Electronic Transactions (Contract Formation) Amendment Bill

This clause 2 relates to the commencement of the bill, and it says that the Act will—

💬 Hon Clayton Cosgrove: You obviously got briefed on this one.

💬 Kris Faafoi: Get on with it then, son.

Well, when you give me the courtesy of some quiet, I will continue. It says: “This Act comes into force on the day after the date on which it receives the Royal assent.” I suppose the first point I would make is in reference to Royal assent. It is important to pay tribute to the Duke and the Duchess who are here in New Zealand with young Prince George. I am sure there is no question that all of us here in this Chamber hope that they had an enjoyable time with the Plunket kids and no doubt are relaxing and turning to this broadcast. We welcome them to New Zealand. Many arrangements have been made in the course of their visit through electronic transactions, no doubt contracted over the internet in the age that we live in. It is interesting to contrast that with the Duke’s grandmother when she first came—1953—when most of the details would have been managed by letters.

In terms of the commencement, I am suggesting that the Act comes into force a day after the date on which it receives the Royal assent. The important point here is that I am not suggesting, and have not suggested—and I will not accept any suggestion from anybody else that I have suggested it—that this would be a retrospective Act or come into effect retrospectively, because I do not agree with retrospective legislation unless it is in the most extreme cases. It is such a sound principle that people should have certainty as much as possible about the laws under which they are to operate. From certainty comes predictability, comes confidence, and comes investment. So I have no truck with those who would argue that this bill should be introduced retrospectively. I think it should definitely come into force only on the day after it is signed, and should not be applied by going back at any point.

By the same token, though, I also do not think that there is any argument for—but I considered it at great length—whether we should delay the introduction of this bill, or the commencement of it, in terms of it coming into force, say, 1 year out after it had received the Royal assent, because there was some thought given as to whether we needed to give the business community the opportunity to prepare for this change in legislation.

💬 Moana Mackey: This doesn’t do anything.

Well, it is a very legitimate question to ask. You do not want to ram change through too soon. But my conclusion after thinking about this was that this legislation cannot come soon enough, because at the moment we are in a period of uncertainty. At the moment we are not sure exactly when an offer is accepted when it is received by means of electronic communication. Is it when he or she receives the email, or when it is in their in-box, or when they open it up, or when it arrives in the server, if there is a gap before its arrival in the server? Similarly, for text messages and other messages. So it may well be that it is best to include a definition of “receipt”. These were the sorts of circumstances that we were considering amending in the bill.

💬 Hon Clayton Cosgrove: Is this the commencement?

Yes, but the point I am trying to make, Mr Cosgrove, is that I do not think it makes sense to delay the introduction of this for a year, given the fact we had an episode in February this year when Telecom cancelled the passwords of more than 60,000 Yahoo!Xtra email accounts that were believed to have been compromised following a cyber-attack. So we have to be cognisant of the fact that people were not able to access their accounts for several days in that instance, and that was just one instance; I could refer to many others. Presumably, the emails had arrived in the server, but they were not available.

So it is that area of uncertainty that this legislation is hoping to resolve, and that is why, in my view, it does not make sense to hold off for a year but, rather, it makes sense to focus on bringing it in the day after the Royal assent.

I did give some thought as to whether or not it would be appropriate to have the Act come into force on 20 September. I did give some thought as to whether it should commence on 20 September, but the thinking was that this could be a point of change or it could be a point of continuity. So after a while I thought, well, 20 September is an election day and there will be a lot going on there. It would not necessarily make sense to have the Act starting on 20 September, but then another opportunity I thought might have been 15 January, but—

💬 Moana Mackey: Are you going to go through every date in the calendar?

No, I was not, but if you would like me to, I could. But the problem with 15—[Interruption] The problem with 15—[Interruption] Mr Chair?

The CHAIRPERSON (H V Ross Robertson): They are being rather noisy, are they not?

I am trying to concentrate. I am afraid I have lost my place. I might have to go back. It is a question of retrospective legislation. I do not agree with that as a general principle. What I wanted to say is that I had considered it commencing the day after the Royal assent and that is where we have fallen down at the moment. I would just be interested in the views of the rest of the Committee. Thank you.

It is a pleasure once again to speak in this part of the Committee stage on the Electronic Transactions (Contract Formation) Amendment Bill now that we are on to clause 2, the commencement clause, which is a very exciting part of the bill, actually.

