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Aussie rules don't always fly for Kiwis

Aussie rules don't always fly for Kiwis

I had occasion to meet up with an Australian colleague the other day. Now this is an unusual experience as most of the time trans-Tasman contact is by email or phone. Our breakfast meeting was very pleasant, even though we did what lawyers always do over meals – discussed legal issues.

I deal with lots of Australian lawyers, either the lawyers acting for my clients’ Australian counterparts, or the lawyers on the other side of a contract. People often don’t realise how comparatively easy it is in New Zealand: we don’t have a federal system, so we don’t have to deal with different state laws with federal laws overlaying state laws. There is just one state, one set of statutes and one court system.

But what I do notice with Australian lawyers is that they almost invariably start from the position that New Zealand commercial law will be identical to Australian commercial law. Don’t get me wrong – it’s not that they see us as another Australian state: rather it’s that they tend to assume because many of our trading laws are aligned under the Closer Economic Relations agreement between the two countries, not only will those laws be identical and enforced in the same way, but all other laws will be the same too.

Life’s not like that, of course. Sure, our Fair Trading Act and Commerce Act are very similar to their Australian Federal counterparts in the Trade Practices Act 1974 (TPA), but our Consumer Guarantees Act (CGA) is quite different from its counterpart (another section of the TPA). So if you are supplying consumer products (and almost all of you do, even if you don’t sell to consumers) it’s a whole different ball game.

The basic rule goes like this: if it’s OK in New Zealand, it’ll probably be OK in Australia – but the reverse isn’t true. That’s because the CGA goes a lot further than the TPA warranty provisions: the CGA gives consumers a clear set of remedies that balance consumer-trader rights.

Also, there is a difference in application of the two post-supply warranty statutes: a “consumer” in Australia is someone who acquires any goods or services costing less than $40,000, or consumer goods of any value. The Australian warranties are contractual (CGA rights are not) and remedies can be limited by contract except where it is not fair or reasonable to do so: the consumer has to show that it wasn’t fair!

That makes it less certain for consumers and traders. Also, the Australian equivalent of the guarantee of acceptable quality is much more limited, and there is no provision that allows resellers to contract completely out of liability in business-to-business contracts. I could go on but I won’t, except to mention our unique accident compensation system. (If you decide to export to Australia you will need product liability insurance).

All in all, it’s a very different situation. The downside for Australians is that misleading New Zealand consumers about their rights is a Fair Trading Act breach, which can lead to Commerce Commission investigations and potential fines of up to $200,000 for a company. Now that’s a lot more than it costs to 'Kiwify' an Oz contract!

This article is intended for general information, and should not be relied on as specific legal advice. You should consult a lawyer for advice relating to your own specific legal problems. Rae Nield can be contacted at raenield@marketinglaw.co.nz.


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