Land Transfer Bill

When I was, unfortunately, interrupted during my earlier contribution on this third reading, I had just acknowledged the original Minister, the Hon Maurice Williamson, and I was a bit devastated to hear a number of National members say: “Who?”. The Hon Maurice Williamson is still a member in this House, and he deserves credit for the work that he did way back in 2010 in getting this bill to the situation that it is at now. I do hope that he is able to join the debate and take a call later in the proceedings. He has not got long left if he wishes to, so I would invite him to take a call as soon as he possibly can. I also want to acknowledge our former parliamentary colleague the Hon Simon Power, who also made a very valuable contribution to this bill, and is no longer a member of the House. He has gone on to greater and more glorious things.

First of all, the Law Commission work on this led to a report that was tabled in the House in 2010. It described, basically, a big, bold step to modernise what was a hopelessly outdated system, and that was our system of land transfer legislation. I do not think anybody in the House has disagreed with the fundamental point, but I want to say that at our select committee we did not give it the once-over-lightly and then pass it along.

I want to commend all the members of the Government Administration Committee, particularly Paul Foster-Bell, and also my colleague the Hon Clayton Cosgrove, who subbed in for a number of these hearings. We did find, during our committee consideration, that there were a number of issues that needed resolving, and we did, by a good process of listening and talking with each other in a respectful way, get to a much better outcome at the end. I am pleased that our committee was able to make that contribution.

We had primary concerns from the Bankers’ Association and the Law Society about matters contained in the bill. One of them caused a lot of debate, and that was the issue of mortgage fraud that was considered in clauses 54 and 55 of the original legislation. This was probably the most contentious, not in terms of party policy, but it was contentious in terms of who was right and who was wrong and how we might best deliberate to protect the people who deserve protection. The Bankers’ Association was pretty upfront with us. It said: “Those clauses aren’t necessary. You’re trying to fix a problem that doesn’t exist. It will cost a huge amount of money, and, by the way, our customers will pay.” Well, that quickly focused our attention, so we tried to determine whether there was a problem, and we agreed with the Bankers’ Association that there did not seem to be one.

Should we be protecting against a problem that could arise in the future? Well, yes, but you would not want to protect against every possible outcome of every possible situation, so we parked that. This could potentially be a problem, but in the end we decided that having banking customers paying to solve a problem that did not exist and may not exist in the future just was not worth it. Unanimously, the committee agreed that those clauses would be deleted. I think that was a very good decision, and I hope the Bankers’ Association is proud of the representation it made. It was a bit of proof that often members of Parliament, across parties, will listen to submissions, consider good contributions that are made, and then change the original premise of the legislation.

As I said right at the outset of my contribution, the original Ministers, the Hon Maurice Williamson and the Hon Simon Power, deserve commendation for their work on this bill, as does the current Minister, the Hon Mark Mitchell. He has picked it up right at the tail end and he will get all the credit, but so he should because he is the Minister responsible for it. This is an important step forward.

I do not know why it has taken 7 years for a bill that does not really arouse much contention. It is pretty dry. It is pretty technical. We did have some debate on it, but not on party political grounds. I cannot imagine why it is being passed only in July 2017, and I am sure some member of the Government—perhaps a member of the committee—will be able to make a contribution and explain it. It is work like this, which is based on Law Commission recommendations, that should be able to be taken up into the House pretty promptly.

It has taken 7 years since that Law Commission report. I know that the Government has had other matters on its mind, and this might not have seemed to be as priority, but consider the number of people who are involved in land transfer every year, consider the amount of money that is spent in that process, and consider that after this third reading our Parliament will have made that process more efficient, will have made it easier, and will have made it, probably, more transparent—and we remain ever hopeful of that. But also, with that efficiency, hopefully it will be cheaper for people. This is a good step forward for our Parliament, and I am pleased we are taking it.

It is a pleasure to rise in support of the Land Transfer Bill in its third reading. I would just like to respond to the previous speaker, Ruth Dyson, and say that of course on this side of the House we know who the Hon Maurice Williamson is. Who would forget the man who was able to fill out the costume of The Greatest American Hero—and did he not look good in that, I must say.

