The acquisition of substances, items of plant and structures is regularly financed by banks and other financial institutions. A common means of financing, and securing the associated debt, is for the financier to own the item and allow for its use by the client pursuant to a lease, charter or some other commercial arrangement.
The provision of the item to the client would ordinarily come within the current definitions of ‘supply’, with the financier owing the duty of care of a supplier.
We received a submission stating that it is inappropriate for the financier to have the obligations of a supplier in these circumstances, because:213
the physical possession of the relevant item has passed directly from a third party to the client, with the financier not at any time taking physical possession;
the client and the third party have determined between them the requirements and specifications and intended purpose of the item; and
the supply of the particular item (other than by way of financing the supply by the third party to the client) is not the ordinary business or undertaking of the financier, meaning that the financier is not the most appropriate person to undertake the OHS activities required to be undertaken by a supplier.
In these circumstances there may be little that may be reasonably practicable for the financier (commonly known as a ‘passive financier’ as the financier does not take active steps in the supply) to do.
We accept the merit of the submission that it is the third party that is the actual supplier of the item who should be the supplier of the item for the purposes of the duty of care of a supplier.
We note that a number of the current State OHS Acts provide for an exclusion of a passive financier from the obligations of a supplier, with those obligations instead owed by the third party from who the plant etc was obtained.214
