by the Scrutiny of Bills committee referred to above.

27. CAANZ, Australian consumer law review: final report, op. cit., p. 61. 28. ACCC v ACN 099 814 749 Pty Ltd, [2016] FCA 403, paragraph 137. 29. Item 2 of Schedule 12 to the Bill inserts proposed section 299 into the CCA.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 9

Within Part XI, section 133D empowers the Commonwealth Minister or an inspector appointed by the ACCC to issue disclosure notices. A disclosure notice can be issued requesting information about a product, normally in relation to safety issues or concerns connected with that product.30

Currently, the provision only allows a disclosure notice to be served on the supplier of the product. This is problematic as other parties (for example test laboratories, other traders or consumers) may be in a better position to provide the required information.

What the Bill does Item 1 of Schedule 6 to the Bill repeals and replaces subsections 133D(1) and (2) of the CCA to expand the disclosure notice provisions so that one can be issued to a person capable of providing the required information, rather than just to a supplier of consumer goods or product related services.

Schedule 7—power to obtain information, documents and evidence

Current law Currently the Australian Securities and Investments Commission (ASIC) and the ACCC are only given the power to investigate and take enforcement action in regard to contraventions or possible contraventions of the law.31 However, while the law provides remedies for unfair contract terms (for example voiding the unfair term) it does not specifically prohibit such terms appearing in a contract. Thus their mere inclusion in a contract does not of itself represent a contravention of the law, so that the investigative powers of the regulators are not triggered.

What the Bill does The amendments in Schedule 7 to the Bill are intended to assist the regulators to investigate unfair contract terms.

Currently section 12GND of the ASIC Act allows ASIC or a party to a consumer contract or small business contract which relates to a financial product or the supply of financial services to apply to the Court for a declaration that a term of the relevant contract is unfair.

Item 1 of Schedule 7 inserts proposed subsection 12GND(6) into the ASIC Act to authorise ASIC to investigate or make inquiries about the terms of the contract for the purposes of determining whether to make an application for a declaration to the Court.

Section 155 of the CCA sets out the powers of the ACCC to obtain information, documents and evidence. Item 2 of Schedule 7 inserts proposed subparagraph 155(2)(b)(v) into the CCA. The amendment will give the ACCC the power to investigate possible unfair contract terms for the purpose of determining whether or not to make an application to the Court for a determination that a term in a consumer contract or a small business contract is unfair. This amendment will only apply to contracts entered into after the Act commences.32

30. CCA, section 133D. 31. ASIC Act, section 12GND; CCA, section 155. 32. Item 3 of Schedule 7 to the Bill.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 10

Schedule 8—non-punitive orders

Current law Currently clause 246 of the ACL provides that, on the application of the ACCC, a court can make a range of orders in relation to a person who has been involved in a contravention of the ACL. One such order is a community service order.33 However, the CAANZ Review noted that it may not be appropriate, or in the consumer’s best interests, for this person to perform the specified community service. This may be, for instance, where an investigation has shown that the person is not qualified to do so or cannot be trusted to do so.34 It is perhaps stating the obvious to note that it is probably not in a consumer’s interests to have an incompetent tradesperson attempt to repair their own errors.

What the Bill does Item 1 of Schedule 8 to the Bill inserts proposed paragraph 246(2)(aa) into the ACL to expand the types of non-punitive orders remedies that a court can make. This amendment allows the court to vary the community service order so as to require the contravening person, at the person’s expense, to engage a third party to perform the specified community service.

Schedule 9—guarantees relating to the supply of services

Current law Currently the consumer guarantees which are set out in Part 3-2 of the ACL do not apply to services that are supplied, in relation to the transportation and storage of goods, to a consignee in the course of the consignee’s business.35 Under those circumstances, the expectation is currently that the consignee will be covered by their own insurance.36

However, following the reasoning in a High Court decision,37 it is unclear whether a business customer, ordering goods for personal use, is covered by the exemption or not. The original intent of the ACL was that it was only business transactions that were exempt, and that other transactions of a personal nature should not be.38

What the Bill does Item 2 of Schedule 9 to the Bill inserts proposed subclause 63(2) into the ACL to clarify the scope of the exemption from the consumer guarantees for the transport of storage of goods. The proposed clause reinforces that it is only business transactions that are exempt. A business customer, buying personal use items, is not covered by the exemption for that specific transaction.

