Credit (Transitional Arrangements) Act 2010

The Act introduces several technical concepts essential to understanding the transition. The “National Credit legislation” is defined in section 3 as the NCCP Act and the NCCP Transitional Provisions Act. The “National Credit Code” means the code in Schedule 1 of the NCCP Act. These two federal instruments replace the earlier state code. The “relevant day” is a day appointed by proclamation for the purposes of the provision in which the term appears , an important mechanism because different provisions may have different transitional dates. “Pre‑Code contracts” under section 4 refer to contracts that, immediately before the relevant day, were subject to an “old system law”, defined as the Consumer Credit Act 1972 or the Consumer Transactions Act 1972 as in force before the commencement of the Consumer Credit (South Australia) Code. These are older contracts governed by laws that predate even the 1995 state code. Section 4(2) provides that such a contract continues to be subject to the old system law to the extent provided by the regulations under section 10 of the repealed Act as they stood immediately before the relevant day. This means that the state regime is not entirely swept away for those contracts; they remain anchored to the earlier statute. The “Consumer Credit Fund” is a creature of the repealed Credit Administration Act 1995, but section 5 continues its existence. The fund is constituted as it was under section 14(2) of that Act immediately before repeal. The Commissioner may apply money in the fund for any purpose authorised by the Minister, and after consulting the Minister, may wind up the fund and apply any remaining money for any authorised purpose. This gives the executive broad discretion over the fund’s assets, with no statutory limit on the purposes for which the money may be spent. Another key concept is the reference substitution regime in section 8. Rather than requiring every document, contract or statutory instrument that mentions the old state Acts or code to be physically amended, the Act operates as a statutory deeming device. The table in section 8(1) maps four pairs: the Consumer Credit (South Australia) Act 1995 and the Credit Administration Act 1995 both become the NCCP Act; the Consumer Credit (South Australia) Code becomes the National Credit Code; and the Consumer Credit (South Australia) Regulations become regulations made under the NCCP Act for the purposes of the National Credit Code. Section 8(2) extends this to references to specific provisions of the state code, which become references to corresponding provisions of the National Credit Code, with the correspondence to be determined under section 5 of the NCCP Transitional Provisions Act. This mechanism is subject to a contrary intention or contextual requirement, preserving flexibility where a literal substitution would produce absurd or inconsistent results.

The Act affects a broad range of persons and entities engaged in or regulated by consumer credit in South Australia, directly or indirectly through the reference substitution and the amendments to other Acts. Primary targets are credit providers who were licensed or operating under the state code; they must now deal with the national regulator ASIC rather than the Commissioner for Consumer Affairs. Consumers holding credit contracts that were entered into before 1 July 2010 are affected: most existing contracts will be governed by the National Credit Code by virtue of the reference substitution, but pre-existing pre-Code contracts (those under the 1972 Acts) retain their old regime under section 4. The Commissioner for Consumer Affairs continues to have a role: administering the Consumer Credit Fund (section 5), providing information and assistance to ASIC (section 6), and potentially entering into agency agreements with ASIC (section 7). ASIC acquires new functions and powers as an agent of the State if an agreement under section 7 is made, and can request documents and assistance under section 6. The scheduled amendments directly affect specific sectors. Part 2 amends the Bills of Sale Act 1886: a bill of sale that constitutes a goods mortgage to which the National Credit Code applies is no longer rendered void as against any person by reason of non-registration. This affects secured creditors and debtors , a secured creditor holding an unregistered bill of sale for a goods mortgage under the National Credit Code now retains enforceability against third parties, which was not the case for unregistered bills of sale generally. Part 3 amends the Criminal Law (Clamping, Impounding and Forfeiture of Vehicles) Act 2007 by updating the definition of “credit provider” from the state code to the National Credit Code. This affects persons whose vehicles may be impounded: the credit provider exemption now refers to the national definition. Part 4 amends the Second-hand Vehicle Dealers Act 1995, similarly updating the definition of “credit provider”. Second-hand vehicle dealers who provide or arrange credit must now satisfy the National Credit Code definition. Part 5 amends the Security and Investigation Agents Act 1995: the exemption for persons lawfully carrying on the business of providing credit is updated from the state code to the National Credit Code. Security and investigation agents who also provide credit must now meet the national definition to remain exempt from that Act’s licensing requirements. Part 6 amends the Stamp Duties Act 1923, changing the definition of “mortgage” by replacing a reference to section 10(3) of the state code with section 9(3) of the National Credit Code. This affects stamp duty liability on certain mortgages, potentially altering the scope of what constitutes a mortgage for duty purposes.

