Courts and Criminal Matters Bill

If I have this part correct—I am just flicking through it to make sure I am correct—this is the part that enables the disclosure of the amount of money that is owed to the Crown by people who have fines outstanding. This is another part of the legislation that will put pressure on fines defaulters to pay. When we examined what was happening with outstanding fines, it became clear that there were a number of people who had significant assets who could pay their fines but refused to do so because there were no inherent problems with it. The amount of money that they owed to the Crown was effectively secret. There was no knowledge of it. This was quite different from the debts that they owed in the private sector. All the information about a person who had an outstanding student loan, owed monies to the bank, owed monies to a finance company, or had however many other debts in the private sector would be available to any potential creditor, but the amount of money the person had outstanding to the State was not. The unintended consequence of this was that people would pay off their private sector debts in preference to their debt to the Crown. Once a person had paid down their private sector debts, it had a positive influence on their credit rating. A person’s credit rating could, therefore, be manipulated.

I felt, and others felt, that there was an imbalance here, in conjunction with the changes that we have made to disclose the number of outstanding fines to finance companies. Also part of it was the disclosure of the outstanding balances that people had in fines in general. When people were then looking at their debt, if the amount of outstanding fines was disclosed as well as their other debts then this would change people’s attitude towards paying off their court fines. It seems in the current structure that there is no pressure to pay fines because it does not affect one’s credit rating. There is pressure to pay off one’s credit card bill because that affects one’s credit rating, but there is no pressure to pay fines because it does not affect one’s credit worthiness. By disclosing this information, we are now putting another pressure point on people who have outstanding fines. There are extra and improved rules for clamping vehicles, the driver licence stop order, demerit points for unpaid fines, and the other rules are about the disclosure of credit. This again shows that Parliament is serious about people who do not pay their fines. I think the message must be very clear.

The public has the impression that the system somehow does not care about debt to the State. All members of Parliament would have received letters or submissions from people, saying “What about these outstanding fines? What are you doing about it?”, how bad it is, and so on. All of that is true, but the problem has been one of our own creation. Parliament has created this situation because the amount of fines that people have outstanding is effectively hidden and undisclosed until it reaches the courts and comes out in public. We need to put pressure on people to make them pay. This is a third pressure point on people to make them pay.

I think it also goes back to the point I made earlier about the person who wrote to me about his mother who was injured in a car accident, because the system took no effective action against the driver who had outstanding fines. I think disclosure is a very good idea. A number of people have complained about it, because they say there are privacy issues here. People say that their debts to the courts, to the Crown, should be private. Well, I say no, and I think this Parliament should also say no. If a person racks up a substantial amount of debt, yet does nothing about it, does not enter into an arrangement to pay with the Ministry of Justice, takes no action, and believes that they can leave their fines and do nothing about them, and can do so with impunity, then this legislation tells them to think again.

When these debts are disclosed—and they can be $20,000, $30,000, or $40,000—and people go to the bank to get a mortgage for a house, they will suddenly find that they cannot get the money. If they try to get a loan from any other facility, they will suddenly find they cannot get the money because of their debt to the Crown. I think this is a very good thing. In the past, debt to the Crown was undisclosed and it had no impact on credit worthiness. I believe that if a person’s debt on a credit card can affect their credit worthiness, then their debt to the Crown by way of fines should also have an equal impact on their credit worthiness.

This is the issue that is at stake here. I see the Minister has an amendment to this bill to change some of the requirements in it, and from looking at it I think we will support that. I report to the Committee that the Law and Order Committee had an extensive discussion with the Privacy Commissioner about these issues and the means of them, and there were quite a number of concerns, but the select committee was at pains to address all of the issues of the Privacy Commissioner. Issues were also raised by the Regulations Review Committee. It had quite a number of issues to raise with us, and with the assistance of Ministry of Justice officials we managed to resolve all of those issues, as well.

Although there were some privacy issues, in my opinion the amendments that have been made to the legislation have addressed those concerns and we now have in place a regime where if an individual thinks that their debts, by way of traffic fines and speeding fines, will go unnoticed, the message from this Parliament is for them to think again. They should think again because it will affect their ability not only to carry a driver’s licence, but also to get credit. I think this is a very good thing. I say to those people who rack up these extensive debts and do little about them that this Parliament cares about it. The State will use all the tools it can to get its money, not because it wants to be owed this money; it is money from fines that people have incurred because of the way they drive. Parliament will make sure that they are held to account by every means possible. I think this is a very good message for this Parliament to send, particularly to those people who in the main have the means to pay but simply choose not to. As I said in debate on the previous part, when someone’s car was clamped, the cheque was found immediately. They did not pay the fines because they did not feel any pressure. Well, there will be pressure from now on. Thank you.

I am really happy to stand and speak, and I congratulate Rick Barker on a very good speech in terms of Part 3. Part 3 is a very, very important part of the bill. I know that Carol Beaumont agrees with me and will probably take a call on this, as well. In terms of credit reporting, the bill proposes that the penalty balance of eligible people via credit reporters would be able to be disclosed using an automated information-matching system. We all know that with knowledge comes power, and the ability to have this scheme for overdue penalties would be very, very helpful.

