Second Reading

Resumed from an earlier stage of the sitting.

HON ALISON XAMON (North Metropolitan) [2.32 pm]: I rise as the lead speaker on behalf of the Greens to speak on this multipart bill. At the outset, I indicate that the Greens will support this legislation, but it is important that we take our time with some of the amendments proposed. It is worthwhile teasing out some of the issues. It is quite a comprehensive bill, seeking to amend 10 different acts. Many of the amendments increase the maximum penalties for offences under the relevant acts. This measure arises out of a review of the legislation by the Consumer Protection division that began in 2014 under the former government. Hon Michael Mischin, in his contribution, talked about the history of some of the changes that arose at that time. The penalties in the bill result from a consideration of consumer price index increases; consistency across different occupations for similar offences, for example, offences relating to unlicensed trading and trust accounts, which is a sensible thing to do; consistency across similar occupations for similar offences, for example, real estate agents, settlement agents and land valuers, or charitable collectors and street collectors; and increased consistency nationally, given that licences can be transferrable between jurisdictions.

I note that none of the penalties that have been proposed are mandatory, so the court retains its discretion to determine an appropriate penalty in each case. I commend the government for sticking to the principle that it brought to office, that it would not introduce any mandatory sentencing provisions. Accordingly, the Greens have no objection to the penalty increases in the bill. Judicial discretion is still being maintained at the same time as we are ensuring sensible consistency across how those penalties are being applied. The minister has said that he intends to introduce future legislation to enable a greater range of offences to be dealt with by the infringement process, rather than having to go to court. Under the infringement process, the penalty will be substantially reduced. Alternatively, the defendant can still elect to have the matter determined by a court, as is their right, if they wish.

The substantive part of the bill, if passed, comes into effect on a day that is fixed by proclamation, and different days may be fixed for different provisions. The minister has said that the parts of the bill that increase maximum penalties to a term of imprisonment require regulations to amend the integrated court management system, and this is expected to take six months. The delayed start will also allow time for people affected by the changes to understand the nature of those changes. That is a sensible approach to take. I understand that the changes will be communicated via the department’s Property Industry Advisory Committee, which comprises members from several stakeholder groups, and also by using its licensing database to inform licence holders of changes in their particular areas.

I will go through some of the specific amendments. There are changes to the Auction Sales Act 1973 to increase maximum penalties for offences under that act. In ascending order of increase, the maximum penalty of a $500 fine for offences relating to the keeping of a livestock auction sales register will be increased to $10 000. The general maximum penalty of a $400 fine for a range of offences, which has been unchanged for around 45 years—quite some time—will be increased to $25 000. The fine component of a penalty for holding a mock auction, or the auctioneer purchasing auctioned livestock without the vendor’s consent, will be increased from a maximum of $1 000 to $50 000, which I think is a more appropriate penalty for this quite concerning conduct. I note that the imprisonment component of that penalty will remain unchanged. The most significant increase is to the maximum penalty for carrying on business as an auctioneer without a licence. The maximum penalty of a $500 fine, which again has been unchanged for over 40 years, will be increased to $50 000.

I listened with interest to Hon Michael Mischin’s interjection on Hon Rick Mazza’s contribution on the issue of auctioneers, and whether we really require them to be licensed. The licensing system is an important protection, particularly for innocent vendors and purchasers. I think it is very reasonable that there be a stiff penalty for operating outside of that system. Otherwise, it can effectively be almost a form of insider trading. It is important that these professions are appropriately regulated, and that penalties are commensurate with the damage that can occur if people do the wrong thing.

I note that fundraiser auctions, however, are not affected by these provisions. Section 5 of the Auction Sales Act 1973 contains exemptions to the act, and these include —

any bazaar or sale of gifts where the whole of the proceeds are devoted for charitable, educational, or church purposes; ...

I am rather pleased that is there, because even I have been asked to participate in auctions for the purposes of charities. We certainly need to ensure that we have appropriate legislation for appropriate purposes.

Another act that will now be altered is the Charitable Collections Act 1946. The amendments to this act will do a few different things. The maximum penalty for the offence of not holding a licence will increase from a $100 fine, again noting that that penalty has not been changed for over 50 years, to a $20 000 fine. The intention is obviously to reflect the seriousness of scams that take advantage of a donor. It also means that moneys are being misappropriated that would otherwise have been paid to a genuine charitable body. Certain functions of the minister will be transferred to the commissioner, and these functions relate to licensing and the checking of financial reports, investigation monitoring, and enforcement. Currently, the minister delegates those functions to the commissioner. However, the investigative and compliance powers in the Fair Trading Act 2010 are not triggered by delegated power, so giving the commissioner the original power rather than that delegated power solves that problem.

