Consumers (HSC SSCE Legal Studies): Revision Notes

The Nature of Consumer Law

Introduction: The evolution of consumer protection

From simple markets to complex economies

Consumer protection law emerged in response to changing economic conditions. Before the Industrial Revolution, most European societies operated on subsistence agriculture with simple marketplaces offering limited product ranges. Consumers could directly inspect unpackaged goods and often knew the producers personally. If problems arose, buyers could easily confront sellers to resolve disputes.

The modern marketplace challenge

Contemporary consumers face vastly different circumstances:

• Complex products: Items like superannuation plans, computers, and mobile phones require specialized technical knowledge that most consumers lack
• Impersonal transactions: Consumers typically deal with salespeople who have no role in manufacturing, or with remote multinational corporations with inflexible bureaucracies
• Power imbalances: In a laissez-faire economy (where state intervention is minimal), wealthy manufacturers historically held significant advantages over poor, uneducated workers

These changes necessitated government intervention through consumer protection legislation to address exploitation and ensure fairness in commercial transactions.

Defining the consumer

Legal definition

A consumer is a person who purchases or uses goods or services generated within the economy. Legally, an individual is considered a consumer when goods or services are purchased essentially for private use or consumption (not business purposes).

The legal relationship

Every purchase creates a special legal relationship between buyer and seller, characterized by:

• A "bundle" of legal rights and responsibilities for both parties
• Legal expectations that both parties will behave fairly
• Contractual obligations governing the transaction

Objectives of consumer law

Primary objective

The fundamental aim is to protect consumer welfare. This is achieved through multiple mechanisms:

Education and awareness

• Informing the public about their rights
• Enabling educated consumers to protect themselves from exploitation

Standards and accountability

• Articulating and mandating quality standards for goods and services
• Promoting transparency in manufacturing and service sectors

Legal remedies

• Providing statutory and common law remedies (means by which redress or reparation is provided for breach of legal rights)
• Implementing weights and measures laws (governing stated weights and measures on packaging to prevent deception)

Professional regulation

• Ensuring various occupations are licensed
• Protecting consumers in the era of global advertising (action designed to draw consumer attention to goods/services), mass marketing, and e-commerce

Contractual safeguards

• Regulating relationships between buyers and sellers
• Addressing 'unfair' contract terms
• Protecting vulnerable and disadvantaged consumers
• Guarding against unsafe and defective products

The three key actors

Consumer law operates through the interaction of:

1. Manufacturers or suppliers of goods and services for domestic consumption
2. The state (parliament and judiciary)
3. Consumers

All three groups pursue particular interests under the law and are interdependent in the contemporary marketplace. The common law of contract and various federal and state statutes govern day-to-day dealings with merchants.

Contracts: The foundation of consumer transactions

What is a contract?

A contract is an agreement made between 2 or more persons that is recognized by courts as legally binding on the parties. The basis of a contract is agreement, typically consisting of:

• An offer made by the offeror (person making the offer)
• Acceptance by the offeree (person to whom the offer is made)

Types of contracts

Written contracts

These are the most common form of consumer contracts, characterized by:

• Clear identification of parties
• Contractual terms in writing for all to see
• Precise language describing terms to avoid relying on memories
• Parties' signatures indicating all terms have been read and agreed to

Parties opt for written contracts to avoid having to prove:

• The contract existed
• The contract is incomplete
• Oral undertakings were given during negotiation
• A party's words or conduct were misinterpreted

Oral contracts

These rely on the good faith (intention to honour a commitment) of all parties. However, they may be difficult to prove and remember precisely, making them open to misunderstanding. Courts will closely examine conduct and statements made by each party leading up to negotiation.

Oral agreements can be supported in court by:

• The conduct of the other party before and after agreement
• Specific actions of the other party
• Past dealings with the other party

Written-oral contracts

Contracts can be a mixture of written and oral agreements, particularly when the written agreement appears incomplete. However, when a contract has been put in writing and appears complete, it will be accepted against a contradictory oral agreement.

Essential elements of a contract

For a contract to exist and be legally enforceable, four elements must be present:

1. Intention to create legal relations

The parties must have intended to enter into a legally binding relationship. Courts examine behaviour and statements to determine intention. Purely social arrangements or agreements between family members typically lack this intention.

