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© State of New South Wales through NSW Fair Trading 2011 Fair Trading Compliance Procedure Manual - Version: October 2011 – v1.0 - 182 -

6D. Home Building, Energy and Utilities

The following teams within the Home Building Service undertake compliance work:

• Building Investigations Branch: residential and specialist building (predominantly work done by unlicensed persons and without home warranty in place); and

• Energy and Utilities Unit: electrical and gas products (predominantly uncertified or unsafe products), unsafe electrical and gas installations (including auto gas), and plumbing connections to the Sydney Water network.

Legislation

• Home Building Act 1989, Home Building Regulation 2004.

• Electricity (Consumer Safety) Act 2004, Electricity (Consumer Safety) Regulation 2006.

• Gas Supply Act 1996 (s.83A), Gas Supply (Consumer Safety) Regulation 2004, Gas Supply (Gas Meters) Regulation 2002.

• Sydney Water Act 1994.

Licences – Building Work

The main factors determining how HBS will handle a complaint are whether the work was residential building work or specialist work, and whether the person who carried out the work on the dwelling was authorised to do so.

The Act provides the following definitions of ‘residential building work’, ‘specialist work’ and ‘dwelling’:

Dwelling means a building or portion of a building that is designed, constructed or adapted for use as a dwelling (such as a detached or semi detached house, transportable house, terrace or town house, duplex, villa-home, strata or company title home unit or residential flat). It includes any swimming pool or spa constructed for use in conjunction with a dwelling and such additional structures and improvements as are declared by the regulations to form part of a dwelling. It does not include buildings or portions of buildings declared by the regulations to be excluded from this definition.

Residential building work means any work involved in, or involved in co-ordinating or supervising any work involved in:

(a) the construction of a dwelling; or

(b) the making of alterations to a dwelling; or

(c) the repairing, renovation, decoration or protective treatment of a dwelling.

It includes work declared by the regulations to be roof plumbing or specialist work done in connection with a dwelling and work concerned in installing a prescribed fixture or apparatus in a dwelling (or in adding to, altering or repairing any such installation). It does not include work that is declared by the regulations to be excluded from this definition.

Specialist work means:

(a) Plumbing work, or


(b) Electrical wiring work or

(c) Any work declared by the regulations to be refrigeration work or air-conditioning work.

The three most common types of contractor licences that authorise a ‘person’ (being an individual, partnership or corporation) to undertake residential building work or specialist work are Building Licences, Trade/Specialist Licences and Building Consultant Licences.

Other persons authorised to undertake residential building work or specialist work are the holders of a Supervisor Certificate, Tradesperson Certificate or Owner-Builder Permit. There are various categories of specialist licences and certificates, eg ‘roof plumbing work’ or ‘air conditioning work’. These licences and certificates are issued and renewed subject to conditions of authority as prescribed in the Home Building Regulations 2004.

As a preliminary step in assessing or investigating a complaint, HBS obtains information from GLS on the current status of a person’s licence and determines whether the person was properly authorised to carry out the type of work or enter into the type of building contract relevant to the complaint.

In exceptional circumstances, residential building work or specialist work may be undertaken by a person without the licence, certificate or permit normally required.

Before issuing a Penalty Notice or pursuing disciplinary action it is prudent to check with the contractor to confirm whether exemptions under the Home Building Regulations 2004 may be applicable. A list of these exemptions is below.

To contracting and advertising Clause 14

From requirements for contracts with holders of contractor licences Clause 15

To provision of consumer information Clause 16

To cooling off periods in contracts Clause 17

From requirements for contracts with holders of building consultancy licenses Clause 18

To provision of information by holders of building consultancy licences Clause 19

To the doing of residential building work Clause 20

To employees of certain corporations Clause 21

To the doing of specialist work Clause 22

To the doing of electrical wiring work by apprentices and trainees Clause 23

Certification – Electrical and Gas Items

Items are required to be certified in one of the Australian jurisdictions. Procedures for certification in NSW are maintained by the Energy and Utilities Unit.

Common Disputes

Disputes commonly relate to the quality of work and payment for home building work.


The Consumer, Trader and Tenancy Tribunal (CTTT) has jurisdiction to hear disputes between tradespeople and consumers. Complaints may also be lodged with NSW Fair Trading, which may involve mediation and/or an inspection of the work.

Complaints also relate to unsafe gas and electrical installations.

Common Breaches

• Unlicensed tradesperson (or work performed outside the tradesperson’s licence class)

• Failure to use the correct contract

• No home warranty insurance in place

• Failing to rectify work as ordered by the CTTT (a ground for disciplinary action) and

• Selling uncertified electrical articles and gas appliances

Enforcement Actions

At the conclusion of the investigation process, if there is sufficient evidence to support the allegation that a building contractor breached the Home Building Act, the investigator is responsible for recommending an appropriate compliance response against the contractor. Possible responses include:

• Issue of a penalty notice

• Prosecution

• Injunction

• Disciplinary action under Part 4 of the Home Building Act (which could result in a monetary penalty, or suspension or cancellation of the contractor’s licence)

• Other actions may be available under the ACL, Fair Trading Act, or Crimes Act (including undertakings, public warnings)

Other outcomes of complaints investigated by the energy teams may include a recall of unsafe items, the recommendation of a safety standard, the temporary ban on the sale of unsafe items or the removal of a gas compliance plate. Possible breaches of the Home Building Act may be referred for further investigation by the Building Investigations Branch (for example unlicensed plumbers detected by the plumbing inspectors).