This bill is about updating and amending the Land Transfer Act 1952. I think it demonstrates a focused Government in its third term that is relentlessly modernising systems in New Zealand. We have one of the best electronic land transfer systems in the world, and it is something that we should be proud of—in fact, something we should boast about. We are leading the way, and, in fact, that is what this bill is about. It is modernising. It is the old cliché—we are moving from the paper office to the paperless office.

I think what underpins this bill is giving New Zealanders confidence. We know that when we look at land and housing, it underpins a lot of social and economic well-being. We saw that in Canterbury post the earthquakes and the impact that had on people in terms of the devastation of their land and houses. So we want to give people confidence. We want to give them security in their property rights. We know that for a lot of people, buying a house will be one of the biggest investments they make over their life’s course.

It is right that we are updating the Land Transfer Act 1952 and bringing it into the 21st century. I do not want to get caught plagiarising, so I will quote the second speaker from Labour, Raymond Huo, who said: “An effective system for land transfer is essential for … a modern economy.” I think I will bridge to Raymond Huo, a fellow centre-right thinker. He is quite right that property rights and land transfer does underpin a modern, working economy. We should be supporting that, and, in fact, we are supporting that under this bill.

There was quite a bit of detail that the Government Administration Committee kicked about during the select committee stage. I was not on the committee at that stage but I just want to acknowledge the chair, the Hon Ruth Dyson, and also the deputy chair, Paul Foster-Bell, for their leadership.

There is a lot of technicality within this bill. I learnt a lot about the Torrens system, the law of indefeasibility, and manifest injustice, but ultimately the select committee was able to clarify the role of the court in understanding where there has been injustice and when there has ultimately been compensation, and also clarify from when the courts can get involved for actually altering a land transfer title as well.

I just want to finish by saying this is a very good bill, and I acknowledge the responsible Minister, the Hon Mark Mitchell, for all his work, and previous Ministers before him. On this side of the House we know things are a team effort, so we do work as a team. That is why I commend this bill to the House. Thank you.

Tēnā koe, Mr Assistant Speaker. The Green Party is pleased to support the Land Transfer Bill. As the chair of the Government Administration Committee, the Hon Ruth Dyson, has noted, it has been a long time in coming. It was back in July 2010 that the Law Commission did a very thorough report about a new Land Transfer Act, and yet it has taken all this time to actually get the legislation into the House.

That said, we are pleased to support it because it has gone through a good process in terms of the Law Commission review, and quite substantial consultation, and because it is taking legislation that is 60 years old and updating that for the modern era, particularly given the electronic basis for the land register at the present time and the fact that the current Act is quite clumsy to administer. So it has been a process of modernisation. In that process we have, of course, retained the key principles at the core of our Torrens system: the indefeasibility of title, the fact that land transactions cannot be made null and void, the fact that they cannot be set aside unless there has been some fraudulent activity in gaining the title, and the fact that it is a register of all interests in land and titles so that people can have confidence and be secure that when they are doing a land transaction they can go to the register and find all of the information there, rather than having to search in other places. It does provide that security of ownership.

There were changes made in terms of the High Court’s ability and discretion to intervene in cases of obvious injustice and the ability to provide compensation, but there is one huge hole in this legislation, and that is around the issue of overseas ownership. Denis O’Rourke, with his Supplementary Order Paper 325, proposed a significant change that would at least have had the register expanded to list transactions where there is an overseas person who ends up owning the land. That was a Supplementary Order Paper that the Green Party supported.

What we are seeing in New Zealand is a significant increase in overseas ownership of land, and we actually end up relying on a community organisation, the Campaign Against Foreign Control of Aotearoa, for the best statistics on the alienation of New Zealand land. We have had a sharp increase in the proportion of shares listed on our sharemarket being overseas owned, from 33 percent of listed shares in 2015 to 36 percent last year, and we have had a significant increase in the amount of land that is overseas owned. In 2015 the Overseas Investment Office approved overseas investors buying nearly 80,000 hectares of land, yet in 2016—last year—the Overseas Investment Office approved the acquisition of 465,863 hectares of rural land by overseas investors. The bulk of that was freehold land, but some of it—about 100,000 hectares—was leasehold land. The bulk of those transactions were where one overseas investor was selling to another. So once land has been alienated—once those high prices have been paid for farmland—it is very difficult for New Zealanders to buy it back. That 2016 figure of nearly 466,000 hectares was just 1 year of land sales, and that was 2.9 percent—

The ASSISTANT SPEAKER (Lindsay Tisch): I will just remind the member that we are on a third reading. A third reading is the result of what transpired in the report back from the Committee of the whole House. I will just refer the member to Speakers’ ruling 137/1 in particular. I will ask you to come back. To mention these other points is fine, but you must come back and not make them what your comments are, which is a substantive part of the speech.

