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Tenancy tops conduct review

A WORKING party undertaking a long-awaited review into unconscionable conduct has delivered its recommendations to Fair Trading Minister John Kobelke.

Unconscionable conduct is one of small business’ biggest concerns. It occurs when one party unfairly takes advantage of another.

One of the key areas in which this occurs is commercial tenancy. Some landlords put a clause into a tenant’s lease forcing them to pay legal costs if the tenant initiates legal action.

At the moment there is little in State law to protect small businesses from unconscionable conduct. The biggest protection comes through the Federal Trade Practices Act but seeking remedies through this means is cost prohibitive.

According to a 1999 Australian Legal Reform Commission study, the average cost of taking Federal Court action was $39,190.

The Court Government drafted a Green Bill called the Fair Trading Amendment Bill, which suggested mirroring Federal unconscionable conduct legislation in the Fair Trading Act.

The Labor Party promised to take steps to stamp out unconscionable conduct in the lead up to this year’s February 10 State election.

One of its first acts as WA Government was to set up the Unconscionable Conduct Working Party.

The working party, chaired by Vincent mayor Nick Catania, included the WA Retailers Association, the WA Small Business and Enterprise Association, the Retail Traders Association, the Chamber of Commerce and Industry and the Property Council of Australia, and made 10 recommendations to Government, including:

p introducing the Green Bill as soon as possible;

p encouraging industry associations to develop industry specific self-regulatory codes of conduct;

p including prescribed codes of conduct when introducing the Green Bill;

p allowing the Department of Consumer and Employment Protection to take representative action on behalf of small businesses where breaches of a prescribed code occurs;

p introducing an unconscionable conduct and small business retail tenancy provision into the Commercial Tenancy (Retail Shops) Agreement Act;

p reviewing the Fair Trading and Consumer Affairs Acts’ voluntary dispute resolution procedures;

p making changes to the Commercial Tribunal;

p allowing the Department of Consumer and Employment Protection to take representative action on behalf of small business where breaches of Department-administered legislation occur;

p establishing a low-cost Fair Trading tribunal; and

p giving the Commercial Tribunal and relevant departments appropriate resources to achieve these recommendations.

Retailers Association of WA chief executive officer Martin Dempsey said some of the recommendations in the review had been watered down.

He believes the push for self-regulation should be scrapped and that the Government should introduce mandatory codes to cover industry sectors.

WA Small Business and Enterprise Association executive director Philip Achurch said the key for his organisation was getting the Federal legislation enshrined in the Fair Trading Act.

“That way, unincorporated small businesses would be covered too. At the moment the Federal legislation will only cover incorporated small businesses,” he said.

Property Council of Australia WA Branch executive director Joe Lenzo said it was important the unconscionable conduct legislation draw-down followed the New South Wales legislation.

In that State, a case of unconscionable conduct has to be heard by at least a District Court judge.

However, to make the process more cost effective, the hearing is held in a tribunal.

“Any appeals from that tribunal can only be based on points of law,” Mr Lenzo said.

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