2. Offer

An offer is a firm proposal made with willingness to be bound by the terms. Distinguished from:

• Preliminary proposals
• Enquiries or price quotations during negotiation
• Invitation to treat (words or conduct inviting someone to make an offer or negotiate)

Examples of invitations to treat:

• Auction sales: The auctioneer's call for bids is an invitation to treat; the bid is the offer; acceptance occurs with the fall of the hammer
• Shop displays: Marked prices on articles in shop windows are invitations to treat, not offers to sell at the stated price
• Catalogues and advertisements offering goods or services
• Timetables offering transport

3. Acceptance

Acceptance is the unconditional consent to all terms of the offer. For acceptance to be effective in law, it must be:

• Communicated to the offeror
• Made in the manner specified by the offeror (if specified)
• Without qualification of all terms

4. Consideration

Consideration is something given, done, or suffered in return for a promise in a contract. It is the essential element that turns a mere promise into an enforceable contract. The "price paid for the promise" shows parties intended to form a binding contract.

Most commonly, consideration is money paid for goods or services. Alternatively, consideration may involve:

• Doing something
• Refraining from doing something
• Giving up something
• Taking on responsibility to obtain the benefit promised

Other requirements for enforceability

Capacity to contract

Parties must be capable of voluntary agreement. Contracts cannot be enforced against people who lack capacity:

• Children
• People with mental disorders
• People under the influence of alcohol or drugs

Statutory requirements

Certain contracts have specific requirements in legislation. For example, in NSW, contracts for the sale of land must be in writing or have a written note or memorandum (Conveyancing Act 1919 (NSW) s 54A).

Free and voluntary consent

Obligations in a contract will be negated if both parties have not given free consent due to:

• Mistake: One or both parties misunderstand each other or agree based on incorrect understanding
• Misrepresentation: One party induces the other by making a false statement
• Duress: Coercion or pressure used to influence someone; consent obtained by violence or threats
• Undue influence: One party's use of power or status to obtain consent

Legality

Contracts for illegal acts (e.g., contract to kill someone) or that contravene public policy (e.g., endanger public safety) are invalid and unenforceable.

Case study: Carlill v Carbolic Smoke Ball Co. (1893) 1 QB 256

Terms of contracts

What are contractual terms?

The terms of a contract relate to the basis of the agreement—the promises made by each party. For example, Amy agrees to sell certain goods to Liam, and Liam agrees to pay $500 to Amy. These promises are the terms of the contract.

Terms can be:

• Express terms: Specifically stated and agreed by both parties, either in writing or orally
• Implied terms: Not expressly stated, but which courts are willing or required by statute to enforce

Terms may appear as:

• Written documents (usually signed by both parties)
• Oral statements
• Notice from supplier to purchaser (e.g., terms on the back of a ticket or on a sign)

Conditions and warranties

Contract terms can be classified as either conditions or warranties:

Conditions

A condition is a term of fundamental and essential importance. If a party breaches a condition, the aggrieved party can:

• Terminate the contract
• Sue for damages (money ordered by a court as compensation for damage suffered)

Warranties

A warranty is a term that is less important or peripheral to the contract (e.g., a manufacturer's promise to repair or replace faulty goods). If a party fails to honour a warranty, the aggrieved party can:

• Sue for damages
• But is NOT entitled to end the contract

Express and implied terms

Express terms

Express terms are contractual terms that have been specifically stated and agreed by both parties at the time the contract is made, either in writing or orally. They clearly set out the legal rights of both parties.

Implied terms

Implied terms are contractual terms that have not been expressly stated, but which courts are willing or required by statute to enforce. The legislature and judiciary in Australia operate on the principle that certain standards must be upheld when persons enter contractual agreements, even where these standards are not stated expressly.

How terms are implied:

• In contracts of a certain type (e.g., contracts for the sale of goods)
• In a particular contract based on parties' presumed intentions
• Based on ordinary custom or usage in a particular market or situation

Requirements for implied terms:

An implied term should be:

• Reasonable
• Equitable
• Consistent with the express terms of the contract
• Able to allow parties to perform their tasks efficiently and fairly

Key implied terms:

Merchantable quality: A condition implied by statute in all contracts for the sale of goods (where goods are bought on the basis of a description), guaranteeing goods offered for sale are of sufficiently high quality to be suitable for sale and are fit for their usual purpose.

Fit for purpose: An implied term in contracts of sale, guaranteeing the goods sold will do what they were designed to do.

Exclusion clauses

Exclusion clauses are incorporated into contracts to limit a party's liability for conduct that would otherwise breach the contract or cause harm. These terms limit or take away the other party's right to claim damages.

