Initiatives and statements by the New Zealand Law Society | Te Kāhui Ture o Aotearoa in recent months include the following:
Proposed barrister AML/CFT reporting requirements opposed
Requiring AML/CFT reporting by barristers would impose an unnecessary and duplicative compliance burden that is disproportionate to any risk, the New Zealand Law Society | Te Kāhui Ture o Aotearoa has told the Ministry of Justice’s AML/CFT Exemptions Team.
Commenting on the ministry’s January 2020 draft class exemption notice for barristers, the Law Society agrees with the New Zealand Bar Association’s view that the proposed draft exemption notice does not engage with the fundamental issue of who the ‘customer’ is for AML purposes, in the context of the unique relationship between a barrister and their instructing solicitor.
“Under the intervention rule the customer is in almost all cases the instructing solicitor, not the individual or entity. Accordingly, AML obligations in relation to the underlying client should be recognised as resting on the instructing solicitor only,” the Law Society says.
The Law Society says its view has not changed from its submission of 13 March 2019 that barrister reporting would be an unnecessary and duplicative burden.
“This duplication is also potentially a consumer issue. Many lawyers will be unable to absorb the compliance costs involved in both instructing solicitor and barrister attending to AML requirements (for example, for enhanced due diligence (EDD)) and are likely to have to pass a portion onto consumers.”
The Law Society says it continues to support the preferred approach it set out in its March 2019 submission. Essentially, under its preferred option the requirement to undertake EDD and suspicious activity reporting should rest on instructing solicitors rather than barristers. Information obtained should be available to the barrister on request.
It says this reflects the realities of legal practice and would support the practical operation of the Act. The Law Society also endorses a NZBA request for a meeting with representatives of the ministry, the Department of Internal Affairs, the Law Society and the NZBA to discuss and resolve matters.
COVID-19 crisis requires commitment to fundamental legal system values
Responding to the COVID-19 crisis requires a commitment to the fundamental values that underpin New Zealand's legal system, New Zealand Law Society | Te Kāhui Ture o Aotearoa President Tiana Epati has said.
On 4 April Ms Epati wrote to the Chair of the Epidemic Response Select Committee, Simon Bridges, offering the Law Society's assistance in considering the legal measures needed to meet the COVID-19 pandemic.
She said the Law Society had called together legal experts from its Rule of Law, Human Rights and Privacy, and Public and Administrative Law committees to discuss how the Law Society might be able to help the Epidemic Response Committee and the Government deal with the pandemic.
"Like everybody else in New Zealand, lawyers and the Law Society recognise the danger COVID-19 poses to New Zealanders and the complexity of dealing with this unprecedented state of affairs. Responding to the crisis requires a commitment to the fundamental values that underpin our legal system.
"There is a general acceptance that in times like this, the first duty of government is the protection of its people, and governments might need to use the law in ways we do not normally accept."
This does not mean the rule of law is any less important, she said. In many ways the rule of law is more important now than ever before.
"New Zealanders must accept restrictions in order to defeat COVID-19. However, clarity about the constraints on our usual freedoms of movement and association and on commerce, and clarity about the legal basis for these constraints, is central to ensuring compliance and ongoing public confidence and support."
Important to identify legal foundations
The Law Society considers it important to identify the legal foundations for the various responses by the Government to the epidemic, Ms Epati said.
"The most conspicuous example is the public confusion that resulted from government communications that are now legally impermissible - that is, contrary to law - and activities that, though lawful, are undesirable and discouraged."
Both types of communications from the Government are helpful and necessary, she says - just as in more normal times, not every behaviour needs or can have a criminal or other regulatory response.
"But the law could be clear, clearly enforceable, and able to be easily accessed and understood by all to whom it applies. We anticipate that some of the confusion may be addressed by the most recent order dated 3 April 2020 made under section 70 of the Health Act 1956."
Public access to key documents
She said the Law Society also welcomed the publication of key legislation, orders and other documents on the COVID-19 website. This could be improved further by creating an explicit link between particular practical instructions or directions and the legal basis on which they are made.
"Legal prohibitions should be explicitly identified, as should the consequences of default. All the legal instruments, policy papers and explanations of their legal foundations should be published as soon as they are available, so that New Zealanders can clearly see the justifications for what is being done and the statutory powers being relied upon.