Thank you, Mr Assistant Speaker. I would comment that about a third of the text of the bill is consequential amendments. One of the Acts that is amended by this bill is the Crown Pastoral Land Act. We have seen, just recently, that Mount White Station, our second-largest Crown pastoral lease administered under the Crown Pastoral Land Act, is unlikely to be able to be purchased by a New Zealand farmer, in the same way that Jericho Station was not, and potentially, because it has been promoted aggressively overseas, is to be bought by an overseas investor. This bill amends the Crown Pastoral Land Act, but it provides no protection in that Act for our Crown pastoral leases—our magnificent high country stations—being alienated overseas.

So it is this major gap in the bill that the Green Party—while supporting the rest of it, around the Torrens system, around indefeasibility of title, and around the modernisation—thinks this bill should have addressed. Otherwise, we will see an increasing proportion of land in New Zealand alienated overseas, and unlike countries like Switzerland, Canada, the United States, Argentina, Thailand, Japan, and Ireland, we do not have strong controls on overseas ownership. So we are supporting this bill, but there is a big gap that the Green Party in Government would remedy by much tighter controls on overseas landownership.

New Zealand First is very happy to vote in favour of this bill, which has been the product of long years of work by the Law Commission and others. As I did in the first reading, I want to especially acknowledge the late George Tanner QC and the late Warren Moyes of the Office of the Registrar-General of Land, who were the specific people who really put the heavy work into producing this piece of legislation. Although it is a Government bill, it is actually a bill that any Government of any flavour would be passing in New Zealand, because it does mean a huge step up in quality for land registration in New Zealand. It modernises the whole system and makes electronic transactions very easy to achieve.

It is overall a very good piece of legislation, but it might have been better. It might have been better in a couple of ways that I want to mention. The first one relates to the question of what should a register of land record, apart just from who is on the register? How far should it go? I do not think that this bill actually goes quite far enough. The opportunity has been lost to add valuable information that could have been included in this legislation.

I refer to, in particular, the need for a register of foreign land ownership. That would have been very easy to incorporate into this bill, and the opportunity has not been taken to do so. If you look at why that is important, just look at what has been in the news recently with the announcement that Mount White Station in Canterbury is up for sale. It is not just an important and large piece of Canterbury’s pastoral land but also an iconic sheep station that has been important, not just as a sheep station but for tourism as well. People should really be able to find out whether that sort of land is being sold overseas. We will not know whether it is sold overseas or not, but we do know that it has been advertised overseas and that that is quite likely.

More and more properties are clearly going to overseas ownership. It is important that New Zealanders should be able to discover that without difficulty. They should be able to find out how much land is in overseas ownership, what land is in overseas ownership, and who owns that land. It is not very difficult information to put on a register. It is quite easy to do and quite inexpensive. The point is that there is currently no easy or accurate way to measure the amount of land held under the control of foreign nationals. Unlike other jurisdictions, there is no official database of foreign ownership in this country, and that is very sad, and it is sad that this particular piece of legislation does not cover it. So in answer to my question of what should a register record, it does need to record those details of the nationality of the buyer, where the land is, how much land there is, and so on. It is sad that that is not being done, because although foreign ownership is apparently—according to most commentators—somewhere between 1 percent and 3 percent, that is growing, and if it grows very much more the issues relating to that are going to be greater and greater.

Some will say that the Overseas Investment Office collects data and you can get it from there. But, actually, you cannot, because it does not collect the data properly or accurately, and it is no good going to it. So that does not capture the information that we think should be there, whereas this legislation could easily have done so. It could have provided a valuable resource for policy makers—for the Government itself—as well as the general public. People would then be able to accurately assess foreign landholdings, not just across New Zealand but also within their own regions and communities. The register would provide transparency for all concerned New Zealanders. There are plenty of people in New Zealand concerned about this issue, and they are not getting the information that they should be able to have. It is a very severe defect in this bill that that register has not been provided for when the opportunity was there to do so. It would not have been difficult and it would not have been complex and it would not have been expensive. So I regret that, and New Zealand First regrets that.

