Courts and Criminal Matters Bill

It is a pleasure to take a call on the Courts and Criminal Matters Bill. We in Labour support this bill, but we do so with some concerns, obviously. It has been described by the Government as the most comprehensive set of measures in 12 years to strengthen the recovery of unpaid money. We do not think it goes anywhere near as far as that, and I think it is another indication that this Government is out of touch with ordinary Kiwis.

💬 Hon Steve Chadwick: Totally.

It is totally out of touch. The reason we in Labour support this bill, quite frankly, is that it results from the work that was started and went some way whilst Labour was in Government. Figures released earlier this year showed that between July 2008 and June 2009 the courts actually wiped $95 million of the total $806 million in unpaid fines. Those unpaid fines are increasing every year. Of course, it not only is a loss of revenue but also does not ensure accountability that fines are paid. That is very much a key focus of this bill.

We question why this bill took so long to come to the House. It was ready. In fact, I have seen many bills—many bills—go through this House that I would have liked to see take a step back rather than this one. This bill goes some way to doing some good, as opposed to a number of other bills that this Government has brought in that do nothing but cause harm—immense harm in some cases, as we see if we look at employment relations and some of the law and order bills.

I go back to this bill, because I know you would want me to, Mr Chair. This bill omits some proposals that were developed by Labour. For instance, one proposal that we had was to create a single agency responsible for the collection of those fines. At the moment, there are 80-plus issuing authorities. This is very cumbersome and it impedes the speedy collection of fines. It would have been very, very helpful if more work had been done. I hesitate to say it, but I think it was perhaps a little lazy to not put the effort into ensuring that there was a single agency. That would have certainly been a more effective way of collecting fines.

The Minister for Courts, Georgina te Heuheu, wanted to introduce a Supplementary Order Paper at the Committee stage to allow offenders convicted of a three-strikes offence but not warned of the consequences to further offending to be brought back to the court to be issued that warning at a later date. We did not support that. Perhaps that Supplementary Order Paper could have been avoided if the Ministry of Justice, rather than the police, had been the lead advisers on the Sentencing and Parole Reform Act in the very first place.

As I said, the bill makes amendments to the District Courts Act 1947 in terms of attachment orders. Those orders are used to allow deductions to be made from wages and benefits to pay debt. Certainly, when we look at penalties that accrue over time, we see that the sooner people can be put in a position—whether or not it is by an attachment order—to make payments on those debts, the better it is not only for the country but also for those people.

There was also some discussion on deputy bailiffs to clarify that a person who is appointed as a deputy bailiff may exercise the powers and perform the functions and duties of a bailiff in respect of any District Court, and not just in relation to a particular District Court.

In terms of employees being subject to attachment orders—I go back to attachment orders—it carries over the existing law that it is an offence for an employer to dismiss an employee or alter the position of an employee to the employee’s prejudice because, among other things, an attachment order in respect of the employee has been served on the employer. However, the new provision removes the existing onus on the employer to prove that the employer’s actions were not taken as a result of the employee’s debt or the attached order.

There are some changes around contempt proceedings and in terms of the driver licence stop orders. There are some amendments to the Land Transport Act 1998 regarding liable persons in terms of driver licence stop orders, which are, obviously, a very effective deterrent. The new measure means that liable persons are sent a warning notice. That warning notice is very important. It gives them 14 days to resolve their traffic penalties before their licence is actually suspended. Those driver licence stop orders will suspend all driver licences held by the person in default, including limited licences. It will also prevent people from obtaining a licence, including a limited licence, whilst that order is in place.

In terms of the process, following those orders all driver licences are suspended until the overdue traffic penalties are resolved through payment or a negotiated payment agreement, or until the penalty is substituted for an alternative sentence. If that person drives in breach of a driver licence stop order, which is a pretty stupid thing to do, then that vehicle will be impounded for 28 days. These measures are stern but fair, I would say. They go some way in terms of making the system fair but, more important, more effective—

💬 Kelvin Davis: Stern.