💬 Hon Clayton Cosgrove: The gritty part.

It is actually gritty, yes—one of those parts of the bill that you want to get down and really understand in some depth. I know Mr Cosgrove is very focused on this part of the bill. He is a details man. He is a details man. I know that from the work I have been doing with him on the Commerce Committee. He gets into those reports—particularly minority reports. There may, in fact, be an opportunity tonight, Mr Cosgrove, to put in a minority report on the commencement clause, the second clause, of this bill.

💬 Kris Faafoi: Don’t start us.

Do not start you? Well, I am happy to sit down and give you the opportunity to do that, Mr Cosgrove.

I move, That the question be now put.

My challenge clearly was not taken up by Opposition members, which is unfortunate, but we gave them the chance. Perhaps tomorrow in the select committees—

💬 Hon Clayton Cosgrove: Oh yes! Same time, same place.

—when you have that opportunity again you may choose to sit out on that one, Mr Cosgrove, but possibly not.

The commencement date is really important because it is actually the commencement of another part of the great National Government plan to actually take this country forward. In fact, if you think of the four key parts of that plan, it is, firstly, to get the country back into surplus, and we are doing that. We are doing that very well. Secondly, it is to build a more competitive and productive economy. Well, this bill, the Electronic Transactions (Contract Formation) Amendment Bill, and the commencement date go to the heart of that particular focus of building a more competitive and productive economy. The urgency of getting this bill across the line once it has obviously had the appropriate debate that is needed in this Chamber is very important.

Do not forget the third part, Better Public Services, which we continue to do on a day-by-day basis in this Chamber. The public is now coming up to me and saying “Minister Tremain”—ex-Minister—“the services that we are seeing from our Government sector are absolutely fantastic.”

💬 Hon Clayton Cosgrove: Relevance?

Do not forget, Mr Cosgrove, the fourth part of that plan. It is very relevant to your electorate down in the south there, rebuilding that beautiful city of Christchurch—that beautiful city of Christchurch.

Coming back to that commencement date, which is critical, and specifically to the second part of that wider Government plan for the economy of building a more competitive economy, one of the key parts of that, as I spoke about earlier, is the information and communications technology strategy and action plan.

💬 Iain Lees-Galloway: I raise a point of order, Mr Chairperson. The member has strayed a long way from the commencement clause. In the Committee stage, he needs to keep his comments directly to the clause we are debating.

The CHAIRPERSON (H V Ross Robertson): Actually, he does. I have been listening, and I have to say that less than 15 seconds ago he actually mentioned the commencement date. But I would ask the member to try to focus on the date.

Thank you, Mr Chair, particularly for listening so intently to the points that I was making. What I was getting to and continuing to focus on was that commencement date and the urgency of it, once we have had the appropriate debate that needs to happen in this Chamber tonight and possibly over more weeks to get this bill through.

What I was really focused on, though, were the other strategies that we are rolling out, particularly in the computing and information and communications technology sector. I want to turn particularly in this regard to other commencement dates in regard to services that are digital by default, because these also are other strategies that we are rolling out in conjunction with the Electronic Transactions (Contract Formation) Amendment Bill. In clause 2, “Commencement”, it states the Act comes into force on the day after the date on which it receives the Royal assent. Well, these other strategies also have some level of urgency to them as well. If the Committee would like, I can go through some of those strategies in some detail. Perhaps the member in the chair, Paul Goldsmith, could comment on some of these strategies and the relevance of the information and communications technology strategic plan and the commencement date in this bill, and how the two wider strategies relate. Yes, I agree, this is not a silver bullet to taking the economy forward, but it is one of the small parts, so the urgency of the commencement date is very important.

I will leave it at that at this point in time. It is up to one of the other members to expand on the commencement date and the importance of the urgency that we are attributing to it this evening. Thank you.

I move, That the question be now put.

No, I am going to call the honourable member Kanwaljit Singh Bakshi.

Thank you, Mr Chair—that is a very wise call. We are debating the second clause of the Electronic Transactions (Contract Formation) Amendment Bill. It is a fantastic bill introduced by my good friend Paul Goldsmith. As has been mentioned, he will be remembered for this bill.

💬 Hon Clayton Cosgrove: Yes, he certainly will. He certainly will be remembered.