Powers – Home Building Act

• Power of entry (see Chapter 4I and the site inspection work sheet on the HBS G: drive)), except residential premises if no consent, ability to take photos/film/audio/video covered by “any examination” – s.126(1) HBA

• Power to request information from contractors and owner-builders – s.127A HBA

• Show certificate of identification to person in charge – s.128(2) HBA

• Search warrants – s.126(4) HBA (See Chapter 4J)

• Notice to produce – s.127 HBA (see Chapter 4K) – refer to templates on the HBS G: drive.


Powers – Gas and Electrical

• Power of entry (see Chapter 4I) – s.26 E(CS)A, cl.13 GS(CS)R

• Show certificate of identification to person in charge – s.39(4) E(CS)A

• Search warrants – s.42 E(CS)A (See Chapter 4J)

• Notice to produce – s.26(2) E(CS)A (see Chapter 4K) – refer to templates on the HBS G: drive


Possible Evidence Sources

• Home Building Act: Contractor advertisements (print, business cards, vehicles), invoices/receipts, building contracts, sub-contractor agreements, home warranty insurance, bank records, consumer/witness statements, investigator observations/photos during inspections, contractor interviews, evidentiary certificates (s.131), CTTT orders, rectification orders

• Electrical/Gas: articles and appliances, evidentiary certificates, test reports, witness statements, investigator observations/photos, retailer interviews

Investigator Resources

The NSW Fair Trading website provides contractors, retailers and consumers with fact sheets in relation to home building licensing, home warranty insurance and contracts, as well as information about gas/electrical safety.

The NSW Business Licence Information Service website provides copies of licence application forms.

Additional templates are available on the HBS G: drive.


6E. MOTOR DEALERS

As an investigator you will be required to conduct an inspection of Motor Dealers records under the Motor Dealers Act 1974 and the Motor Dealers Regulations 2010.

The inspection may be the result of an allegation or may be part of an inspection program. The information in this procedure will take you through the process of completing an inspection report which is a thorough check of the licensing requirements and business records required to be kept by a motor dealer.

The current inspection form is accessible via the Compliance e-Resource.

Internal Database searches

Prior to attending the premises, searches of the Government Licensing System (GLS) and the Business Registration System (BRS – See Chapter 8B), TRIM and CAS (Chapter 8A) are required, these searches will inform you:

• if it is a corporation or an individual trader;

• the class of licence held;

• the legal entity name;

• the registered business address;

• the directors; and

• confirm that the registered business name is current.

Material removed subject to Government Information (Public Access) Act 2010

External Database Searches

It is also recommended that an Australian Securities and Investments Commission (ASIC) search is conducted. This will provide details of:

• directors;

• current status of the company (registered, in liquidation etc);

• the date the company was registered; and

• the registered business address.

Licence Requirements

An individual or corporation who wishes to trade in the buying, selling, dismantling or exchanging new or second-hand motor vehicles is required to be licensed under the Act (there is no requirement for the person and the corporation to be licensed separately).

Motor Dealers Licence – allows a person to carry on the business of buying, selling or exchanging any vehicle (and to undertake any of the activities allowed by other types of licences except that of a car market operator/financier).

Auto Dismantler Licence – allows a person to demolish or dismantle vehicles or their parts, buy vehicles, sell substantially demolished or dismantled vehicles and buy or sell certain prescribed parts and accessories:

• airbags;


• alloy 'mag' wheels;

• boot lids;

• bonnets;

• car radio, tape, television, digital videodisc (DVD) or compact disc (CD) equipment;

• chassis and major body sections;

• electronic navigation equipment;

• engines and engine blocks;

• front and rear bumper bars;

• front apron panels;

• gearboxes and transmissions;

• hatchback doors;

• instrument clusters;

• right and left back doors;

• right and left front doors;

• right and left front mudguards.

Persons holding a repairer's licence under the Motor Vehicle Repairs Act 1980 and only buying or selling parts and accessories in the normal course of their repair business do not require an auto-dismantler's licence.

Wholesaler Licence – allows the trader to carry on the business of selling vehicles to, or exchanging vehicles with, financiers and other licence holders (not consumers). Wholesalers may purchase vehicles from the public but cannot sell directly or through auctions to the general public.

Motor Vehicle Parts Re-Constructer Licence – allows a person to carry on the business of buying or acquiring for the purpose of selling, exchanging or reconstructing parts and accessories of motor vehicles such as:

• airbags;

• engines and engine blocks;

• gearboxes and transmissions; and

• instrument clusters.

Motor Vehicle Consultant Licence – allows traders to advise others about where they can purchase a particular vehicle. A motor vehicle consultant cannot be a party to the sale of any particular vehicle.

Car Market Operator Licence – allows a person to provide a site from which other people make private sales of second-hand vehicles.

At the Registered Place of Business

It is usual practice that inspections will be conducted by more than one investigator.


Before introducing yourself to the licensee (or whilst the lead investigator introduces themselves), review the car yard in particular look for vehicles that are offered and displayed for sale off the licensed premises.

s23 (A)(1) If there are vehicles displayed for sale in the street or on the footpath, take photographs of these vehicles. The photographs should include:

• location of the vehicle;

• vehicle registration number;

• make and model;

• the advertised selling price; and

• the prescribed form.

