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Proposed New Rights for NSW Dealers

Automotive Industry Law
As of 25 October 2013, the NSW State Government has commenced its overhaul of the current legislation affecting motor vehicle dealers, repairers, recyclers and industry tradespersons (stakeholders).
The Motor Dealers and Repairers Bill 2013 (Bill) has been put before the NSW Legislative Assembly which will consider whether the Bill will serve to reduce the red tape in the motor vehicle dealer and repair industry.
The Bill’s objectives state that it will:
  1. establish a scheme for the licensing and regulation of motor vehicle dealers, repairers, recyclers and industry tradespersons;
  2. provide consumer protection and remedies against dealers, repairers, recyclers and industry tradespersons;
  3. increase the transparency of the retail sector of the industry through the establishment of conduct standards;
  4. institute enforcement and disciplinary mechanisms for any violation of the proposed Act; and,
  5. provide protection for motor vehicle dealers against unfair contract dealings with motor vehicle manufacturers.

Part 2 of the Bill proposes that all the stakeholders are to acquire a licence that is valid for 3 years, subject to any conditions imposed at the discretion of the Public Service agency (the Secretary).

The Bill makes it possible for stakeholders to hold different licenses consecutively should their business activities cross over between the sale, repair or recycling of motor vehicles.
The obligations in this part of the Bill provide that:
  1. a licensee is prohibited from carrying on business, or advertising the carrying on of a business, anywhere but the address(es) stated on the licence;
  2. a licensee cannot sub-contract work to any service provider who does not hold a valid licence under the Bill;
  3. a person cannot receive requests for repair work from insurers if they do not hold a valid motor vehicle repairer’s licence.
Part 6 of the Bill addresses the relationship between motor vehicle dealers and manufacturers, specifically with regard to unfair contract terms and unjust conduct. However, this area is already covered by Federal legislation under the Competition and Consumer Act 2010 and the National Franchising Code. The Chief Executive of the Federal Chamber of Automotive Industries, Tony Weber, stated that the ‘Bill seeks to hold motor vehicle distributors to a higher level of account than any other business operator’.
This part of the Bill, amongst other things, provides:
  1. that any motor industry group may raise their dispute with the Office of the NSW Small Business Commissioner on the grounds of an unfair contract term or unjust conduct by any manufacturer/distributor under a supply contract;
  2. that any valid dispute can be raised with the Consumer Trader and Tenancy Tribunal (CTTT) for a declaration of an unfair contract term or unjust conduct;
  3. that a range of remedies or orders, including monetary compensation, is available to the CTTT at its discretion to exercise over a party in violation of Part 6 of the Bill.

Part 6 of the Bill reinstates the protection that motor vehicle dealers once enjoyed under the Industrial Relations Act 1996, which were made redundant by a High Court decision in 2006.

It is important for stakeholders to note that the Bill is not in its final form, if it is to be passed through the NSW State Government at all.

 If the Bill is passed in its current proposed form it will be inconsistent with several national regulatory schemes that currently govern the commercial conduct of motor vehicle dealers, repairers, recyclers and industry tradespersons.
For those affected the enacted Bill could mean higher regulatory costs for motor vehicle distributors and unnecessary confusion for the motor vehicle industry at large.

 

Contact one of our Automotive Law team members if you have any queries in relation to this article, or if you require any assistance in respect of your promotional material.

 


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