Consumer Credit Legislation Amendment (Enhancements) Act 2012 (130 of 2012)
Schedule 5 Consumer leases
National Consumer Credit Protection Act 2009
24 After section 179 of the National Credit Code
Insert:
179A Statement of amount payable on termination
(1) A lessor must, at the written request of a lessee, provide a written statement of the amount required to terminate a consumer lease as at such date as the lessee specifies. If so requested, the lessor must also provide details of the items which make up that amount.
(2) The statement must also contain:
(a) a statement to the effect that the amount payable to terminate the lease may change according to the date on which it is paid; and
(b) a statement to the effect that the lessee has no right to own the goods if the lease is terminated; and
(c) a statement to the effect that the lessee must return the goods to the lessor by a specified date; and
(d) any other matters prescribed by the regulations.
(3) A lessor must give a statement, complying with this section, within 7 days after the day the request is given to the lessor.
Criminal penalty: 50 penalty units.
(4) In the case of joint lessees, the statement need only be given to the lessee who requests the statement and not, despite section 194, to each joint lessee.
(5) Subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
179B Court may determine amount payable on termination if lessor does not
(1) If the lessor does not provide a statement of the amount payable to terminate a consumer lease in accordance with this Subdivision after a request is duly made by a lessee, the court may, on the application of the lessee, determine:
(a) the amount payable on the date of determination; and
(b) the amount by which it increases daily; and
(c) the period for which the determination is applicable.
(2) The consumer lease is discharged if:
(a) the goods hired under the lease are returned to the lessor within the applicable period; and
(b) an amount calculated in accordance with the determination is tendered to the lessor within the applicable period.
179C One-off notice to be given the first time a direct debit default occurs
(1) This section applies if:
(a) a lessee authorises payment of an amount for a consumer lease by direct debit; and
(b) default occurs; and
(c) it is the first occasion the default occurs.
(2) The lessor must give the lessee a notice, complying with this section, within 14 days of the default occurring.
Criminal penalty: 50 penalty units.
(3) The notice must contain the information prescribed by the regulations.
(4) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) This section does not affect any other requirement under this Code to give a notice.
Subdivision C - Enforcement of consumer leases
179D Requirements to be met before lessor can enforce consumer lease against defaulting lessee
Enforcement of consumer lease
(1) A lessor must not begin enforcement proceedings against a lessee in relation to a consumer lease unless:
(a) the lessee is in default under the lease; and
(b) the lessor has given the lessee a default notice, complying with this section, allowing the lessee a period of at least 30 days from the date of the notice to remedy the default; and
(c) the default has not been remedied within that period.
Criminal penalty: 50 penalty units.
Note: If a lessee has given a lessor a hardship notice or a postponement request there may be extra requirements that the lessor must comply with before beginning enforcement proceedings - see sections 179F and 179H.
Default notice requirements
(2) A default notice must contain a prominent heading at its top stating that it is a default notice and specify:
(a) the default; and
(b) the action necessary to remedy the default; and
(c) a period for remedying the default; and
(d) the date after which enforcement proceedings in relation to the default, and, if relevant, repossession of goods hired under the lease may begin if the default has not been remedied; and
(e) the information prescribed by the regulations about the lessee's right to:
(i) give a hardship notice under section 177B; or
(ii) give a postponement request under section 179H; or
(iii) make an application to the court under sections 177D and 179K; and
(f) the information prescribed by the regulations about:
(i) the approved external dispute resolution scheme of which the lessor is a member; and
(ii) the lessee's rights under that scheme; and
(g) that a subsequent default of the same kind that occurs during the period specified for remedying the original default may be the subject of enforcement proceedings without further notice if it is not remedied within the period; and
(h) that, under the Privacy Act 1988, the debt may be included in a credit reporting agency's credit information file about the lessee if:
(i) the debt remains overdue for 60 days or more; and
(ii) the lessor has taken steps to recover all or part of the debt; and
(i) any other information prescribed by the regulations.