It is good practice to use a camera that records the date and time the photographs were taken as this will assist with updating your notebook. Ensure the correct date and time are updated in the equipment. Each vehicle offered and displayed for sale off the licensed premises is a separate offence (Warning/Penalty Notice).

The inspection will also include, a review of the cars within the Lot/Yard to ensure that every car has the correct prescribed form (form 4, 8 or 10) displayed appropriately (see displaying a prescribed notice).

Again, the best evidence of a failure to display the prescribed form are photographs (see later in this manual for assistance with prescribed forms).

cl. 9(1) at their place of business a licensee must display legibly and conspicuously a sign. The sign must:

• contain the words ‘licensed motor dealer’, ‘licensed auto-dismantler’, ‘licensed wholesaler’, ‘licensed motor vehicle parts re-constructor’, ‘licensed car market operator’ or ‘ licensed motor vehicle consultant’ depending on the classification held;

• contain the words Licence and display the licence number; and

• lettering must be at least 50 mm high.


Introducing yourself

When entering the dealership or place of business:

• introduce yourself to the person greeting you and show formal identification; and

• ask to speak to the licensee. If the licensee/manager is unavailable, every effort should be made to inform them of your attendance at the office.

You have the authority to inspect the records in the absence of the licensee/manager.

� Take as many photos as required to demonstrate the vehicle is

off licensed premises and for a period of time.


Once you have established who will be assisting you request a suitable place within the registered office that will enable you to inspect the records.

Suitable location - you should observe the privacy requirements that the trader may have in respect of company records. However, you should not put your personal safety and wellbeing at risk.


Records required for inspection

The legislation requires a trader to maintain prescribed forms. The licensee can retain these records using a manual or computer system.



Written Records

A register that is kept in writing must be kept in a series of books that meets the following requirements:

• each book must consist of pages permanently bound together;

• each book must bear on its front cover a number corresponding to its number in the series (such as, Book 1, Book 2 and so on);

• each book must be used for the purposes of one kind of register and for no other purpose.

Each record must be:

• be on white standard A4 sized paper;

• clearly legible;

• contain no deletions; and

• not be torn or defaced.

If a record must be altered the change must still be legible, with the preferred method being a line through the deleted entry.

Computer Records

No computer system has been accredited by Fair Trading.

The most commonly used computer systems are:

• Easy Cars

• Virtual Yard

• Reynolds

These systems usually comply with the legislation in that they will not allow the trader to leave information off the prescribed forms. However, you should still ensure that the information is correct and that the trader does not substitute information for characters i.e. *****

A register that is kept by means of computer software must ensure that:

• the information in the register:

o can be displayed and printed, on demand, at each place of business;

o when displayed or printed each page in the register is in the form prescribed for the register; and

o includes the date on which each record was made.

• in the event that any information in the register is amended or deleted, a record is kept:

o of the information prior to the amendment or deletion; and

o of the date on which the information was amended or deleted.


If the trader is using computer software it must be able to provide a report on demand, displaying all original entries and changes.

It must also have in place a procedure for backing-up data held in the register that should be held off premises and be readily available for inspection. Records must be available for display and printing at all times the dealership is open.

Displaying the Prescribed Notice

s24(2) Where a dealer offers or displays a second hand car for sale, the dealer must attach the prescribed notice. The notice must be:

• A4 in size and clearly legible; and

• All the sections of the form complete (no blanks); and

• attached to the inside surface of the windscreen or internal sun visor on the left hand side of the vehicle.

If this is not practicable then the notice has to be displayed in a part of the vehicle that is clearly visible to any person standing outside the vehicle.

Every failure to display the prescribed (or incorrect form) is a separate offence.

Prescribed Forms (form 2, 4, 8, 10)

Offences under this section of the Act are Strict Liability Offences.

Form 2

Motor Dealers and Wholesalers Register – (Police Book) the register of cars acquired for sale and subsequently disposed of. The details in the Form 2 should be the same as is stated on the Form 4 or Form 8.

Statutory Notice Age KM’s Comments

Form 1 Records the acquisition and disposal of consignment vehicles.

Form 2 Also known as ‘Police Book’. Records the acquisition and disposal of used vehicles.

Form 4 Less than 10 years

Less than 160, 000

Must be displayed on a second hand vehicle for sale. All fields must be completed

Form 8 More than 10 years

More than 160,00

Must be displayed on a second hand vehicle for sale. All fields must be completed

Form 9 Must be displayed in vehicles sold at Auction

Form 10 Must be displayed in a vehicle that is Not for Sale


s21 (9) The trader has 1 business day to update records in respect of acquisitions.

s53B(3) The dealer must have these records on site and produce them when requested by an authorised officer.

Example of From 2:

Acquisition

Disposal

When inspecting a dealership you should cross check the acquired vehicles against the disposed vehicles and then ensure that all the vehicles displayed for sale on the Lot are registered on the Form 2 (Police Book).

• It is an offence to leave any part of the police book blank and each blank space constitutes an offence (Warning/Penalty Notice offence).

• The information must be the same as the information on the Form 4 or 8.

• The entries should be numbered consecutively.

• There should be no ‘white out’ in the book (errors require a new form 4/8).

• If manual records the writing must be legible.

The dealer MUST have a Form 10 in any vehicle on the lot that is not for sale.

