(a) with whom the supplier has a contract, arrangement or understanding relating to the supply to the supplier of goods in which the supplier deals, relating to the business carried on by the supplier of supplying goods or services or relating to the provision to persons to whom goods or services are supplied by the supplier of credit in respect of payment for those goods or services; or
(b) to whom the supplier, by arrangement with the credit provider, regularly refers persons for the purpose of obtaining credit; or
(c) whose forms of contract or forms of application or offers for credit are, by arrangement with the credit provider, made available to persons by the supplier; or
(d) with whom the supplier has a contract, arrangement or understanding under which contracts or applications or offers for credit from the credit provider may be signed by persons at the premises of the supplier.
(2) For the purposes of this Code, a tied continuing credit contract is a continuing credit contract under which a credit provider provides credit in respect of the payment by a debtor for goods or services supplied by a supplier in relation to whom the credit provider is a linked credit provider.
(3) For the purposes of this Code, a tied loan contract is a credit contract (other than a continuing credit contract) entered into between a credit provider and a debtor where:
(a) the credit provider knows or ought reasonably to know that the debtor enters into the credit contract wholly or partly for the purposes of payment for the goods or services supplied by a supplier; and
(b) at the time the credit contract is entered into the credit provider is a linked credit provider of the supplier.
Division 2—Liability of credit providers for suppliers’ misrepresentations
128 Credit provider liable with respect to supplier’s misrepresentations etc. about tied credit contract
(1) If there is a tied loan contract or a tied continuing credit contract in respect of a sale contract, any representation, warranty or statement made (whether orally or in writing) by the supplier, or any person acting on behalf of the supplier, to the debtor in relation to the tied loan contract or tied continuing credit contract gives the debtor the same rights against the credit provider as the debtor would have had if it had been made by the credit provider.
(2) Without prejudice to any other rights or remedies to which a credit provider may be entitled, a credit provider is entitled to be indemnified by the person who made the representation, warranty or statement, and any person on whose behalf it was made, against any damage suffered by the credit provider through the operation of this section.
Division 3—Liability of credit providers in relation to goods
129 Right to damages under sale contract against both supplier and linked credit provider
General right to damages
(1) If:
(a) a supplier supplies goods, or causes goods to be supplied, to a linked credit provider of the supplier and a debtor enters into a contract with the linked credit provider for the provision of credit in respect of the supply by way of sale of the goods to the debtor; or
(b) a debtor enters into a contract with a linked credit provider of a supplier for the provision of credit in respect of the supply by the supplier of goods or services, or goods and services, to the debtor;
and the debtor suffers loss or damage as a result of misrepresentation, breach of contract, or failure of consideration in relation to the sale contract, the supplier and the linked credit provider are, subject to this Division, jointly and severally liable to the debtor for the amount of the loss or damage, and the debtor may recover that amount by action in accordance with this section in a court of competent jurisdiction.
Credit provider’s defences
(2) A linked credit provider of a particular supplier is not liable to a debtor by virtue of subsection (1) in proceedings arising under that subsection if the credit provider establishes:
(a) that the credit provided by the credit provider to the debtor was the result of an approach made to the credit provider by the debtor that was not induced by the supplier; or
(b) if the proceedings relate to a contract of sale with respect to which a tied loan contract applies, that:
(i) after due inquiry before becoming a linked credit provider of the supplier, the credit provider was satisfied that the reputation of the supplier in respect of the supplier’s financial standing and business conduct was good; and
(ii) after becoming a linked credit provider of the supplier, but before the tied loan contract was entered into, the linked credit provider had not had cause to suspect that the debtor might, if the contract was entered into, be entitled to recover an amount of loss or damage suffered as a result of misrepresentation, breach of contract or failure of consideration in relation to the contract as referred to in subsection (1); and
(iii) after becoming a linked credit provider of the supplier, but before the tied loan contract was entered into, the credit provider had not had cause to suspect that the supplier might be unable to meet the supplier’s liabilities as and when they fell due; or
(c) if the proceedings relate to a contract of sale with respect to which a tied continuing credit contract entered into by the linked credit provider applies, that, having regard to:
(i) the nature and volume of business carried on by the linked credit provider; and
(ii) such other matters as appear to be relevant in the circumstances of the case;
the linked credit provider, before becoming aware of the contract of sale, or of proposals for the making of the contract of sale (whichever the linked credit provider first became aware of), had not had cause to suspect that a person entering into such a contract with the supplier might be entitled to claim damages against, or recover a sum of money from, the supplier for misrepresentation, breach of contract or failure of consideration as referred to in subsection (1).