Stern but fair, as the former principal would say. I think that in terms of going forward this part certainly makes some positive changes.

In relation to superior priority of seizing property, the District Court can obtain higher priority over secured property of a credit provider if the loan was advanced when the overdue penalties could have been released under the credit reporting proposal. When that property is subsequently seized by the court, some or even all of those discoverable penalties are still overdue.

There are also changes around substituted sentences. The bill actually authorises prison or home detention sentences to be substituted for unaffordable and unenforceable payments. We would not like to see that. We hope that that happens very rarely and that the enforcement and payment of fines is more effective under these bills. I think we would all agree that subjecting somebody for unpaid penalties and fines does not serve any purpose if they are sentenced to home or prison detention, and that a far more effective way is to obtain those moneys and those penalties, either through payments or through a payment agreement.

Sitting suspended from 6 p.m. to 7.30 p.m.

This is my first call in the Committee stage of the Courts and Criminal Matters Bill. It is my understanding that we are currently going over Part 1, which sets out the provisions on the use of attachment orders to allow deductions to be made from wages and benefits to pay debts. At present, attachment orders can be imposed only after an examination hearing to assess the debtor’s ability to pay the debt, and that hearing requires both parties to attend. This is an attempt to streamline that provision and the enforcement process by enabling judgment creditors to file a financial statement or ask the court to assess the debtor’s financial means in the debtor’s absence.

I will add a couple of extra questions that have been considered earlier in this area, I understand—or at least considered by the select committee—on the question of attachment orders to enable deductions to be made from wages. I remember at the select committee questioning whether this would unfairly impinge on, for instance, a small-business owner, if they would have to administer the attachment order on behalf of the debtor, and whether it would represent a considerable cost. This came to mind after I had seen similar provisions in the UK result in a significant burden on small-business owners in particular. It is just a question that we may wish to discuss during the debate on this part, but I imagine that, by and large, it will probably not be a great issue.

I am working from memory here, and perhaps a current member of the select committee can remind me of the arrangements for someone who is, for instance, on a benefit. A judgment might be made that an attachment order would be difficult for someone on such an income, but I guess there are separate questions that sit around that issue. I would be interested in the difference between administering such arrangements for a Work and Income recipient, for instance, versus a small-business employee.

I want to highlight, though, that this is a bill that Labour supports, and we do so because overall it enhances the court’s powers and processes for the collection of fines. We were involved in the development of the bill from the outset. I think Rick Barker was involved in this work, and I know this is an area he has always been very passionate about. One of the points I think he would raise is that we would like to see an overarching agency with responsibility for fines, and there is no provision for that in the legislation. The reason for calling for such an agency is just the proliferation of groups involved in the collection of fines. I believe that more than 80 issuing authorities are involved in issuing fines, and that plays some role in impeding the collection of fines.

What kind of an amount of money are we talking about? Figures released earlier this year show that between the period of July 2008 and June 2009, just in terms of unpaid fines, the courts wiped $95.1 million of a total of $806 million in unpaid fines. That is a huge amount—not only the amount that is being wiped but also in terms of unpaid fines. I know quite a bit of work has been done to try to improve the collection of fines, such as using the ability to stop someone at the border before they travel abroad. I do not have the statistics, but anecdotally I think there is probably a suggestion that that has been a successful campaign.

I am really interested in the psychology involved when someone accrues quite a large amount of fines they need to pay. I think the Ministry of Justice has looked into this issue—and rightly so, given its consideration of the wiping of debt. That research has shown that when people cross a threshold of money owed—and for young people it sits around, I think, the $2,000 mark—they become unable and even unwilling to even attempt to pay off their fines. So we get to a point where if we start adding anything on, it starts to become absolutely meaningless.