When default notice not required
(3) A lessor is not required to give a default notice or to wait until the period specified in the default notice has elapsed, before beginning enforcement proceedings, if:
(a) the lessor reasonably believes that it was induced by fraud on the part of the lessee to enter into the consumer lease; or
(b) the lessor has made reasonable attempts to locate the lessee but without success; or
(c) the court authorises the lessor to begin the enforcement proceedings; or
(d) the lessor reasonably believes that the lessee has disposed of goods hired under the lease, or intends to dispose of such goods, contrary to the terms of the lease; or
(e) the lessee becomes insolvent after entering into the consumer lease.
Non-remedial default
(4) If the lessor reasonably believes that a default is not capable of being remedied:
(a) the default notice need only specify the default; and
(b) the lessor may begin the enforcement proceedings after the period of 30 days from the date of the notice.
Strict liability
(5) Subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
179E Defaults may be remedied
(1) If a default notice under section 179D states that the lessor intends to take action because the lessee is in default under the consumer lease, the lessee may remedy the default within the period specified in the notice, and the lease is then reinstated and any acceleration clause cannot operate.
(2) A lessee does not remedy the default if, at the end of the period, the lessee is in default under the consumer lease because of the breach specified in the notice or because of a subsequent breach of the same type.
179F Effect of hardship notices on enforcement
(1) This section applies if:
(a) a lessor is required to give a default notice under section 179D before beginning enforcement proceedings; and
(b) before or after the lessor gives the default notice, the lessee gives the lessor a hardship notice (the current hardship notice ) under section 177B; and
(c) either:
(i) in the 4 months before the current hardship notice is given, the lessee had not given the lessor another hardship notice; or
(ii) in that 4-month period, the lessee had given the lessor one or more other hardship notices, but the lessor reasonably believes that the basis on which the current hardship notice was given is materially different from the bases on which the other hardship notices were given.
(2) The lessor must not begin enforcement proceedings against the lessee unless:
(a) the lessor has given the lessee a notice under paragraph 177B(4)(b), in response to the current hardship notice, stating that the lessor and the lessee have not agreed to change the consumer lease; and
(b) the period of 14 days, starting on the day the lessor gave the notice under paragraph 177B(4)(b), has expired.
Criminal penalty: 50 penalty units.
Note: The lessor must allow the lessee at least 30 days from the date of the default notice to remedy the default - see section 179D. The 14-day period in subsection (2) may end before, at the same time as, or after the end of the period for remedying the default specified in the default notice.
(3) However, the lessor may take possession of goods hired under a consumer lease if the lessor reasonably believes that:
(a) the lessee has removed or disposed of the goods, or intends to remove or dispose of them; or
(b) urgent action is necessary to protect the goods.
(4) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
179G Requirements to be met before lessor can enforce an acceleration clause
(1) An acceleration clause of a consumer lease is to operate only if:
(a) the lessee is in default under the lease; and
(b) the lessor has given to the lessee a default notice under section 179D; and
(c) the default notice contains an additional statement of:
(i) the manner in which the liabilities of the lessee under the consumer lease would be affected by the operation of the acceleration clause; and
(ii) the amount required to terminate the lease (as accelerated); and
(d) the default has not been remedied within the period specified in the default notice (unless the lessor reasonably believes that the default is not capable of being remedied).
(2) However, a lessor is not required to give a default notice under section 179D or to wait until the period specified in the default notice has elapsed before bringing an acceleration clause into operation, if:
(a) the lessor reasonably believes that it was induced by fraud on the part of the lessee to enter into the consumer lease; or
(b) the lessor has made reasonable attempts to locate the lessee but without success; or
(c) the court authorises the lessor not to do so; or
(d) the lessor reasonably believes that the lessee has removed or disposed of goods hired under a consumer lease, or intends to remove or dispose of goods hired under the lease, or that urgent action is necessary to protect the goods.
Subdivision D - Postponement of enforcement proceedings
179H Postponement of exercise of rights
Postponement request
(1) A lessee who has been given a default notice under section 179D may, at any time before the end of the period specified in the notice, request (a postponement request ), orally or in writing, that the lessor negotiate a postponement of:
(a) the enforcement proceedings; or
(b) any action taken under such proceedings; or
(c) the operation of any applicable acceleration clause.
