Hire Purchase Acts
Hire Purchase Acts were first introduced from the late 1950s to regulate the then predominant form of consumer finance. With the passage of time and the introduction of broad-based consumer credit legislation, where this legislation remained in place its coverage by default became confined to commercial transactions.
AELA formed the view that this type of legislation was an anachronism and an inappropriate form of regulation of what had essentially become a commercial finance product. This view was confirmed by successive official inquiries, and the legislation has now been largely repealed in all jurisdictions. SA repealed its Act in the early 1970s, with NSW and ACT following in the mid-1980s, and Tasmania and the NT in late 1996 to coincide with the introduction of the Consumer Credit Code. The Victorian legislation was largely repealed in 1998, and those provisions, which were retained, lapsed on 30 June 2003.
In Queensland the Hire Purchase Act was effectively repealed from 1 January 2003. Hire purchase contracts entered into after 1 January 2003 are no longer regulated. Contracts entered into before 1 January 2003 remain regulated by the Act until it expires on 30 June 2010.
In WA, Part 9 of the WA Acts Amendment and Repeal (Competition Policy) Act 2003 commenced on 1 May 2004, substantially repealing the Hire Purchase Act. Contracts entered into before 1 May 2004 remain subject to and regulated by the full range of provisions of the Hire Purchase Act 1959. For contracts made subsequent to that date, some rights continue to apply according to whether the hirer is a farmer or not. Non-farmers have rights to receive the benefit of any surplus on repossession or voluntary surrender and to ask a court to review the contract if it is unconscionable. For farmers, in addition to those rights, they must receive prior written notification of enforcement action and can ask a court to postpone repossession of the farmer machinery.
In addition, there remains other legislation affecting hire-purchase contracts in Victoria (where the hirer must receive the benefit of any surplus on repossession) and NSW and Queensland (where there are procedures to follow when enforcing a hire-purchase agreement against a farmer).
AELA will make an assessment in light of the impact of Personal Property Security Reform about the continued application of specific state statutory rights and obligations to hire-purchase agreements, and if necessary make representations for further change or full repeal.
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