Moving on to another issue, which relates to clause 57(3), I am going to repeat what I have said in previous stages of this bill, that that is a problematic clause of the bill. If you look at clause 57(1), you will see that it provides for cancellation of a registration where it would be “manifestly unjust” to maintain it. That is a very high bar to prove something to be manifestly unjust, so you would have to have very good evidence and very persuasive evidence, and that clause along with clause 57(2) are good provisions, with an appropriately high standard to be reached. But then you get clause 57(3), and I think that it is very wrong and should not be there at all, because what that does is it prevents cancellation unless the court finds in the negative that compensation could not properly address the injustice. Well, what on earth has that really got to do with somebody who is applying, who has a right to obtain title—what has that got to do with it? It really is not adequate or fair or just.

If you consider that the high standard of the term “manifestly unjust” in clause 57(1) is met, then there is no reason why the applicant should not be entitled to cancellation, unless the court finds that for some very good reason, justice should not be done. So what has happened is that the burden of proof is the wrong way round, because clause 57(3) requires the applicant to prove the justice of it, and it should be for the defendant, as is normally the case, to prove that it would be unjust for cancellation to be given instead of just compensation, and, after all, clause 59 already exists to provide for compensation where that is applied for.

What you would expect the person to do is to apply in the alternative for cancellation, if that is the just and proper thing to happen—if the person can meet that high bar that I spoke of. But if that fails, then compensation is normally what you would do. So why on earth is clause 57(3) there at all? What is it intended to achieve, except to make the standard of proof so high for an applicant that it will be virtually impossible for such a person to get cancellation where that is justifiable? That clause should not be there. It achieves nothing but to make the standard not just very high but virtually impossible. That is not just. That is not proper. If a person is entitled to obtain title and to have the current registered proprietor cancelled, then all they should have to do is to comply with clause 57(1) and (2) and let the defendant show that it would be unjust to do otherwise.

That is the attitude that New Zealand First takes. I think most jurists would take the same attitude. I cannot for the life of me understand why that clause is there. I do not think it was in any previous legislation. So this is new, but it is wrong. It will cause injustice, and it should not be there.

That is the other reason why I think that this bill represents some lost opportunities. The first reason was the lack of a foreign ownership register of land and this one is just a defect in the bill that was brought up during the previous stages and ignored by the Government members, who apparently did not understand it. I listened to the speeches, and I did not hear anyone give an argument about this. I think the Government Administration Committee got it wrong, as well.

I regret very much that that clause is there, and I think in due course that clause will have to be repealed. It is a shame that the court will be hamstrung by clause 57(3) in the future, in the way that that clause is written, so that it will not be able to do justice in a particular case. But, with those severe reservations, New Zealand First will vote for the bill, which overall is a very good piece of legislation.

It is a pleasure to rise in support of the Land Transfer Bill in its third reading. I sat on the Government Administration Committee, and it was an absolute pleasure to serve on that and to hear the submissions. I would like to congratulate and commend the Hon Mark Mitchell. He was a member of the committee at the time the bill went through the select committee phase, and, of course, he is now the Minister who gets to shepherd it and conclude this item of business in the House with, hopefully, from what we hear today, unanimous support.

The purposes of the bill, fundamentally, were to modernise land transfer to meet, quite frankly, the 20th century, let alone the 21st. It does things such as permit certain notices to be addressed electronically instead of in paper form. Some of us would say that with email being around for as long as it has, that is many, many years overdue. But, overall, the idea to modernise what is otherwise a particularly strong and well-regarded title system is a good thing.

The bill also introduced an area that the previous speaker, Denis O’Rourke, touched on quite wrongly, I think, actually. I think that if that member had spent some time on the select committee he might better understand the provisions and what they introduced in the first place and why. The bill actually introduced the ability in the case of a manifest injustice to permit some sort of redress or some sort of compensation for someone who had fraudulently been done over, if you will, over their land. So if you look at what would otherwise have been the case, of course, the ability to get the right level of compensation or redress simply was not there before this bill.

