Charities Amendment Bill

Members, we come now to the debate on Part 2. But before I get into this part, I just want to remind the committee and all of those in the committee that the question of relevance in the debate is determined by the Speaker. So relevance is determined in a committee stage by—I will always accept matters that relate to the substance of the bill. If it is a particularly broad-ranging bill and more general in nature, then so is the committee stage debate—just bringing in other aspects which are relevant. It doesn’t mean that the debate will go off on topic. It always has to relate to the bill. Members are used to me bringing them back, but I just want to make it clear that the sole judge of relevance belongs with the Speaker, whoever it is.

So members, again, we come now to the debate on Part 2. The question is that Part 2 stand part.

Thank you for that clarification; that is helpful. So Part 2, I want to ask some questions specifically around the appeals process. As I’ve mentioned in the earlier part, I think this is the bit that concerns the lawyers. I don’t know the last time you got a lawyer’s bill—there’s usually a few fat zeros on the end. So let’s climb into appeals. I want to specifically ask questions—so some of the submitters were happy with the proposal for charities to be able to go to the Taxation Review Authority, but the piece that I want to specifically ask about is the evidence about charities being litigious. I am specifically referring to the Community Networks Aotearoa submission here. There was a statement that the Charities Services—which, for those just tuning in, is part of the Department of Internal Affairs—was concerned about many charities being litigious. And I would like the Minister to address, where is the evidence for that and what is the number of cases that have been taken since the charities commission was first set up? Are there more; are there less? What is the evidence to support that statement?

And the comment also about a fair appeals process being likely to reduce costs due to better structural accountability and therefore trust. And there were quite lengthy discussions in the select committee around the whole right of appeal, so I’d like to start with that first piece around what is the evidence that many charities are litigious.

Thank you very much. I’d like to ask the Minister in relation to new Part 2A, section 58E, in relation to the “Grounds of appeal and burden of proof”. It talks about “(1) In an appeal,—(a) the appellant is limited to the grounds stated in the notice of appeal; and (aa) the respondent is limited to the grounds stated in the decision appealed against;”. And that looks perfectly reasonable, that you can only talk about or discuss and debate a specific area where the application is actually made. But in relation to section 58E(2), it says “Despite subsection (1), the Authority may, either on the application of the appellant or of its own motion, amend the grounds stated in the notice of appeal.”

I’m not a lawyer; I don’t have a law degree. Maybe the Minister could potentially explain to me why I read into this that it is, in fact, the authority that could potentially shift the goalpost, making it difficult. It’s like changing the rules. It certainly reads that way. So perhaps the Minister could actually explain that to me. So what does that actually mean in practice, that an appellant actually makes notice of an appeal and they have a rule as to what they may discuss and actually apply to the authority to discuss—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! As the member is debating, she’s referring to matters in Part 1. Could the member now move on to Part 2.

MELISSA LEE: It’s 2A, Madam Chair.

CHAIRPERSON (Hon Jacqui Dean): So, I’m advised that Part 2A is inserted into the principal Act, which is in Part 1 of that Act.

MELISSA LEE: Point of order, Madam Chair. Obviously, I read that wrong. If that’s the case, does that mean that the Minister doesn’t have to actually answer the question that I just gave her?

CHAIRPERSON (Hon Jacqui Dean): So Part 2, being the consequential amendments to the Taxation Review Authorities Act—so that’s Part 2 of the bill.

Speaking to questions around the Taxation Review Authority, I come back to my comment earlier about what costs are involved for charities, because I think it is really critical that we don’t, through unintended consequences, lay more costs on to charitable organisations. So I would appreciate if the Minister could answer a question, specifically in Part 2, around the Taxation Review Authority and the changes in this part as to what costs may fall on charitable organisations.

