Response to issues paper exempt selling regime madeleine kingston

First ACL Bill	Trade Practices Amendment (Australian Consumer Law) Bill 2009 The Bill has been passed through Parliament and became effective on 14 April 2010
FT Act or FT Acts	State and Territory Fair Trading Legislation, including Fair Trading Act 1987 (New South Wales), Fair Trading Act 1999 (Victoria), Fair Trading Act 1989 (Queensland), Fair Trading Act 1987 and Consumer Transactions Act 1972 (South Australia), Fair Trading Act 1987 and Consumer Affairs Act 1971 (Western Australia), Fair Trading Act 1990 (Tasmania), Fair Trading Act 1987 and Fair Trading (Consumer Affairs) Act 1973 (Australian Capital Territory) and Consumer Affairs and Fair Trading Act 1990 (Northern Territory)
FTA	Fair Trading Act 1999
GDSP	“gas distribution supply point”^42 A point on a distribution system at which gas is withdrawn from the distribution system for delivery to a customer which is normally located at: the inlet of a gas installation of a customer; the outlet of a meter; or the end of a main; and includes a “supply point’ and an “ancillary supply point” as defined in the Gas Industry Act in relation to a distribution system. These definitions refer to gas meters not hot water flow meters that neither measure water volume, temperature (heat) or gas (taken from v9 ESC website December 2009 analyzed in relation to the Gas Supply Act 2001, the Gas Residual Provisions Act 1994 at the time of privatization in Victoria, the deemed provisions and proper interpretation of relevant customer in the context of the BHW provisions – see appendices 2, and 9-12 No gas enters water meters. Volume of water supplied whatever the temperature is not measured through hot water flow meters. Neither is volume of gas nor electricity supplied where a single gas or electricity meter is used to heat a stationery boiler tank (with all its health risks) The ESC has already admitted in its final report on the Small Scale Licencing Review 2006-2008 that:
GIA	Gas Industry Act 2001 (Victoria) The ESC relies on this and impliedly also the Gas Industry (Residual Provisions) Act 1994 (Victoria) legislated at the time that energy assets were privatized
GIRPA	Gas Industry (Residual Provisions) Act 1994 (Victoria)
GCF	Gas Connections Framework for the Connection of Retail Customers to the Natural Gas Distribution Networks – a component of the NECF Note my submission to this Framework of 5 April 2009 and participation in the Public Forum, in addition to numerous emailed communications when policy issues were being formulated within the MCE The issues were also relevant to other streams, both economic and non-economic
IGA	Intergovernmental Agreement for the Australian Consumer Law signed on 2 July 2009 by COAG
LI Act	Legislative Instruments Act 2003 (Cth)
MCCA	Ministerial Council on Consumer Affairs A body responsible for energy policy and legislation for which the Commonwealth Department of Energy Tourism and Resources (RET) offers a Secretariat service. This body comprising representatives from State and Territory Ministers and a single Federal Minister
MCE	Ministerial Council on Energy^43
MEU	Major Energy Users
MIRN	Meter Identifying Registration Number It is inappropriate to allocate to water meters an MIRN where only one gas or electricity meter supplies heat to heat a stationary boiler tank in multi-tenanted dwellings (whether occupied by private owners or by residential tenants
NECF1	National Energy Consumer Framework 2 (First Exposure Draft)
NECF2	National Energy Customer Framework 2 (Second Exposure Draft Note the Gas Connections Framework now forms part of the NECF The differences between gas and electricity markets has now been adequately reflected within the NECF2 package, as noted by industry participants and other stakeholders. For example there is no such thing as an embedded gas network, yet the provisions continue to explicitly include gas under this heading
	Further, where heated water supplies are provided after a single gas or electricity meter fires a centrally heated water tank supplying water to individual occupants with heated water in water pipes, neither group of recipients is “embedded” This term is being creatively and inappropriately used, with implications for determination of the proper contractual party, their rights, the threat of disconnection of the wrong party; using the wrong trade measurement instrument and the wrong scale of measurement. See revised National Measurement regulations, subject to intended lifting of the utility exemptions and the concept of legal traceability It would seem that these provisions have been created without due regard to recognition of the National Measurement Institute sole legal authority on metrology matters relating to measurement. The gas market is less well understood and has always lagged behind the electricity market. The Bulk Hot Water provisions and their implications, including pursuant to the Arrow Asset Management case are poorly understood by most policy-makers and/or economic regulators. Besides conduct issues, and enshrined rights pursuant to contractual law and informed consent there is the question of fiduciary duty encumbent on developers and “Body Corporate Guardians” refer Arrow Asset Management case NSWSC 2007