It is good practice to photocopy the last three pages of the Form 2 (for both Acquisitions and Disposals).

Form 10

This is a strict liability offence.

However, some yards do have areas cordoned off with a notice that vehicles past this point are not for sale. This is also acceptable.

� A Form 10 is a notice that a car is ‘Not For Sale’. The trader must

display a form 10 on any vehicle kept on the lot th at is not for

sale.


Form 4

(The details should be the same as what is entered into the Form 2 and the entry number should correlate).

Under the legislation the trader has to display this form as described. This notice informs the purchaser of their entitlement to a statutory 3 month warranty (Form 8 cars do not have statutory warranty).

No entries on the Form 4 should be blank or different to the advertised details/Selling Price (for every incorrect or blank entry it is an offence under s 24(2)).

If the trader has made an error or has altered the selling price etc, then a new form 4 is required (the trader is not allowed to cross or white out errors).

cl. 24(b) – once a vehicle has been disposed of the trader is required to maintain a copy of the Form 4.

The records must be in consecutive order in a loose leaf folder (the number will begin

with a H). The trader is required to maintain these records for three years.

s.24(3) – You should inspect the Form 4 (sold) records to ensure they:

• comply with the legislation; and (no blanks/white out etc)

• have been signed by the customer.

Form 8

(The details should be the same as what is entered into the Form 2 and the entry number should correlate).

The difference between a Form 4 and a Form 8 is that the dealer is not required to provide any statutory warranty.

No entries on the Form 8 should be blank or different to the advertised details/Selling Price (for every incorrect or blank entry it is an offence under s 24(2)).

If the trader has made an error or has altered the selling price etc, then a new form 8 is required (the trader is not allowed to cross or white out errors).

cl 24(b) – for vehicles that have been disposed of the trader is required to maintain a copy of the Form 8.

The records must be in consecutive order in a loose leaf folder (the number will begin with a H).

�

The prescribed document, required to be displayed i n a second

hand vehicle greater than 10 years old and more tha n160,000

� The prescribed document, required to be displayed i n a second

hand vehicle less than 10 years old and under 160,0 00 kms.


s24(3) – You should inspect these records to ensure they:

• comply with the legislation (no blanks/white outs);

• have been signed by the customer.

This is an example of a Form 8 that is in breach of the legislation.

Consignment Vehicles

Dealers can also sell vehicles on behalf of private individuals. This is called a consignment vehicle sale. The Act refers to the individual as the ‘Consignor’.

Dealers who sell consignment vehicles must comply with the following:

Records

Dealers are required to keep a separate register detailing specifics of all motor vehicles being sold on consignment known as a Form 1.

Form 1

�

When conducting an inspection you should ask the de aler if he

conducts ‘Consignment’ sales. These vehicles are re corded in

Only difference from a

Form 2 is the Trust

Account Entry column

the inspection report number

is incorrectly set to ‘0000’.

This is a requirement

of a Form 8.


s.42 of the Reg. states, when selling a motor vehicle through consignment (unless selling on behalf of another dealer) the dealer should complete a consignment agreement the dealer should keep one copy and a copy must be given to the consignor.

No parts of the agreement should be left blank and must include:

• name and address of the dealer and the seller;

• licence number of the dealer;

• description of the vehicle, including registration number;

• agreed price;

• details of any encumbrance or no encumbrance;

• Directions for disbursement;

• any amount required to be paid to discharge any encumbrance to which the vehicle is subject;

• if any balance is not to be paid to the consignor, directions for payment of that balance and (e.g. cleaning, repairs etc);

• date of commencement, the period and date of termination of consignment.

Sample of a Consignment Agreement


The above example shows that the Consignee (the Dealer) has failed to complete the form correctly, leaving blank spaces. This is an offence under s.42 of the Motor Dealer Regulations 2004. This breach would attract prosecution or Disciplinary Action (there is no prescribed penalty notice offence).

Consignment trust accounts

Before taking any vehicle under a consignment agreement, the dealer must have opened a 'Consignment Trust Account' in which to deposit the funds (within NSW).

The dealer must ensure that the name of the trust account includes:

• the full name of the dealer; or

• the trading name (if any); and

• the words 'consignment trust account'.

Payments into and out of consignment trust accounts

• All funds from the sale of a consignment vehicle must be paid into the trust account.

• If the vehicle is sold on consignment and the dealer accepts a trade-in vehicle as part payment (consideration), the dealer must deposit in the trust account an amount equal to the trade-in value of the vehicle.

• If the trade-in value is greater than the amount owed to the consignor or owner of the vehicle, the dealer may deduct the money owed to the purchaser from the trade in-value deposited.

• Payment of the money into the trust account must be made within one business day of receipt.

• Payment to the person consigning the vehicle (the owner) must be made within fourteen business days of receiving payment.

• A dealer's commission must be authorised in writing and must be paid from the trust account. This is shown in Condition 3 of the consignment agreement.

• Only monies relating to consignment transactions can be deposited or withdrawn from a trust account. Bank fees and charges for operating the trust account must be paid from a dealer's general account.

The trust account must be audited every 12 months, with a copy of the report submitted to Fair Trading with the annual renewal of the dealers licence. For an audit to be carried out they must keep:

• trust receipt book;

• cash book and;

• deposit book.


