Trans-Tasman Proceedings Bill

Another member was on his feet last night, and I was hoping that he would continue with the call, because it was such an interesting contribution to the debate.

💬 Hon Ruth Dyson: Who was that?

I cannot remember his surname, so I cannot say—ha, ha! Perhaps one of my colleagues could help me.

💬 Hon Ruth Dyson: It wasn’t Maurice Williamson, was it?

No, it was not.

Seriously, I do have a serious question to ask. One of my colleagues, Raymond Huo, made a contribution to the second reading debate last night. The point he was making was in relation to some concerns that had been raised by Chapman Tripp in the public arena prior to the Trans-Tasman Proceedings Bill going to the Justice and Electoral Committee. I alluded to this point myself in the first reading debate, but I did so at the end of my contribution. I said that I would deal with it once we got to the Committee stage, because, as my colleague Raymond Huo pointed out—very well, I thought—it is actually quite a tricky area. Let me just run back over the end point of my contribution on the first reading debate.

I have here the Chapman Tripp publication Trans-Tasman integration: court proceedings and enforcement. It states: “The proposed recognition and enforcement of regulatory sanctions is perhaps the most controversial part of the regime. The proposed reforms partially displace the longstanding rule that domestic courts do not enforce penal (as opposed to compensatory) laws of foreign states, because to do so is contrary to the principles of independent sovereignty.” The point that my colleague Raymond Huo made last night was that under the proposed reforms some of the Australian regulatory penalties imposed by courts can now be seen to be directly enforceable in New Zealand courts, and vice versa, in the same way civil judgments are. The point he was making—and this is the point elucidated in this commentary—is that regulatory regimes based around civil penalties and regulatory regimes based around criminal penalties are going to be treated differently under the new regime. For civil penalties there will basically be cross-border reach, unless it is expressly excluded, and that is dealt with in Subpart 7 of the bill, which is the part of the bill that I would like the Minister to focus his attention on—clauses 68 and 69. These provisions refer back to Subpart 5, as well. For criminal penalties it will be where they are included in the regulatory reach. On the one hand, if sanctions are framed as civil pecuniary penalties, they will be directly enforceable unless specifically excluded by Order in Council—“a negative list” approach. Sanctions framed as “regulatory regime criminal fines” will be directly enforceable only if declared to be so by Order in Council—a “positive list” approach. It would be worthwhile to have on the record of the House why the distinction applies in this legislation. It would be an extremely useful contribution to an understanding around how this will work in practice.

The reason I am asking for this is that Chapman Tripp basically said that it was not obvious that the difference in treatment was warranted, because for some of the civil penalties versus criminal penalties arguments, one will literally be dancing on the head of a pin. It used the example of a fine under section 40 of the Fair Trading Act, which is a criminal penalty, and a fine under section 80 of the Commerce Act, which is a civil penalty. I think it is quite an interesting point, and it would be really worthwhile if the Minster would contribute to our understanding of why there is the difference between the two regimes as they are being implemented in the Trans-Tasman Proceedings Bill.

It is quite an interesting argument, and Chapman Tripp takes it a little bit further. The question is this: “As a matter of broader principle, one might ask when and to what extent direct and mutual enforcement of the regulatory penalties is desirable.” So this is really the second issue—the first issue is the distinction between the civil and the criminal penalties. The point that Chapman Tripp went on to make is that “Where those court judgements relate to regulatory proceedings, the domestic regulatory systems of both New Zealand and Australia will have a broader reach. But this does not ensure (or even seek to ensure) that the respective regulatory systems will promote the same policies or pull in the same direction.” So the point raised in this article is that there is “a risk of cross-cutting, rather than more streamlined, regulation in areas such as competition law, securities regulation and consumer protection.” As I also said in the first reading debate on this bill, it was in my role as the Minister of Commerce that I welcomed the introduction of the Trans-Tasman Proceedings Bill on the basis that a lot of the work that would be seen to be able to be concluded under it would fall within the ambit of my concern in that area.

But the point that Chapman Tripp makes in this article is that anecdotal evidence suggests “that New Zealand and Australian regulators are still a lot way from sharing a common mindset or working in a truly coordinated fashion. The New Zealand Commerce Commission is unlikely to accept arguments that a New Zealand penalty should be reduced to take account of penalties imposed in Australia in respect of the same or related conduct. Likewise for the Australian Securities and Investments Commission. Perhaps in time a regime of mutual enforceability will foster a joint approach by regulators in such situations. For now, one can expect a somewhat imperfect overlap as the effects of closer coordination, but not single-source regulation, are felt.” I do not necessarily agree with Chapman Tripp on this point. I think that sometimes we leap to an end conclusion without seeing whether there are intermediate steps that we can take along the way, and in many respects I prefer the graduated approach that this legislation seems to favour, which is to have the mutual enforceability through the approach of the Trans-Tasman Proceedings Bill rather than to have single set of regulation applying across the Australian Securities and Investments Commission, the Commerce Commission, and indeed the Securities Commission.