Characteristics:

• Almost always contained in a written document
• May or may not be signed
• Often appear on tickets or signs

Examples:

• Car park ticket stating owners take no responsibility for damage to vehicles while parked on premises
• Airline ticket guaranteeing a flight but not necessarily on the stipulated date
• Housing insurance that won't cover acts of God or terrorism

Consensus ad idem

For a contract to be valid and legally enforceable, parties must demonstrate consensus ad idem (Latin for "agreement as to the same things")—agreement about the terms. Whether or not there is a subjective "meeting of the minds," a court must determine whether parties agree from their words and behaviour.

Unjust contracts and unconscionable conduct

What makes a contract unjust?

Where a contract is unjust or unfair as a result of unconscionable conduct (one party's exploitation of the vulnerability of another), the innocent party can bring a civil action seeking rescission (termination of a contract with the court's approval, treating it as if it never existed and discharging parties from obligations).

The victim may also be entitled to various remedies, such as damages. Both common law and legislation provide protection from unjust contracts.

Understanding unconscionability

Unconscionability is best understood by considering whether both parties bargained on equal terms, or whether one party used superior position to take advantage of another. If someone is induced to enter a contract by the other person's:

• Misleading statements
• Greater bargaining strength

...they can seek to have the court set it aside.

Case study: Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447

Case study: Blomley v Ryan (1956) 99 CLR 362

Common law protection: Implied terms

As previously noted, a party who is a victim of duress, undue influence, or unconscionable dealing is entitled to obtain relief and can have the contract rescinded. Additionally, the law will imply contractual terms requiring parties to do what is necessary to enable performance of the contract.

When courts imply terms:

• Sometimes courts ask whether parties would have expressly agreed to the term if they had considered the issue when entering the contract
• In other cases, 'standard' terms are implied without inquiry into actual intent of parties
• If parties have demonstrated a clear intention to the contrary, terms will not be implied

Important common law principles

The law protects consumers in several ways:

Fair negotiation without undue influence

Where parties are in a relationship in which one may exercise considerable influence over the other, there is risk of abuse of trust. People who are materially or emotionally dependent upon another can be easily influenced.

Professional services with reasonable care

A contract for professional services must be performed with reasonable care.

Absence of duress or coercion

A contract must be entered in the absence of duress or coercion.

Merchantable quality

The product purchased must be of merchantable quality.

Fit for purpose

The product must be fit for the purpose for which it is required.

Matching advertised description

A product must match its advertised description where the buyer relies on that description, whether or not they have seen the product or bought based on description alone.

No deceptive or misleading marketing

Manufacturers/suppliers cannot engage in deceptive or misleading marketing behaviour.

Statutory protection

Overview of consumer protection legislation

Several state and federal statutes ensure all consumer contracts contain implied terms providing broad protection against:

• Unconscionable conduct
• Defective products
• Deceptive or misleading advertising

Key legislation:

• Sale of Goods Act 1923 (NSW): Governs sale of goods transactions
• Competition and Consumer Act 2010 (Cth): Federal consumer protection (formerly Trade Practices Act)
• Fair Trading Act 1987 (NSW): Mirrors federal counterpart but regulates NSW businesses not incorporated (the federal Act applies only to corporations under s 51(xx) of the Australian Constitution)
• Contracts Review Act 1980 (NSW): Allows courts to grant relief for unjust contracts
• Australian Securities and Investment Commission Act 2001 (Cth): Governs consumer protection in financial services

Competition and Consumer Act 2010 (Cth)

Section 74 mandated that all contracts for supply of services contain an implied warranty that they will be rendered with due care and skill, and that any materials supplied will be fit for purpose.

Section 68 ensured suppliers cannot 'contract out' of their statutory obligations regarding consumer protection.

Contracts Review Act 1980 (NSW)

This Act allows courts to grant relief for unjust contracts. The court may (s 7):

• Refuse to enforce any or all provisions of the contract
• Make an order declaring the contract void
• Make an order varying (changing) any provision in the contract

Trade Practices Amendment (Australian Consumer Law) Act 2009 (Cth)

This was the first stage of the process resulting in new consumer legislation of 2010. It amended the then Trade Practices Act 1974 (Cth) and Australian Securities and Investment Commission Act 2001 (Cth) by inserting new provisions on:

• Consumer contracts
• Financial services contracts

Unfair terms in standard form contracts:

Unfair terms of standard form contracts (contracts prepared by one party—generally the party with bargaining power—then presented to the other party who must accept or reject) will be void, without requiring court action.