130 Limits on debtor’s right of action against linked credit provider
Debtor may raise credit provider’s liability
(1) Subject to subsection (2), in relation to a contract referred to in paragraph 129(1)(a) or (b), in which a credit provider claims damages or an amount of money from a debtor, the debtor may set up the liability of the credit provider under section 129 in diminution or extinction of the debtor’s liability.
Proceedings to be brought against both supplier and linked credit provider
(2) Subject to subsection (3), a debtor may not, in respect of a liability for which, by reason of section 129, a supplier and a linked credit provider are jointly and severally liable:
(a) bring proceedings to recover an amount of loss or damage from the credit provider; or
(b) where proceedings are brought against the debtor by the linked credit provider, make a counterclaim or exercise the right conferred by subsection (1) against the credit provider;
unless the debtor brings the action against the supplier and the credit provider jointly or, in the case of a counterclaim or right conferred by subsection (1), claims in the proceedings against the supplier in respect of the liability by third‑party proceedings or otherwise.
When joint proceedings not required
(3) Subsection (2) and paragraphs (5)(a) and (6)(a) do not apply in relation to proceedings where:
(a) the supplier is insolvent, cannot be located after reasonable inquiry, or has died or been dissolved; or
(b) in the opinion of the court in which the proceedings are taken, it is not reasonably likely that a judgment obtained against the supplier would be satisfied and the court has, on the application of the debtor, declared that subsection (2) and paragraphs (5)(a) and (6)(a) do not apply in relation to the proceedings.
Limit of credit provider’s liability
(4) The liability of a linked credit provider to a debtor for damages or a sum of money in respect of a contract referred to in subsection 129(1) is not to exceed the sum of:
(a) the amount of credit under the tied loan contract or tied continuing credit contract; and
(b) the amount of interest (if any) or damages in the nature of interest allowed or awarded against the linked credit provider by the court; and
(c) the amount of costs (if any) awarded by the court against the linked credit provider or supplier or both.
Enforcement of judgment against linked credit provider
(5) Where in proceedings arising under section 129, judgment is given against a supplier and a linked credit provider, the judgment:
(a) must not be enforced against the linked credit provider unless a written demand made on the supplier for satisfaction of the judgment has remained unsatisfied for not less than 30 days; and
(b) may be enforced against the linked credit provider only to the extent of the amount calculated in accordance with this section, or so much of the judgment debt as has not been satisfied by the supplier, whichever is the lesser.
Enforcement of right against linked credit provider
(6) Where in proceedings in respect of the liability arising under section 129, a right conferred by subsection (1) is established against a linked credit provider, the debtor:
(a) may not receive the benefit of the right unless judgment has been given against the supplier and linked credit provider, a written demand has been made on the supplier for satisfaction of the judgment and the demand has remained unsatisfied for not less than 30 days; and
(b) may receive the benefit only to the extent of the amount calculated in accordance with this section or so much of the judgment debt as has not been satisfied by the supplier, whichever is the lesser.
131 Liability of supplier to linked credit provider
Unless the linked credit provider and supplier otherwise agree, the supplier is liable to the linked credit provider for the amount of a loss suffered by the linked credit provider, being an amount not exceeding the maximum amount of the linked credit provider’s liability under subsection 130(4) and, unless the court otherwise determines, the amount of costs (if any) reasonably incurred by the linked credit provider in defending the proceedings by reason of which the liability was incurred.
132 Interest may be awarded
(1) Despite any other law, where, in proceedings arising under section 129, judgment is given against a supplier and a linked credit provider or against a linked credit provider for an amount of loss or damage, the court in which the proceedings are taken must, on the application of the debtor, unless good cause is shown to the contrary, award interest to the debtor against the supplier and credit provider or against the credit provider, as the case may be, on the whole or a part of the amount from the time when the debtor became entitled to recover the amount until the date on which the judgment is given, at a rate prescribed by the regulations.
(2) In determining whether good cause is shown against awarding interest under this section on the whole or part of an amount of loss or damage, the court is to take into account any payment made into court by the supplier or credit provider.
133 Subrogation of credit provider
If a judgment given in proceedings arising under section 129 is enforced against a linked credit provider of a particular supplier, the credit provider is subrogated to the extent of the judgment so enforced to any rights that the debtor would have had but for the judgment against the supplier or any other person in respect of the loss or damage suffered by the debtor as a result of the misrepresentation, breach of contract or failure of consideration in relation to the contract from which the liability arose.