NERC	National Energy Retail Code
NERL	National Energy Retail Law
NGL	National Gas Law
NGR	National Gas Rules
NMA	National Measurement Act 1960 and all corollary provisions including the National Measurement Amendment (Utility) Act 2009, effective dated 1 July 2009 See NMA, Part V Using Measuring Instruments for Trade http://www.comlaw.gov.au/ComLaw/Legislation/ActCompilation1.nsf/0/AC996739A0F25545CA2575E60019C6E7/$file/NatMeas60_WD02.doc see National Amendment (Utility Meters Act) 1999 No. 9 Commencement Date 31 March 2009 http://www.comlaw.gov.au/ComLaw/Legislation/Act1.nsf/0/3A68EBC53AC7A50CCA25742500057102/$file/009-99.doc see National Measurement Regulations 1999 1999 No. 100 http://www.austlii.edu.au/au/legis/cth/num_reg_es/nmr19991999n110358.html See National Measurement Regulations 1999 1999 No. 110 Explanatory Statement Statutory Rules 1999 No. 110 National Measurement Act 1960 found at http://www.austlii.edu.au/au/legis/cth/num_reg_es/nmar20091n151o2009521.htm Note that some utility exemptions have already been lifted including cold water and electricity meters I have not had time to update this section but will in the next submission
NMI	National Measurement Institute “The National Measurement Act 1960 (NMA) provides the legislative basis for Australia's National Measurement System. See also the National Measurement (Amendment) Utility) Act 1999) effective date The aim of the Act (NMA) is to ensure that measurements are what they purport to be and to give legal sanction to the national standards of measurement. The NMI or its agents provide legal metrological traceability to the national standards of measurements through the issue of certificates issued under regulation 13 of the National Measurement Regulations 1999. The NMI, a division within the Department of industry, Tourism and Resources, is responsible for Australia’s national infrastructure in physical, chemical, biological and legal measurements. Under the NMA, NMI is responsible for coordinating Australia’s national measurement system, and for establishing, maintaining and realizing Australia’s units and standards of measurement, thereby allowing Australian industry to operate competitively in a global environment^4412
	The Hawkless Report (2006)^45 on Utility Metering Regulations recognizes that” “A national approach to the regulation of energy distribution and retail has been the subject of review. Any attempts to implement national energy regimes for consumer protection and distribution price regulation will risk being ineffective if they fail to address metering”
NMAUA	National Measurement Regulations 1999 No 110 Explanatory Statement commencement date 1 July 2009, found at (Minister for Industry Science and Tourism) http://www.austlii.edu.au/au/legis/cth/num_reg_es/nmar20091n151o2009521.html
NMR	National Measurement Regulations Amendment Act 2009
NPA	National Partnership Agreement to Deliver a Seamless National Economy
OIC	Order in Council Electricity Industry Act 2000 Ex emption Order ^46 The Governor in Council acting under section 17 of the Electricity Industry Act 2000 (the "Act") hereby makes the following Order: 1. Date of effect This Order comes into effect on 1 May 2002. See response by then Minister for Energy concerned about the interpretation made of this Order, intended only to be for short-term transitional purposes. Minister’s Response to ESC 2006 Small Scale Licencing Review: Minister Theophanous said (my apologies but I simply cannot access the link I once relied upon in citing this) “…licence exemption Orders (which are made on Ministerial recommendations) are primarily designed to address incidental, unintended or technical breaches of the standard licencing provisions. Although the exemption process has been recently used to facilitate small scale distribution and selling activities, this is the not intended use of such instruments.” One consideration was “the extent to which small scale retailing and distribution is emerging as a valued service for consumers in embedded network situations”
PC	Productivity Commission
Regulators	The ACCC and the consumer agencies of the States and Territories, including: NSW Office of Fair Trading, Consumer Affairs Victoria, Queensland Office of Fair Trading, Department of Commerce — Consumer Protection (Western Australia), Office of Consumer and Business Affairs (South Australia), Department of Justice — Consumer Affairs and Fair Trading (Tasmania), Department of Justice — Consumer Affairs (Northern Territory) and Department of Justice and Community Safety — Office of Regulatory Services — Fair Trading (Australian Capital Territory)