An unfair term is defined as a term that would 'cause a significant imbalance in the parties' rights and obligations' under the contract.

In determining whether a term is unfair, courts must consider:

• The extent to which the term would cause detriment to a party if applied or relied upon
• The extent to which the term is transparent and readily understood by both parties
• Any other relevant matters

Case study: Director of Consumer Affairs of Victoria v AAPT Ltd [2006] VCAT 1493

Negligence and consumer protection law

Multiple avenues for redress

Where goods manufactured without proper care cause injury, loss, damage or death, the consumer is entitled to bring an action under:

• Relevant federal or state legislation
• Breach of contract (if the supplier or manufacturer expressly or impliedly promised goods are free of defect)
• Negligence (breach of a duty of care resulting in harm that could be foreseen)

Government responsibilities for product safety

Federal and state governments seek to ensure:

• Unsafe products reaching the market are readily detected and reported
• Effective and timely removal of unsafe products from the market
• Compulsory product recall occurs if required
• Compensation is available to consumers who purchase unsafe products
• Breaches of consumer protection laws attract sanctions

Duty to warn and product recall

Suppliers have a duty to warn consumers of products whose dangerous characteristics are discovered after they are already on the market. They may also be required to recall the product under:

• Competition and Consumer Act 2010 (Cth)
• ss 34–35 of the Fair Trading Act 1987 (NSW)

Recent product recall examples:

• Hewlett-Packard (HP) and Compaq Notebook Computer Lithium-Ion Battery Packs – overheating and exploding (2009)
• Cadbury Old Gold Dark Chocolate, 70% Cocoa, 200g block – milk solids not declared on labelling, causing allergic reactions for lactose-intolerant consumers (2009)

Consumer product safety standards

Legislative provisions regarding consumer product safety standards include requirements for:

• Testing of goods
• Inclusion of warnings or instructions with products

These standards are intended to prevent or reduce the risk of injury to any person (see Fair Trading Act 1987 (NSW) s 38).

Examples where safety standards are particularly important:

• Children's prams
• Smoke detectors
• Kitchen ovens

Regulation of marketing and advertising

Statutory protection

Although common law provides some protection regarding deceptive practices of manufacturers/suppliers, it wasn't until codified into statute that consumer law truly emerged as a force for social and economic justice.

Provisions protecting consumers from deceptive advertising and marketing practices are contained in both federal and state consumer legislation. The provisions of the Competition and Consumer Act 2010 (Cth) governing marketing and advertising are incorporated into the new Australian Consumer Law (the collection of federal consumer laws, attached as Schedule 2 of the Competition and Consumer Act 2010 (Cth)—formerly the Trade Practices Act).

Deceptive or misleading conduct

Section 18 of the Australian Consumer Law (formerly s 52 of the Trade Practices Act) and s 41 of the Fair Trading Act contain similar provisions prohibiting misleading or deceptive conduct.

What is 'conduct'?

'Conduct' means 'doing or refusing to do any act'.

What constitutes misleading or deceptive conduct?

• Exaggerated statements about a product
• Failure to disclose all relevant information
• In some circumstances, silence
• Promises that are not kept
• Incorrect predictions

Remedies: Under federal legislation, a consumer can recover damages for personal injury or death resulting from a supplier's misleading or deceptive conduct.

Application: Under the Australian Constitution, a federal Act applies only to corporations trading across state borders. The Fair Trading Act 1987 (NSW) regulates firms operating only within NSW and has broader application, extending to individuals. Section 42 prohibits misleading or deceptive conduct.

Case study: Handley v Snoid (1981) 4 TPR 361

False or misleading representations

In addition to the general prohibition of misleading and deceptive conduct, s 29 of the Australian Consumer Law contains specific provisions regarding representations (statements or assertions). Section 44 of the Fair Trading Act 1987 (NSW) has similar content.

Suppliers breach the law by making false representations including:

• False claims about quality or value of a product
• Claims that goods are new when they are second-hand
• Representations that a product is sponsored by or used by a celebrity when it is not
• False or misleading representations concerning a potential buyer's need for goods or services
• False claims concerning existence or effect of any condition, warranty or guarantee
• False or misleading representations about the place of origin of a product
• False claims about availability of repair facilities or spare parts for a product

Unconscionable conduct

Section 21 of the Australian Consumer Law and s 43 of the Fair Trading Act provide broad protection for vulnerable consumers against unscrupulous suppliers who use their greater bargaining power to obtain an advantage.