Division 4—Termination of related transactions
134 Termination of sale contract which is conditional on obtaining credit
(1) If a purchaser of goods or services makes it known to a supplier that credit is required in order to pay for the goods or services and the purchaser, after making reasonable endeavours to do so, fails to obtain credit on reasonable terms, the purchaser is entitled to terminate the sale contract.
(2) A purchaser may terminate a sale contract under this section even though goods or services have already been supplied under the contract but, if practicable, goods supplied under the sale contract must be returned to the supplier.
(3) If a sale contract is terminated under this section:
(a) the supplier is entitled to:
(i) reasonable compensation for damage to, or deterioration of, goods supplied under the sale contract (other than fair wear and tear) up to the date of their return to the supplier or, if they are not returned, the cash price of the goods; and
(ii) the reasonable value of the services supplied under the sale contract up to the date of termination; and
(b) the purchaser is entitled (subject to the supplier’s entitlement referred to above) to the return of money paid under the sale contract.
(4) This section does not apply to a sale contract for the supply of rights in relation to, and interests in, real property unless the supplier was aware that the purchaser intended to obtain the credit from the supplier or from a linked credit provider of the supplier.
135 Termination of (or recredit under) tied credit contract if sale contract terminated
(1) If a sale contract is rescinded or discharged (whether under this Code or any other law) and there is a tied loan contract or a tied continuing credit contract made with the purchaser by a linked credit provider of the supplier under the sale contract, the debtor is entitled:
(a) in the case of a tied loan contract—to terminate the credit contract; or
(b) in the case of a tied continuing credit contract—to be credited with the amount of credit in relation to the sale contract and the interest charges attributable to that amount.
(2) If a tied loan contract is terminated under this section, any related guarantee or mortgage is terminated to the extent to which it secures obligations under the contract or any related guarantee.
(3) If a tied loan contract is terminated under this section, the credit provider is entitled to recover from the debtor any part of the amount of credit that has not been paid to the supplier and the debtor is entitled to recover from the credit provider any interest charges or other amounts paid by the debtor under the credit contract.
(4) If a mortgage or guarantee is terminated under this section, the credit provider is entitled to recover from the mortgagor or guarantor any part of the amount of credit that has not been paid to the supplier and that is secured by the mortgage or guarantee, and the mortgagor or guarantor is entitled to recover from the credit provider any other amounts paid by the mortgagor or guarantor.
(5) If a tied loan contract is terminated under this section, the credit provider is entitled to recover from the supplier (subject to any agreement between them) the amount of any loss suffered by the credit provider as a result of the operation of this section.
(6) A supplier who knows that a sale contract referred to in subsection (1) has been rescinded or discharged must forthwith give the credit provider under any tied loan contract or tied continuing credit contract notice of the termination.
Criminal penalty: 50 penalty units.
(7) This section does not apply if the credit is provided as a result of an approach by the debtor that was not induced by the supplier or credit provider.
(8) This section applies:
(a) to the exercise by a purchaser of a right under this Code or any other law to rescind or discharge a sale contract; and
(b) to a tied loan contract or a tied continuing credit contract, but only if the sale contract was the principal purpose for which the credit was provided.
136 Termination of linked maintenance services contract if credit contract terminated
(1) If:
(a) there is a tied loan contract or a tied continuing credit contract made with the debtor by a linked credit provider of the supplier under a sale contract to supply maintenance services; and
(b) the tied loan contract or tied continuing credit contract is terminated (whether under this Code or any other law) before the end of the term of the sale contract;
the debtor is entitled to terminate the sale contract to supply maintenance services and recover from the supplier a proportionate rebate of consideration paid under the sale contract.
(2) In any such case, the credit provider must inform the debtor in accordance with the regulations of the debtor’s rights under this section.
Criminal penalty: 50 penalty units.
(3) Subsection (2) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(4) The regulations may prescribe the manner of calculating the proportionate rebate of consideration for the purposes of this section.
(5) This section does not apply if the credit is provided as a result of an approach by the debtor that was not induced by the supplier or credit provider.
137 Termination of contract under this Part to be in writing
An entitlement to terminate a sale contract or credit contract that is conferred by a provision of this Part may be exercised only by notice in writing to the other party to the contract.
138 Powers of court with respect to termination of contract under this Part
The court may, on the application of any interested party, make orders:
(a) declaring whether a purported termination of a contract under this Part is valid; and
(b) for the adjustment of rights following termination of a contract under this Part.
139 Part 5 not to apply to termination of contract under this Part
Part 5 does not apply to the termination of a contract under this Part.
Division 5—Other provisions
140 Requirement as to source of credit for goods or services