New South Wales Bills Explanatory Notes

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FAIR TRADING AMENDMENT BILL 2004

Explanatory Notes

Fair Trading Amendment Bill 2004

Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.


Overview of Bill


The object of this Bill is to amend the Fair Trading Act 1987 as follows:


(a) to expressly authorise the Commissioner for Fair Trading (called “the
Director-General” in the Act) to disclose information to, and receive
information from, fair trading agencies, law enforcement agencies and
other relevant agencies,

(b) to empower investigators, under the authority of a search warrant, to enter
and search any place (which includes a vehicle) for evidence of a
contravention of the Act and to seize anything that is connected with any
such contravention,

(c) to replace the current provisions that regulate pyramid selling with
provisions that mirror those contained in the Trade Practices Act 1974 of
the Commonwealth,

(d) to make other miscellaneous amendments of a minor or consequential
nature.

Outline of provisions


Clause 1 sets out the name (also called the short title) of the proposed Act.

Clause 2 provides for the commencement of the proposed Act on a day or days
to be appointed by proclamation.

Clause 3 is a formal provision that gives effect to the amendments to the Fair
Trading Act 1987 set out in Schedule 1.

Clause 4 is a formal provision that gives effect to the amendments to other Acts
in Schedule 2.

Schedule 1 Amendment of Fair Trading Act 1987
Exchange of information with other agencies
Schedule 1 [1] expressly authorises the Director-General to disclose
information to, and receive information from, other fair trading agencies and law
enforcement agencies in Australia and overseas as well as certain agencies that
exercise functions with respect to matters affecting the interests of consumers.

The information that may be the subject of an information sharing arrangement
under proposed section 9A will be limited to certain matters (such as
investigations, law enforcement or complaints) that relate to the functions of the
Director-General or other agency concerned.

Powers of entry, search and seizure under search warrant
At present, section 19 of the Act empowers an investigator to enter any place or
land where goods are manufactured, prepared or supplied (or where services are
supplied or arranged) and exercise certain powers such as taking goods for
which the investigator pays a fair price. Section 19 also presently empowers an
investigator, with the written authority of the Director-General, to enter certain
premises and to inspect, and make copies of or take extracts from, documents
evidencing conduct in contravention of the Act.

In addition to these existing powers of entry and inspection, Schedule 1 [3] will
empower an investigator, under the authority of a search warrant, to enter and
search any place (which will include a vehicle, vessel or aircraft for the purposes
of the proposed section 19A) and seize anything that the investigator believes on
reasonable grounds is connected with a contravention of a provision of the Act.

Provision is made for the return of anything seized that is not required as
evidence in proceedings for an offence.

Schedule 1 [2] is a consequential amendment that requires an investigator who
is exercising powers under a search warrant issued under proposed section 19A
to show his or her identification as an investigator if required to do so.

Prohibition on pyramid selling
Pyramid selling is a sales scheme that concentrates on recruiting new sales
people into the scheme rather than selling products. At present, section 56 of the
Act prohibits certain pyramid selling schemes. The Trade Practices Act 1974 of
the Commonwealth was amended in 2002 to include new provisions in relation
to pyramid selling.

Schedule 1 [4] omits section 56, and in its place, Schedule 1 [5] inserts proposed
Part 5D which contains provisions that mirror the Commonwealth’s new
pyramid selling provisions. Schedule 1 [6] and [7] make consequential
amendments.

Miscellaneous amendments
Schedule 1 [8] restates the defences provided by section 71 (1) (a) and (b) of the
Act to exclude certain information (namely, information in the nature of legal
advice on the legal consequences of conduct) from the type of information to
which the defence applies. As a result of the amendment, which is in keeping
with recent amendments to the corresponding provisions of the Trade Practices
Act 1974 of the Commonwealth, the defence will be restricted to a reasonable
mistake of fact, including a mistake of fact (not law) caused by reasonable
reliance on information supplied by another person. Schedule 1 [9] is a
consequential amendment.

Schedule 1 [10] inserts savings and transitional provisions consequent on the
enactment of the proposed Act.

Schedule 1 [11] inserts a power to make savings and transitional regulations
consequent on the enactment of the proposed Act.

Schedule 2 Amendment of other Acts
Schedule 2 amends certain legislation in connection with the search warrant
power to be inserted by Schedule 1 [3] to the proposed Act.

Note: If this Bill is not modified, these Explanatory Notes would reflect the Bill as passed in the House. If the Bill has been amended by Committee, these Explanatory Notes may not necessarily reflect the Bill as passed.

 


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