Thank you, Mr Chairperson, for the opportunity to speak in the Committee stage of the Courts and Criminal Matters Bill. It is a worry that surveys show that about $672 million in fines, which includes reparation, remains unpaid. I do not think that is a particularly fine figure. Surveys on the public’s perception of the courts have found that over half of respondents believe offenders can avoid paying their reparations or fines. That is not a good situation for those of us who wish to uphold the law, so into this Chamber comes the Courts and Criminal Matters Bill.

I have to say that the bill was considered by the Law and Order Committee before I was a member of the committee, but on reading this bill I find there are several very good aspects to it. I confine my comments to Part 1, which seeks to amend the District Courts Act 1947. The amendments are intended to improve the efficiency and effectiveness of both attachment orders and examination hearings. Attachment orders require mandatory deduction from wages and benefits in order to pay debts, and alongside examination hearings they are the most common and effective civil debt enforcement processes. However, to date they have been somewhat cumbersome, and have put a bit of a burden on those creditors who are required to attend hearings.

This bill includes provisions for judgment creditors to file a financial statement, which is a much simpler process to undertake than an attachment order, or indeed to ask the court to assess the debtor’s financial means in the creditor’s absence. My reading of this clause is that if someone is a creditor, they will not necessarily be required to go to a court hearing. I know that at the courthouses in my electorate on court days there are large numbers, regrettably, of people sitting out in the sunshine or whatever, waiting for their turn in court. Arguably, it is a waste of time, if someone is a creditor, to have to take time off work or their normal daily activities.

Part 1 is commendable, and when it is implemented I am pretty sure it will find favour with those creditors who find themselves unwittingly and unwillingly caught up in the court process. This whole bill represents the most comprehensive legislative improvements for the recovery of unpaid fines and civil debt in 12 years. I commend Part 1 to the Committee.

It is a pleasure to speak on the Courts and Criminal Matters Bill. It was dealt with by the Law and Order Committee prior to my membership of that committee, but I know it has general support, and certainly Labour supports this bill. As my colleague Jacinda Ardern has mentioned, development of this bill was commenced, in fact, under Labour. Credit goes to Rick Barker, I think, and I am pleased to see it acknowledged in the commentary that the work was begun under the previous Government. I think that is a good thing to note.

We are, of course, speaking on Part 1. Part 1 covers the amendments to the District Courts Act 1947. The bill is an omnibus bill so it covers a number of different Acts, and this part solely addresses the District Courts Act. The matters in this part relate to attachment orders, which allow for deductions to be made from wages and benefits in order to pay debts. The issue of debt is a significant problem in the current climate. It is not just about a whole lot of individuals who keep racking up fines and do not pay them. There are some people like that, I am sure, but also there are many people who are struggling very seriously to make ends met and who are incurring debt. Monetary fines as a punishment can, in fact, be very difficult requirements for some people to meet. One of the particular things about this bill is that it tries to look at alternative ways that people can make amends or meet the requirements of any punishment other than by paying fines.

This part is about attachment orders, which is about paying fines. The bill aims to streamline in this regard, as it does in others, the enforcement process by enabling judgment creditors to file a financial statement or ask the court to assess the debtor’s financial means in the debtor’s absence. That provision avoids the delays, the cost, and the inconvenience of bringing all the parties together to do that.

One of the things I was interested in—and I thought others on the Law and Order Committee at the time this bill was considered might be able to help me with this—was Supplementary Order Paper 202, which deals with attachment orders and proposes the carrying over of the existing law that it is an offence for an employer to dismiss an employee or alter the position of an employee to the employee’s prejudice because, amongst other things, an attachment order in respect of the employee has been served on the employer. That sounds sensible to me. If a person is complying and doing what they are required to do, they should not face the possible loss of their job, especially in times of very, very high unemployment, such as we are facing now.

As I understand it, the new provision removes the existing onus on the employer to prove that the employer’s action was not taken as result of the employee’s debt or the attachment order. In other words, it weakens that protection. I wondered why it does that. I thought that perhaps members of the Law and Order Committee could elucidate that matter and explain why the provision has changed and why the onus on the employer has been removed so that employers do not have to prove that their actions in dismissing somebody were not taken as a result of the employee’s debt or the attachment order.