Offering gifts and prizes

Section 32 of the Australian Consumer Law and s 48 of the Fair Trading Act make it illegal for suppliers to entice consumers to buy products by offering gifts, prizes or other free items with the intention of not providing the advertised gift. Suppliers participating in such marketing schemes are considered to have been engaging in deceptive practice.

Bait advertising

Bait advertising is the practice of advertising something at a specified price, with the knowledge that it will not be possible to offer it at that price for a reasonable time and in reasonable quantities. Often called the 'bait and switch,' it has the objective of getting consumers into shops where sales staff inform customers they've 'run out of a particular line' and attempt to convince them to buy a more expensive product or model.

Such behaviour breaches federal law (s 35 of the Australian Consumer Law).

Case study: Reardon v Morley Ford Pty Ltd (1980) 49 FLR 401

Referral selling

Section 49 of the Australian Consumer Law makes it illegal for a supplier to offer discounts, rebates or other benefits to consumers in return for introducing other customers to the supplier.

Pyramid selling

Section 44 of the Australian Consumer Law makes it illegal for a corporation to participate in a pyramid selling scheme (an illegal form of selling whereby an individual pays to become a distributor of a good in return for a reward for recruiting new distributors).

The practice is fraudulent because what is really being 'sold' is the right to distribute, not the actual product or service being marketed.

Unsolicited and unordered goods

Section 39 of the Australian Consumer Law makes it illegal for suppliers to send unsolicited credit cards through the mail (with the exception of credit card companies providing a replacement for an expired card).

Section 40 prohibits suppliers from sending unsolicited goods and then demanding payment.

Coercion

Section 50 of the Australian Consumer Law prohibits corporations from using:

• Physical force
• Harassment
• Coercion

...on consumers in connection with the sale or possible sale of goods or services, or to obtain payment for goods or services.

Non-statutory controls on advertising

Overview

Non-statutory controls also afford consumer protection against deceptive and misleading marketing and advertising. Australia has a highly accessible, self-regulatory framework which complements its statutory regime.

The Advertising Standards Bureau (ASB)

Australia's system for non-statutory regulation of advertising and marketing is administered by the Advertising Standards Bureau through:

1. The Advertising Standards Board
2. The Advertising Claims Board

These boards operate on the principle that advertisers share a common interest in promoting consumer confidence in and respect for general standards of advertising.

Advertising Standards Board

Functions:

• Provides a free complaint resolution service to the public
• Makes determinations on complaints about most forms of advertising and marketing

Issues from which complaints arise:

• Use of language
• Discriminatory portrayal of people
• Concerns about children
• Portrayals of violence, sexuality and nudity
• Health and safety

Appeal mechanism: The community and advertisers can challenge decisions made by the ASB.

Advertising Claims Board

Functions:

• Provides a complaint resolution service regarding issues of truth, accuracy and legality of advertising
• The complainant bears the cost of the resolution process

Primary purpose: To resolve disputes between competitors through alternative dispute resolution (ADR) (dispute resolution processes, such as mediation, arbitration and conciliation, that do not involve courts), rather than expensive and time-consuming litigation.

Professional codes of ethics

Both boards use professional codes of ethics as the basis for their determinations, including:

• Australian Association of National Advertisers (AANA) Code of Ethics
• AANA Food & Beverages Code
• AANA Code for Advertising and Marketing Communications to Children

Cooling-off periods

What is a cooling-off period?

A cooling-off period is a period of time that gives buyers an opportunity to rethink their decision to enter into a contract of sale.

Why cooling-off periods exist

Legislative provisions permit cooling-off periods in contracts because the law acknowledges the existence of high-pressure sales tactics that can influence consumers to make purchases they otherwise would not. These tactics may not constitute unconscionable conduct, but may result in purchases that put the buyer at a disadvantage.

Statutes providing for cooling-off periods

Fair Trading Act 1987 (NSW)

• Regulates direct commerce contracts (door-to-door and telephone sales)
• Permits a 5-day cooling-off period (s 40E)

Conveyancing Act 1919 (NSW)

• Specifies a 5-day cooling-off period for sales of residential property (s 66S)

Student Assistance Act 1973 (Cth)

• Provides for a 14-day cooling-off period for a loan contract between a student and a financial company

Occupational licensing

Purpose of licensing

Regulation of professions and occupations aims to guarantee that people employed in various occupations have attained the requisite skills and perform their roles honestly. If all individuals in the workforce could be trusted to maintain high standards of ethical practice, there would be no real need for licensing.

