Fair Trading (Unconscionable Conduct) Act 2001

i Fair Trading (Unconscionable Conduct) Act 2001 Act No. 86/2001 TABLE OF PROVISIONS Section Page 1. Purpose 1 2. Commencement 1 3. Consequential amendment to section 7 1 4. New sections 8A and 8B inserted 2 8A. Unconscionable conduct in business transactions 2 8B. The price for a supply or acquisition, or possible supply or acquisition 8 ═══════════════ ENDNOTES 11 -- 1 of 12 -- 1 Fair Trading (Unconscionable Conduct) Act 2001† [Assented to 11 December 2001] The Parliament of Victoria enacts as follows: 1. Purpose The purpose of this Act is to amend the Fair Trading Act 1999 to prohibit persons from engaging in unconscionable conduct in business transactions. 2. Commencement This Act comes into operation on the day after the day on which it receives the Royal Assent. 3. Consequential amendment to section 7 Victoria No. 86 of 2001  -- 2 of 12 -- Act No. 86/2001 Fair Trading (Unconscionable Conduct) Act 2001 2 In section 7(2) of the Fair Trading Act 1999, after "section 8" insert "or 8A". 4. New sections 8A and 8B inserted After section 8 of the Fair Trading Act 1999 insert— '8A Unconscionable conduct in business transactions (1) A person must not, in trade or commerce, in connection with— (a) the supply or possible supply of goods or services to another person (other than a listed public company); or (b) the acquisition or possible acquisition of goods or services from another person (other than a listed public company)— engage in conduct that is, in all the circumstances, unconscionable. (2) This section only applies to— (a) the supply or possible supply of goods or services to a person; or (b) the acquisition or possible acquisition of goods or services by a person— whose acquisition or possible acquisition of the goods or services is or would be for the purpose of trade or commerce. (3) Without in any way limiting the matters to which a court or the Tribunal may have regard for the purpose of determining whether a person (the "supplier") has contravened sub-section (1) in connection with the supply or possible supply of goods or services to another person (the "business s. 3 -- 3 of 12 -- Act No. 86/2001 Fair Trading (Unconscionable Conduct) Act 2001 3 consumer"), the court or Tribunal may have regard to— (a) the relative strengths of the bargaining positions of the supplier and the business consumer; and (b) whether, as a result of conduct engaged in by the supplier, the business consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and (c) whether the business consumer was able to understand any documents relating to the supply or possible supply of the goods or services; and (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the business consumer or a person acting on behalf of the business consumer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and (e) the amount for which, and the circumstances under which, the business consumer could have acquired identical or equivalent goods or services from a person other than the supplier; and (f) the extent to which the supplier's conduct towards the business consumer was consistent with the supplier's conduct in similar transactions between the supplier and other like business consumers; and s. 4 -- 4 of 12 -- Act No. 86/2001 Fair Trading (Unconscionable Conduct) Act 2001 4 (g) the requirements of any applicable industry code; and (h) the requirements of any other industry code, if the business consumer acted on the reasonable belief that the supplier would comply with that code; and (i) the extent to which the supplier unreasonably failed to disclose to the business consumer— (i) any intended conduct of the supplier that might affect the interests of the business consumer; and (ii) any risks to the business consumer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the business consumer); and (j) the extent to which the supplier was willing to negotiate the terms and conditions of any contract for supply of the goods or services with the business consumer; and (k) the extent to which the supplier and the business consumer acted in good faith. (4) Without in any way limiting the matters to which a court or the Tribunal may have regard for the purpose of determining whether a person (the "acquirer") has contravened sub-section (1) in connection with the acquisition or possible acquisition of goods or services from another person (the "small business supplier"), the court or Tribunal may have regard to— s. 4 -- 5 of 12 -- Act No. 86/2001 Fair Trading (Unconscionable Conduct) Act 2001 5 (a) the relative strengths of the bargaining positions of the acquirer and the small business supplier; and (b) whether, as a result of conduct engaged in by the acquirer, the small business supplier was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the acquirer; and (c) whether the small business supplier was able to understand any documents relating to the acquisition or possible acquisition of the goods or services; and (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the small business supplier or a person acting on behalf of the small business supplier by the acquirer or a person acting on behalf of the acquirer in relation to the acquisition or possible acquisition of the goods or services; and (e) the amount for which, and the circumstances in which, the small business supplier could have supplied identical or equivalent goods or services to a person other than the acquirer; and (f) the extent to which the acquirer's conduct towards the small business supplier was consistent with the acquirer's conduct in similar transactions between the acquirer and other like small business suppliers; and s. 4 -- 6 of 12 -- Act No. 86/2001 Fair Trading (Unconscionable Conduct) Act 2001 6 (g) the requirements of any applicable industry code; and (h) the requirements of any other industry code, if the small business supplier acted on the reasonable belief that the acquirer would comply with that code; and (i) the extent to which the acquirer unreasonably failed to disclose to the small business supplier— (i) any intended conduct of the acquirer that might affect the interests of the small business supplier; and (ii) any risks to the small business supplier arising from the acquirer's intended conduct (being risks that the acquirer should have foreseen would not be apparent to the small business supplier); and (j) the extent to which the acquirer was willing to negotiate the terms and conditions of any contract for the acquisition of the goods and services with the small business supplier; and (k) the extent to which the acquirer and the small business supplier acted in good faith. (5) A person is not to be taken for the purposes of this section to engage in unconscionable conduct in connection with— (a) the supply or possible supply of goods or services to another person; or s. 4 -- 7 of 12 -- Act No. 86/2001 Fair Trading (Unconscionable Conduct) Act 2001 7 (b) the acquisition or possible acquisition of goods or services from another person— by reason only that the first-mentioned person institutes legal proceedings in relation to that supply, possible supply, acquisition or possible acquisition. (6) For the purpose of determining whether a person has contravened sub-section (1)— (a) the court or Tribunal must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and (b) the court or Tribunal may have regard to circumstances existing before the commencement of this section but not to conduct engaged in before that commencement. (7) This section does not apply to— (a) a supply or possible supply of goods or services; or (b) an acquisition or possible acquisition of goods or services— at a price in excess of $3 000 000 or such higher amount as is prescribed. Note: Section 8B deals with the price for a supply or acquisition, or possible supply or acquisition, of goods or services. (8) In sub-section (1)— "listed public company" has the same meaning as in the Income Tax Assessment Act 1997 of the Commonwealth. s. 4 -- 8 of 12 -- Act No. 86/2001 Fair Trading (Unconscionable Conduct) Act 2001 8 8B. The price for a supply or acquisition, or possible supply or acquisition (1) For the purposes of section 8A(7), the price for— (a) the supply or possible supply of goods or services to a person; or (b) the acquisition or possible acquisition of goods or services by a person— is, subject to the rest of this section, taken to be the amount paid or payable by the person for the goods or services. (2) For the purposes of section 8A(7), if a person is supplied with, or acquires, goods or services by way of a purchase that includes other property or services and no specified price was allocated to the goods or services in the contract under which they were purchased, the price for the supply or acquisition of the goods or services is taken to be— (a) the price at which, at the time of the supply or acquisition, the person could have purchased the goods or services from the same supplier without the other property or services; or (b) if, at that time, the goods or services were not available for purchase from the supplier without the other property or services but goods or services of the kind supplied or acquired were available for purchase from another supplier without other property or services—the lowest price at which the person could, at that time, reasonably s. 4 -- 9 of 12 -- Act No. 86/2001 Fair Trading (Unconscionable Conduct) Act 2001 9 have purchased goods or services of that kind from another supplier; or (c) if, at that time, goods or services of the kind supplied or acquired were not available from any supplier for purchase separately from other property or services—the value of the goods or services at that time. (3) For the purposes of section 8A(7), if a person is supplied with, or acquires, goods or services other than by way of purchase, the price for the supply or acquisition of the goods or services is taken to be— (a) the price at which, at the time of the supply or acquisition, the person could have purchased the goods or services from the supplier; or (b) if, at that time, the goods or services were not available for purchase from the supplier or were so available only together with other property or services but goods or services of the kind supplied or acquired were available for purchase from another supplier—the lowest price at which the person could, at that time, reasonably have purchased goods or services of that kind from another supplier; or (c) if, at that time, goods or services of the kind supplied or acquired were not available for purchase from any supplier or were not so available separately from other property or services—the value of the goods or services at that time. s. 4 -- 10 of 12 -- Act No. 86/2001 Fair Trading (Unconscionable Conduct) Act 2001 10 (4) For the purposes of section 8A(7) but without limiting by implication the definition of "services" in section 3— (a) the obtaining of credit by a person in connection with the supply to, or acquisition by, the person of goods or services is taken to be the supply to, or acquisition by, the person of a service; and (b) any amount by which the amount paid or payable by the person for the goods or services is increased by reason of the person's so obtaining credit is taken to be paid or payable by the person for that service. (5) For the purposes of section 8A(7), the price for the supply or possible supply, or the acquisition or possible acquisition, of services comprising or including a loan or loan facility is taken to include the capital value of the loan or loan facility.'. ═══════════════ s. 4 -- 11 of 12 -- Act No. 86/2001 Fair Trading (Unconscionable Conduct) Act 2001 11 ENDNOTES † Minister's second reading speech— Legislative Assembly: 1 November 2001 Legislative Council: 29 November 2001 The long title for the Bill for this Act was "to amend the Fair Trading Act 1999 and for other purposes." Endnotes -- 12 of 12 --