The new provision consequentially removes the time limit for the protection provided to employees, which is currently 6 months. Again, I ask those members who were on the select committee to explain the reasoning behind removing that time limit for protection. Those are a couple of questions about attachment orders that I would very much like to know the answers to. Perhaps the Minister in the chair, the Minister for Social Development and Employment, might be able to help us out on that matter.

The Supplementary Order Paper also talks about imprisonment for the non-payment of fines. As I understand it, it carries forward the provision that the period of imprisonment imposed in respect of the non-payment of any fine, or where the sale of any property under the process does not produce sufficient proceeds to pay the fine, shall be such a period as, in the opinion of the court or District Court judge fixing the period, will satisfy the justice of the case. However, the period of imprisonment cannot exceed, in the case of an offence that was punishable by imprisonment, the maximum term of imprisonment to which the defendant was liable on the conviction, or a period of 1 year, whichever is the lesser, and in any other case a period of 3 months. It goes on to talk about that.

Another area in Part 1 that I thought was interesting—again, Supplementary Order Paper 202 relates to this part—was the proposal to amend the provision of the bill as introduced allowing a judgment creditor to apply to the District Court for the judgment debtor to be sentenced to community work as a sanction for non-compliance with the payment orders made by the court. I am assuming this is in a situation where somebody is really unable to pay the debt. The legislation provides another way for the person to actually meet their debt to society, if you like, so that we do not have a whole lot of people with substantial levels of debt in fines that they will never be able to pay off. It would provide an alternative: community work or other penalty is referred to here.

There is also a provision in Part 1 for property and goods to be sold by the bailiff. Again, Supplementary Order Paper 202 proposes that it be made clear that the purchaser of goods sold by a bailiff charged with the enforcement of a warrant to seize property acquires good title to those goods free of all ownership interests and other proprietary interests held in them before the sale. This particular part of Supplementary Order Paper 202 amends clauses 28 and 29, amending respectively sections 90 and 91 of the Act.

In closing, I would be very interested indeed to hear a little more about this issue of employees subject to an attachment order, why there has been a change to the existing law so that the onus of proof has changed, and why the time limit for protection has been changed.

It is a great pleasure to rise to speak on Part 1 of the Courts and Criminal Matters Bill. Part 1, as we heard, involves amendments to the District Courts Act 1947. The whole purpose of this omnibus bill, which amends a number of statutes, is to enhance the courts’ powers and processes for the collection of fines and other monetary penalties and civil debt. We realise, of course, that most New Zealanders, if they err, do pay their fines, but there are a number who do not, and this bill is designed to deal with that rather significant problem.

Part 1, as I said, involves amendment to the District Courts Act 1947. The principal amendments are to Part 6 of the Act, involving enforcement of judgments, and these amendments are designed to improve civil debt enforcement processes. The civil enforcement system can be complex, cumbersome, and costly for all parties. It generates high levels of tension and frustration among users, and attachment orders, which entail mandatory deductions from wages and benefits in order to pay debts, are the most effective civil debt enforcement option.

Currently, an attachment order can be imposed only after an examination hearing has been held to assess the judgment debtor’s ability to pay the debt, and both parties have to attend the hearing. Part 1 amends the District Courts Act to provide greater flexibility in enforcement processes, particularly in the establishment of the said attachment order, gathering information on a judgment debtor’s means to pay the debt, removing geographic restrictions, and modernising service provisions.

I would like to mention briefly the concept of attachment orders and what we are attempting to do here. Clauses 13 to 18 amend a number of provisions in the District Courts Act that deal with attachment orders. These orders will be able to be issued following application for an attachment order and the filing of a financial statement or a financial assessment being undertaken. Unlike other enforcement options, attachment orders will be able to be issued immediately after a court judgment or order has been made, and this will expedite the process and reduce costs to the parties.

