Roy Heather: Motor Vehicle Sales Amendment Bill — First Reading 
Roy Heather: Motor Vehicle Sales Amendment Bill — First Reading 
[Volume:655;Page:4651] 
Hon HEATHER ROY (Minister of Consumer Affairs) 
: 
 I move  
That the Motor Vehicle Sales Amendment Bill be now read a first time. 
 It is my intention that this bill be referred to the Commerce Committee. Section 163 of the Motor Vehicle Sales Act requires the Ministry of Consumer Affairs to conduct a review of the Act after 2 years of its operation. This bill is the result of a proactive assessment of the Act which looked at whether the operation of the legislation is meeting the intended policy goals. The bill makes a number of amendments to improve the legislation’s workability and operation. 
As an ACT Party Minister in the National-led Government I am very supportive of such proactive assessments of the relevance and effectiveness of legislation. Legislation should achieve its stated intention without imposing unnecessary and unforeseen side effects. The principal Act came into force in December 2003. It introduced a new registration regime for motor vehicle traders. This regime served to make traders more accountable but it also offered people more flexibility to participate in the industry. New information disclosure requirements for used motor vehicles were introduced and the Motor Vehicle Disputes Tribunal was established to offer consumers a forum for the hearing of complaints against traders. 
The policy that underpins the principal Act has several core elements: a requirement for motor vehicle traders to be registered requirements for information disclosure concerning used motor vehicles and a provision for consumer redress through the Motor Vehicle Disputes Tribunal. The review of the Act by the Ministry of Consumer Affairs considered how those elements were operating. The review identified areas where the Act’s operation would benefit from amendment. The review report which was tabled in the House in March 2008 was followed by further consultation on the review’s recommendations and that has led to the amendments set out in this bill. 
The bill makes amendments to the renewal of annual registration by motor vehicle traders. At present an individual who is applying to become a director of a motor vehicle trading company must supply a statutory declaration with his or her initial application. That person is then required to provide an annual statutory declaration as part of the registration renewal process. The requirement is onerous costly and serves no purpose if the person’s details have not changed. The bill amends the renewal procedure to allow a company secretary to confirm to the registrar that the information held on the registry about the company is correct. In particular companies with directors who are based overseas will benefit from reduced compliance costs as a result of a small legislative change. 
Acceptance or refusal of a renewal application by the registrar will remain essentially the same as it is currently. However at present people can be appointed as directors between annual registrations without any check on their suitability. Accordingly it is proposed that the Act be amended to require that notification of a new director or of the appointment of an individual who is involved in the company’s management be accompanied by a statutory declaration as to the person’s suitability for registration. Again this is just a small legislative change but it is one that brings added protections to consumers that unsuitable persons are not legally able to become motor vehicle traders. 
There is a further loophole in the current legislation that allows unregistered traders or those whose registration has lapsed at the time of their conviction for certain offences or at the time of their going into bankruptcy to not be automatically banned from trading as a motor vehicle dealer in the future. Such traders can currently continue to sell motor vehicles until the registrar can take a case to court to ban them. That process can take some months and incurs costs to the Government. This bill closes that loophole and proposes that such a person can be automatically banned without being registered under the Act if he or she met specific criteria such as convictions for crimes of dishonesty or going into a second bankruptcy within 10 years of the first. 
The Act currently requires private sellers to display a consumer information notice or window card containing information on the trader cost vehicle registration warrant of fitness and other important details when selling through a car market. In all other circumstances private sellers do not have to display a consumer information notice. These notices are prescribed by regulation under the Fair Trading Act 1986 must be completed and displayed by traders when selling used motor vehicles and must list the consumer’s rights when purchasing from a trader. The current requirement for private sellers at car markets to display a consumer information notice is confusing for private sellers and for consumers who are often under the impression that they have more rights than they actually do. The requirement also creates compliance costs for car market traders who spend much time ensuring that private sellers complete the forms and it diverts much of the Commerce Commission’s enforcement time. 
Under this bill traders who use car markets will still need to display the notices and car market operators will have a specific obligation to ensure that this happens. The bill also removes the requirement to display a consumer information notice for transactions between traders or between traders and wreckers. This is an unnecessary compliance cost on such traders as it provides no value to either party. 
The bill provides for costs to be awarded against a trader who does not attend a Motor Vehicle Disputes Tribunal hearing without good cause. Although the existing legislation already provides for the awarding of costs against a complainant for non-attendance this provision does not extend to non-attendance by a trader even though many hearings are held near the trader’s premises. That creates a perverse incentive for traders to be absent from the hearing as they know that costs cannot be awarded against them and it causes inconvenience and cost to consumers. This amendment should lead to consumers having more timely access to redress. 
Changes are also made in order to improve transparency through amendments to the tribunal’s reporting requirements set out in the Act. The changes will allow all decisions of the tribunal to be made public. Through publication of the tribunal’s decisions both motor vehicle traders and consumers will benefit by learning about what they can expect under the law. Consumer advocacy groups will also be better informed and better able to pass their knowledge on to their clients. The Ministry of Consumer Affairs and enforcement agencies will be better positioned to assess the effectiveness of the tribunal and to monitor for any systemic issues within the industry. 
Lastly I bring it to the attention of the House that the bill increases the financial limit for the operation of the tribunal from $50000 to $100000. This change in the limit reflects consultation with the tribunal industry and consumer organisations. It also recognises that motor vehicles both new and used may cost in excess of $50000. This change future-proofs the financial limit and it provides protection to consumers who purchase high-end vehicles. Regardless of consumers’ financial means they can still have difficulty in gaining redress from a motor vehicle trader. The change in the limit allows consumers to have their issues heard in the appropriate forum. 
The changes I have outlined will strengthen the operation of the Motor Vehicle Sales Act. They are designed both to reduce unnecessary compliance costs to the industry and to improve consumer protections and give consumers better access to dispute resolution through the Motor Vehicle Disputes Tribunal in relation to vehicle purchases. I commend this bill to the House.