Trade Practices Amendment Act 1992 (Cth)

Trade Practices Amendment Act 1992

No. 106 of 1992

An Act to amend the Trade Practices Act 1974 to provide for the compensation of persons who suffer loss caused by defective goods, and for related purposes

[Assented to 9 July 1992]

The Parliament of Australia enacts:

Short title etc.

1.(1) This Act may be cited as the Trade Practices Amendment Act 1992.

(2) In this Act, "Principal Act" means the Trade Practices Act 19741.

Commencement

2. This Act commences on the day on which it receives the Royal Assent.

Application

3. Part VA of the Principal Act as amended by this Act applies to goods supplied by their manufacturer after the commencement of this Act ("supplied" and"manufacturer" having the same meanings as in that Part).

4. After Part V of the Principal Act the following Part is inserted:

"PART VA—LIABILITY OF MANUFACTURERS AND IMPORTERS FOR DEFECTIVE GOODS

Interpretation

"75AA. In this Part:

'action goods', in relation to a liability action, means the goods whose supply and defect is alleged in the action;

'Commonwealth mandatory standard', in relation to goods, means a mandatory standard in respect of the goods imposed by a law of the Commonwealth;

'defendant', in relation to a liability action, means a person against whom the action is brought (however described);

'liability action' means an action under section 75AD, 75AE, 75AF or 75AG and includes such an action because of paragraph 75AD(f) or section 75AH;

'loss' includes damage;

'mandatory standard', in relation to goods, means a standard:

(a) for the goods or anything relating to the goods; and

(b) that, under a law of the Commonwealth, a State or a Territory, must be complied with when the goods are supplied by their manufacturer, being a law creating an offence or liability where there is such non-compliance;

but does not include a standard which may be complied with by meeting a higher standard;

'manufactured' includes grown, extracted, produced, processed and assembled;

'plaintiff', in relation to a liability action, means the person by whom the action is brought (however described);

'use' includes consume.

Certain interpretation provisions (importers and others taken to be manufacturers etc.) apply to this Part

"75AB. Subsections 74A(3) to (8) (inclusive) operate as if references in them to Division 2A of Part V included references to this Part.

Meaning of goods having defect

"75AC.(1) For the purposes of this Part, goods have a defect if their safety is not such as persons generally are entitled to expect.

"(2) In determining the extent of the safety of goods, regard is to be given to all relevant circumstances including:

(a) the manner in which, and the purposes for which, they have been marketed; and

(b) their packaging; and

(c) the use of any mark in relation to them; and

(d) any instructions for, or warnings with respect to, doing, or refraining from doing, anything with or in relation to them; and

(e) what might reasonably be expected to be done with or in relation to them; and

(f) the time when they were supplied by their manufacturer.

"(3) An inference that goods have a defect is not to be made only because of the fact that, after they were supplied by their manufacturer, safer goods of the same kind were supplied.

"(4) An inference that goods have a defect is not to be made only because:

(a) there was compliance with a Commonwealth mandatory standard for them; and

(b) that standard was not the safest possible standard having regard to the latest state of scientific or technical knowledge when they were supplied by their manufacturer.

Liability for defective goods causing injuries—loss by injured individual

"75AD. If:

(a) a corporation, in trade or commerce, supplies goods manufactured by it; and

(b) they have a defect; and

(c) because of the defect, an individual suffers injuries;

then:

(d) the corporation is liable to compensate the individual for the amount of the individual's loss suffered as a result of the injuries; and

(e) the individual may recover that amount by action against the corporation; and

(f) if the individual dies because of the injuries—a law of a State or Territory about liability in respect of the death of individuals applies as if:

(i) the action were an action under the law of the State or Territory for damages in respect of the injuries; and

(ii) the defect were the corporation's wrongful act, neglect or default.

Liability for defective goods causing injuries—loss by person other than injured individual

"75AE.(1) If:

(a) a corporation, in trade or commerce, supplies goods manufactured by it; and

(b) they have a defect; and

(c) because of the defect, an individual suffers injuries; and

(d) a person, other than the individual, suffers loss because of:

(i) the injuries; or

(ii) if the individual dies because of the injuries—the individual's death; and

(e) the loss does not come about because of a business relationship between the person and the individual;

then:

(f) the corporation is liable to compensate the person for the amount of the person's loss; and

(g) the person may recover that amount by action against the corporation.