Yes, he will be remembered. He has done a lot of work and is continuing to do so. He is a very good chair of the Finance and Expenditure Committee.

This bill has got clause 2, which states that the Act commences on the day after the date on which it gets the Royal assent. I would like to ask the member in the chair why he decided on having that Royal assent date, because he mentioned that he had considered making it 1 year after the commencement date. Why not 2 years? It is important that people should understand this important bill.

💬 Hon Clayton Cosgrove: Do you understand it?

Yes, I have understood it. Do not worry about it, Mr Cosgrove.

💬 Hon Clayton Cosgrove: I’m not.

Yeah? We will see to it. I would like to mention that the member from New Zealand First said that it is a simple bill. Every contract is very important and has very detailed clauses in it. It is not a simple bill. It has got many clauses. We need to understand how the contract has been formed and what clauses are there. With this, we need to understand, and I ask the member, why he considered that once the Royal assent is received, it commences on the day after that date. Why not later on? With these words, I conclude my contribution.

I move, That the question be now put.

I am very happy to take a call on the second clause, the commencement clause, in what is a very good bill, the Electronic Transactions (Contract Formation) Amendment Bill, brought to this House by my colleague Paul Goldsmith. He made a very good explanation around the title and I now clearly understand why we have the words “contract formation” in there. It is really the heart of the bill.

The commencement date is very important in this bill. Mr Goldsmith has already indicated very clearly that he wants the commencement date to be the date after it receives the Royal assent. I support this position completely. It was interesting, because I guess I did have a question around whether or not this should be retrospective legislation, and the member made it very clear that he has decided that he does not want it to be retrospective. In fact, as he said, he is a member of this House who is not in favour, generally, of retrospective legislation for his own very good reasons. In actual fact, this bill probably does not lend itself to being retrospective in nature.

This is a very good bill, and I think that Paul Goldsmith made a very good point, which is that there is a sense that we do live in an electronic age now. He sort of went back in time and said that once upon a time a contract was formed through the preparation, the mailing, and the receiving of a letter. The contract was formed when it was put into the envelope, the stamp was put on it, and it was put in the mail—that was when the contract was formed. It was very clear. The reason why I mention this is that it relates directly to the commencement date, and to why the member is pushing very hard for a commencement date that will be the day after the bill receives the Royal assent. But now, in the modern age—hello, Barbara—we live in an entirely different era, where electronic transactions—

💬 Carol Beaumont: The member is better than this.

—are a part of daily life. I would invite Ms Beaumont to take a call so we can actually hear what the Opposition feels about this bill.

💬 Hon Clayton Cosgrove: No, no, we’re listening to you.

I would be very interested to hear that, and I am sure that there would be an amazing contribution from Mr Cosgrove. I invite him to take a call as well.

In these modern times a lot of our transactions are electronic, and I think Mr Goldsmith raises a very good point. It comes to the heart of this bill, and it comes to the reason why the commencement date is so important. I keep coming back to the fact that the member in the chair has highlighted the day after the Royal assent is given, and I fully support that bit. But the thing is that now in these electronic times, he is quite right to ask when the contract is formed. Is it when an email arrives in the server, when the email arrives in your in-box, or when you open the email? There does have to be certainty and there does have to be clarity around this. I come back—

💬 Carol Beaumont: Commencement.

Well, the commencement date is critical.

💬 Hon Todd McClay: No, no, but the contract forms when it commences—like the commencement date.

That is right. The contract does form on the commencement—you are absolutely right. We keep coming back to it and we keep highlighting it, but, listen, I think it is very important to continue to highlight that Mr Goldsmith has stated very clearly that he wishes the commencement date to be from the day that the bill receives the Royal assent.

I would like to come back to a comment that my colleague the Hon Chris Tremain made, because he made some very, very good observations. When we are talking about transactions, it actually does come to the heart of our economic growth, does it not? There are thousands of transactions being made every day in this country.

💬 Hon Clayton Cosgrove: Really? Is that right?

Yes, that is right, Mr Cosgrove. I know that you might be a little bit disconnected from what is happening in the country, but, actually, there are thousands of transactions happening every day. So, finally, I would just like to come back and finally state and support Mr Goldsmith’s comments and statements around his preferred commencement date—that is, the day after this bill receives the Royal assent. Thank you.

Clause 2 agreed to.

Clause 3 Principal Act