Uncollected Goods Bill

About this Item
SpeakersShaw The Hon Jeffrey
BusinessBill, First Reading, Second Reading


Bill introduced and read a first time.
Second Reading

The Hon. J. W. SHAW (Attorney General, and Minister for Industrial Relations) [5.28]: I move:
      That this bill be now read a second time.

The Government seeks to repeal the Disposal of Uncollected Goods Act 1966 in order to simplify the procedure currently required under that Act for the disposal of uncollected goods. The goods which the legislative proposals cover are those which have been left in the possession of another party by the owner and are not claimed - for example, goods which have been left for servicing, restoration or repair. There comes a time when those persons who have been left with such goods should be entitled to dispose of them. At common law, disposal can take place by way of an agreement between the owner or, in legal terminology, the bailor and the bailee or the person who has been left with the goods. The difficulty with this is that the parties often do not think to make provision for the event of non-collection at the time they enter into the bailment arrangement. Where the bailor cannot be contacted, great inconvenience is caused when goods remain uncollected.

In the absence of an agreement there are a number of statutes which regulate the disposal of uncollected goods. These statutes cover specific industries such as pawnbrokers, warehousemen and innkeepers. There is also the Disposal of Uncollected Goods Act 1966, which applies to many classes of bailment where there is no agreement as to disposal and where industry-specific legislation does not apply. The Act currently provides a bailee with a statutory right to sell certain uncollected goods. Part II provides the procedure for disposal by notice. However, this part of the Act is limited only to those bailments created in the course of business for repair or other treatment. The procedure for giving notice is complex and in many cases not observed where it could be. This forces the parties into disposal only by the courts under part III.

Part III provides for disposal by way of court order and it covers all bailments for reward including contracts for hire, carriage of goods and warehousing.
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The Act does not apply where terms of collection are governed by a contract. The result is that in many cases uncollected goods can be disposed of only after obtaining a court order from the Local Court. This procedure is onerous, particularly where the value of the goods does not justify expenditure on court proceedings. The proposed legislation will provide for disposal by a bailee of uncollected goods by way of court order and for disposal of goods up to $5,000 in value by way of notice. Three different notice periods and methods of sale will apply depending on the value of the goods. The bill defines "bailed goods", "bailment" and "uncollected goods"; it provides a minimum period of three months for disposal of goods greater than $100 in value by certain commercial bailees; it provides for the bill's application in addition to other statutory methods of disposal and for its application on any aspect of the disposal of goods not dealt with in an agreement.

The proposals arise out of the recommendations of the New South Wales Law Reform Commission. In 1988 the Law Reform Commission inquired into, and reported on, among other things, the law relating to the rights and liabilities of persons in possession of uncollected goods and the application of the Disposal of Uncollected Goods Act 1966. The Law Reform Commission concluded that the procedures available under the Act are too cumbersome and the notice and holding requirements are excessive. It recommended that remedies should extend to all persons in possession of uncollected goods including those held other than by bailment; that where goods are less than a certain value they should be disposable either by court order or after giving notice; and that the stringency of notice provisions should vary according to the value of goods. It was also recommended that the Act should provide for a minimum notice period; and that provisions for sale by public auction should apply only to goods above a certain value and otherwise be disposable as the bailee wishes, provided that full records are kept.

The aim of the bill proposed by the Government is to simplify the procedures currently available under the Act in accordance with the Law Reform Commission's recommendations. The bill will preserve the right for businesses, when receiving goods, to enter into specific agreements for disposal. A minimum notice period will apply to certain businesses to be specified in regulations. This will allow for additional protection to consumers in those industries where it is needed. I shall briefly outline the main aspects of the Uncollected Goods Bill. Various types of bailment are covered by the bill. Bailment is a common transaction in everyday life and covers a wide range of commercial and other dealings. The various subcategories of bailments include bailments for reward, gratuitous bailments, and involuntary bailments. The definitions at clause 3 of the bill, in line with legislation in other States and the United Kingdom, are drafted specifically to include all those categories of bailment rather than proceed by reference to the mere possession of goods. Clause 5 of the bill sets out the circumstances in which goods are uncollected for the purposes of the proposed legislation. The Law Reform Commission's report envisaged that the rights given by the legislation were to be in addition to remedies available to particular classes of bailees - for example, pawnbrokers, innkeepers and warehousemen. Clause 6 of the bill makes it clear - as the Act currently does - that the general procedures which it provides are available where there is no agreement between the parties as to disposal and as an alternative to other statutory means of disposal of uncollected goods. Clause 33 provides that any common law rights shall remain in force to the extent that they are not affected by the proposed legislation. During consultations on the preparation of the bill, a concern was expressed that clause 6 could result in a choice of statutes which could undermine the operation of some of the industry-specific legislation. To overcome this, the definitions of "bailment" and "goods" at clause 3 of the bill do not include anything excluded from the definitions by the regulations. This will allow for the exclusion of goods and classes of bailments covered by other statutes from the operation of the bill, preventing parties from avoiding the provisions of industry-specific legislation, where appropriate.