“Recognising that the realities of the current crisis have prevented the normal policy and law-making process, the Law Society believes as time goes on that draft instruments and policy papers should be made available to enable New Zealanders to comment on proposed measures that affect them or in which they are otherwise interested," Tiana Epati said.
"It is particularly important that the values and processes set out in the Legislation Guidelines are maintained as much as possible. People affected should be consulted where feasible. Decisions that affect peoples' rights should be reviewable in some way. Where there are constraints on rights and interests usually recognised by law, sunset clauses are desirable to prompt re-examination of the need for ongoing restrictions."
Scrutiny of legislative instruments
Ms Epati said if the Henry VIII powers in the Epidemic Preparedness Act 2006 are used, Parliament needs to be able to exercise its disallowance power even if it cannot meet as it usually might. Any future statute contemplating more extensive Henry VIII powers should be carefully tailored to provide for public consultation where possible and should be subject to approval or disallowance through the parliamentary process.
Some thought should be given to establishing a role for the Epidemic Response select committee in the process, as well as the Regulations Review Committee, she suggests. Re-convening Parliament also needed to be considered if that could be done in a safe way, before the end of the currently notified Level-4 period, and certainly if it was extended.
Practical suggestions for Residential Tenancy Bill changes
The Law Society has suggested a number of changes that could be made to the Residential Tenancies Amendment Bill. In a submission to the Social Services and Community Committee, it says it does not comment on the policy objectives of the bill but on the practical workability of some amendments and drafting issues.
Its suggestions include:
- A longer lead-in period for the bill to come into force than six months, particularly given the significant additional and new penalties and infringement fines.
- Strengthening the provision stating that landlords “must not invite or encourage” bids for rent, to add the terms “pressure or cajole”.
- Including leases in the list of examples given in the section on proposed “minor changes” to premises.
- Specifying a maximum period in which landlords can prohibit fibre connection if they plan to carry out extensive changes to the premises which the installation would impede.
- Setting a clear timeframe for informing tenants (instead of “as soon as practicable”) if the premises are put on the market.
- Defining the term “harassment” in new section 55A which enables a landlord to apply to the Tribunal for an order terminating a tenancy on the basis of “anti-social behaviour”.
- Clarifying the meaning of “purports” in new section 60AA, which relates to the landlord acting to terminate a tenancy without grounds.
ILANZ election results
The In-house Lawyers Association of New Zealand (ILANZ), has elected office holders for the 2020/2022 period. Sian Wingate was elected President and Grant Pritchard Vice President. The General Committee members are:
- Sian Atkinson, Te Wananga o Aotearoa, Te Awamutu,
- Jodie Flowerday, University of Canterbury, Christchurch,
- Linda Frew, NZ Forest Research Institute Ltd (Scion), Rotorua,
- Benjamin Jacobs, Xero, Auckland,
- Anitesh Ram Govind, Auckland Council, Auckland,
- Lyn Wain, Inland Revenue Department, Christchurch,
- Frieda Winstanley, New Plymouth District Council, New Plymouth.
“Unconscionable” conduct threshold questioned
In a submission to the Economic Development, Science and Innovation Committee on the Fair Trading Amendment Bill, the Law Society expressed its concern that more certainty is needed for the threshold at which conduct is deemed ‘unconscionable’.
The bill introduces a prohibition against ‘unconscionable conduct’ into the Fair Trading Act 1986. The Law Society notes that there is currently no statutory prohibition in New Zealand against ‘unconscionable’ conduct, but the concept of unconscionability has developed in case law and has been applied where the courts have considered it inequitable to allow a party to enforce contractual rights against another party.
It says in the regulatory analysis supporting the bill, three essential features justifying such intervention are that:
- the weaker party has a qualifying disability (eg, age, infirmity, difficulty understanding English);
- the stronger party has knowledge (actual or constructive) of this disability; and
- the stronger party took advantage of this disability to extract a benefit from a transaction.
The Law Society’s submission notes that the bill is based on Australian legislation and conduct can be found to be unconscionable “even if there is no conscious targeting of a vulnerable party”.
“The Law Society questions whether this is justified. For a statutory prohibition backed by serious criminal consequences, we consider that some element of culpability – ie, that the trader knew, or ought to have known, that the person was vulnerable and took advantage of that vulnerability – should be required.”