Another important aspect of this amendment bill is the removal of geographic restrictions. The amendment removes geographic restrictions to allow court processes to be undertaken at any District Court, rather than at the specific local court. Clause 10 inserts new section 79A to enable a judgment to be enforced in any District Court, and clause 8 repeals section 69, which regulated the removal of a judgment from one court to another. Clauses 5 to 7 make the necessary consequential adjustments to the powers of registrars, deputy registrars, and bailiffs respectively. This is done, once again, for the convenience of the parties involved.

I commend this part to the Committee.

Kia ora, Mr Assistant Chairman Robertson. Before I start, I acknowledge the great work done by the Hon Rick Barker. I also thank the National Government for carrying on the great work initiated by Labour while in Government. I agree with my colleagues Lynne Pillay and Jacinda Ardern, who, in their earlier speeches in this Chamber, both said that Labour would like to see one overarching agency with the responsibility for fines. But there is no provision for that in the legislation, and that is regrettable.

Part 1 amends the District Courts Act 1947. Under this Act attachment orders are used to allow deductions to be made from wages and benefits in order to pay debts. At present, attachment orders can be imposed only after an examination hearing to assess the judgment debtor’s ability to pay the debt. Both parties are required to attend the hearing, which can be inconvenient and incur delays and costs. This bill aims to streamline this enforcement process by enabling judgment creditors to file a financial statement, or to ask the court to assess the debtor’s financial means in the creditor’s absence.

The Law and Order Committee received 15 submissions, and I acknowledge the great work done by the officials. They have done a tremendously good job. Some of the submitters commented on the changes to attachment orders. Those in favour of the changes commented that the changes would create better outcomes for creditors. The opposing view was that those changes had the potential to create a situation where attachment orders were imposed at a level that was unsustainable, and that could be potentially imposed without a debtor’s knowledge. One concern, in particular, was that an individual could be subject to enforcement action without being aware of that, as a result of the removal of these requirements.

Another issue was the change to the service provision, and some submitters commented that the extension of the service provisions to enable creditors to complete a service more efficiently would result in a more expedient enforcement process. Others were concerned about relying on the presumption of service, and about the weakening of the current service provisions. Thank you.

Taloha ni. I understand that Part 1 of the Courts and Criminal Matters Bill amends the District Courts Act 1947. The substantial provisions in this part basically change the way that attachment orders for the collection of fines from salaries and benefits can be processed by the courts. My understanding of the current situation is that it needs both the creditor and the debtor to have an assessment as to whether the debtor can pay the fine, but the substantial provision in this part changes that so that the creditor can ask for an assessment to be done by the court as to whether the debtor is able to pay that fine. As many speakers on this side have said before, we support Part 1 because it will streamline the process for those who are expecting some money, especially those in the civil debt arena, to know whether they can be paid.

Part 1 will also address the huge problem that we have with unpaid fines. It is a big problem. I believe that in the year July 2008 to June 2009 there was around $800 million of unpaid fines, and the Ministry of Justice had to write off around $90 million of that. So Part 1 will, hopefully, go some way to addressing that problem by streamlining the process and by making sure that those who have transgressed and have been asked to pay a fine will fulfil their obligations as asked by the court, as soon as they possibly can. If they are not able to pay their fine, then that will be assessed and we will know soon enough so there is not the level of frustration for those who are owed money. I guess that would be a very frustrating position to be in if one was expecting some money from an individual or organisation that had been fined for a transgression, but then had to go through this process, which could be strung out because previously both parties had to be present at a hearing to get an attachment order. Part 1 will now streamline that process to make sure that a proper assessment is done of a fined person’s ability to pay that fine.