So the bill says the court can make a decision to provide compensation if the injustice is clear and manifest. The compensation could be monetary; it could be in kind, in some form; or in the case of the provision that the previous member dwelt upon, it could be by returning the title to the original holder. Of course, that would itself, though, have implications for the notion of indefeasibility of title. If the member had sat on the select committee he might realise that that is why it is placed as the final alternative to other forms of compensation, because while this bill modernises the land transfer processes and system, it understands and fundamentally does not alter the linchpin of the confidence in land title in New Zealand, which is indefeasibility of title, and any changes to it, even though they may be just to the parties who were wronged, still have to bear in mind and accommodate the principle of indefeasibility of title. It is a shame Mr O’Rourke did not sit on the select committee, even if he had done so simply in an observational status.

This is a very, very good bill. All provisions of it were well scrutinised and are well worth the affirmation of this House. I commend this bill to the House.

Members, the next call is a split call. Michael Wood—5 minutes.

I am very pleased, also, to rise to speak in favour of this third reading of the Land Transfer Bill. It is a bill that modernises what is a very significant piece of legislation. Reading through the notes, we know that the piece of legislation that is immediately being superseded is the Land Transfer Act 1952, but its predecessor legislation was set up in 1885. So we have considerable periods of time—about 60 or 70 years, it would seem—between revisions of this piece of legislation.

💬 Brett Hudson: About when Winston entered Parliament.

I will not comment on whether certain members of this House may or may not have been present at the time of those various pieces of legislation. I do have to comment that I was somewhat amused when Mr Doocey reflected on the Government’s relentless modernising drive in respect of this bill, but, of course, the Hon Ruth Dyson did note in her previous comments that it has taken the Government 7 years from the beginning of this piece of legislation—from the initial report that we received from the Law Commission—to actually progress the legislation through the House. So if that is a relentless modernising drive, I would hate to see what slow and steady progress is.

It is a bill that the Labour Party supports, and it is a bill that is important, really, to our whole economic system and to our whole society because it underpins the way in which—as the title rather suggests—we transfer land and understand the transfer of land to operate. There are a number of principles that underpin that, which are modernised and updated within this bill.

The fundamental principle, which the bill affirms—and this is in the very purpose of the bill and is reflected particularly through the first two parts of the bill—is the Torrens system. The Torrens system—as we discussed at great length in the Committee stage, actually, in what was a very good interchange between members of the Committee and Mr Finlayson in the chair—is a system that evolved in South Australia in the 19th century and has spread around a number of Commonwealth jurisdictions, in which we have absolute confidence in a public, central register of landholdings. That is incredibly important because in our system you want to know that if you own a bit of land, it is understood that you own it. You want to know that if you are buying or selling a piece of land, you know whom you are buying it from or selling it to. Those things are utterly crucial to the operation of our economy and society. So we affirm that within this piece of legislation, but we update important aspects of it.

I was thinking, in preparing for my comments tonight, about the fact that only 10 or 15 years ago, in a job I had that interacted significantly with the financial sector, we still did a lot of our communication through faxes. We still faxed a lot of information. In fact, in many respects it was the main way that we communicated across our organisation. But, of course, that has been largely outmoded now. It was still a paper-based system. That was not all that long ago, and what we know is that across most of the areas of our economic life now, what we actually rely upon is electronic communication. So one of the key things that the Land Transfer Bill does is just recognise that—recognise the reality of the way in which we conduct these kinds of transactions. One of the useful things that the Land Transfer Bill does in respect of this is it not just brings us up to date with where we are at now in 2017 but, actually, we build into this bill—in the latter part—some capacity through the use of regulation for the bill to be adapted to forms of communication that may evolve in the years to come.

Quite appropriately, what we have also done in the legislation—and I approve of this, wearing my Regulations Review Committee hat. As I have said, there is a 5-year check-in on that, so in 5 years we come back and, if via regulation we have determined that alternative methods of electronic communication are appropriate in respect of land transfer, then let us actually either build that into the Act or have a fundamental look at it. Let us not just leave it hanging out there in regulation land. Let us actually make sure that the Act stays live and stays up to date as best we can.

