AADA has highlighted shortcomings in Western Australian legislation that leaves Dealers vulnerable to unfair contract dealings by motor vehicle manufacturers.

Following the initial review in August 2013, the WA Government has commenced the Stage Two review of the Motor Vehicle Dealers Act 1973 (MVDA Act) and Motor Vehicle Repairers Act 2003 (MVRA Act).

The Government commissioned the Department of Commerce (Consumer Protection Division) to conduct the review and issued a Regulatory Impact Statement for consultation. The policy objective is to develop options for reform that seek to balance the competing interests of motor vehicle Dealers, motor vehicle repairers and consumers, and which provide adequate protections for consumers while ensuring that motor industry representatives are not overburdened with unnecessary regulation and red tape.

AADA lodged a submission to the review panel on 18 December 2015, drawing attention to a major shortcoming in the Acts concerning the relationship between car Dealers in WA and motor vehicle manufacturers in respect of the protection for Dealers against unfair contract dealings by manufacturers.

AADA’s submission advocated for similar provisions contained in the Motor Vehicles Dealers and Repairers Act 2013 (NSW), that prohibits unfair contracts and unjust conduct in New South Wales between Dealers and motor vehicle manufacturers.

AADA asked the Government of Western Australia to consider and support amendments to regulate the Dealer and distributor business relationship in circumstances where there are examples of unfair contracts and unjust conduct on WA Dealers, and where there is an absence of adequate regulatory measures in the Franchising Code of Conduct or in the new unfair contracts legislation recently enacted at the Federal level.

AADA argued the adoption of similar provisions into the MVDA Act would address the imbalance of power between Dealers and manufacturers and lead to improved and fairer business relationships.

In addition to the submission, AADA CEO, Bruce McDonald, wrote to the WA Attorney General and Minister for Commerce, the Hon Michael Mischin MLC, and Small Business Commissioner, David Fraser, to draw their attention to an opportunity to address the imbalance of power issues. He asked them to give serious consideration to the opportunity to incorporate into the MVDA Act legislation that provides similar provisions to those recently enacted in the Motor Vehicles Dealers and Repairers Act 2013 (NSW) which prohibit unfair contracts and unjust conduct. Without making these provisions, the 150 WA new motor vehicle Dealers would continue to face a significant power imbalance in contract and franchisee negotiations with their respective manufacturers.

The final stage of the MVDA will include the release of a Decision Regulatory Impact Statement addressing the outcome of consultation with stakeholders and making recommendations for reform. The Decision Regulatory Impact Statement will analyse the impacts of the various options and recommend preferred options for reform.

AADA will maintain its presence throughout this process and continue to advocate on behalf of WA’s new car Dealers.