Review of the Hire-Purchase Act 1959

Chapter One

INTRODUCTION

1.1 The Scrutiny of Acts and Regulations Committee, in conjunction with Chief Parliamentary Counsel has been given a Reference by the Governor-in-Council to review all Victorian Legislation. One of the primary objects of the Reference is to reduce the number and complexity of Victorian Acts and Instruments. As part of the review, the Committee is examining all Acts and provisions which may be redundant or are in need of re-writing and updating.

1.2 The terms of reference are as follows-

1. The Committee is requested in conjunction with Chief Parliamentary Counsel, to inquire into, consider and make recommendations as to:

Acts of Parliament and provisions of Acts of Parliament which are unnecessary or redundant;

legislative instruments made under an Act of Parliament and provisions of legislative instruments made under an Act of Parliament which are unnecessary or redundant.

2. The Committee is requested in conjunction with Chief Parliamentary Counsel, to inquire into, consider and make recommendations as to:

Acts of Parliament and provisions of Acts of Parliament which are unclear, ambiguous or should be re-drafted;

legislative instruments made under an Act of Parliament and provisions of legislative instruments made under an Act of Parliament which are unclear, ambiguous or should be re-drafted;

3. In the conduct of this reference, the committee is requested to pursue the primary objects of reducing the number and complexity of Victorian acts and legislative instruments, and ensuring that acts and instruments are clearly expressed in accordance with modern drafting practices.

4. This reference shall continue unless revoked by the Governor -in-Council.

1.3 Following the March 1996 election and the commencement of the 53rd Parliament of Victoria, the Governor in Council on 18 June 1996 again referred the terms of reference to the Committee.

The Redundant Legislation Subcommittee

1.4 Under the 52nd Parliament the Chairman of the Redundant Legislation Subcommittee was the Honourable Mr. B.A.E. Skeggs, MLC, with the members of the Subcommittee being Mr Carlo Carli, MP, Dr Ken Coghill, MP, Mr Victor Perton, MP and Mr Murray Thompson, MP.

1.5 For the current and 53rd Parliament, the Chair of the Redundant Legislation Subcommittee is the Hon. Maree Luckins, MLC with the members being Mr Robert Cameron, MP, Mr Carlo Carli, MP, the Hon. Peter Katsambanis, MLC and Mr Murray Thompson, MP.

Procedure

1.6 On 24 May 1995, the Committee received a submission from the Australian Finance Conference, the national finance industry association, requesting the Committee to examine the possible repeal of the Hire-Purchase Act 1959 ("HPA"). The Committee wrote to the Minister for Fair Trading, the Honourable Jan Wade seeking her comments. The Minister then invited the Committee to conduct a review of the Act.

1.7 The review of the Act was advertised by the Committee in the Age and the Herald-Sun on 26 August 1995.

1.8 The Committee wrote to over seventy organisations and individuals seeking their comments on the review of the Act. The Committee sought opinions whether the Act may be redundant and appropriate for repeal; or whether some parts of the Act may be appropriate for repeal while other parts should be maintained with protections preserved but in another piece of legislation.

1.9 The Committee invited comments or views in respect of the legislation which addressed the following issues:

1. Is there any reason why the Hire-Purchase Act 1959 should not be repealed?
2. Are there certain protections under the Hire-Purchase Act 1959 which should be preserved and moved to another Act?
3. Are there certain protections available to specific groups of people or covering specific transactions which are not available under any other legislation and require statutory regulation?
4. How could these protections and rights be best preserved?

1.10 These issues were not seen as exhaustive. The Committee received thirty-eight responses. Correspondence and written submissions were received from--

Public hearings

1.11 The committee conducted public hearings on 27 August 1996 and heard evidence from witnesses representing the following organisations--

• Victorian Farmers Federation
• Australian Finance Conference
• RTV Consultancy
• Australian Bankers Association
• Corrs Chambers Westgarth, Solicitors
• Faulty of Law, Monash University
• Financial Services Consultancy Pty Ltd
• Consumer Credit Legal Service (Vic) Inc
• Consumer Law Centre (Vic)
• Consumer and Financial Counselling Association
• Banking Finance and Consumer Committee, Banking Law Section: Law Council of Australia

1.12 The public hearings received media attention with articles published in the Age on 26 August 1996[1] and the Border Mail (Albury-Wodonga) on 28 August 1996.[2]

Overview

1.13 The submissions and evidence put before the Committee raised the following issues as those most pertinent to the review--

• the Act now applies to business transactions and no longer to consumer transactions as it was originally intended;
• the Act is rigid, over-prescriptive and inappropriate as a means of regulating business finance;
• the capping of interest rates at 8% is not consistent with the modern commercial finance market;
• the Act provides the right to have harsh or unconscionable hire-purchase agreements re-opened which is a protection which may need to be preserved;
• the right to a twelve month moratorium on the repossession of goods by farmers is a right which may need to be preserved.

1.14 In Chapter two of this Report the Committee outlines the development of the hire-purchase law; previous inquiries into consumer credit transactions and recommendations about the HPA arising from those inquiries; as well as the legislative context in which hire-purchase transactions operate. Chapter three examines the provisions of the HPA. In Chapter four legislative options taken by various States in Australia are examined. Chapter Five discusses the evidence given to the Committee by way of written submissions and evidence in the public hearing. Finally, in chapter six the Committee draws its conclusion and makes recommendations on the review of the Hire Purchase Act 1959 (Vic).

Last update 12/8/99 ©Parliament of Victoria