This scheme will not include overdue penalties subject to court orders relating to name or identity suppression from either the Youth Court or the Family Court. It will also not include people whose penalties are not overdue, including those subject to a payment plan, so that good behaviour will not be punished. If there is a process in place to pay back those penalties, then the people concerned will not be part of the credit reporting scheme. The Ministry of Justice is authorised to use the information to collect those fines. This will lead to efficiency, and the amount, which I forget—the hundreds of millions of dollars in outstanding fines—will go a long way towards getting back so much of the money involved in unpaid fines.

The bill requires the Minister for Courts to consult with the Privacy Commissioner before recommending any regulations implementing the exchange of information between the Ministry of Justice and the credit reporting industry. I think that is a very sensible move. Although it is important to get to the bottom of the issue of making that information available, it is also very important to comply with people’s rights and entitlement to privacy.

As I have said in an earlier speech, this part also authorises prison or home detention sentences to be substituted for repayments that are unaffordable and unenforceable. That move would be very regrettable and I do not think that anyone in this Chamber would see it as a positive move, but in situations where the debt cannot be repaid it does come down to accountability, as my colleague Stuart Nash said. People in these instances are quite clearly breaking the law, and it is very important in our democracy that the law is upheld. Although the ability is there for that substitution to be made, I, along with everyone else, I am sure, hope that that will not be a frequent occurrence.

There is also an amalgamation of all the existing provisions relating to seizures, which have been reordered to better align with the more up-to-date seizure process. In what I think is a very progressive move, arrangements can now be made to have longer times to pay fines or make payments by instalment. There is no point in insisting that a defendant pay a debt if there is utterly and completely no ability for that person to pay. This measure would give the ability for the court, rather than to make the order itself, to direct a registrar to determine whether it is appropriate to enter into an arrangement with the defendant to allow a greater time to pay that debt or fine, upfront or by instalment. It could be paid by a mixture of both, so that there could be an upfront payment and payments, as affordable, in instalments. That is a very sensible move in the long term or medium term, and it will go a long way towards clearing debt.

We have already identified that 69 percent of people affected are between 20 and 39 years of age, and this change means that those people have some hope of making their repayments. It is a win-win situation, not only because the debt can be cleared by the person, and will not become a black mark against his or her character that is available to be viewed through credit reporting agencies, but also because the money can be retrieved. If it takes a longer time to retrieve it, so what? At least that money is being retrieved.

There is a provision in the bill whereby the registrar will also have the power to take action if the fine is not paid or if time payment arrangements are cancelled. This provision sets out actions that a registrar may take if a fine or instalment is not paid, or if an arrangement extending the time available to pay the fine or attachment order is cancelled. I ask the Minister in the chair, Christopher Finlayson, to take a call on that issue. It would be very interesting to hear about it because, having not been on the Law and Order Committee, and certainly not being the Minister in charge of the bill, I would really like to know how that would work. I would like to know whether there is the ability for people in hardship to voluntarily go into that arrangement, or to request that arrangement from the registrar. I am uncertain about that, but I am sure that Chris Finlayson, with his sharp legal expertise and ability to explain things, will be able to enlighten the Committee on that issue. He is certainly not backward in coming forward to show off his intellectual abilities in terms of the law. I must say that I have at times heard some quite smart things come from him. He is a little bit remiss and backward in terms of the Sentencing Council; that was always something that saddened me, as the former chair of the Justice and Electoral Committee. But I can see that the Minister is getting ready to spring to his feet and answer the questions I have asked, and I think the Committee will be very appreciative of that.

There are a number of other aspects to this part, but I really would rather focus on the most important aspects. As I said, the credit reporting, the prioritising of seizing a property, and substituted sentences are all important. I did not touch on streamlining, but the infringement system under the Summary Proceedings Act has been amended to improve the operation of the system, court collection, and enforcement processes by looking at the inconsistencies there, in order to make the whole operation more effective and efficient, thereby delivering a benefit, again, in receiving and collecting the moneys that are owed.

Along with my colleagues, I am very pleased that Labour is supporting this bill, even though we know that it has not gone as far as recommended, and despite all the work that was done under the Labour Government prior to this legislation. As I have said earlier, I do not want to be too churlish but I feel that it is a pity the bill has taken so long to come to the House, especially when I can see all the hard-working officials sitting in the Chamber. I know they will be very relieved, because the bill has been languishing on the Order Paper for quite some time. Thank you very much.

I move, That the question be now put.

It is a pleasure to talk on Part 3 of the Courts and Criminal Matters Bill. As others have mentioned, amendments are made to the Summary Proceedings Act 1957. Part 3 is a fairly substantial part of this bill. Quite major things are covered, including quite a large area that covers “Service under this part”. Another large area covers default balances to certain authorised persons, which are the credit reporting provisions that a number of recent speakers have talked about. There is a huge area on seizure release and sale of property, so there is quite a lot in this part of the bill.