Investigation powers that currently exist under the Fair Trading Act will be imported to apply to this act, with the exception of the power to enter business premises. That is an exception because charitable collectors are usually volunteers at home and it has been decided that a warrant should be required for home entry. There are also changes to financial auditing, although not to the records that must be kept, but the bill specifies that they must be kept for seven years and it is setting a maximum penalty of a $5 000 fine for a breach. It will also enable the commissioner to require access to the financial records of individuals or groups of licensees rather than all licensees at the same time. The intention of that is to enable the commissioner to exercise discretion so that they are relieving particular charities of the burden of annual audits when appropriate, whilst ensuring that records will always be retained for long enough so that if there is a complaint, at least there will be a seven-year trail available to the auditors. That discretion relates to the 15 per cent or so of charities that do not have tax exempt status, and so are not registered with the Australian Charities and Not-for-profits Commission, which has annual audit requirements. I understand that there was consultation about those financial auditing changes with the Charitable Collections Advisory Committee and I understand from the briefing that it supports that particular reform. The imposition of a potential fine for the breach that I mentioned is to provide an alternative to the current single enforcement tool, which is cancelling the licence. It also provides an alternative option, when cancelling the licence might be a disproportionate response. Cancelling the licence could also be impossible to carry out if, for example, the event for which the collections were taken were over and the collecting organisation was no longer functioning.

There are also changes to the Debt Collectors Licensing Act 1964. The amendments to that act will again update the maximum penalties. The maximum penalties that were a $100 fine in 1965 will be increased to $20 000 and the maximum penalties that were a $200 fine, again, in 1965 will be increased to $25 000 with two exceptions. The maximum $200 fine penalty for an offence under regulations will be increased to $5 000 and the maximum penalty for carrying on business as a debt collector without a licence will increase from a $200 fine for individuals or $400 for corporations to $50 000. Again, I think this reflects the policy of the bill that there needs to be stiff penalties for operating outside an applicable licensing system, because licensing systems are for the protection of consumers.

There are also changes to the Fair Trading Act and the amendments to that act relate to the amendments made to the Charitable Collections Act, which I have already discussed. The changes to the Home Building Contracts Act 1991 will make two changes to home indemnity insurance. The first change is that insurance or the corresponding cover will no longer be required for residential building work when either a building permit is not required for the work or the work is not included as a prescribed building service under the Building Services (Registration) Act, which effectively means non-structural work that need not be carried out by a registered builder. I am talking about things such as cabinet making, tiling and painting. This is current practice in any case, because it is not possible to get insurance for this sort of work, but this issue was raised in a 2004 statutory review of the scheme and was also addressed in a consultation paper relating to a 2006 review of the act. I understand that almost all stakeholders agreed that the scheme presumed mandatory insurance should only be for structural work. That makes a lot of sense, noting that home indemnity insurance will continue to be needed for structural work.

The second change is about what the insurance must cover. Currently, it must cover the builder dying, becoming insolvent or being unable to be located. This bill will expand that so that insurance must also cover the builder being unable to be located in Australia or ceasing to exist if the builder is not an individual, such as if it is a corporate body or having their registration as a building service contractor cancelled or not renewed because of the builder not satisfying the prescribed financial requirements. This last addition removes the need for a consumer to wait for the builder to start formal insolvency proceedings before the consumer can make a home indemnity insurance claim. It is the government’s response to a recommendation by the Economic Regulation Authority in around 2013 that itself rose out of a Senate inquiry in around 2008 that a claim should be triggered by loss of a builder’s licence. The amendment is expected to benefit consumers without increasing their financial liability, because the loss of a licence is almost inevitably followed by the builder becoming insolvent. I think this will provide some very important protections for people who otherwise can have their lives and finances completely ruined through no fault of their own. This is a really overdue and much welcome reform.