We have moved a long way, and, as I also said in my first reading speech, the mutual recognition of securities offerings and the sorts of advancements that were made under the previous Labour Government will benefit, I think, from the platform that this establishes. But I think it is worthwhile for the Government to place on record a response to this particular issue, because it is one that commentators will continue to reflect on as the legislation comes into force. The legislation as a whole is legislation that we absolutely welcome. As I said in the first reading, I was the Minister who was fortunate enough to be able to sign the original agreement on behalf of the New Zealand Government, and that is something that, obviously, someone in my situation would regard as an absolute privilege to do. So we are very pleased that the Government has taken up legislative requirements to match the legislative requirements put in place in Australia. But those two issues, I think, are worthy of having a good statement on the record of this House. Those who are going to study the in-depth detail of this legislation and are going to implement it from time to time will want to see why the Government has chosen to split the approach on civil and criminal penalties. They will want to see how the new system is supposed to operate, when in fact the regulators may be working under different rules. In many respects, the blurring of the line between the two will certainly mean that people will see that one country’s own domestic circumstances will be imposing on those of the other.

As we have heard, the Trans-Tasman Proceedings Bill seeks to integrate our own justice system further with that of Australia. As far as I can see, it is the most far-reaching attempt to achieve that integration since the days of Geoffrey Palmer, as he then was, and the mutual recognition that was extended between the Federal Court of Australia and our High Court as to certain orders and judgments. So it is good to see a scheme that further extends that pioneering work, which is over 20 years old. One might say that we have tarried a bit to get to the situation that we are in now, but that we have come even as far as this is thanks in large part to the excellent work of Lianne Dalziel in the previous regime. It is great to see that that work is being continued.

I shall look at the regulatory impact statement in the legislation, and then ask the Minister in the chair a couple of questions. I can see that he is intensely engaged in this debate! It would be very interesting to hear what the Minister has to say on the questions I have for him; perhaps the answers lie on his iPad, which he is studying so assiduously. The regulatory impact statement weighs up four options. One is keeping the status quo—

💬 Paul Quinn: Looking at the bill. Get with the programme, Charles—the bill is on the iPad.

Now we have the usual excellent quality contribution from Mr Quinn in the Committee stage! He is a learned figure in the Parliament on these matters, so I hope he will keep chipping in! As he will know, the regulatory impact statement suggests that there were four options to proceed with: we could keep the status quo, which we clearly have not decided to do; we could amend existing legislation; we could implement changes modelled on another supranational project of note in the world at the moment, the European Union, with its integration of justice systems; or we could implement the changes outlined in this bill. The regulatory impact statement concluded, given the needs that it outlined, that the changes suggested in the bill are the best response to our needs.

As well as identifying the problems within our current regime, the statement gives a wider context as to why the bill’s reforms are needed. It notes the increase that has occurred in the movement of people between Australia and New Zealand, the movement of assets and services between the two countries, and the subsequent increase in cross-border disputes involving individuals or businesses based in both countries.

We have always assumed in this Parliament, I think, that this is an inevitable process—that there is an ever-greater prospect of integration between Australia and New Zealand—but history, of course, shows that that is not the case. We need only look at the politics that were played with the trans-Tasman therapeutic regime in the last Parliament, and now we have the prospect of a conservative Government, if it comes to power in Australia, having promised to look again at the ability of people to move freely between Australia and New Zealand for residential and working purposes. That would be a retrograde step; it would be a terrible thing if that agreement were altered, if the special purpose visa that New Zealanders have for going to Australia as of right, and Australians have for coming here, were to be abolished. I certainly hope that Mr Abbott does not have the opportunity to get his hands on that agreement, which I think has been a great thing for the two countries. I think it is unusual that Mr Key rang Mr Abbott on the weekend and left him a message, but did not ring the Prime Minister of Australia to congratulate her on her campaign. But let us hope that this does not presage a change in the trend that we have seen so far, of greater integration between the countries.

💬 Paul Quinn: You give her a ring, Charles. Say you’re speaking on behalf of the nation.

Well, I think it would be better to hear me speaking on behalf of the country than Mr Quinn, because at least people would be able to understand what I was saying.