Rule Maker(s)	Australian Energy Market Commission (AEMC) a body apparently believing itself unaccountable or at any rate ‘independent’ on account of its incorporation as a legal entity. That identity means little since it was set up under statutory provisions
RPWG	Retail Policy Working Group (*MCE SCO)
RUCP	Review of Unfair Contract Provisions
RTA Vic	Residential Tenancies Act 1997 (Vic)
RTA Tas
RTA SA	Residential Tenancies Act 1995, (now version February 2012, with some further changes pending on the basis of Bills before Parliament I discuss some of those changes in the section marked Residential Tenancy and Consumer Issues Associated with Residential Tenancies Regulations 2010 (SA)
RTA Qld	Residential Tenancies Act Qld
RTA NSW	Residential Tenancies Act NSW
RTA ACT	Residential Tenancies Act ACT
SCO	Standing Committee of Officials (MCE) (replaced by SCER Standing Committee Energy and Resources
SICW	Statutory Implied Conditions and Warranties
TPA	Trade Practices Act 1974 This has been repealed and after significant changers, took on a name change to Competition and Consumer Act 2010 The Senate Economics Committee considered in the Second Bill aspects of Unconscionable Conduct. In my view the changes did not go far enough Unconscionable conduct also occurs in relation to businesses.
	I note that even before rubber-stamping the AER has its hands full with pending and proposed applications for exemptions altogether from the newly endorsed National Energy Retail Law and National Energy Retail Code. I believe protections should be afforded to all Australians and that carve outs to cater for two three and four tier systems of protection are unacceptable.

	Therefore I oppose the moves of those exclusively in the business of on-selling with its many variations to seek to gain advantage over business, government organizations and others simply because the big boys can look after themselves. This could lead to expensive open court litigation which ultimately will impact on consumers and smaller business. Nothing that happens in the downstream end of the market leaves the rest of the market unscathed and the pass-through cost philosophy of just anything and everything whether not related to sale and supply of energy (being limited to gas and electricity as goods not services or composite products. Meanwhile the AEMC is frantically making Rule Changes that dilute the few protections gained. The wisdom of the AEMC’s Rule Change and other policy decisions has come in for widespread criticism unless the issues happen to suit industry participants
TUV	Tenants Union Victoria An incorporated body funded by Consumer Affairs Victoria (CAV) a regulator of numerous provisions including the Residential Tenancies Act 1994; the Victorian Fair Trading Act and the Unfair Contracts provisions ; Owners Corporations Act 2006 Note there is community pressure to adopt national unfair contract provisions
UTP	Unfair Trade Practices
VCAT	Victorian Civil and Administrative Tribunal

STRUCTURE OF SUBMISSION

My new submission in response to the Revised Exempt Selling Guideline of 28 November 2012 is similar in structure and content to that made on 2 August 2010 to the Issues Paper Retail Exemptions, but I have updated and added sections where time permitted.

Failure to comment on any one aspect of the Issues Paper does not imply endorsement, merely time constraints.

Though I have much new material as raw data and commentary that could have been included, time constraints and short notice preclude this. I am using the format and substance of previous submission(s) and providing what I can.

I now expand and reinforce the material already submitted.

The Contents page will be familiar and serves to identify the structure, though I have added a few sections like a Glossary that could do with expansion and am working on another updated bibliography which I would be happy to provide upon request, when completed.

I have added an Annotated Glossary with notes that will help to refresh this matter and new implications including the far-reaching implications of the decision in the Arrow Asset Management case Community Association DP No 270180 v Arrow Asset Management Pty Ltd & Ors [2007] NSWSC 527 delivered by McDougall J on 30 May 2007⁴⁷/⁴⁸

Meanwhile I rely on footnotes which include both citations and commentary, some of which are either new or expanded.

Any detail or consideration that may be considered to be beyond prescribed scope should be taken as representing a wholistic approach to a complex issue since I believe that not only are the implications far-reaching but conflicts and overlaps between schemes, jurisdictions and the common law, besides neglect of social infrastructure parameters and potential to hamper competition require a broader perspective than is normally possible within the usual approaches to consultative dialogue

To various sections that formed part of my original August 2010 submission to the AER Exempt Selling Issues Paper (Retail Exemptions) I have added some updated information.