Changes to the Land Valuers Licensing Act 1978 will do three things. First, the time for licence renewal will be confirmed as 28 days, which will correct a glitch whereby section 61 of the Interpretation Act had time provisions rendered as 27 days rather than the 28 days that was always intended. That amendment was proposed by Parliamentary Counsel and will make the licence renewal period consistent with other licensing legislation. The second change is that the offence of giving false or misleading information in an application will be extended to giving false or misleading information relating to any matter under the act. I note that the penalty for the offence is unchanged. The rationale for that amendment is to facilitate online applications by replacing the requirement to provide paper statutory declarations, with a broad prohibition on providing false or misleading information. It is expected that online applications will be able to be made in 12 months, after the necessary programs have been developed and aligned with other programs that enable online WA police checks. The third change, of course, is once again to the issue of maximum penalties. The maximum penalty for carrying on business as a land valuer without a licence or falsely claiming to be licensed will be doubled from a $50 000 fine to a $100 000 fine. Again, the licensing system is a really important protection for consumers and it is completely appropriate that the penalty for operating outside that system be a hefty one.

There are nine substantive changes to the Real Estate and Business Agents Act 1978, apart from some changes which are really of a minor housekeeping nature. I understand that the Real Estate Institute of Western Australia has no objection to any of the amendments except the one that imposes a maximum penalty of imprisonment, which I will discuss in a moment. The first change is to agent licensing and triennial certificates. Under the act, agents need a licence and a triennial certificate in order to work. The bill provides that if an agent is required to surrender their licence and certificate, but still continues to work, they are taken to be working without a licence, for which penalties apply. The bill makes it clear that a triennial certificate is not to be renewed unless certain criteria are met. The bill will allow the Commissioner for Consumer Protection to impose special conditions on a licence or a triennial certificate at any time, not just at the time of grant or renewal, and, similarly, for a special condition to be removed at any time. The bill also will enable a person to surrender their triennial certificate for a time while retaining their licence, and to apply later for renewal of their triennial certificate, rather than having to give it up altogether—for example, while they are on parental leave, taking a sabbatical or if they are working in a different field. I think that is an important reform to reflect current times.

The bill also will tighten provisions for when a firm or company must surrender its licence and triennial certificate because it no longer meets a requirement for having them—for example, the minimum number of licensed partners or directors, including the person who is genuinely in control of the business—and the bill will impose a $5 000 maximum penalty for failure to comply with compulsory professional development requirements. This provides an alternative to the only sanction that is available at present, which is a cancellation of the licence. The government’s intention is to introduce regulations that will enable the infringement process to apply to this, which might be a more appropriate penalty in some instances. The bill will enable allegations against agents to be made to the State Administrative Tribunal for up to 12 months after the agent has ceased to hold a licence or certificate, whether the licence or certificate has expired or the agent has chosen to surrender them, and SAT’s powers under section 103 will include the capacity to be able to issue a reprimand, caution, fine or disqualification—the disqualification can be temporary, permanent or until a specified condition is met—and orders regarding the agent’s commission or profit.

The second change will be to the registration of sales representatives. Under the act, a sales representative who is not a licensed and certificated agent must hold a current registration certificate and work for either a licensed and certificated agent or a developer, and the bill will make similar changes to sales representatives as it does to agents.

The third change will increase the maximum penalties for offences relating to trust accounts. We have seen some pretty devastating examples of breaches of trust accounts that have resulted in people suffering significant financial detriment. I think it is a really important provision. The maximum penalty for failure to credit interest will be increased from a fine of $10 000 to $50 000, and the maximum penalty for unauthorised withdrawals or payments will be increased from a fine of $3 000 to $25 000, or two years in prison. The maximum fine for other offences will increase from $3 000 to $25 000.

As I mentioned before, concerns have been raised by the Real Estate Institute of Western Australia, particularly about whether a principal might be held criminally liable for an employee’s embezzlement. I note that in the other place, it was confirmed on the record that if a person is not directly involved in the trust account offence—for example, they made an administrative error or failed to detect that staff had made an unauthorised withdrawal— which is a scenario that could very easily arise, they will not be dealt with by the Magistrates Court under these provisions, nor be dealt with pursuant to the stealing provisions in the Criminal Code. Instead, they will be dealt with by the State Administrative Tribunal under section 103 of the act, which does not include imprisonment as a penalty. It is not intended that a person who has not committed the offence will face prison, but it does mean that even if that person is not personally managing that trust account, they will have to take some responsibility for their staff who are. I think it is important that we get that balance right.