Certificates of Inspection

Where motor vehicles are sold with number plates attached to private purchasers (not to a Motor vehicle trade owner or dismantler) they have to have a Safety Inspection Report (pink slip) issued by an Authorised Inspection Station (AIS).

If a motor dealer wants to sell a vehicle to a consumer which any number plate is attached - they need to (at or before the time of sale) provide a pink slip stating vehicle is roadworthy (s.46).

A dealer is exempted of doing the above if they display notice disclosing it is a defect vehicle (Form 6 refer c38, refer also exemption orders, s.27, s.28, s.29, cl.35).

If an auctioneer wishes to sell a motor vehicle to a consumer which any number plate is attached (during a bona fide auction) then they need to provide a pink slip stating vehicle is roadworthy (s.23B) - note they get around this if they have a prescribed notice at the auction (Form 9 - refer cl.26). But they still have to provide a certificate of inspection at the time of delivery.

An auctioneer may sell a vehicle outside the auction times but they need to attach a prescribed form (e.g. form 4 or 8).

s. 46 (c) – vehicles registered for the first time 1 month prior to sale are exempt form a certificate of inspection.

(if registered or renewed in accordance with the regulations).


Motor Auctions

As an investigator you will be required to conduct an inspection of Motor Auctioneers. Your inspection will ensure that the records of the auction house comply with the Motor Dealers Act 1974 and the Motor Dealers Regulations 2010.

The inspection may be the result of an allegation or may be part of a compliance program. Motor Auctioneers are required to retain the same records in respect of sales, acquisitions and consignments as a Motor Dealer. For help with these requirements please refer to the Motor Dealers Procedure.

The current inspection form is accessible via the Compliance e-Resource

Licence Requirements

Auction houses are responsible for ensuring the cars they sell have no money owing on them.

Where motor vehicles are sold at an auction with number plates attached to private purchasers (not to a Motor vehicle trade owner) they have to have a Safety Inspection report (pink slip) issued by an Authorised Inspection Station (AIS).

s.23B – The certificate of inspection report must:

• be not more than one month old at the time of auction;

• state that the vehicle is roadworthy;

• be attached to the vehicle at the time it is offered or displayed for sale; or

• be provided to the purchaser at the time of delivery of the vehicle.

When a vehicle (other than an exempted vehicle e.g. commercial) is offered or displayed for sale at auction a Form 9 should be displayed.

The Form 9 must:

• state that the vehicle is not subject to the warranty provisions of the Motor Dealers Act 1974 ; and

o displayed either on the vehicle;

o be adjacent to the auctioneer; or

o at each entrance to the auction.

� The process of inspecting a motor auctioneer for li censing

requirements is the same as requirements of a motor dealer.


6F. MOTOR VEHICLE REPAIRERS

The Motor Vehicle Repairs Act 1980 and Motor Vehicle Repairs Regulation 1999 regulate motor vehicle repairs in NSW. This legislation was previously administered by the Motor Vehicle Repair Industry Council (MVRIC) and then the Motor Vehicle Repair Industry Authority (MVRIA). MVRIA continues to exist as a statutory authority, but its functions are delivered by NSW Fair Trading.

Licences & Trade Certificates

Repairers require a licence for the classes of repair they propose to undertake. The classes are listed in cl.4A of the Regulation. Employees require trade certificates allowing them to perform the class of work they are qualified to undertake. Licence holders also need a certificate to do repairs, or employ certificate holders. Licences and certificates are now issued by Fair Trading’s Business Licensing Unit using GLS.

Trade certificates are business-card sized, do not contain expiry dates, and are carried by the certificate holder. Old certificates are still valid if the person has paid the renewal (check on GLS). Examples of the old/new licences & certificates:

NSW Department of Finance & Services NSW Fair Trading PO Box 972 Parramatta NSW 2124 T: 02 9895 0111 F: 02 9895 0222 TTY: 1300 723 404 www.fairtrading.nsw.gov.au


Common Disputes

Disputes commonly relate to sub-standard work and the price charged for the work, often as a result of a lack of clear contracts between the parties. Complaints are often received from consumers and insurers. Anonymous complaints about sub-standard work may come from insurance assessors. Other complaints are referred by the Motor Traders Association (voluntary industry association), NSW Police and NSW Roads and Traffic Authority.

The Consumer, Trader and Tenancy Tribunal (CTTT) has jurisdiction to hear disputes between repairers and consumers. The Motor Vehicle Services Unit (MVSU) within Fair Trading’s Customer Service Division have staff who are qualified to assess the standard of work and may provide an opinion for consumers on the reasonable labour for particular jobs. A contingency (compensation) fund is administered by the MVSU.

Common Breaches

• Unlicensed repairer advertising or carrying on the business – s.15(1)

• Trading under name not authorised by licensing authority – s.18B(2)

• Repairer employing staff not holding correct class of trade certificate – s.22(1)

• Insurer contracting with unlicensed repairer – s.22(4)

• Uncertificated employee holding out as having certificate – s.40

• Repair work below the usual trade standards – s.42(1)(a)

• Failure to keep records of traceable parts – cl.5

• Failure to display signage – cl.15

• Failure to display licence – cl.16

Enforcement Actions

• Prosecution – s.87 – 1 year statutory limitation period (except s.15 licence offences), 100 penalty unit limit for Local Court.

• Penalty notices – s.87A – Schedule 1 of the Regulation.