In terms of what our needs are in the regulatory impact statement, there are a number of problems that people currently run into. I ask Minister Williamson whether he is confident that those problems will be fully addressed by the legislation. The first problem is where a defendant does not submit to the jurisdiction of an Australian court. At the moment the resulting judgment may not be fully enforceable in New Zealand.

There is another issue—final money judgments are the only things at the moment that are enforceable across the Tasman. There is no ability to get interim relief, particularly in a commercial sense. One cannot apply for the freezing of assets to preserve the position of the parties in litigation when proceedings are based in the other country, decisions of the tribunals of one country cannot be enforced in the other with any great ease, and the rules to determine which country’s courts should decide a dispute are based in private international law. The same rules apply there as apply to, say, a dispute involving New Zealand on the one hand and Bolivia, Zimbabwe, or some other country, on the other hand, that we do not have any particular affinity with as far as legal systems are concerned. Clearly, that is not a desirable state of affairs. Also, civil pecuniary fines, as Lianne Dalziel said, imposed in one country are not enforceable in the other. The same situation applies to criminal fines, so the inability to have that mutual level of enforcement lets certain regulatory offences continue to undermine trans-Tasman markets, ultimately to the detriment of both Australia and New Zealand. Obviously it is desirable to have the same set of general rules applicable in both places.

Obviously there will be some administrative costs involved in implementing those reforms; the statement recognises that. But it concludes that those will be outweighed by the many reduced regulatory costs to businesses and to people doing their activities on a trans-Tasman basis, and, because of better enforcement there will also be, in the end, lower costs. There will be other substantial benefits, as other members have outlined. They include more efficient court proceedings and more effective remedies. The bill will also play a crucial part in the success of the furthering of closer economic relations and single economic market initiatives like streamlined trans-Tasman insolvency procedures, which is obviously a good thing, and the mutual recognition of financial intermediaries. So we should all hope that this integration process continue rather than grinding to a halt or hitting some speed bumps because of the internal politics in Australia I have referred to. I think one speaker on the opposite side last night noted that New Zealand has been the overwhelming beneficiary of these integration moves, so, certainly, it is in our interests to enact this legislation.

But I would like the Minister to consider in particular clause 51(1) of the legislation, under which the Governor-General by Order in Council can declare certain tribunals of a state or a territory of Australia to be a tribunal to which the subpart applies. That is a way in which the executive can extend the application, or the intended application, of the legislation. I would be interested to know what types of tribunal the Government has in contemplation, if it has any at all, as far as that power is concerned. It seems to me that if the full purpose and effect of the legislation is to be realised, then the sorts of tribunals that are contemplated by that clause will be quite wide; we will see a large number of Australian administrative tribunals gazetted by the Governor-General under that clause, and we will see the ability to have a wide range of orders mutually enforced, because hopefully we will see under the reciprocal provisions in Australia a similarly broad approach to New Zealand tribunals. That would be a good thing. As I said, it would be useful to hear from the Minister in the chair whether there has been some thought on that issue or whether we will be looking at just another hiatus of 20 years before we take the next logical step toward integrating our legal systems.

It is a pleasure to stand and speak in support of the Trans-Tasman Proceedings Bill, which we are debating under urgency. I note that most of the bills before the House are non-controversial. That is what we know and love about Maurice Williamson, the Minister in the chair; “Mr Non-controversial” is what we often call him. When we consider some of the legislation that has gone through the House in very recent times, it is a pleasure to speak to a bill that adds value. I understand that my colleague Brendon Burns will take a call on the bill after me, and that is really good, too.

The bill and the equivalent Australian legislation will integrate our countries’ civil justice systems to simplify the resolution of legal disputes with a trans-Tasman aspect. The bill resulted, if we are being really honest, from work started by Helen Clark in 2003. I would like to speak briefly about the background. The Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement was established by Helen Clark and John Howard in 2003. It reported back in December 2006, and made a range of recommendations that included the use of video technology to allow witnesses to appear while overseas, and an increase in the types of judgments that could be enforced in each country. The agreement produced was signed in 2008 by Labour’s previous speaker, Lianne Dalziel, as Minister of Commerce, and Robert McClelland, the Australian Attorney-General. The agreement went to the Law and Order Committee, and the unanimous recommendation from that committee was that the agreement was the best way forward.

In terms of the bill itself, we know that it reduces the cost and complexity of litigation and provides better remedies. The bill will certainly enhance the very good relationship that we have with Australia, even though it is absolutely romping ahead of us economically, in the job stakes, and in supporting people through a recession. In fact, that country has barely felt the recession, as opposed to this country. I am hoping that through this bill and the work that will happen across the Tasman this Government will be able to draw on some policies that will enhance New Zealand’s economy, which is in a dreadful state.

💬 Hon Member: They’ve got none of their own.

