TM Law’s Alistair Sullivan looks at the potential effects on transport and logistics operators

Introduction

The Australian Consumer Law (the “ACL”) regime that provides certain guarantees and protections to consumers in Australia has been the subject of a Consultation Regulation Impact Statement, released on behalf of Consumer Affairs Australia and New Zealand (CAANZ).

The Statement, initially released on 9 March 2018, aims to simplify, clarify and modernise the consumer guarantee framework of the ACL. The proposed amendments to section 63 will have significant implications for those involved with the importation and transport of goods.

If passed the scope of liability and risk for transport and storage operators, as well as their insurers, will be expanded and is something of which those conducting business in this space should be aware.

Points to note for transport and logistics operators

Some of the proposals include: increasing the threshold to provide access to consumer guarantees from $40,000 to $100,000; clarifying that a consumer has a right to choose a refund or replacement a short period of time after the purchase as well as when there are multiple failures in relation to the goods; enhancing disclosure for extended warranties.

This could include requiring additional information on what the default protections the consumer law provides compared to the extended warranty; and providing access to consumer guarantees for goods sold at auctions.

Modernising the operation of the consumer law to auctions by removing current exemptions that prevent the consumer guarantees as to acceptable quality, fitness for purpose, etc.

Specific to those involved with the transport of goods, section 63 of the ACL provides an exemption from certain consumer guarantees supplied under “a contract for… the transportation or storage of goods for the purposes of a business … carried on … by the person for whom the goods are transported or stored”.

A previous similar exemption has been interpreted to apply if either the consignee or consignor entered into a transport agreement for business purposes [see Wallis v Downard-Pickford (North Queensland) Pty Ltd (1994) 179 CLR 388]. In that case it was determined that the transport of household effects by a Police officer in connection with his posting to another police station was not an ordinary incident of his occupation as a police officer.

Therefore, the carriage of goods “was for personal, domestic and household purposes” and consequently, the exemption now dealt with by section 63 of the ACL did not apply. Guarantees, including that services will provided with due care and skill, will therefore only apply if both seller and buyer of the goods are not engaged in what would ordinarily be considered business purposes.

The proposed amendment to section 63 is that the exemption will only apply when the buyer of the goods is a business. If passed this amendment would have implications for transport operators as well as their insurers as it is difficult to determine whether a consignee is operating a business. If the threshold for access to the consumer guarantees is also raised to $100,000 the risk associated with such transportation services would also become more difficult to determine.

Present position and next stages

The proposals are yet to be introduced in various Parliaments through amending legislation. The consumer affairs ministers’ consideration of the Final Report of 2017 ACL Review on the impact of such amendments has been requested and is due to be provided by August 2018.

For more information on the proposed changes to the Australian Consumer Law please contact the author or the Thomas Miller Law Sydney office.

Author: Alistair Sullivan

+612 8262 5859

alistair.sullivan@tmlawltd.com