Many aren’t aware that there are specific laws which governs how goods are to be dealt with in the event that they remain uncollected or are abandoned. The Disposal of Uncollected Goods Act 1970 (“the Act”) sets out the procedure that must be followed by a ‘bailee’ (i.e. someone who is in possession of goods that they do not own and should have been collected by the owner, or the ‘bailor’) when they intend the sell or otherwise dispose of the goods. The most common scenario when this might occur is when a person leaves goods with a business (like a car left with a mechanic, for example) and then never returns to collect them.
The Act splits goods into four different categories, being: –
- Goods that are ‘prescribed goods’ as defined by the Act, which include household items and appliances, like bedding, TVs, clothes, footwear and cooking utensils and appliances (to name a few), motor vehicle parts and accessories, soft furnishings and sports equipment;
- Goods that are not prescribed goods and are valued at $3,500 or less;
- Goods that are not prescribed goods and are valued at more than $3,500; and
- Goods acquired in any way other than under a bailment to which the other categories do not apply.
The procedure that must be followed for each different type of category is very outdated and quite onerous on the bailee, which has prompted a review by the Commissioner for Consumer Protection, David Hillard. For example, the Act lists items such as radiograms and typewriters as ‘prescribed goods’ and required all notices to be sent out in the post and published in the Government Gazette, rather than sent via email and advertised online.
In addition, the notice requirements and time frames that are imposed on a bailee before the goods can be dealt with (or in some cases, before the bailee can apply to the Magistrates Court for an order to dispose of the goods) are unrealistic, and are the most onerous out of all the states in Australia. For example, in relation to prescribed goods, the bailee must serve a notice on the owner advising that the goods are available for collection, and if the goods are not collected within three months, the bailee must serve another notice on the owner (and any other interested party and the Commissioner of Police) advising that they intend to sell or otherwise dispose of the goods. The bailee must then wait another month until they can attempt to sell the goods by auction or private sale. If the bailee is not able to sell the goods within a further month, then they can dispose of the goods as they see fit. So, a bailee dealing with prescribed goods that virtually have no value and can’t be sold, can be waiting up to 5 months before they are able to dispose of the goods, and that is only if the owner doesn’t dispute the disposal.
The time frames and procedures for goods that are not prescribed goods and are valued at more than $3,500 are even more onerous for the bailee. In addition to the notices that must serves as above, the bailee must wait 6 months for a response from the owner, advertise in the local newspaper and the Government Gazette, and apply to the Magistrates Court for an order to sell or otherwise dispose of the goods. This process, depending on when the Court lists the matter for hearing and how many hearing are required, could easily take 7-12 months before the bailee is relieved of the goods.
I often act for bailees that fit into the 4th category listed above. Whilst the notice requirements and time frames are not as onerous as category 3 (in that there is no requirement to advertise, and the bailee can make an application to the Magistrates Court to sell or otherwise dispose of the goods after 1 month of giving notice), the bailee is often out of pocket in storage costs and legal fees after going through the process, which are usually next to impossible to recover from the owner of the goods. This can be a hard pill to swallow, given that the bailee is usually at no fault but is forced to go through the motions due to the inaction of the owner of the goods.
The Act is long overdue for a review, and hopefully, after the Department of Mines, Industry Regulation and Safety have concluded their consultation, changes will be implemented which not only protect consumers, but ensure that it isn’t so difficult and costly for bailees to dispose of goods they have been lumped with through no fault of their own.
If you are a business owner or any person who has acquired goods and need advice on dealing with them, please contact our office on (08) 6244 0985 for a free, no-obligation 15 minute telephone consult.