"(2) For the purposes of this section:

(a) a profession is taken to be a business; and

(b) a relationship between employer and employee or a similar relationship is a business relationship.

Liability for defective goods—loss relating to other goods

"75AF. If:

(a) a corporation, in trade or commerce, supplies goods manufactured by it; and

(b) they have a defect; and

(c) because of the defect, goods of a kind ordinarily acquired for personal, domestic or household use (not being the defective goods) are destroyed or damaged; and

(d) a person who:

(i) so used; or

(ii) intended to so use;

the destroyed or damaged goods, suffers loss as a result of the destruction or damage;

then:

(e) the corporation is liable to compensate the person for the amount of the loss; and

(f) the person may recover that amount by action against the corporation.

Liability for defective goods—loss relating to buildings etc.

"75AG. If:

(a) a corporation, in trade or commerce, supplies goods manufactured by it; and

(b) they have a defect; and

(c) because of the defect, land, buildings, or fixtures, ordinarily acquired for private use are destroyed or damaged; and

(d) a person who:

(i) so used; or

(ii) intended to so use;

the land, buildings or fixtures, suffers loss as a result of the destruction or damage;

then:

(e) the corporation is liable to compensate the person for the amount of the loss; and

(f) the person may recover that amount by action against the corporation.

Survival of liability actions

"75AH. A law of a State or Territory about the survival of causes of action vested in persons who die applies to actions under section 75AD, 75AE, 75AF or 75AG.

No liability action where workers' compensation or law giving effect to an international agreement applies

"75AI. Section 75AD, 75AE, 75AF or 75AG does not apply to a loss in respect of which an amount has been, or could be, recovered under a law of the Commonwealth, a State or a Territory that:

(a) relates to workers' compensation; or

(b) gives effect to an international agreement.

Unidentified manufacturer

"75AJ.(1) If a person who wishes to institute a liability action does not know who manufactured the action goods, the person may serve on a supplier, or each supplier, of the action goods who is known to the person a written request to give the person particulars identifying:

(a) the corporation which manufactured the goods (having regard to section 75AB); or

(b) the supplier of the goods to the supplier requested.

"(2) If, 30 days after the person has made the request or requests, the person still does not know who manufactured the action goods, then the corporation, or each corporation, that is a supplier:

(a) to whom a request was made; and

(b) who did not comply with the request;

is taken, for the purposes of the action, to have manufactured the action goods.

Defences

"75AK.(1) In a liability action, it is a defence if it is established that:

(a) the defect in the action goods that is alleged to have caused the loss did not exist at the supply time; or

(b) they had that defect only because there was compliance with a mandatory standard for them; or

(c) the state of scientific or technical knowledge at the time when they were supplied by their actual manufacturer was not such as to enable that defect to be discovered; or

(d) if they were comprised in other goods (`finished goods')—that defect is attributable only to:

(i) the design of the finished goods; or

(ii) the markings on or accompanying the finished goods; or

(iii) the instructions or warnings given by the manufacturer of the finished goods.

"(2) In this section:

`supply time' means:

(a) in relation to electricity—the time at which it was generated, being a time before it was transmitted or distributed; or

(b) in relation to other goods—the time when they were supplied by their actual manufacturer.

Commonwealth liability for goods that are defective only because of compliance with Commonwealth mandatory standard

"75AL.(1) If a defendant in a liability action raises the defence that the action goods had the alleged defect only because there was compliance with a Commonwealth mandatory standard for them, that defendant must, as soon as practicable after raising that defence, serve on the Commonwealth a prescribed notice of the action and of that defence together with a copy of that defendant's defence in the action.

"(2) Service of the notice and defence makes the Commonwealth a defendant in the action.

