Identify the additional legislative requirements of the stock and station sector
Contents
Overview 3
Key legislation 4
Property, Stock and Business Agents Act 2002 (NSW) 4
Collusive practice 6
Comebacks 6
Documenting livestock purchases and sales 7
Keeping records of buying and selling livestock at the stock agency 7
Ensuring required documents accompany livestock bought or sold 7
National Livestock Identification System (NLIS) 8
Auctions 11
Legal obligations at auction 11
Additional items of legislation relevant to NSW stock and station agents 13
Check your learning 15
Summary 16
Overview
If you are working in the stock and station sector of the property industry in NSW, you need to be aware of some additional items in the legislation framework that govern what you do. For the most part, the legislation is the same as for NSW real estate agents.
This reading outlines these additional requirements. Stock and station students should read it in conjunction with the other reading document in this topic.
Key legislation
Property, Stock and Business Agents Act 2002 (NSW)
When buying and selling livestock, you must comply with the conditions outlined in the Property, Stock and Business Agents Act 2002 (NSW) and Regulations 2003. This legislation is governed by the Office of Fair Trading (OFT), a specialist NSW government body that monitors agents’ actions and resolves and investigates any complaints or disputes. One of the OFT’s responsibilities is to ensure compliance with the Act. Other key OFT responsibilities include:
· the licensing of agents throughout NSW
· the certification and licensing of agents working in the industry
· the setting of minimum education standards and practical experience required for the issuing of the various categories of licences.
Part of the work of the OFT includes the periodic inspection and auditing of agencies, particularly in relation to the correct maintenance, control and receipting of funds. OFT sets minimum standards of stock agents’ behaviour through their rules of conduct. A stock and station agent must:
· have knowledge and understanding of the Act and Regulations
· comply with fiduciary obligations when you may be asked to act as a trustee or hold something in trust for others
· act with honesty, fairness and professionalism
· act with skill, care and diligence
· act in the client’s best interest
· respect confidentiality
· act in accordance with client authority
· act in accordance with client instructions
· consider if there is a conflict of interest
· provide copies of signed documents.
A stock and station agent must not:
· accept inducements
· solicit through false or misleading advertisements or communications
· use high pressure tactics, harassment or unconscionable conduct.
Licensees must ensure their employees comply with the Act and Regulations and must not accept payment for a referral.
The OFT imposes penalties when breaches of the Act have occurred. Penalties can include fines, loss of agent's licence or registration or, in the case of gross misconduct, jail terms.
It is an agent’s responsibility to be fully aware of the legislative requirements so that all documentation required is completed correctly and any advice given to their client is correct.
The OFT has a website which provides a copy of the Act in full. Go to www.fairtrading.nsw.gov.au and follow the links to ‘legislation’ and then to ‘Property, Stock and Business Agents Act 2002’ and ‘Property, Stock and Business Agents Regulations 2003’. You can view the regulations relating to all aspects of an agency. While all aspects of the Act must be complied with, following is a brief description of some key sections that relate to the buying and selling of livestock.
· Part 2 – Licences and Certificate of Registration – You must hold a Certificate of Registration or a licence before you conduct any business. You must participate in continuing professional development (CPD) activities each year eg attend professional development seminars etc to retain your licence.
· Part 6 – Auctions – General – Auctioneers must inform potential buyers of the conditions of an auction before commencing the sale.
A stock and station agent or real estate agent who offers land or livestock for sale by auction must notify the conditions of the sale with a notice that:
a. sets out the conditions of the sale clearly and legibly written or printed in the English language, and
b. is exhibited in a conspicuous position so as to be clearly visible to, and available for inspection by, any person attending the auction before and during the auction.
An agent must not:
o engage in collusive practices (see below for a full explanation)
o make false auction entries in auction records
o misrepresent the quality of livestock.
Relevant sections of the Regulations include:
· Section 18 – conditions of sale by auction
· Section 19 – notification of auction conditions
· Section 20 – warnings about bidders’ obligations, especially the parts relating to:
o penalty for collusive practices
o successful bidders.
Collusive practice
Collusive practice is when a buyer or buyers combine to dictate the bidding to their advantage and the disadvantage of the vendor. Under the Act it is an offence for a person to do any of the following:
· abstain from bidding
· to bid to a limited amount
· to do any other act or thing that might prevent free and open competition.
For example, at the auctions of residences A and B, two buyers could be seen to ‘collude’ if one of the buyers says, “I will not bid on property A if you do not bid on property B so that we can buy as cheaply as possible”.
In livestock auctions two buyers may be considered to ‘collude’ by agreeing that only one will bid and if he/she is successful, both buyers will get an equal share of the stock. Another way buyers can collude is by arranging alternative bidding where one buyer will bid for one pen while another will bid for the next pen and so on.
Comebacks
Comebacks are prohibited, that is, the auctioneer must not sell any livestock for a price lower than any price bid at an auction. Previously, in major livestock saleyards, it had become common practice for the auctioneer to revert to a minimum bid for the final bid and attribute that bid after the fall of the hammer. For example, if a buyer bid $2.00 per kilogram for steers and the minimum bid was 0.2 cents, after the fall of the hammer the auctioneer would nominate the bid at $1.98. This is known as a comeback and has been outlawed in the current Act.
All sale details must be recorded appropriately and the successful bidder must supply their details immediately after an auction.