The Act imposes few new duties; its primary effect is to preserve rights and to enable the transfer of functions and information. The most notable duty is on the Commissioner for Consumer Affairs under section 6: the Commissioner is authorised, on his or her own initiative or at ASIC’s request, to provide ASIC with documents and other information in the Commissioner’s possession or control that is reasonably required by ASIC in connection with its functions under the National Credit legislation, and to provide other assistance reasonably required. This is not a mandatory duty , the Commissioner “is authorised” , but in practice ASIC may rely on this power to compel cooperation. The duty is elevated by section 6(2), which provides that the section has effect “despite any other Act or law”. This overrides any state secrecy or privacy restrictions that might otherwise prevent disclosure. Rights are more prominent. Section 4 gives the right for parties to pre-Code contracts to continue under the old system law, unaffected by the repeal of the state regime. This is a substantive preservation right: for example, a pre-Code credit contract that was regulated by the 1972 Acts remains under that regime, and the rights and obligations under it (including any interest rate caps or disclosure requirements applicable under those old laws) continue to apply. Section 5 gives the Commissioner a right to apply the Consumer Credit Fund money for any purpose authorised by the Minister, and a right to wind up the fund after consulting the Minister. The Minister or authorised person under section 7 has the right to enter into an agreement with ASIC for ASIC to perform state functions, even if those functions are otherwise conferred on a different person or body by state law. This is a delegation power that can remove functions from existing state bodies and give them to ASIC without amending each empowering Act. Section 8 creates a right for parties to contracts and instruments: references in documents to the old state regime are deemed to refer to the national regime, so that those documents remain valid and effective without formal amendment. However, this deeming is subject to contrary intention or context, so if a document was drafted to rely on the specific wording of the state code, the deemed substitution may produce unintended consequences. Section 9(3) is a protective limit on the Governor’s regulation-making power: transitional regulations may take effect retrospectively only if they do not operate to the disadvantage of a person by decreasing the person’s rights or imposing liabilities. This means that the executive cannot use retrospective transitional regulations to cut off vested rights or impose new burdens on past conduct.

The Credit (Transitional Arrangements) Act 2010 itself creates no penalties, offences or enforcement mechanisms. It is a machinery Act that facilitates the transition from one regulatory system to another. Its enforcement significance lies in the changes it makes to other Acts that do carry penalties. For example, the amendment to the Bills of Sale Act 1886 (Schedule 1, Part 2) removes the condition that an unregistered bill of sale is void as against any person if it constitutes a goods mortgage to which the National Credit Code applies. This effectively expands the enforceability of such securities, which may indirectly affect the rights of creditors and debtors in enforcement actions. Previously, a failure to register a bill of sale under the Bills of Sale Act could render it void, but now if the bill is a goods mortgage under the National Credit Code, non-registration is no longer a ground for voidness. This could affect the outcome of disputes over priority or enforcement against third parties. The amendments to the Criminal Law (Clamping, Impounding and Forfeiture of Vehicles) Act 2007, the Second-hand Vehicle Dealers Act 1995, and the Security and Investigation Agents Act 1995 update definitions that are relevant to the application of those Acts’ offence provisions. For example, the exemption for credit providers in the Security and Investigation Agents Act now refers to the National Credit Code definition, so a person who provides credit but does not fall within that definition may need a security licence or risk prosecution. The amendment to the Stamp Duties Act 1923 alters the definition of “mortgage” for duty purposes, which could affect the duty payable on certain transactions and the penalties for non-payment. The repeal of the Consumer Credit (South Australia) Act 1995 and the Credit Administration Act 1995 terminates any enforcement powers that existed under those Acts. For instance, the old state Act may have had inspectorial powers, offence provisions for unlicensed credit activity, or civil penalties. Those are replaced by the enforcement regime under the NCCP Act and the ASIC Act, which include significant civil and criminal penalty provisions for credit licensees. The transitional arrangements ensure that there is no gap: conduct before repeal that was an offence under the state Acts may be preserved by transitional provisions in the NCCP Transitional Provisions Act or by regulations under section 9 of this Act. However, the Act itself does not address the enforcement of past breaches under the repealed Acts; practitioners would need to consult the NCCP Transitional Provisions Act and any regulations made under section 9.