"(3) If, in the action, the Court finds that the plaintiff would have succeeded against the defendant who served the notice but for the action goods having the alleged defect only because there was compliance with a Commonwealth mandatory standard for them, then:

(a) the Commonwealth, and not the defendant who served the notice, is liable to pay the plaintiff for the amount of the loss caused by the defect; and

(b) the Court is to enter judgment against the Commonwealth for that amount; and

(c) the Court may make such orders for costs as the Court considers just.

Liability joint and several

"75AM. If 2 or more corporations are liable under section 75AD, 75AE, 75AF or 75AG for the same loss they are jointly and severally liable.

Contributory acts or omissions to reduce compensation

"75AN.(1) If the loss in a liability action under section 75AD or 75AE was caused by both:

(a) an act or omission of the individual who suffers the injuries concerned; and

(b) a defect of the action goods;

the amount of the loss is to be reduced to such extent (which may be to nil) as the court thinks fit having regard to that individual's share in causing the loss.

"(2) If the loss in a liability action under section 75AF or 75AG was caused by both:

(a) an act or omission of the person who suffered the loss; and

(b) a defect of the action goods;

the amount of the loss is to be reduced to such extent (which may be to nil) as the court thinks fit having regard to the person's share in causing the loss.

"(3) For the purposes of this section, the acts and omissions of a person who is responsible for another person include the acts and omissions of that other person.

Time for commencing actions

"75AO.(1) Subject to subsection (2), a person may commence a liability action at any time within 3 years after the time the person became aware, or ought reasonably to have become aware, of the alleged loss, the defect and the identity of the person who manufactured the action goods.

"(2) A liability action must be commenced within 10 years of the supply by the manufacturer of the action goods.

Application of provisions not to be excluded or modified

"75AP.(1) Any term of a contract (including a term that is not set out in the contract but is incorporated in the contract by another term) that purports to exclude, restrict or modify, or has the effect of excluding, restricting or modifying:

(a) the application of all or any of the provisions of this Part; or

(b) the exercise of a right conferred by any of those provisions; or

(c) any liability under any of those provisions;

is void.

"(2) A term of a contract is not taken to exclude, restrict or modify the application of a provision of this Part unless the term does so expressly or is inconsistent with that provision.

Representative actions by the Trade Practices Commission

"75AQ.(1) The Commission may, by application, commence a liability action on behalf of one or more persons identified in the application who has suffered the loss for whose amount the action is commenced.

"(2) The Commission may only make an application under this section if it has obtained the written consent of the person, or each of the persons, on whose behalf the application is being made.

Saving of other laws and remedies

"75AR.(1) This Part is not intended to exclude or limit the concurrent operation of any law, whether written or unwritten, in force in a State or Territory.

"(2) This Part is not to be taken to limit, restrict or otherwise affect any right or remedy a person would have had if this Part had not been enacted.

Jurisdiction of courts

"75AS. Subsection 75B(2) and sections 86, 86A and 86B operate in relation to an action under this Part as if:

(a) references in them to Part VI included references to this Part; and

(b) references in them to Division 1 or 1A of Part V included references to this Part; and

(c) references in them to the Minister were omitted.".

Other amendments

5. The Principal Act is further amended as set out in the Schedule.

___________

SCHEDULE Section 5

OTHER AMENDMENTS

Paragraph 6(2)(c):

After "that Part" insert "or in Part VA".

Paragraph 170(1)(a):

After "under" insert "Part VA, ".

Paragraph 170(1)(c):

After "under" insert "Part VA, ".

NOTE

1. No. 51, 1974, as amended. For previous amendments, see Nos. 56 and 63, 1975; Nos. 88 and 157, 1976; Nos. 81, 111 and 151, 1977; Nos. 206 and 207, 1978; No. 73, 1980; Nos. 61 and 176, 1981; No. 80, 1982; No. 39, 1983; Nos. 63, 73 and 165, 1984; No. 65, 1985; Nos. 8, 17 and 168, 1986; Nos. 23 and 141, 1987; Nos. 8, 20 and 87, 1988; Nos. 28 and 34, 1989; Nos. 11 and 70, 1990; and Nos. 49 and 122, 1991.

[Minister's second reading speech made in—

Senate on 26 May 1992

House of Representatives on 4 June 1992