Although Labour supports this part of the bill, there are some omissions that my colleague Jacinda Ardern alluded to earlier that we thought could have been included in Part 1. One of those omissions was a single agency to be responsible for the collection of fines. We understand that at the moment there are 80-plus issuing authorities for fines. With unpaid fines being in the region of $800 million over the 1-year period I mentioned, if we had one unitary body that was responsible for fines then we might do a better job of collecting most of those unpaid fines. As I said, 80-plus issuing authorities have responsibility for fines. Although Labour supports Part 1, we believe that it could have gone a little bit further in terms of making sure there was a much more streamlined process for the collection of those fines.

As Jacinda Ardern also alluded to earlier in this debate, there is a problem with young people in terms of the level of fines that they are starting to receive where it becomes impossible for them to begin addressing it. That level is around $2,000, and we can imagine how difficult it is at the moment for these young people to do the basics like pay their rent, pay the bills, or even get a job. We can imagine how difficult it would be to be stung with fines in the region of $2,000. It would be a mountain to climb to pay off that debt. I am pretty sure that any of those young people who face that kind of debt from the courts would like a much more streamlined process, or at least to have some way of their being assessed as to whether they could pay it. If we are talking about a level of $2,000 for young ones at the moment, I think most of them would struggle to pay off that debt.

I think this bill goes a long way to making sure that there is a process there for them. If they owe money to the courts, there is now a much more streamlined process so that that process is not strung out for them. It is not a burden that has to be carried by them for a long period of time. Thank you.

In rising to take a call on Part 1, I acknowledge Rick Barker who did so much work on the Courts and Criminal Matters Bill whilst Labour was in Government. I know that his commitment to justice and to the court system is certainly second to none. It is a wonderful opportunity to acknowledge all the good work that he does. The fact that he is the chief whip has nothing to do with that, and I look forward to seeing Rick Barker taking the call in the very near future.

I want to talk about contempt proceedings. Just to recap very quickly, when I last spoke I talked about how unfortunate it was that the Government did not bring all of the collections under one agency. That was Labour’s intention, and I think that would have been much more efficient and effective. Having said that, Labour still supports this bill.

I also spoke about deputy bailiffs. I clarified that a person who is appointed as a deputy bailiff can exercise the powers and the functions of a deputy bailiff in any District Court, not just in relation to the particular District Court.

I now move to the contempt proceedings in Part 1. A debtor can be sentenced to community work or another penalty for non-payment of debts. The proposal is to amend the bill as introduced, allowing a judgment creditor to apply to a District Court judge for the debtor to be sentenced to community work as a sanction for non-compliance with payment orders that have been made by the court—that is, when the court has gone through that process. That allows the court to impose any of orders, including ordering the judgment debtor to do community work.

It also authorises judges to decline an application from a creditor for contempt proceedings on the papers if that judge is not satisfied that the debtor can afford to pay the debt and is refusing to do so. If there is a case where the debtor does not have the means to pay, then that can be taken into account.

Removing the requirement for an application for contempt proceedings to be supported by an affidavit setting out details of the debtor’s alleged disobedience and also authorising registrars to issue warrants to arrest judgment debtors who fail to appear at the hearing of the application or who cannot be served with the application will go some way to effectively ensuring that debts get paid. The bill makes provision for the sanctions that we spoke about before, the ability of the orders to pay, and also the driver licence stop orders, which I will not speak about at length here, because they are in Part 2.

The purpose of the bill is to improve the process and address a general concern about the amount of overdue fines, the satisfaction of victims when offenders do not comply with orders and make payments to those victims, and the sheer frustration of creditors and debtors using the court’s civil debt enforcement process. Although this bill does not go as far as we would have liked, it does go some way to improving the collection of fines in our court system. For that reason, Labour is supporting this bill.

The question was put that the amendments set out on Supplementary Order Paper 244 in the name of the Hon Georgina te Heuheu to the proposed amendments set out on Supplementary Order Paper 202 in her name to Part 1 be agreed to.

Amendments to the amendments agreed to.

The question was put that the amendments as amended set out on Supplementary Order Paper 202 in the name of the Hon Georgina te Heuheu to Part 1 be agreed to.

Amendments as amended agreed to.