• Disciplinary action – ss.41-5 – only action for licensee undertaking work “below usual trade standard” or “not competent” trade certificate holders. Undertaken by Compliance & Enforcement Division’s Enforcement Branch.

• Undertakings – ss.46-50 – for unjust conduct, enforceable through the Administrative Decisions Tribunal.

• Other actions may be available under the ACL, Fair Trading Act, or Crimes Act.

Powers

• “Inspector” includes an investigator appointed under s.18 Fair Trading Act – s.4(1)

• Power of entry (see Chapter 4I), except residential premises if no consent, silent on ability to take photos/film/audio/video – s.75(1)-(2) – NSW Police have powers for stolen goods.

• Show certificate of identification to person in charge – s.74A


• Safety first – wear visibility vests and steel capped boots; be mindful of location of employees, exits and possible hazards (eg falling equipment, fumes, welders).

• Search warrants – s.75A (See Chapter 4J)

• Notice to produce – s.75B – also can request verbally (see Chapter 4K)

Possible Evidence Sources

• Evidence of sub-standard work – request the assistance of a qualified investigator from the Coordinator, Motor Vehicle Services Unit in Customer Services Division. Expert witness provisions apply (see Chapter 4H). Inspectors may be able to arrange to have vehicles inspected at an inspection station operated by the RTA or a private workshop while the consumer obtains quotes for more repairs.

• Evidence of unlicensed/uncertificated work – observations and discussions during inspection (notebook), photographs of licence, photograph of signage, photograph of equipment and vehicles being worked on, invoice books, job cards, business cards, witness statements, evidentiary certificates (s.78(2) – contact the Manager, Licensing in Customer and Property Services).

• CTTT files for completed matters, including orders, evidence, applications and audio recording of hearings (where recorded) – by submitting a request form via FT’s Operational Data Unit.

• Local councils may provide information about the permissible use of premises.

Investigator Resources

The NSW Fair Trading website provides landlords and agents with copies of fact sheets, including:

• Motor repairers guidelines;

• Motor vehicle warranty and repair disputes; and

• Code of conduct – Motor vehicle insurance and repair industry.

The Compliance e-Resource provides investigators with:

• Equipment lists for different classes of repairers. The lists (no longer part of the Act or Regulation) are provided only as a guide for investigators as to the type of equipment they may see in a repair workshop and may assist in identifying that repairers are performing work outside their licence class.

Related Organisations

• NSW Police – often involved in joint operations;

• NSW Roads and Traffic Authority – provide information;

• Motor Traders Association – voluntary industry association;

• Tow Truck Association. The Coordinator, Motor Vehicle Services Unit can be approached for contact details for these organisations.


6G. PAWNBROKER & SECOND-HAND DEALER INVESTIGATION

The Pawnbrokers and Second-Hand Dealers Act 1996 (the Act) aims to reduce the trade in stolen goods by providing a licensing regime with record keeping and proof of identity requirements. It also aims to facilitate the return of stolen property to rightful owners quickly and equitably.

Persons who carry on the businesses of pawn broking or buying or selling second-hand goods (which are prescribed in the Regulation) are required to be licensed. There are some exceptions to holding a licence.

A person does not need a licence under the Act to:

• conduct activities for which they hold a licence under the:

o Property, Stock and Business Agents Act 1941;

o Firearms Act 1996; or

o Motor Dealers Act 1974.

• deal in second-hand goods as part of a fund raising appeal under the Charitable Fundraising Act 1991.

• conduct the business of an auctioneer. (the business of an auctioneer does not include selling goods by tender)

• engage in recycling programs:

o selling goods collected in such a program or contracting with another person to give them ownership of those goods collected in a recycling program (local government councils, their employees, contractors to local governments and their employees operating under a contract in regard to the recycling program [but only if tenders were invited for the contract and the contractor was the successful tenderer]).

A person is not required to be licensed if in the course of carrying on a business that:

• sells goods pursuant to a power conferred by the Uncollected Goods Act 1995; or

• takes goods as a trade-in as part payment for any new or used goods, or on sells any goods so taken; or

• sells any goods that have become second-hand goods by reason of being used in the course of a rental business conducted by the person; or

• sells any goods for the purpose of taking or enforcing securities over those goods.

� Trade-in in relation to goods, means the taking of the goods as

part payment for any new or used goods.


Display of license - s. 17 (1)(e)

s.14 & cl. 17 – All licensees under the Act must conspicuously display on all licensed premises the following signs.

• A sign which is written in the English language, in at least 5cm high capital letters and which states the following:

o the name of the licensee;

o the licensee's number; and

o the category of licence.

Employees - s. 16(2) & Cl 13.

The licensee is required to electronically record the following details in relation to employees:

o name;

o date of birth;

o residential address.

Signage requirements (vary depending on the type of licence held)

Pawnbrokers

Pawnbrokers must display the following additional signs in a prominent location, to which the public has access so that the notice is clearly visible to the public, in each of their licensed premises.

S. 14 & cl. 17 – A sign which is written in the English language, in at least 5cm high capital letters in Arial or similar font containing the words.

o That any information provided to the licensee by or about a customer in relation to the trading of second-hand goods may be furnished to the police.

S.32C & cl 29 – A sign which is written in the English language, in at least 2.5cm high black Arial lettering on a white background which specifies:

o the rate or rates of interest charged; and

o any other fees and charges, including those that may be deducted from the proceeds of the sale of unredeemed goods.

s.32 & cl. 33 – A sign which is written in the English language, in at least 2.5cm high black Arial lettering on a white background and which states the following.