The Act currently requires bailees who wish to dispose of goods to obtain a court order from a Local Court, except bailees coming into possession of uncollected goods for repair or other treatment, who may also dispose of goods by giving notice. Under part 2 of the bill, the option to obtain a court order will remain available to all bailees and will be the only remedy where goods are moved above the maximum value allowing disposal by way of notice. The procedure for disposal by way of court order is simplified and set out at clauses 8 to 18 of the bill. The bill also makes it clear at clause 11 that a court may authorise the disposal of uncollected goods even though there is a dispute between the bailor and bailee as to an amount owed or regarding the condition of the goods or the nature or quality of repairs or other work done in connection with the goods. In such cases the court can have regard to the matters in dispute in determining the amount, if any, of charges due to a bailee.

The main departure from the current Act in the bill will be the revision of notice provisions which are set out at part 3. As I have previously said, under the current Act disposal by way of notice may take place only in the circumstances of a bailment for repair or other treatment in the course of a business. The Act currently requires that a notice be displayed on the business premises advising of the bailee's right of sale if goods remain uncollected six months after they are ready for delivery and that a notice be given to the bailor and all persons with an interest in the goods once they are ready for delivery. Six months after giving such a notice a further notice of intention to sell the goods is given to the bailor and every person with an interest in the goods. The notice must also be published in a newspaper published in Sydney and circulating throughout New South Wales and, in the
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case of motor vehicles, in the Government Gazette. Goods must be sold at public auction in lots. The matters to be included in the notices are also set out in the Act. The Law Reform Commission found that these requirements are costly and cumbersome and therefore, the remedies provided by the Act appear illusory.

As recommended by the commission, the stringency of the notice provisions in the bill vary according to the value of the goods. They are set out at clauses 19 to 21 of the bill. They apply to all bailed goods up to $5,000 and over which there is not a dispute as to charges by the bailee or the condition of the goods. The form of notices and the procedure for service are set out at clauses 26 to 27 of the bill. Where the goods are up to $100 in value, clause 19 provides for written or oral notice to the bailor for disposal on the expiry of 28 days from the date of such notice and disposal in such manner as the bailee considers appropriate; where goods are of $100 to $500 in value clause 20 provides for written notice to the bailor and the owner and parties claiming an interest. It provides for disposal on the expiry of three months from the date of notice and disposal by way of public auction or private sale for fair value.

Where goods are of $500 to $5,000 in value, clause 21 provides for written notice to the bailor, the owner and the parties claiming an interest. It provides for disposal on the expiry of six months from the date of notice, for a copy of the notice to be published in a daily newspaper circulating in New South Wales 28 days before disposal and for disposal by way of public auction. Clause 23 provides for regulations to vary the monetary limits determining the methods of disposal which I have outlined. Responsibility for valuing the goods will rest with the bailee. An independent valuation would be onerous in the case of goods of smaller value. Bailees, most of whom will have received the goods in a commercial context, would generally know their value. The bailor's rights will be protected by the requirements to give notice and the fact that goods over $500 must be sold at public auction.

The bill simplifies the requirements for dealing with the net proceeds of sale which are set out at clauses 14 and 29. The Act currently provides that the seller of uncollected goods may deduct charges in relation to the goods for storage, for costs incurred in connection with the sale and of insurance. The net proceeds of the sale are claimable by the owner of the goods. They are currently to be placed in a bank account within 14 days of the sale and if not claimed within 12 months are payable to the Treasurer to be placed to the credit of the Consolidated Fund. Under clause 28 of the bill the bailee will be able to deduct charges from the proceeds of sale and the balance will be able to be dealt with under the Unclaimed Money Act 1982. The bailee will be required to keep a record of the details of disposal as set out in the bill, for a period of six years pursuant to clause 30 of the bill.

The Law Reform Commission recommended that repair and service businesses be encouraged to make increased use of private agreements, to set their own conditions for disposal of uncollected goods and to create their own rights of sale. In order to ensure that any such private agreements are fair and complementary to the new legislation clause 32 provides a minimum notice requirement in respect of certain commercial bailments to be prescribed under regulations. The minimum notice period of three months will apply in respect of goods exceeding $100 in value, which the bailee has accepted for carriage or storage or for repair. The bill provides that the notice period cannot be varied and any variation on the notice period would be void.

The bill also provides for a review to be undertaken as soon as possible after the period of five years from the date of assent to the Act, at clause 41. The review clause will facilitate a future assessment of the effectiveness of the reforms contained in the bill and the need for the continued existence of general legislation providing for the disposal of goods. Such a provision will also be consistent with the Law Reform Commission's suggestion that a further review of the legislation might be appropriate once information regarding available procedures becomes widespread. I believe that the bill will provide for much needed reform of the current legislation in respect of uncollected goods, and I commend the legislation to the House.

Debate adjourned on motion by the Hon. J. P. Hannaford.