The fourth change relates to when a claim can be made against the fidelity fund to make good any loss that is caused by an agent’s embezzlement. Currently, a claim can be made if an agent was licensed and certificated, including any period when the certificate was not current, if the CEO considers it just and reasonable in the circumstances to allow the claim. The bill will change this to cover up to six months after the agent was licensed, provided the CEO considers it just and reasonable in the circumstances to allow the claim.

The fifth change will extend the time when an application for homebuyer assistance can be made from 90 days after the date of contract for purchase to 90 days after the date of settlement, because—this is just sensible—often information that is required for the application is unavailable until after settlement.

Another change will be to broaden the offence of giving false or misleading information from being in respect of information provided to the Commissioner for Consumer Protection in relation to certain applications to being any information required under the act to be provided to the commissioner or the CEO.

The seventh change will be to extend the provision regarding the refund of licence or triennial certificate fees for agents to also cover the refund of registration and certificate fees for sales representatives.

The eighth change will be to qualifications for an agent to get a licence. Schedule 1 sets out a list of the alternatives. The bill will add to those that a person has held a licence and worked as an agent in Western Australia for at least two years within the last five. This matches the provision for agents moving to WA from interstate and ensures that we have national parity.

The ninth change will increase the maximum penalties for various offences under the act. If someone does not hold an agent licence, that fine will increase from $20 000 to $100 000. The same fine will apply if a person allows someone else to use their agent licence or triennial certificate. The fine for not being registered as a sales representative will increase from $3 000 to $25 000; again, that is the same for a business sales representative. The fine for a partner or director not being registered will increase from $2 000 to $20 000.

Some of the proposed changes to the Residential Tenancies Act 1987 have attracted the most attention and I suspect they will be the subject of more discussion. There are seven substantive changes to the Residential Tenancies Act. The first change will be to insert a definition of “common area”. That means an area accessible to or for the common use of tenants, including “common property”, as defined for the purposes of a strata scheme.

The second change will give a court discretion to order a party to proceedings be represented or assisted if the court is satisfied that the party cannot appear personally or conduct the proceedings on their own behalf, and will ensure that no other party to the proceedings will be disadvantaged. In 2011, to increase consistency across decisions on representation, the act was amended to enable a party to authorise a property manager or an advocate from a not-for-profit organisation to act as an agent. However, I note that this has led to concerns that the court might not have the power to appoint someone else if appropriate. This amendment will return broad discretion to the court to be able to determine what is appropriate, to ensure that the matter is conducted fairly.

The third change extends the tenant’s responsibilities in respect of cleanliness and damage to the premises and to common areas and chattels in common areas. A very important change is the fourth change, which implements the 2017 recommendation of Coroner Linton, who conducted the inquest into the tragic accidental death of 21-month-old Reef Kite. Reef died in 2015 of crush asphyxia after he climbed and tipped onto himself a tallboy that was not affixed to the wall. Paragraph 33 of that coronial report referred to research carried out by the Australian Competition and Consumer Commission in 2015 that indicated that several hundred children are injured in this way every year. Tragically, Reef was by no means the first fatality. Paragraph 40 of the coronial report refers to research carried out by the WA Consumer Product Advocacy Network, which indicated that in the five years to December 2016, 148 children had been injured by furniture tipping on them, and that between 2000 and 2015, at least 14 Australian children under the age of nine had died as a result of furniture falling on them.

Coroner Linton recommended that the WA government consider amending the act to enable televisions and furniture to be affixed to walls with the lessor’s consent, and for the lessor not to unreasonably withhold such consent. This is the key reform of the legislation. It makes it a term of every residential tenancy agreement that, for the purpose of ensuring the safety of a child, the tenant can, with the lessor’s consent, affix furniture to the wall. I think it is important to recognise that it will not only be parents living with young children who will want to avail themselves of these new provisions; it could also be grandparents who might have children coming into their home, or just people who regularly, for whatever reason, have children coming into their home. Hon Rick Mazza made the important point that there are a lot of other people, not just children, who could potentially be hurt by unstable furniture that has not been affixed, so I think the opportunity to undertake this change is beneficial for a range of people, although it has arisen as a specific result of the devastating death of a child.