Part 2 makes amendments to the Taxation Review Authorities Act 1994. It is actually quite specific. It’s just an amendment to the legislation to allow cases under the Charities Act to be heard. Very quickly what I will say in terms of cost is that the cost currently under the status quo is onerous, can be onerous for many charities, particularly smaller charities because the only record they have is to take their appeals to the High Court. What this change does is add another level of appeal which then means the charities can go to the Taxation Review Authority. It is much cheaper for charities to do that because they can then represent themselves, as opposed to having to hire a lawyer to go before the High Court. So the costs will be reduced, and that’s actually the reason that we’re doing this. It also expands justice to a wider cross-section of charities, particularly smaller ones.

Thank you, Madam Chair. I want to come back to the Sue Barker Charities Law submissions and just tease further out this issue of whether or not the appeal should be to the Taxation Review Authority or the High Court, and whether or not proposed new section 58X, in new Part 2A, would allow the Taxation Review Authority to refer a case to the High Court on a question of law or on whether the appeal should be heard by the High Court in the first instance. And does that mean—and this is a question I would like answered, please—that, potentially, a charity is having to pursue action in two different courts concurrently, which of course would add to the costs. And I’m specifically referring to a specialist in charities law who was asking the question as to whether or not two proceedings would be required to be filed in two different courts, so the judicial review proceedings in the High Court, and appealing the proceedings in the Taxation Review Authority.

So I would appreciate clarification of that. If that is the case, then clearly that would work against the stated objective of the Charities Amendment Bill—which is to improve access to justice—by limiting choices and adding cost and complexity into the appeal process.

I move, That the question be now put.

Thank you, Madam Chair. I do think this particular issue is an important one. The last thing any of us would want to do—well, I’m making a fairly general assumption there—particularly in National Volunteer Week would be to make it even more onerous. So the specific question, again, is: is it intended that charities would have to file proceedings in two different courts concurrently? Because if appeals are restricted to the Taxation Review Authority (TRA), it actually restricts the charities’ ability to access the highest court in the land, and I wondered if that was the intention.

The subsequent comment here is, I think, an important one, and it’s asking the question about whether or not, in drafting this part, charities aren’t trusted to make the decision for themselves as to whether they commence proceedings in the High Court or in the TRA.

I will say, once again, as I said before in response to the member’s question, that Part 2 is very narrow. It actually just makes an amendment to the Taxation Review Authorities Act 1994 to allow the Taxation Review Authority to hear cases under the Charities Act. So that’s literally all this part does.

But to the member’s question around cost, I’ll say that High Court appeals generally cost around $1,200, and appeals to the Taxation Review Authority around $500, so it is much cheaper for charities, and the evidentiary threshold is lower.

In terms of the question that the member asked, there have only been 25 appeals since the Charities Act came into force, and out of that, only two have had a judicial review, so it’s very uncommon to have both.

Thank you, Madam Chair. I do think it is important, though, to clarify whether or not the suggestion that I have outlined, in terms of parallel proceedings in two different courts, can actually happen, as with this change to the Taxation Review Authority. If the Minister’s shaking her head and saying no, I think it would be great for that to be clarified for the record, because, as we know, what happens is when there are issues down the track, organisations or lawyers actually look back at the Hansard to determine what Parliament’s intention was.

Thank you, now as a reformed lawyer—reform lawyer—

CHAIRPERSON (Hon Jacqui Dean): Ha, ha! You’re never reformed.

TAMA POTAKA: —and just checking through the materials in Part 2, the Taxation Review Authority, there was a comment made by Te Whakakitenga o Waikato Incorporated Society—which is the incorporated society for the whole Waikato-Tainui charity web—around the registration board, but the Taxation Review Authority requiring a bit of investment of resource and Government funding to fulfil the new roles under this bill. So there were two questions that emerged out of that for me. One of them was: has there been an assessment of the additional funding that’s going to be required to skill these people up? And, particularly in the case of Waikato-Tainui, the observation that there’s been a dearth of legal training around tikanga Māori and other Māori dynamics that associate with thousands of Māori charities out there—whether or not there’s been consideration given for the Taxation Review Authority to be experienced or upskilled or acknowledged in that space.

I move, That the question be now put.

Motion agreed to.