The Government has none of its own, as my colleague said. Perhaps its members will learn from our neighbours a way to support people in work, rather than—[Interruption]—exactly, having a plan.

I commend the Law and Order Committee, which looked at a number of amendments to the bill. They included refining applications for stays of proceedings, and giving New Zealand courts the power to declare jurisdiction. It also looked at the procedural rules of the courts, and wanted “to allow rules prescribing things required or necessary for implementing the bill to be made using any powers given by any Act to make procedural rules for a court or tribunal.” Very sensible work was done by the Law and Order Committee, which was quite an achievement, given that the chair is not always up there in terms of achievement—would that be a fair comment?

💬 Paul Quinn: What? Say that again!

I am not talking about the Justice and Electoral Committee; I am certainly not talking about that select committee. I know that Brendon Burns will take a call, so I will note just a couple more issues. One was the serving of initiating documents in Australia. In terms of the defendant’s address for service, some really sensible work was done to ensure that it was the most efficient possible.

I am very pleased to take a call on the Trans-Tasman Proceedings Bill, and to note that this is a continuation and an enhancement of the process of the closer economic relationship with Australia, which I have to acknowledge began under a National Government in the late 1970s and early 1980s under the Hon Hugh Templeton. It got support from the Labour leader Bill Rowling at that time, and took off, and it was a very appropriate and timely move for this country. It acknowledges the strength and depth of our relationship with Australia, and this bill continues to acknowledge that, which is important.

I think it is also important that we have some complementarities, where possible, in the judicial systems of Australia and New Zealand, and this bill endeavours to implement some of those. It is important to have those complementarities, because the capacity of New Zealanders to travel to Australia, and of Australians to come to New Zealand, is ever-increasing. Obviously, our court systems have to acknowledge the fact that people are not always domiciled in one country; they can live in one country and cross to the other, and court proceedings can take place in one country or the other. This bill effectively allows some sort of acknowledgment that there are issues that need to be resolved in courts across the two countries.

But there are still some gaps that I will allude to, and I have a constituent who is facing one at the moment. My constituent has had to return to Australia to face proceedings in Australia’s equivalent of our Family Court in relation to a custody case. It is a very distressing and harrowing case, because this poor young woman has been forced to go back to Australia by the father of her child, under circumstances that suggested that the father wanted to have ongoing contact with the child. She has now been back in Australia for some 9 months but the father has not made any contact. In fact, I understand that he is on the run from the police in two states of Australia. I acknowledge the intervention last week of the Minister of Justice, Simon Power, who has asked his officials to investigate, and who has also asked the Ministry of Foreign Affairs and Trade to provide whatever assistance it can to this poor young constituent of mine. She is faced with the ongoing demands and delays of a court system of which she has no knowledge, no power and, in her view, no real authority to try to expedite proceedings.

This bill does not extend to those issues; it is more related to the business community and those sorts of relationships, but that case is a signal of the need for real complementarities between the justice systems of our two countries. We are a very movable nation and our affairs are often interwoven with Australian affairs. Our business and family relationships are increasingly taking us back and forward across the Tasman, and this bill is an attempt to expedite those issues.

The bill, of course, began under Helen Clark’s leadership. It has come through Parliament—it has been through the select committee process—and it will reduce some of the complexities and costs that are in place in trans-Tasman litigation, and provide better remedies. It is therefore a very sensible measure. Through facilitating the effective resolution of trans-Tasman disputes, this bill will foster those ever-increasing economic relationships with Australia and New Zealand. That is important. It will simplify proceedings within our courts and the enforcement of judgments. That is very sensible. We have had a significant increase in the movement of people, assets, and services across the Tasman; obviously, they will be subject to disputes from time to time. Therefore it is important that we have this arrangement, which is perhaps internationally one of the best arrangements between any two sovereign States with separate legal systems. We still retain our entire independence in respect of our judicial system, but obviously we want to try to ensure that there are as few impediments as possible to the process of justice, whether people are on this side of the Tasman or the other.

The Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement has worked through these issues. The group was set up by Helen Clark and John Howard back in 2003. It has brought forward the proposals that are now enmeshed in this bill. It is appropriate that we now see this bill passed, and move towards that closer integration of the New Zealand and Australian civil justice systems so that we can continue to develop and foster the closer economic relationship that began even before the time of the Hon Maurice Williamson in this House. Thank you.

The question was put that the amendments set out on Supplementary Order Paper 160 in the name of the Hon Simon Power be agreed to.

Amendments agreed to.

Parts 1 and 2, schedules 1 and 2, and clauses 1 and 2, as amended, agreed to.

Bill reported with amendment.

Report adopted.

Third Reading