The Act interacts with several categories of South Australian and Commonwealth law. First, it explicitly overrides other state laws where necessary. Section 6(2) states that section 6 (provision of information to ASIC) has effect “despite any other Act or law”. This means that any state secrecy, privacy, or confidentiality restriction that would otherwise prevent the Commissioner from sharing documents or information with ASIC is overridden. Similarly, section 7(2) provides that an agreement or arrangement with ASIC has effect “despite any provision of a law of the State” that might otherwise regulate the function or power in question. This gives the Minister broad authority to transfer state regulatory functions to ASIC without the need for individual legislative amendments. Second, the Act amends five other South Australian Acts via Schedule 1: the Bills of Sale Act 1886, the Criminal Law (Clamping, Impounding and Forfeiture of Vehicles) Act 2007, the Second-hand Vehicle Dealers Act 1995, the Security and Investigation Agents Act 1995, and the Stamp Duties Act 1923. Those amendments replace references to the state code with references to the National Credit Code, thereby aligning the definitions in those Acts with the national regime. The Act also repeals two Acts: the Consumer Credit (South Australia) Act 1995 and the Credit Administration Act 1995. The consequence is that the state-based consumer credit licensing and enforcement regime ceases to exist. Third, section 8 operates as a statutory deeming provision across the entire state legal landscape. Any reference in an Act, statutory instrument, or any other kind of instrument, contract, agreement or other document to the repealed state Acts, code or regulations is to be read as a reference to the national equivalents unless a contrary intention appears or the context requires a different interpretation. This affects not only the Acts listed in Schedule 1 but every other South Australian Act, regulation, local law, contract, mortgage, or deed that happens to mention the old state credit laws. For example, a contract that says “this agreement is governed by the Consumer Credit (South Australia) Code” is now read as saying “governed by the National Credit Code”. This can have substantive effects if the two codes differ in substance , for instance, on interest rate calculations, hardship provisions, or enforcement requirements. The interaction with Commonwealth law is also direct: the Act defines key terms by reference to the NCCP Act and the National Credit Code. It treats ASIC as the recipient of information and as a potential agent for the State. The NCCP Transitional Provisions Act is incorporated by reference for determining correspondence of provisions in the reference substitution regime (section 8(3)). Any regulations made under section 9 of this Act must not disadvantage persons (decrease rights or impose liabilities) if made retrospective, but they can otherwise supplement the transition.

The legislative history provided indicates that the Credit (Transitional Arrangements) Act 2010 was assented to on 24 June 2010 and commenced on 1 July 2010, as proclaimed in the Gazette on 1 July 2010 (page 3337). No subsequent amendments are listed in the extracted legislative history. The Act appears to have been enacted as a single self-contained transitional instrument without subsequent amendment. However, the Act itself amended several other Acts (Bills of Sale 1886, Criminal Law (Clamping etc) 2007, Second-hand Vehicle Dealers 1995, Security and Investigation Agents 1995, Stamp Duties 1923) and repealed two Acts (Consumer Credit (South Australia) Act 1995 and Credit Administration Act 1995). Those amendments and repeals came into effect on the same commencement date. The absence of amendment history suggests that the Act has remained in its original form since 2010, which is consistent with its transitional nature: once the transition is complete, there is little reason to amend it. The fact that the Act still appears on the South Australian legislation website indicates that some of its provisions remain operative, particularly section 4 (pre-Code contracts) and section 5 (Consumer Credit Fund) which may continue to have effect until the fund is wound up and all pre-Code contracts have run their course. The Governor’s power to make regulations under section 9 has presumably been exhausted or remains available as needed.

The extracted source material does not refer to any cases that have interpreted or applied the Credit (Transitional Arrangements) Act 2010. The Act is a procedural and mechanical transitional instrument, and it is unlikely to be the subject of substantial litigation in its own right. Where disputes arise, they are more likely to concern the interpretation of the National Credit Code or the NCCP Act, or the effect of the reference substitution in section 8 on specific contracts. A party seeking to argue that a contract should still be governed by the old state code might rely on section 4 (pre-Code contracts) or on the “contrary intention” exception in section 8. There could also be litigation about the validity of regulations made under section 9, particularly if a regulation is alleged to disadvantage a person retrospectively in breach of section 9(3). The amendment to the Bills of Sale Act (removing voidness for non-registration of National Credit Code goods mortgages) could give rise to priority disputes where an unregistered bill of sale is asserted against a later registered security interest under the Personal Property Securities Act 2009 (Cth), which came into effect around the same time. However, no specific South Australian cases on this amendment have been identified in the source. The Act’s litigation history is effectively nil, which is a notable characteristic: the Act achieved its purpose without generating reported judicial interpretation.