For example where time permitted I have updated some information on Residential Tenancy provisions, clearly indicating the updates and date of last sighting updated regulations. Most of the updates relate to South Australia but over time will scrutinize other changes

Since all of my material relies on inter-relatedness between regulatory schemes and governing philosophical positions of various state and federal authorities and allegedly “independent” regulators appointed pursuant to statutory provisions, I make no apology for embracing a raft of issues that the AER may not consider relevant to considering the implications of the expanded Exempt Selling Regime.

I have provided further limited commentary and links regarding the implications for the Exempt Selling Regime approach of the Arrow Asset Management Decision delivered by McDougall J on 30 May 2007

Arrow Asset Management Case Decision delivered by McDougall, J on 30 May 2007 Arrow Asset Management Case Community Association DP No 270180 v Arrow Asset Management Pty Ltd & Ors [2007] NSWSC 527

See for example analysis by Francesco Andreone Senior Counsel “Strata and Community Title in Australia for the 21 Century III Conference: The Implications of the Arrow Asset Management Case” (2001) first published 2009), (with acknowledgements to Gary Bugden)

I can only repeat my reservations about the limitations and effectiveness of the industry-based complaints schemes under the umbrella of Energy and Water Ombudsmen, misleadingly called conciliation or mediation or alternative dispute bodies.

The do none of these things. They investigate such complaints as are within their limited powers (which excludes matters of policy), and they make determinations. Whilst they can handle the simpler issues of dispute regarding selected market conduct, churn or wrongful disconnection under limited circumstances, they cannot manage more complex issues such as contractual imposition such as say under the Bulk Hot Water provisions.

The National Energy Retail Law (South Australia) (NERL) and parallel National Energy Retail Rules (NERR) has permitted exempt selling subject to regulation, but is clear about provision of energy being based on ‘flow of energy’ to the premises deemed to be receiving energy (electricity or gas, not honey milk, internet services and other commodities or services, which may or may not be provided to Body Corporate entities or landlords, but not directly to end-users if those users are provided with heated water (often of varying temperature since this is not measured at all with hot water flow meters)

There is no such thing as an embedded gas network. Either the gas is directly supplied as a good (not as a water product that has been transformed by attributes, viz heated water) or it is not, to the end user held liable contractually.

Otherwise that contract relates to services supplied top a Body Corporate or landlord who must take liability.

Unfortunately the Residential Tenancy laws can only deal with simple disputes directly between landlords and tenants, not third party suppliers of goods or services engaged by the Landlord, or Body Corporate, or otherwise forced into long- term contractual arrangements that defy enshrined obligations of fiduciary duties.

Therefore the suggestion by industry participants and special interest community groups that either EWOV’s ministrations or those of VCAT will be sufficient redress, this will not work for many embedded situations where third parties are involved, including the Bulk Hot Water Provisions I have had direct dealings with body corporate entities who do not see the rosy advantages that are promoted by those with a vested interest in participating in an exempt selling program. Line forcing and inappropriate negotiations for long-range contracts often imposed without informed consent whilst a Developer is still working on a strata-titled property and during a time when a Body Corporate Guardian is put in place.

My Case Study 1 Legal Dispute between an Owners’ Corporation and Service Provider (Service Link Australia Pty Ltd with AGL as host retailer at Oasis Inkerman Developments well illustrates this point.

Refer to Arrow Asset Management Case Decision delivered by McDougall, J on 30 May 2007 Arrow Asset Management Case Community Association DP No 270180 v Arrow Asset Management Pty Ltd & Ors [2007] NSWSC 527

See for example analysis by Francesco Andreone Senior Counsel “Strata and Community Title in Australia for the 21 Century III Conference: The Implications of the Arrow Asset Management Case” (2001) first published 2009), (with acknowledgements to Gary Bugden⁴⁹)

The redress options proposed by most responding to this Revised Exempt Selling (Retail Exemptions) through an industry energy and water ombudsman (with very limited powers); or through Residential Tenancies Tribunal provisions are not appropriate since these issues cannot be dealt with by the former because of possible restrictions relating to prohibited input regarding policies; and/or conflicts of interest such as described in the case of EWOV.

Since I have provided an annotated contents section, I hope this will make it easier to navigate this document

As requested I am providing this material in word format, but have retained originally submitted appendices in .pdf format.