I will talk about two things, first of all the bit that my colleague Lynne Pillay talked about, which is the credit reporting element. This is about the release of overdue penalty balances of eligible people to the private sector credit industry. The Hon Rick Barker, when he spoke earlier, made particularly good points on the fact that debt to the Crown was perhaps harder to ascertain than debt to private sector organisations, and that did not seem right. This part deals with that. It provides for a credit reporting scheme. Importantly, it does not include those people whose penalties are not overdue, including those who are subject to a payment plan.

I think, as Chris Hipkins said, it is very important that people who are finally taking responsibility for paying back the fines they owe, and who have come to some agreed arrangement, should not be further penalised. We all know that at the moment it is tough for people to make ends meet, and people can easily get into debt situations. The important thing is that they come to an agreed payment plan where they are paying back that money. It is important that that arrangement is specifically precluded from this credit reporting scheme. The Ministry of Justice is authorised under the bill to use information from credit reporting agencies, such as updated addresses and so on, to collect fines.

I was interested in the bit about the Privacy Commissioner. The Hon Rick Barker mentioned this bit, as well. The bill requires the Minister for Courts to consult the Privacy Commissioner before recommending any regulations that implement the exchange of information between the Ministry of Justice and the credit reporting industry. When I look at this bill, I see that this was quite a significant matter that was dealt with by the Law and Order Committee, and the Regulations Review Committee had quite a lot to say about this.

It has been interesting as a new member of Parliament to see the role of the Regulations Review Committee. It seems to me that it is very important that—

💬 Aaron Gilmore: Hard-working committee.

I have to agree with the member opposite. It is very important work and somebody needs to keep a very close eye on the powers that are given to make regulations. As I understand it, the Regulations Review Committee expressed concern that the regulation-making powers in this part potentially had a high policy content, which could infringe on the right to privacy. Select committee members also felt that it would allow regulations to be made that could override the general provisions of the Privacy Act. Consequently, the Law and Order Committee clearly thought quite long and hard about this, and this part requires the Minister to consult the Privacy Commissioner before recommending any new regulations to the Governor-General. That provision was further strengthened by amending clause 69 to require the Minister for Courts to be satisfied that any proposed regulations are consistent with section 92B of the Summary Proceedings Act.

The committee went a step further and amended section 92A of the Summary Proceedings Act by amending the definition of “recognised user”. When I look at section 92I(1), in clause 69, I see that “The Governor-General may, by Order in Council made on the recommendation of the Minister for Courts, make regulations for …”, and then there is a lengthy list of things. So it seems to be quite important. Some of those things include quite serious matters, including prescribing the period for which fine status responses may be retained or used by recognised users and subscribers, and requiring the destruction of those responses on the expiry of specified periods.

It is really important, I think, that individuals have the confidence that although they have some responsibilities—and this bill is about making sure people fulfil those responsibilities to pay fines for things they have done—they also have rights, and there is some balance. I think that quite a lot of thought has been given to this matter by both the Regulations Review Committee and the Law and Order Committee in trying to get that balance right. It is quite a lengthy provision, and I think good work was done by the select committee.

The select committee did not go as far as the Regulations Review Committee would have liked. The commentary on the bill states: “We do not propose adopting the Regulations Review Committee’s suggestion that the bill be amended to require confirmation by Parliament of any regulations made under subparagraph (h) that overrode the general provisions of the Privacy Act relating to the use and disclosure of information.” I think committee members tried to take account of the concerns and they came up with some reasonably robust provisions, but they certainly did not go as far as the Regulations Review Committee would have liked.

The other thing I found interesting in this part is the bit about “Service under this Part”. It is not something I know a great deal about, but I was quite interested to see how extensive the provisions were. It talks about the various ways that a document can be served. It can be personally, by mail, electronically, or anything else. Interestingly enough, it has a whole section, section 79B of the Summary Proceedings Act, “Mode of service under this Part modified in special cases”, inserted by clause 58. I wondered what they were.

They include situations where somebody is served who is “living or working on board any vessel (including any vessel belonging to the Royal New Zealand Navy), by an authorised process server delivering the document to the person on board who at the time of service is apparently in charge of the vessel:” So it even goes as far as talking about serving notices on ships, and to members of the New Zealand armed forces, although there will be fewer of them, of course, as we have seen major cuts in our Defence Force. But none the less, those who remain may have something served on them by delivery of the document “at the barracks, camp, or station to the officer for the time being in command of the unit or detachment to which the recipient belongs:” It was interesting to see just how detailed this legislation is with regard to the service of these documents and the way it is done in special circumstances, some of which I have just outlined.

Finally, an area in this part that is quite significant is called the super-priority seizing of property. The District Court can obtain higher priority over secured property of a creditor provider if the loan was advanced when the overdue penalties could have been released under the credit reporting proposal and when that property is subsequently seized by the court, some or all of these discoverable penalties are still overdue. Lenders, for example, can check registers, and so on, but the court will retain a higher priority over secured property. I did not go into a lot of detail in looking at that bit, but I am interested in hearing more about the super-priority that is provided in Part 3, which I have been speaking about. Thank you.

I move, That the question be now put.