Practitioners need to watch several traps. First, the definition of “relevant day” in section 3 is not a fixed date; it is a day appointed by proclamation for the purposes of the provision in which it appears. Section 4(2) uses “the relevant day” without further definition, so one must check the proclamation to know from what date pre-Code contracts are preserved. The Act itself commenced on 1 July 2010, but the relevant day for section 4 may be different. If no proclamation has been made, the provision may be inoperative. Second, the reference substitution in section 8 is subject to “unless the contrary intention appears or the context requires a different interpretation”. This is a double escape clause. A document that was drafted with specific reliance on the wording of the state code may not function correctly if the National Credit Code has a different definition or provision. The contrary intention might be inferred from the document’s use of particular terms that have no equivalent in the national code. For example, if a contract defines “credit fees and charges” by reference to the state code’s specific list, the substitution may be contextually inappropriate. Third, the Consumer Credit Fund continues under section 5, but the rules for its operation are minimal. The Commissioner may apply the fund for any purpose authorised by the Minister, and may wind it up for any purpose authorised by the Minister. There is no statutory constraint on the Minister’s authorisation, which could be broad. This creates a risk that fund monies collected from licensees or fees under the old regime could be redirected to purposes not originally intended, subject only to ministerial approval. Fourth, section 6 authorises the Commissioner to provide information and assistance to ASIC “despite any other Act or law”. This is a blanket override of privacy, secrecy and confidentiality obligations. A person who provided information to the Commissioner under the old state regime on a confidential basis may find that information passed to ASIC without their consent. There is no notification requirement or limitation. Fifth, the amendment to the Bills of Sale Act means that an unregistered bill of sale that is a goods mortgage under the National Credit Code is not void for non-registration. However, a bill of sale that does not constitute such a goods mortgage remains void if unregistered under section 28(1). This creates a bifurcated regime for bills of sale: those that are National Credit Code goods mortgages are exempt from the voidness rule; others are not. The distinction may be difficult to draw in practice, especially where a bill of sale contains both regulated and unregulated elements. Sixth, the repeal of the Credit Administration Act 1995 removes the statutory basis for the Consumer Credit Fund’s operation, but section 5 continues the fund “constituted in the manner provided by section 14(2) of that Act immediately before the repeal”. This preservation may create ambiguity about whether and how the fund can receive new money after repeal, since the old Act’s provisions for payments into the fund are also repealed. Finally, section 9(3) protects persons from disadvantage by retrospective transitional regulations, but the protection is limited to decreasing rights or imposing liabilities. A regulation that merely clarifies an existing obligation or reduces a benefit that was only an expectation may not be caught.

Compliance with the Credit (Transitional Arrangements) Act 2010 itself is minimal because the Act is not a regulatory code imposing ongoing obligations. The primary compliance tasks fall on credit providers, their lawyers, and state government agencies. For credit providers: ensure that all new credit contracts are made under the National Credit Code and the NCCP Act, not the repealed state code. Review all existing contracts and documentation to confirm that the reference substitution in section 8 operates as intended. If a contract contains a clause that references the state code, the party relying on that clause should satisfy itself that the corresponding National Credit Code provision achieves the same result. Where a contrary intention exists (for example, a contract drafted to rely on a specific state code provision that has no equivalent in the national code), consider executing a variation or novation to avoid ambiguity. For pre-Code contracts (those under the 1972 Acts), identify them and maintain a separate compliance system under the old regime, which continues under section 4. The Commissioner for Consumer Affairs should establish a procedure for winding up the Consumer Credit Fund (section 5(3)), with ministerial authority for each application of money, and ensure that any information provided to ASIC under section 6 is properly recorded and that ASIC’s requests are responded to promptly, given the override of other laws. Any state agency whose Act has been amended by Schedule 1 should update its internal policies and forms to refer to the National Credit Code definitions (e.g., credit provider, mortgage, goods mortgage). For example, the Office of Consumer and Business Services (or its successor) should ensure that registers under the Bills of Sale Act note the exception for National Credit Code goods mortgages. For ASIC: if it wishes to exercise state functions, it should seek an agreement under section 7 with the Minister, which will then override conflicting state law. For legal practitioners: when advising on any South Australian contract, deed, or statutory instrument that references the old state credit regime, be alert to the deeming effect of section 8. Do not assume the substitution works automatically; consider whether the context requires a different interpretation. Also check whether any transitional regulations have been made under section 9, as they may affect the timing or scope of the transition. Finally, for any person affected by a retrospective transitional regulation, monitor section 9(3) as a constraint , if a regulation decreases rights or imposes liabilities, it may be invalid in its retrospective operation.