One of the really important areas that we cover in this piece of legislation is the area of indefeasibility. That, of course, is incredibly important. That underpins the Torrens system. It says that if something is here in our land transfer system, that is it. You can take it to the bank; there is no backing down from that. One little area we have looked at in the Land Transfer Bill, which was bit of a tricky area to work through at the Committee stage and also at the Government Administration Committee, was the question of manifest injustice. What actually happens in situations where something arises and we can see that through, possibly, the pernicious actions of one party, something has made its way into the land transfer system that might be manifestly unjust. Someone may have been dishonest or there may have been some kind of error in the system, and so we have a record in the land transfer system where, under the principles of the Torrens system and the indefeasibility, we would otherwise say: “Well, we just accept that. That is the way it is. You cannot change it.” What we have actually built into the Land Transfer Act is this concept of manifest injustice, and it is about recognising that the courts have some capacity—through the High Court only—to recognise the manifest injustice, where that might occur, and to do something to put that to rights.

Mr O’Rourke, in his comments, spoke about the debate that we had about this at both the second reading and the Committee stage. The Labour Party did support the Supplementary Order Paper Mr O’Rourke put forward in this area, which did not make its way through into this bar 3 version of the bill. I do just want to comment on that briefly and affirm that the Labour Party did think that was a little bit unfortunate, because in this area of manifest injustice we set a very, very high threshold—an extremely high threshold—and the things that need to be met are listed in the Act and left to the discretion of the High Court. The point that Mr O’Rourke made, which the Labour Party agrees with, is that if you have met that threshold—if there is a manifest injustice and something is incorrectly entered into the land transfer system—then why would the remedy simply not be to put that right? Instead, what we have built into this Act is a system whereby compensation is considered first. We in the Labour Party just did not think that was quite the right approach. We would have preferred the system put forward in Mr O’Rourke’s Supplementary Order Paper, where we say we would simply put it right. We remedy what went wrong—we remedy the original manifest injustice.

What I would say around the question of manifest injustice, also, is that in the consideration of this bill there were submissions and there was discussion about whether a definition of that should be entered into the Act, or whether we should leave that for the court to determine through its processes—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.

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

This is a bill that deserves the full attention and time of the House, I feel. In coming back to the Land Transfer Bill, I will just recap on a few of the key points I touched on prior to the break. These are really addressing the core principles of the bill, which the Labour Party, and I think the whole House, supports. These are the things that underpin our incredibly important land transfer system: the Torrens title system, which means that we have an indisputable way of recording landownership in our country, and the principle of indefeasibility, which means that when we say something is in the land transfer system, we say something is transferred, we jolly well know that it is. There is not any dispute about it. We do not have to argue over titles—if it is in the register, then that is it. Also, there is the new principle that has been introduced through this bill, which is that of manifest injustice—the fact that if something really does go wrong in the process of land transfer there is a limited capacity through the High Court to address manifest injustice through a system of compensation or, if necessary, to make corrections in the register.

I do just want to reflect briefly on one of the comments made by my colleague Hon Ruth Dyson, who, of course, chairs the Government Administration Committee, which oversaw this piece of legislation. It is around the area of mortgage fraud and the fact that through the submissions process there was a very considered and collegial process that looked at this area. It had originally been put up, I think, in the Law Commission report that we needed to look very carefully at this area, but as a result of the weight of submissions, particularly from the very good and public-spirited people at the Bankers’ Association, we were able to actually look at the regulatory balance that had been proposed in the first stage of the bill and actually say, well, what is the serious risk of mortgage fraud in our jurisdiction? What is the history of it? And what is the regulatory burden that would be placed on banks and potentially passed on to consumers if we did proceed with the original provisions of the bill?

I think the select committee worked through that process really well and came to a sensible outcome. We are a party that does believe in public-good regulation. Not all regulations are bad. We have them there to protect people. But we carefully weigh up what is the benefit and what is the cost. In this case, we largely agreed with the submissions, which said that, actually, given the very small risk of mortgage fraud in this country, which has been measured as being less than in other similar jurisdictions, that was not a track we wanted to go down.

In concluding, this is a sound, important background piece of legislation. It will not have people jumping on the sofas tonight, but it is really integral to the way that our economy and our society operates, and I have no hesitation in commending it to the House this evening.

I too stand in support of the Land Transfer Bill tonight in its third and final reading. This bill is sponsored by the Minister for Land Information, Hon Mark Mitchell. I commend the Government Administration Committee for the work that it has done over many years in the preparation of this bill that we are debating, and as we have heard in other speeches tonight, it is better late than never.