“You have a legal right to claim goods from these premises that you have good reason to believe are yours. Go to any Police Station and a police officer will advise you of your rights and what you will need to do.”

Second-hand dealers

s.14 & cl.17 – a sign which is written in the English language, in at least 5cm high legible capital letters, in Arial or similar font, containing the words:


that any information provided to the licensee by or about a customer in relation to the trading of second-hand goods may be furnished to the police.

Computer System - (s.16(5A) & Cl. 15(1))

Pawnbrokers and second-hand dealers (who are not exempt) are required to, as a condition of their licence, keep computer records. Some exemptions may apply. (refer to the section on exemptions below)

The law requires pawnbrokers and secondhand dealers who must keep computer records, to electronically transfer those computer records to the NSW Police, within 3 working days of the record being made via the electronic Weblink System (internet). If licensees require further information in relation to this process, they should contact the:

Pawnbrokers Unit

Operational Information Agency

NSW Police Service

Tel. 8835 7818

Licensees, who are not required to keep computer records, are only required to send their manual records to the police, if so requested.

s.17(5)(b) – authorised officers may require a licensee or employee to produce records in hard copy or copied on to computer diskettes or reduced to some other portable form suitable for removal and capable of reproducing the record for viewing it.

s.18 (1) – Authorised officer may take temporary possession of any record produced to the officer under this Act.

Exemptions from keeping computerised records

s. 11 – The law exempts some existing small scale second-hand dealers from the requirement to keep computer records.

The exemption will be granted, on a yearly basis, to second-hand dealers:

• who held a second-hand dealers licence immediately prior to the commencement (30 April 1997) of the Pawnbrokers and Second-Hand Dealers Act 1996;

• the gross receipts of their business relating to all used goods (that is, not just those second-hand goods prescribed in the Pawnbrokers and Second-Hand Dealers Regulation) totaled $150,000 or less in the previous financial year;

Pawnbrokers are not eligible for the exemption.

An application for an exemption must be made at the time a licence application or renewal is made. An exemption is only granted on a yearly basis.

�

If it is appropriate, these signs may be reproduced in another

language and displayed in addition to the English l anguage

signs.


Prescribed second-hand goods

The second-hand goods that are prescribed in the Regulation are those which are considered to be at high risk of theft. A licence is required when a trader deals in any of the following prescribed second-hand goods:

• items of jewellery (including watches) that include gemstones or precious metals;

• gemstones and precious metals;

• sporting and recreational goods;

• musical instruments; (but not including pianos other than electric or electronic pianos);

• photographic equipment; (including digital cameras and digital imaging equipment);

• portable engine-powered, motorised or air powered tools and equipment;

• microwave cookers and other electric or electronic goods (other than refrigerators, washing machines or other ‘whitegoods’);

• computer hardware and interactive game consoles;

• computer software and interactive game software;

• compact (laser-read) discs (including compact discs, digital video discs and mini discs) and similar items that are used or designed for use with electric or electronic audio, visual or audio-visual systems;

• watercraft and parts of watercraft;

• tool kits;

• car accessories;

• mobile phones;

• devices designed to play digital audio files (such as MP3 players and iPods); and

• Global positioning system equipment.

Interactive game console means equipment for the playing of a game:

• that involves a display on a computer monitor, television screen, liquid crystal display or similar medium; and

• where the way in which the game proceeds and the result achieved at various stages of the game is determined in response to the decisions, inputs and direct involvement of the player.

Interactive game software includes software (whether in a cartridge or otherwise) that comprises a game and that is used or designed for use with an interactive game console.

Second-hand goods that can be sold without a licence

The following goods are exempt and are not prescribed second-hand goods for the purposes of the Act and a licence is not required when buying or selling them:


• motorised wheelchairs, wheeled lounges, spinal carriages and other goods designed to carry people with a disability; or

• industrial machinery, or farming machinery, that cannot be driven or is not portable.

s. 12 – states that the licensee in their application for a second-hand dealer licence must nominate in the application any premises that the applicant intends to make regular use of, whether as business premises or storage premises, for the purposes of carrying on the licensed business.

The licensee must not retain second hand goods on any premises other than that premises nominated.

Retention of goods

Before taking goods for sale or pawn, licensees must:

• s. 15(1) & Cl. 18 – obtain prescribed documentary evidence of the person’s identity which includes the customers:

o photograph;

o residential address; and

o signature.

• s. 15(3) & Cl 18(4), 26 & 33 – obtain a prescribed declaration regarding ownership of the goods (Form 1).

A copy of Form 1 Pawnbrokers and Second-hand Dealers – Statement by customer as to who is the owner of goods sold or pawned – can be accessed from:

http://www.fairtrading.nsw.gov.au/pdfs/Businesses/Form_1_Pawnbrokers_and_Second-hand_Dealers.pdf

(The form can be a separate document or can be incorporated into another document.)

s. 21(1)(a) – licensees must hold any second hand goods which were purchased or received in the course of the licensed business, unaltered, for 14 days after receipt. Exemption to s.21(1)(a) includes:

• goods sold on consignment for sale;

• goods purchased by the licensee at auction;

• pawned goods; or

• goods purchased by tender or auction from a government dept or state owned corporation or statutory authority.