Schedule 10—consumer protection

Current law Subsection 12DC(1) of the ASIC Act relates to false or misleading representations in relation to financial products that involve land. It refers to representations in connection with ‘the sale or

33. ACL, clause 246. 34. CAANZ, Australian consumer law review: final report, op. cit., p. 90. 35. ACL, clause 63. 36. CAANZ, Australian consumer law review: final report, op. cit., p. 27. 37. Wallis v Downard-Pickford (North Queensland) Pty Ltd, [1994] HCA 17. 38. CAANZ, Australian consumer law review: final report, op. cit., p. 27.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 11

grant, or the possible sale or grant of a financial product that consists of, or includes, an interest in land’.

What the Bill does The amendments in Schedule 10 to the Bill alter the wording of section 12DC of the ASIC Act without intending to change their operation.39 To this end, item 1 of Schedule 10 to the Bill omits the reference to ‘sale or grant, or the possible sale or grant’ in subsection 12DC(1) and substitutes a reference to a ‘supply, or possible supply’. In addition, item 2 inserts proposed subsection 12DC(1AA) into the ASIC Act to make it clear that the prohibition against false and misleading representations applies whether or not the representation is made before or after the financial product consists of, or includes, an interest in land.

The amendments were recommended by the CAANZ Final Report as necessary to correct inconsistent terminology in the ASIC Act.40

However, in solving one problem, this provision may create another, as the original terms ‘the sale or grant’ and ‘the possible sale or grant’ remain elsewhere in the ASIC Act; indeed remaining in provisions that are located quite close to the proposed amendments.41 The Explanatory Memorandum states that this is because the proposed amendments only apply to provisions examined in the course of the ACL Review;42 and it is understandable that other terms in the ASIC Act would not be amended by this Bill without specific consideration.

Nevertheless the lack of consistency is not an entirely desirable outcome—it is a principle of statutory interpretation that different words in an Act, particularly words close to each other, prima facie indicate different meanings,43 and this is clearly not the intention here. While extrinsic materials such as the Explanatory Memorandum state that the change of terminology does not indicate a different meaning, a future consistent use of terminology in the ASIC Act might be preferable.

Schedule 11—consumer protections in relation to financial products

Current law Currently subsection 12BAB of the ASIC Act sets out the conditions to be satisfied in determining whether a person provides a financial service.

What the Bill does Item 2 of Schedule 11 to the Bill inserts proposed paragraph 12BAB(1AA) into the ASIC Act so that the definition of financial services includes financial products. This leads to a number of consequential changes—reference to financial products is removed from a number of clauses as its presence is no longer necessary, being subsumed under financial services.

Other provisions Schedule 12 does not have any substantive amendments. Its purpose is to specify that the substantive amendments set out earlier do not have retrospective application.

39. Explanatory Memorandum, Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018, p. 16. 40. CAANZ, Australian consumer law review: final report, op. cit., pp. 78-9. 41. For example, ASIC Act Section 12DE(1)(b)(iii) will continue to use the terms ‘sale or grant’ and ‘possible sale or grant’. 42. Explanatory Memorandum, Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018, p. 16. 43. DC Pearce and RS Geddes, Statutory Interpretation in Australia, 8th edition, Lexis Nexis Butterworths, Sydney, 2014,

pp. 150-1.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 12

Concluding comments The proposed provisions in this Bill generally represent fine tuning of the ACL and ASIC Act to strengthen or clarify consumer protections. The amendments follow an extensive public review of the subject matter and the agreement of Commonwealth and state and territory Ministers.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 13

© Commonwealth of Australia

Creative Commons

With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.

In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.

To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.

Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.

Disclaimer: Bills Digests are prepared to support the work of the Australian Parliament. They are produced under time and resource constraints and aim to be available in time for debate in the Chambers. The views expressed in Bills Digests do not reflect an official position of the Australian Parliamentary Library, nor do they constitute professional legal opinion. Bills Digests reflect the relevant legislation as introduced and do not canvass subsequent amendments or developments. Other sources should be consulted to determine the official status of the Bill.

Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library’s Central Enquiry Point for referral.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.