Documenting livestock purchases and sales
The legislation requires that stock and station agents record specific details about livestock when buying or selling it.
Keeping records of buying and selling livestock at the stock agency
Before auction day, vendors confirm how many head of livestock they will be submitting for sale. A stock and station agent needs to record these details in the booking-in book at their agency office. This is a legal requirement. Here is an example of a typical layout for a booking-in book.
Vendor name / No. head / Type / Carrier company(if required)
F Smith / 20 / Cows / J Williams
J Jones / 2 / Bulls / J Williams
Table 1: Sample booking-in book
Ensuring required documents accompany livestock bought or sold
Before livestock are bought or sold, producers must complete a National Vendor Declaration (NVD) and ensure that each animal is appropriately tagged, if required. An NVD gives information on the food safety status of the stock that will be sold. For example, it includes information about whether the livestock have been exposed to chemicals, contaminated feeds or have been unduly stressed. It also provides information and a history on the cattle.
National Livestock Identification System (NLIS)
Eartagging allows details to be kept about the history of the animal on the National Livestock Identification System (NLIS) database.
The NLIS is a system that identifies and traces stock back to the property of birth. Each time ownership of an animal changes, it must be recorded on the NLIS database. An agent can access the NLIS database by going to the website at www.nlis.mla.com.au and creating an account.
National Vendor Declarations (NVDs)
A National Vendor Declaration is completed by the owner of the cattle, the livestock carrier and the livestock agent. An NVD gives information on the food safety status of the stock that will be sold. For example, it includes information about whether the livestock have been exposed to chemicals, contaminated feeds or have been unduly stressed. It also provides information and a history on the cattle.
The form must be completed before the cattle leave the saleyards or the property. Meat and Livestock Australia (MLA) issues NVDs.
Meat and Livestock Australia (MLA)
Meat & Livestock Australia (MLA) is a producer-owned company, working in partnership with industry and government to promote the red meat and livestock industry. MLA provides marketing and research services to its 43,500 livestock producer members and the broader red meat industry to help them meet community and consumer expectations.
Below are details of the documentation that should accompany cattle, sheep, goats and pigs.
Cattle and bobby calves
· Cattle NVD waybill/ NVD bobby calves – The owner of the cattle, the livestock carrier and the agent complete an NVD to accompany the cattle. It must be completed before the cattle leave the saleyards or the property. The owner must hand it to the carrier carting the livestock to sale, as it acts as a permit. Once the NVD has been signed, it is a legally binding document. While there is no law stating the NVD is compulsory and it is possible to sell livestock without one, most producers will find it very difficult to find a buyer who will accept cattle without one. An emergency NVD can be ordered from the MLA website at www.mla.com.au if you have a Livestock Production Assurance password, by phone or in writing.
· Eartag – Each beast must have a unique, identifying eartag. Once ownership of the cattle has been transferred and cattle moved, the MLA must be notified within seven days. Ownership records are kept in the NLIS database. Electronic notification of device numbers is preferred either through an electronic account with the database or via email. Most agents have their own computer set up to transfer the information to the MLA. Producers are able to use an agent to access information on the NLIS database on their behalf once an Access Authority Form has been completed. This form can be downloaded from MLA website.
· Tailtag – Each producer has a Property Identification Number (PIC) and each beast must have a tailtag on, stating this number. A PIC is a number allocated by each State Department of Agriculture or Rural Lands Protection Board (RLPB) that relates to a parcel of land or a physical location. This number also appears on the NVD.
· Emergency eartags and tailtags – Producers with small numbers of cattle, who do not have a Property Identification Number (PIC) may purchase emergency eartags and emergency tailtags from their local Rural Lands Protection Board (RLPB) prior to their cattle being sold. The agent may attach the tags to the cattle at the saleyards prior to sale.
· EU – Those producers who participate in the European Union (EU) scheme need to have a separate eartag from the NLIS eartag, stating this. Each beast must have its own individual number. The MLA must be notified when there is transfer of ownership after the sale. An agent generally completes the documentation for the transfer of ownership for their client. An EU Vendor Declaration also needs to accompany the cattle.
Sheep and lambs
· Sheep and lambs NVD waybill – An NVD must also be completed for sheep and lambs. The same rules apply as for cattle ie the (legally binding) form must be completed by the owner, carrier and agent.
· Animal Health Statement (AHS) – The AHS is a formal document, signed by the seller that provides information on the health status of restocker sheep. It is a valuable tool that enables buyers to assess the risk of Ovine John's Disease (OJD) when buying sheep. It must be completed accurately and signed. The statement is not required for exempt sheep. Exempt sheep are:
o sheep being moved directly to or via a ‘slaughter only’ sale
o lambs accompanied by an NVD on which section 7 has been completed
o sheep being sent or delivered to an AHS exempt sale.
AHS forms are only available through your local Rural Lands Protection Board (RLPB).
Goats
Producers are also required to complete an NVD for goats. The details required are very similar to those for cattle and sheep.
Pigs
No NVD is required for pigs but they must be tattooed.
Private sale contracts
For a private livestock sale, the agent, the vendor and the buyer agreeing to the terms and conditions of the sale must complete a private sale contract. Once this agreement is completed correctly and signed by all parties, it becomes a legally binding contract. To get copies of the recommended private sales contract, you’ll need to become a member of the Australian Livestock and Property Agents Association (ALPA). Their website is www.ssaaonline.com.