A minimum 3 month redemption period applies to pawned goods. However a pawner may redeem their goods at any time.


A pawner must receive a copy of the pawn agreement (also known as a pawn ticket) and other prescribed material. Licensees must be aware of their obligation under the legislation.

s. 20 – all pawned goods must be tagged with the contract and stock number.

Pawn ticket

The notice is included in the Regulations as a prescribed form, Form 2 – Notice to person pawning goods. A copy of this prescribed form can be accessed from: http://www.fairtrading.nsw.gov.au/pdfs/Businesses/Form_2_Pawnbrokers_and_Second-hand_Dealers.pdf

s. 28(5A) – A pawn ticket must include the following information:

• a fair and reasonable description of the goods, including any serial numbers or other identifying numbers and any hallmark, inscription or engraving of every component;

• the total amount lent on the goods together with the rate of interest charged and by what period as well as any other charges;

• an equivalent annual interest rate;

• the name, residential address and date of birth of the owner of the goods and any agent through whom they were pawned; and

• the date of the pledge and the agreement signed.

The following notices must accompany a pawn ticket.

A notice about fees and charges specifying the following:

• fees and charges that are (or may) become payable, including those that are (or may) become deductible from the proceeds of the sale of the goods;

• the amount of the fees and charges (so far as they are known); and

• how the fees and charges will be calculated (if the amounts are not known).

A notice regarding interest charges that disclose the following:

• that the pawner has the option of paying interest monthly if the interest period is going to be greater than a month; and

• the then agreed frequency of interest charges and when they become payable (for example, on a Friday or on the 20th of the month).

A notice regarding the redemption of pawned goods specifying the following:

• the method(s) by which goods will be sold if they are not redeemed;

• whether goods can be redeemed separately if the pawn ticket covers more than one item;

� A copy of the pawn ticket, including all the requir ed information,

must be given to a pawner at the time that the reco rd is made.


• details of the premises where the goods will be held during the redemption period;

• the date on which the redemption period ends; and

• A notice of a pawners rights and obligations.

s. 25(b) – the record should also contain the name and signature of the employee who took the pawn.

Extending the redemption period

The Pawnbroker and the pawner can agree to extend the redemption period even if the original redemption period has expired.

This can also be done by anyone else who is entitled to redeem the goods. If the pawner is unable to extend the agreement, they can provide an authority to someone who can do it on their behalf.

s. 29A – The Pawnbroker must make a record of the extending agreement and provide the pawner with a copy. The agreement must:

• include an identifying reference to the original agreement which must be attached or incorporated in it;

• include the new redemption period;

• include the date the extending agreement was entered into;

• specify any new or varied rates, fees or charges; and

• be signed by the pawner or the person extending the agreement for the pawner.

Stolen goods

The law provides that authorised officers may serve a notice on a licensee directing them to hold goods reasonably suspected of being stolen or unlawfully obtained for a period of 56 days.

A further 56 day notice may be served on the licensee if required. This assists the police in conducting a comprehensive criminal investigation and to ascertain the owner of goods suspected of being stolen or unlawfully obtained that are in the possession of a licensee.

If the theft or unlawful dealing of the goods has been reported to the Police on an earlier occasion, then the person (known as a claimant) must then provide Police with:

• documentary evidence of ownership; or

• a statutory declaration; and

• make a written claim to the Police that they are the owner of the goods and that the goods have been stolen or otherwise unlawfully dealt with.

�

Section 26(1) of the Sale of Goods Act 1923 provides that where

goods are sold by a person who is not the owner and they sell

them without the authority or consent of the owner, the buyer of

the goods does not acquire title to those goods.


If the Police Officer has no reason to suspect that the documents or statements are false or misleading in a material particular, then he/she may serve on the licensee what is known as a Restoration Notice.

Upon being served with a restoration notice a licensee has 28 days to either return the goods to the claimant or lodge a hearing to have the matter resolved with the Consumer, Trader and Tenancy Tribunal.

If criminal proceedings in relation to the theft of the goods are commenced, the police will notify licensees of that commencement and the goods must be retained unaltered until those proceedings are completed.

If no decision is made about ownership of the goods during those proceedings, the 28 day period will carry on at the conclusion of those proceedings.

Demerit Points Scheme

If a licensee or any employee of a licensee:

• has been convicted of any offence prescribed by the regulations for the purposes of this section; or

• has paid a penalty pursuant to section 26 in respect of any such offence; or

• is a person against whom an order has been made under Division 4 of Part 3 of the Fines Act 1996 in respect of such an offence.

The Director-General may endorse, on a record kept in relation to the licensee:

• particulars of the offence;

• the penalty;

• the number of demerit points allocated to the offence; and

• the date on which the offence is alleged to have been committed.

The number of demerit points to be allocated to an offence is the number prescribed by Schedule 2 of the regulations in relation to the offence.

� The licensee must retain the goods, unaltered until the

matter is resolved.


If the licensee incurs a total of 12 or more demerit points within any period of 3 years, the Director- General may issue him with a Notice to Show Cause.

For the purposes of this section, any demerit points incurred in respect of an offence are to be taken to have been incurred on the date on which the offence was allegedly committed.

A certificate that purports to be signed by an officer prescribed by the regulations and that certifies the number of demerit points accruing to a particular licensee in a particular period is evidence, in any proceedings, of the particulars certified in it.

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