The Land Transfer Act is, in itself, over 60 years old. Some of the language in it is, of course, very archaic, difficult to understand, and a bit confusing, but it is also based on a paper-based system. So this new bill will bring the legislation into the 21st century and make it fit more easily with the modern reality of our electronically based systems.

The current Act has to be read in conjunction with two other statutes, too. That in itself is confusing for landowners who wish to make themselves familiar with their rights and their obligations. So, again, it is another really good reason for the updating of this legislation.

This bill has been strongly supported by the legal profession. In fact, the New Zealand Law Society and the Auckland District Law Society have had extensive input into the drafting of this bill. They have been fully consulted throughout its development. It is also supported by financial institutions, and that was through the New Zealand Bankers’ Association and the Financial Services Federation. Land Information New Zealand also consulted very widely with its key stakeholders. Also, the Office of the Privacy Commissioner had a part to play in the development of provisions within the bill. All of those organisations have supported this bill.

It is hugely important that the land transfer system provides people and businesses with secure property rights. This is because of its importance to many New Zealanders. As we understand, for many of those, the purchase of their home is probably their greatest investment—the most expensive investment that they will make in their lifetime. This bill maintains the core principles of the current land registration system, and it introduces improvements that secure property rights. It is a very much needed update to our legislative work, and I have pleasure in commending it to the House.

I stand in support of the Land Transfer Bill. As has been commented on by most of the speakers, this comes out of the 2010 Law Commission review. There are a number of things about this bill that are important, but, first and foremost, when the legal profession recognises that we need to go electronic, you know that we are in the 21st century. It is probably one of the last professions that has embraced technology in a way that many others have before it. I can say that as my father was a lawyer and learnt to type at about the age of 78. Dictaphones are no longer the way, I do not think, any more.

But this is bringing us into the 21st century. It is over 50 years since the legislation has had a comprehensive review. The Law Commission did do a big report on it, but there are a number of points that I would like to make with regard to this bill but also with regard to Land Information New Zealand (LINZ) in general.

Land Information New Zealand, obviously, is the one under which this bill resides, or the registration of title resides, but it also looks after the Overseas Investment Act. There was a point in time when I was the land information spokesperson, and I had a good, hard look at the Overseas Investment Office, what it was doing, and the provisions in the Overseas Investment Act. This is central to the bill, because, obviously, before a foreigner can purchase more than 5 hectares of land, that has to go through a process, which is with the Overseas Investment Office. The overseas investor has to prove that they can add value over and above that which can be added by a New Zealander. It is quite a tight test. There are about six different areas under which an overseas investor can show they are adding value, and it is to do with employment, it is to do with technology, it is to do with adding value, and it is also to do with just a number of different areas. But the thing that concerns me about this is that the Overseas Investment Office is woefully understaffed to the point where it is making decisions that are not in the best interests of New Zealand.

The other thing that is happening with the Overseas Investment Office under LINZ is that, in fact, it is not following up on whether these overseas investors are meeting the promises that they make when they put an application in to buy land. This is obviously under LINZ, and it is a very important part. I think it is important to remember that before a title can be registered—and this is a problem—it has to receive approval from the Overseas Investment Office through the Overseas Investment Act. I know that up to about 2 years ago, and before that for about an 8-year period, there were over 80 overseas investments that had actually gone through the sale and purchase process for an overseas investment that had not received approval from the Overseas Investment Office. So they had been registered with LINZ and the sale had gone through, but it had not received approval. The interesting thing about this is that every single one of these was actually granted retrospectively. I think what that says is that we are not taking a really good look at who is buying our land, why, under what conditions, and, as mentioned, whether they are meeting the promises made.

This is where we have come in. We support this bill because it is a largely technical bill but it is important to move with the 21st century. Our Land Information New Zealand agency is actually held up internationally as one of the best. The system we use is held up as one of the better ones—there is no doubt about that. It is very difficult—we talk about indefeasibility—actually, to commit fraud under this system because of the checks and balances.

The interesting thing about indefeasibility, as Michael Wood mentioned and no doubt a number of other speakers have, is that you can claim compensation only if there has been fraud, but not if there has been a mistake. There are one or two examples of where a lawyer has registered the wrong title, and the claim of the person—usually the purchaser—is only through the Lawyers Fidelity Fund or by suing the lawyer. They actually cannot get the property back once it has been registered. I did not sit on the Government Administration Committee, and I would have enjoyed it actually. I would have loved to hear the submissions from the various lawyers involved in this and from the Law Society because it would have been quite interesting, but I am not too sure whether that has changed in this. I suspect it probably has, because it is about fairness.