The government considers the term “furniture” to be broad enough to include televisions. I think it is important to note that for the purposes of debate on this legislation. The coroner also recommended that that should be the case. The lessor has seven days within which to refuse consent, and can refuse consent only if affixing the furniture would disturb asbestos; if the premises are heritage listed; if the premises are in a strata and the by-laws prohibit it; or for a prescribed reason. I note that nothing is currently intended to be prescribed; this provision is effectively future-proofing to cover, for example, any prohibitions that may arise in the future from the recently passed community titles laws. I note that the tenant still needs to remove the item from the wall upon vacation of the premises, and that the tenant must bear the cost of affixing and removing the item. If affixing or removing the item causes damage, the tenant must notify the lessor and the lessor has the option either to require the tenant to repair it or compensate the lessor for reasonable expenses incurred by the lessor fixing it.

A similar issue arose when we talked about the changes to the Residential Tenancies Act to ensure that homes could be made safer for people addressing domestic violence issues. I am aware that there may be circumstances in which the lessor of a property wants to keep some of the changes within their home. For example, it is very common these days to affix televisions to walls at a set point with particular television racks. It may be that the owner, rather than simply removing it and trying to make good any damage caused, would prefer to say, “Look, just keep it there. We’re really quite comfortable with that being retained.” I am curious to know whether there is flexibility for that sort of sensible arrangement to be negotiated or whether that was ever intended to be a provision of the legislation.

The fifth change the bill makes to the act is to tighten provisions for how a tenant can be charged for public utility services, by clarifying that the tenant can be charged only for their consumption. That is calculated by meter reading or, if there is no meter, calculated according to a prior written agreement between the parties, rather than daily service fees. A new 30-day time limit for giving the tenant written notice, from the date of receipt of the public utility invoice, is also imposed on the lessor. The notice must include the total charge for the tenant’s consumption, how it was calculated and the GST. The time limit is extended to “as soon as practicable”, if the tenancy has already ended and the tenant has to be located, if they can be located.

The transitional provisions under clause 71 apply this provision to existing residential tenancy agreements, as well as new ones, except in relation to public utility invoices for which an account has already been given to the tenant, pursuant to the current provisions, but payment has not yet been received; and in relation to public utility invoices that have already been received, but for which an account has not yet been given to the tenant. In that situation, the 30-day time limit does not apply.

The sixth change extends to common areas or chattels in a common area. Existing provisions allow a court to terminate a residential tenancy agreement if the tenant has or is likely to intentionally or recklessly cause or commit serious damage to premises, or injury to the lessor, property manager or person in occupation or permitted on adjacent premises.

The seventh change extends the restrictions that apply to tenancy database information to database operators outside WA, if the personal information on the database relates to a WA resident or the occupation of Western Australian residential premises. From the briefing, I understand that this is pursuant to a national agreement, with the legislation now being mirrored across Australian jurisdictions.

There are changes to the Settlement Agents Act 1981 and this bill makes changes to the Real Estate and Business Agents Act that largely mirror those changes. The government says that when the Property Industry Advisory Committee discussed this, the Australian Institute of Conveyancers raised no objections to the changes.

There are changes to the Street Collections (Regulation) Act 1940. The main changes to that act are to maximum penalties and aim to capture street beggars, not charity collectors. Collecting in a metropolitan region without a permit in breach of section 3 will attract a maximum penalty of a $5 000 fine, which is up from $2 000. That penalty was last amended in 2003. Unauthorised use of badges and certificates in connection with street collections in breach of section 6 will attract a maximum penalty of $5 000 fine, which is up from $2 000 and was last amended in 2003. Offences created by regulations will attract a maximum penalty of a $2 000 fine, up from $40, which was last amended in 1965. It is a hodgepodge of changes, all of which have unfortunately had to be made because at various times people have been significantly disadvantaged or left out of pocket. As I have already discussed, some of these changes are about saving people’s lives. There is a fair bit there, but it is good that the government has brought on these changes and that these long overdue amendments will be brought up to date and we will have national consistency.

It is excellent that the government has acted on the coroner’s recommendations. It will be particularly important for Reef Kite’s family. They will be able to see that progress has been made since the coroner’s report. I express my deepest sorrow and sympathy to the family of Reef Kite. Nothing can ever take away the tragic loss, but I hope it is some degree of comfort that changes have been proposed, and will hopefully pass, that will go some way to mitigating the chance that such a tragedy will happen again. The Greens will support the bill.

Comments and speeches from various members

Debate adjourned, on motion by Hon Alannah MacTiernan (Minister for Regional Development).


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