Lessor's notice about postponement
(2) If the lessee gives the postponement request, the lessor must, within 21 days after the day of receiving the request, give the person a written notice:
(a) that states whether or not the lessor agrees to negotiate a postponement; and
(b) if the lessor does not agree to negotiate - that states:
(i) the name of the approved external dispute resolution scheme of which the lessor is a member; and
(ii) the person's rights under that scheme; and
(iii) the reasons for not agreeing to negotiate.
Criminal penalty: 30 penalty units.
Enforcement proceedings
(3) If the lessee gives the postponement request, the lessor must not begin enforcement proceedings unless:
(a) the lessor has given the lessee a notice under subsection (2) in response to the postponement request; and
(b) the period of 14 days, starting on the day the lessor gives the notice under subsection (2), has expired.
Criminal penalty: 50 penalty units.
Note: The lessor must allow the lessee at least 30 days from the date of the default notice to remedy the default - see section 179D. The 14-day period in subsection (3) may end before, at the same time as, or after the end of the period for remedying the default specified in the default notice.
(4) However, the lessor may take possession of goods hired under the consumer lease if the lessor reasonably believes that:
(a) the lessee has removed or disposed of the goods, or intends to remove or dispose of them; or
(b) urgent action is necessary to protect the goods.
Strict liability
(5) Subsections (2) and (3) are offences of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
179J Effect of negotiated postponement
(1) A default notice under section 179D is taken, for the purposes of this Code, not to have been given if a postponement is negotiated with the lessor under section 179H and the lessee complies with the conditions of postponement.
(2) A lessor must give written notice of the conditions of a postponement referred to in subsection (1) not later than 30 days after agreement is reached on the postponement. The notice must set out the consequences under subsection (5) if the conditions of the postponement are not complied with.
Criminal penalty: 100 penalty units.
(3) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) A lessor that is required to give notice under section 177A (which deals with changes to leases by agreement) in relation to a postponement is not required to comply with subsection (2).
(5) If any of the conditions of a postponement are not complied with, a lessor is not required to give a further default notice under this Code to the lessee with whom the postponement was negotiated before proceeding with enforcement proceedings.
179K Postponement by court
(1) If the lessee is unable to negotiate a postponement, the lessee may apply to the court for a postponement.
(2) After allowing the applicant and the lessor a reasonable opportunity to be heard, the court may:
(a) order the postponement to which the application relates; or
(b) refuse to order the postponement; or
(c) make such other orders as it thinks fit.
(3) The court may, if it thinks it appropriate in the circumstances, stay any enforcement proceedings under the consumer lease until the application has been determined.
179L Lessor may apply for variation of postponement order
(1) A lessor that is subject to an order under this Subdivision may apply to the court for variation of the order.
(2) On such an application, the court may:
(a) vary the order to which the application relates as it thinks fit; or
(b) refuse to vary the order; or
(c) revoke the order.
Subdivision E - Enforcement procedures for goods hired under a consumer lease
179M Information as to location of goods hired under a consumer lease
(1) A lessor may, by written notice to a lessee, require the lessee to inform the lessor, within 7 days after the day the notice is given to the lessee, where the goods hired under the consumer lease are and, if the goods are not in the lessee's possession, to give the lessor all information in the lessee's possession that might assist the lessor to trace the goods.
(2) A lessee who contravenes a notice under this section commits an offence.
Criminal penalty: 50 penalty units.
(3) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
179N Entry to residential property to take possession of goods
(1) A lessor, or an agent of a lessor, must not enter any part of premises used for residential purposes for the purpose of taking possession of goods hired under a consumer lease unless:
(a) the court has authorised the entry; or
(b) the occupier of the premises has, after being informed in writing of the provisions of this section, consented in writing to the entry.
(2) The regulations may provide for procedures for the obtaining and giving of consent for the purposes of this section and may set out the circumstances in which consent is or is not taken to have been given.
(3) If premises are entered in contravention of this section by a lessor or an agent of a lessor, the lessor commits an offence.
Criminal penalty: 50 penalty units.
(4) Subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
179P Court may order entry
The court may, on the application of a lessor that is entitled to take possession of goods hired under a consumer lease, authorise the lessor to enter residential premises for the purpose of taking possession of the goods.
179Q Order for possession
(1) The court may, on the application of a lessor that is entitled to take possession of goods hired under a consumer lease, order a person who has possession of the goods to deliver them to the lessor:
(a) at a specified time or place; or
(b) within a specified period.