The other thing, of course, is that this should, hopefully, reduce compliance costs for mortgagees. Whether or not it does remains to be seen, and there are a number of bills that have appeared before this House—one in particular that I spoke about last week—where a piece of legislation has actually reduced the costs for the ratepayer or the taxpayer or the person involved in the transaction. We had a real concern that that cost would not be passed through but that the margin would be taken by those in the profession who actually are responsible for advocating for the Act—i.e., the person who was buying or selling a house, who should have benefited from any changes in efficiency or any reduction in the cost of the transaction, actually was not. There is a little bit of concern about this. I am not too sure whether it was canvassed at the select committee. I am assuming it probably was. But it is my view that if efficiency is driven through by legislation, then everyone should benefit from this—of that there is no doubt.

There were also amendments made, as mentioned, to reduce compliance costs, and it is mainly for banks, which would have had to take reasonable steps to verify the identity of mortgagors, including offshore investors. Again, I come back to—we have got an anti - money-laundering bill going through the Law and Order Committee at the moment. Whilst it is slightly more onerous, or we are placing a greater responsibility on lawyers and other professions that deal with overseas clients, we are placing a greater responsibility to ensure that, in fact, the transactions that are going through the system are robust and are nothing to do with money-laundering or financing terrorism. It is absolutely necessary. I would like to think we are leading the way in this part of the law, but in fact we are not. We are followers.

Michael Wood and Ruth Dyson talked about our global reputation and how it is very important to protect the integrity of our system because it plays into our global brand but also what we would never want to be seen as is a soft touch for people who are laundering money. What we do know—and I am sure Phil Twyford has talked about this before—is that the buying and selling of properties is an easy way to launder money, so what we are very much looking to do is tighten up on that. Anyone who is involved in nefarious activities, do not come to New Zealand, because we are going to make sure that you are caught out. Under the proceeds of crime legislation we can actually confiscate a lot of this stuff, without actually having—[Interruption] Yes, back to LINZ. One of the principles—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Back to the bill, actually.

Back to the bill, actually—yes. One of the fundamental principles of the land transfer system—it will remain unchanged. But some improvements that were recommended include, for example, giving the court limited discretion in the event of fraud or other illegality to restore a landowner’s registered title in rare cases where such intervention is warranted to avoid a manifestly unjust result. Of course, manifestly unjust is—

💬 Hon Ruth Dyson: Pretty unjust.

It is extremely unjust. But, again, it is one of those concepts that often need to be defined in a court of law. I do not think there is a legal definition of manifestly unjust, but I think that if you use the reasonable person definition, then it is pretty easy to come up with a definition ourselves.

What it does is it reinforces the obligation of lenders to property to verify landowner identity for mortgage purposes. Again, this is just tightening up the rules. It is common sense. This is the thing about this legislation—it is actually common sense. It does bring the system—a very old system. The Torrens system goes back centuries, I think, does it not?

💬 Hon Member: 140 years.

140 years. It does bring it into the 21st century. What it does do is it clarifies the scope of the powers of correction of the Registrar-General of Land, which is very important for those who are interested in this game. It also provides new mechanisms for noting land covenants where the benefit attaches to a person rather than to land—if that makes sense.

But, anyway, what I would like to say is that I think the Minister is very responsible in actually accepting the vast majority of the Law Commission’s recommendations.

💬 Hon Ruth Dyson: Who was that Minister?

The Minister was Maurice Williamson—a good Minister, I understand. I think he is actually off to—I am not too sure where Maurice is, at the moment.

💬 Phil Twyford: They should bring him back.

They should bring him back. Was he any good, Phil, at housing? I am not sure.

But the bottom line is that we do support this bill. Labour supports most common-sense bills. There need to be more of them in this House. But we do support the bill for the right reasons, and that is it is bringing things into the 21st century, it is providing clarity, it is reducing compliance and red tape, and it is exactly the sort of bill that I think New Zealanders expect us all to work very hard on. Thank you very much.

Bill read a third time.