Serious Fraud Office Amendment Bill

on behalf of the Minister of Justice: I move, That the Serious Fraud Office Amendment Bill be now read a third time.

The bill amends the Serious Fraud Office Act, which has been in place for 36 years. It is outdated and is limiting the ability of the Serious Fraud Office (SFO) to investigate and prosecute the criminals responsible for the most serious, complex fraud and corruption in New Zealand.

The bill is carefully targeted. It is designed to address issues causing the greatest challenges for the SFO, its search warrant powers, and the legal test for evidential admissibility.

The bill will ensure the SFO can appropriately search and gather evidence of fraud, in an increasingly digital environment, by more effectively enabling the SFO to search digital devices and the cloud. This is crucial so it can prosecute cases and hold offenders to account.

The bill also makes several common-sense changes. These include enabling the SFO to access necessary utilities, like electricity, when conducting a search, and to exclude someone from a search site if there are reasonable grounds to suspect the person might compromise a search.

The bill updates the legal tests used in the SFO Act to determine the admissibility of evidence that was obtained unlawfully. The existing legal test is outdated, so the bill changes this to reflect the more modern and widely applied tests from the Evidence Act.

To conclude, it is critical that our laws continue to adapt in response to ever-changing landscape of financial crime, including advances in technology and how fraud is committed.

Ultimately, the bill ensures the SFO has the tools it needs to hold serious fraudsters to account and to protect New Zealanders from the significant harm they cause. This Government has committed to restoring law and order and this bill is a practical example of how we’re doing that. I’m very happy to commend this bill to the House.

💬 DEPUTY SPEAKER: The question is that the motion be agreed to.

Thank you, Madam Chair. Firstly, I thought that was a very good committee stage, actually. There were some good questions in there and I thought the Minister of Police and his officials answered well, so thank you for that engagement, Minister.

We all agree that fraud and serious fraud is a serious blight. Sitting on the Justice Committee, we have had Karen Chang and her officials in and she has explained the strategy of the Serious Fraud Office to seek to uphold the Government’s intention to address the slide that New Zealand has had on things like the Transparency International rankings and the view that corruption in public office and election fraud and those things which erode the foundations of our democratic society are important. I applaud that strategy. I agree that the tools are needed. This isn’t blaming this Government, because we’ve all let it slip by, right? But it’s a bit unfortunate that we didn’t do our housework and keep this bill up to date over the years. It’s only when we have a case like R v Pikia that it highlights the fact that we’ve really got work to do.

In this final reading debate, I do want to just put one matter on the record very clearly, and that is that retrospectivity point. The commencement date is going to be in a few days’ time, and this will be passed before the election, even though it probably won’t be passed tonight. The Minister made it very clear in the committee of the whole House that there is no intention that any evidence that was gathered in breach of rules gets the benefit of the Evidence Act rule, which is the kind of proportionality test, but it will still be measured under the rule as it is right now under the Serious Fraud Office Act, which is that illegally obtained evidence cannot be used in court. That would comply, I think, with the principle of retrospectivity. It would comply with the general rule of interpretation that if there are two interpretations and one favours non-retrospectivity, that’s the one we should adopt.

I do think it’s worth, as we go through—one of the reasons we have this is that the conduct of the Serious Fraud Office in R v Pikia was less than optimal, shall we say. I think it’s a timely reminder that searches should be the least intrusive possible and that a search can be a reasonable search and it should be only as extensive as necessary, it should be conducted at a time that is the least intrusive possible, and the people who are conducting it should do so in a way which is, essentially, as humane as possible.

Now, in some cases—less likely in fraud cases—that’s not going to be easy and it is going to be rushing in and bashing down the door and making sure everyone’s safe and that there are no firearms and so on. I get that. But in other cases, it can be done with a lot more civility, and I think it’s really important that that happens.

I do think it’s good that we now have much clearer requirements that the Serious Fraud Office has to go to the authorised or issuing officer with a clear framework of reasons and, essentially, comprehensive evidence. It was interesting to have that interchange with the Minister around the identity of informers and the balance to be struck. We might not have agreed entirely, but I think we agree that there will be cases where if you’ve got someone who’s an informer who is going to be let out on parole early because they’ve shown themselves to be cooperative, then they’ve got an incentive to not be entirely truthful, and we need to know that. That’s also an important part of the framework there.

I do worry a little bit about the retention of documents, and my colleague Tracey McLellan also made some really good points, I thought, around documents which were not just private and confidential but also legally privileged. There is a challenge that when we download a hard drive, you get the lot. I’m concerned that the Minister seemed happy with the Serious Fraud Office holding on to information indefinitely—that was the word I think he used—even when a decision not to prosecute has been made.

Now, if a decision has been made that this guy has done some stuff—or person or woman has done some stuff—which is shady but not illegal, so we can’t prosecute them, then get rid of it, because they’ve done nothing wrong. Well, they’ve done nothing illegal—wrong and illegal are two different concepts—so you’ve got no basis on which to hold that information.

I do think there are some genuine concerns, but it’s a bit of modernisation legislation. I do think it’s good. I do think it’s right that we focus in on the fact that this is a part of our infrastructure that supports our democracy. It’s actually not about scams of, you know, old people’s savings accounts. Serious and complex fraud—which is the test in the Act itself—is actually about systemic fraud, fraud which attacks the integrity of a system.

Now, the current focus is on, essentially, our democratic and civil society, but it might equally be our banking system or our insurance system—something that’s of such a scale or nature as to be systemically important. It’s important that we get this right and that’s why the Serious Fraud Office is doing a good job in saying—you know, they have got limited resources. It’s a really small agency. We need to focus on the things that really matter and the outcome we want to see is a strengthened response to fraud, which systemically damages New Zealand as a free, liberal, and transparent democracy. With that, I will commend this bill to the House.