(2) The court may, on the application of a lessor or other person required to deliver goods to a lessor, by order vary the place at which or time or period within which goods must be delivered to the lessor.
(3) A person who contravenes an order under this section commits an offence.
Criminal penalty: 30 penalty units.
(4) Subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Subdivision F - Enforcement expenses
179R Recovery of enforcement expenses
(1) A lessor must not recover or seek to recover enforcement expenses from a lessee in excess of those reasonably incurred by the lessor. Enforcement expenses of a lessor extend to those reasonably incurred by the use of the staff and facilities of the lessor.
(2) Any provision of the consumer lease that appears to confer a greater right is void. If enforcement expenses are in fact recovered in excess of this limitation, they may be recovered back.
(3) If there is a dispute between the lessor and the lessee about the amount of enforcement expenses that may be recovered by the lessor, the court may, on application by any of the parties to the dispute, determine the amount of that liability.
Division 9 - Linked lessors and tied consumer leases
Subdivision A - Interpretation and application
179S Linked lessors and tied consumer leases
(1) For the purposes of this Code, a linked lessor of a supplier means a lessor:
(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; or
(ii) the business carried on by the supplier of supplying goods; or
(iii) the provision to persons of a consumer lease for the hire of goods supplied by the supplier to the lessor; or
(b) to whom the supplier, by arrangement with the lessor, regularly refers persons for the purpose of being provided with a consumer lease; or
(c) whose forms of contract or forms of application or offers for a consumer lease are, by arrangement with the lessor, made available to persons by the supplier; or
(d) with whom the supplier has a contract, arrangement or understanding under which applications for a consumer lease or offers to be provided with a consumer lease from the lessor may be signed by persons at the premises of the supplier.
(2) A tied consumer lease is a consumer lease entered into between a lessor and a lessee where:
(a) the lessee enters into the lease to hire goods supplied by the supplier to the lessor; and
(b) at the time the lease is entered into the lessor is a linked lessor of the supplier.
Subdivision B - Liability of lessors for suppliers' misrepresentations
179T Lessor liable for supplier's misrepresentations about hired goods
(1) If there is a tied consumer lease, any representation, warranty or statement made (whether orally or in writing) by the supplier, or any person acting on behalf of the supplier, to the lessee in relation to:
(a) goods hired under the lease; or
(b) the lease; or
(c) services, supplied or arranged by the lessor, that are incidental to the hire of goods under the lease;
gives the lessee the same rights against the lessor as the lessee would have had if it had been made by the lessor.
(2) Without prejudice to any other rights or remedies to which a lessor may be entitled, a lessor is entitled to be indemnified by the person who made the representation, warranty or statement, and any person on whose behalf it was made, against any damage suffered by the lessor through the operation of this section.
Division 10 - Conduct relating to consumer leases
179U False or misleading representations
(1) A person must not make a false or misleading representation:
(a) in relation to a matter that is material to entry into a consumer lease or a related transaction; or
(b) in attempting to induce another person to enter into a consumer lease or a related transaction.
Criminal penalty: 50 penalty units.
(2) It is a defence to prosecution for an offence against this section if a person charged proves that he or she reasonably believed that the representation was not false or misleading.
(3) A person who suffers loss as a result of a contravention of this section by another person may recover the amount of the loss from:
(a) that other person; or
(b) any other person involved in the contravention.
179V Harassment
A lessor or supplier must not harass a person in attempting to get that person to:
(a) apply for a consumer lease; or
(b) enter into a consumer lease or a related transaction.
Criminal penalty: 100 penalty units.
Division 11 - Other Code provisions applicable to consumer leases
179W Application of certain Code provisions to consumer leases
(1) Part 12 (relating to miscellaneous matters) and subsection 204(2) (definition of associated ) apply in relation to a consumer lease in the same way as they apply in relation to a credit contract.
(2) For the purposes of the application of those provisions:
(a) references to a credit provider are to be read as references to a lessor; and
(b) references to a debtor are to be read as references to a lessee; and
(c) references to a credit contract or contract are to be read as references to a consumer lease; and
(d) references to a linked credit provider are to be read as references to a linked lessor.