Types of regulation

Registration

• Listing practitioners on an official register
• Identifies them
• Ensures compliance with legal requirements

Certification

• Recognizes those who have obtained necessary and/or desirable qualifications for practicing the profession
• Provides information to the public to help them choose between competing professionals

Licensing

• Identifies those who have fulfilled criteria related to education, experience and compliance with professional codes of ethics
• Authorizes them to practice
• Generally involves a regulatory body to administer the licensing regime

Occupations and businesses requiring licenses in NSW

Professions	Trades	Businesses
Doctors	Plumbers	Travel agents
Lawyers	Electricians	Car dealers
Engineers	Builders	Credit providers
Dentists	Motor mechanics	Hotels
Architects	Carpenters	Motels
Veterinarians	Fitters and turners	Restaurants

Self-regulation

One way industries may set practicing standards and regulate entry into their field is self-regulation through professional bodies.

Notable examples:

• Australian Medical Association (AMA): National body regulating ethics, work standards and academic qualifications of doctors
• NSW Law Society: Performs the same role for solicitors in NSW

State regulation

As a consequence of problems with self-regulation, states have been forced to intervene via legislation. State parliaments have enacted legislation providing strict guidelines regarding the fiduciary duty (legal obligations that must be fulfilled without regard to self-interest or opportunity to make unauthorized profit from the position; legal duty to manage a client's money while it is held in a trust account—a bank account for money held and dealt with on behalf of clients) of solicitors, real estate agents and travel agents.

Objective: To compel businesses, tradespersons and professionals to act honestly and in accordance with their legal duties to the consumer.

Example: Motor car dealers and repairers

The activities of car dealers and repairers in NSW are governed by:

• Motor Dealers Act 1974 (NSW)
• Motor Vehicle Repairs Act 1980 (NSW)

Motor Dealers Act ensures that:

• Firms seeking to buy or sell cars are licensed by the NSW Office of Fair Trading
• Dealers must refrain from making false or misleading statements regarding quality of vehicles
• All guarantees and warranties are honoured

Motor Vehicle Repairs Act makes it illegal to:

• Trade as a vehicle repairer without a licence
• Governs activities of all licensed auto-electricians, panel beaters, spray painters, and brake and transmission mechanics
• Ensures only qualified repairers complete such work

Any licensee (licence holder) whose work is below the industry minimum standard has their licence revoked and will not be able to undertake any repair work which could potentially harm a vehicle owner or cause further damage.

Example: Travel agents

In NSW, travel agents are regulated via the Travel Agents Act 1986 (NSW). The NSW Office of Fair Trading oversees operation of this statute. Disputes between agents and clients are heard by the NSW Consumer, Trader and Tenancy Tribunal.

Key provisions:

• All travel agents must be licensed
• Must contribute financially to a Travel Compensation Fund (TCF) to compensate consumers if an agent becomes bankrupt
• Travel agents are not required to keep a trust account, but in some circumstances the trustees of the TCF can require them to do so

Unjust conduct: It is illegal for travel agents to behave in an unjust manner. 'Unjust conduct' is defined in s 28 as conduct that is:

• Dishonest or unfair
• In breach of contract
• Infringes the Act or a regulation
• Fails to comply with a condition of the agent's licence

Enforcement: The Director General can apply to the NSW Administrative Decisions Tribunal for an order that the agent refrain from that conduct (s 31). The Commissioner of the Office of Fair Trading has power to discipline licence holders, with measures ranging from a reprimand to suspension or cancellation of the agent's licence.

Review of licensing decisions

The regulatory body for a particular profession or occupation may grant or revoke a licence. When it makes an administrative decision to deny access to or revoke a licence, it must do so in accordance with the rules of natural justice (the body of rules that ensure decision-makers act fairly, in good faith and without bias when resolving disputes).

In simple terms, this means individuals must be:

• Given an opportunity to hear the reasons why a licence has been denied or revoked
• Able to present arguments as to why the licence should be granted or reinstated

Appeal process:

1. Apply to the Office of Fair Trading for an internal review
2. If dissatisfied, apply to the Administrative Decisions Tribunal for further review

Reasons for refusing or revoking a licence

Possible reasons for refusing a licence	Possible reasons for revoking a licence
Inadequate training or education of the applicant	Malpractice by the licence holder
Inability of the licence holder to meet minimum industry or professional standards	Fraudulent, misleading or deceptive behaviour by the licence holder
Breach of the licence holder's fiduciary duty with regard to trust funds
Concern regarding the character of the applicant, such as their honesty

Remember!