It says the Legislation Guidelines state in relation to the creation of criminal offences that offences must be defined clearly so that people know what is and what is not prohibited. Therefore, it is necessary to consider exactly what conduct is prohibited by a criminal offence.
“It is notable that the alternative option of prohibiting ‘oppressive conduct’ was preferred by officials. The reasons for this are persuasive ... The Law Society recommends that the committee consider this alternative option and obtain further advice from officials,” it says.
Truncated bill submission time criticised
The Law Society has criticised the short time period allowed for submissions to the Health Committee on the Smokefree Environments and Regulated Products (Vaping) Amendment Bill.
In a submission, it says while the bill was introduced on 24 February 2020, it did not receive its first reading until 11 March 2020 at which point it was referred to the Health Committee with submissions due by 1 April 2020, providing only a three-week submission period for public input.
“The Law Society has previously expressed concerns as to truncated submission timeframes, both in submissions on bills and in recent submissions to the Standing Orders Committee during the 2017 review of Standing Orders and the 2020 review,” it says.
The submission notes that the Standing Orders Committee’s 2017 Report endorsed the Law Society’s observations and indicated desirable time frames for closing dates for submissions. These included generally, a minimum of six weeks, with a lesser “but still realistic” period permissible in exceptional circumstances, and “longer is desirable for large or complex bills”. Sufficient time must be allowed for proper drafting and consideration of amendments and commentaries.
“The Law Society is unable to see why the period for public submissions has been restricted to three weeks. It cannot fairly be described as so urgent as to be exceptional and to justify a period shorter than six weeks,” it says.
Commenting on the bill itself, the Law Society says it agrees with Attorney-General’s Report to the House of Representatives pursuant to section 7 of the Bill of Rights, that the restrictions in the bill on packaging, advertising and promoting vaping products are inconsistent with the right to freedom of expression.
It accepts, as does the Attorney-General, that on the current state of the evidence some restrictions around vaping of the general type set out in the bill are appropriate.
“However, the Law Society endorses the Attorney-General’s conclusion that, on the available evidence, the limits on freedom of expression identified in the report do not meet the standard of being ‘demonstrably justified’ as set out in section 5 of the Bill of Rights.”
Bill provides chance to provide for fair compensation
The Greater Christchurch Regeneration Amendment Bill 2020 is an opportunity to amend the Greater Christchurch Regeneration Act 2016 to provide for fair compensation for the public taking of private property, the Law Society has stated in a submission on the bill to the Governance and Administration Committee.
The Law Society says it considers there is a continuing concern about the need for fair compensation. It recommends including a provision which amends the open-ended ministerial discretion to determine compensation in section 114 of the Act.
“Fair compensation for the public taking of private property is a fundamental constitutional principle. The justification for giving the Minister an open-ended discretion to determine compensation is not clear,” it says.
“The Law Society considers that the bill should amend section 114(3) by repealing the proviso in section 114(3) that the Minister ‘is not limited to determining the amount of compensation on that basis alone’. This would mean that the two matters in section 114(4) which the Minister must have regard to are mandatory, and other considerations would be irrelevant.
“If it were intended that section 114(3) would give the Minister power to award an amount of compensation higher than the current market value and under Part 5 of the Public Works Act 1981, then it is submitted this should be expressly made clear.”
Effects of COVID-19 on visas and visa applications
The convenor of the Law Society’s Immigration and Refugee Law Committee, Mark Williams, wrote to the Head of Immigration New Zealand, Greg Patchell, on 7 April to note lawyer concerns about a number of operational issues arising from the COVID-19 pandemic.
Mr Williams said the committee was very conscious of the enormous pressure and workload on Immigration New Zealand, and it appreciated the updates and announcements it had provided to the legal profession. However, he said there were some operational issues which were likely to present barriers to access to justice.
Deportation and detention of individuals: It would be helpful for INZ to clarify whether deportations scheduled for the period covered by the Epidemic Preparedness (Epidemic Management-COVID-19) Notice 2020 had been postponed or cancelled. Clarification about directions for detained individuals was also sought.
Individuals in New Zealand unlawfully: People holding interim visas which expired before 2 April were requested by INZ to apply for interim visas. Clarification was sought of their status and how complaints from “unlawful” individuals were to be processed.
Time frames: The committee suggested extension of timeframes for a number of applications and certificate validities.
Document and filing requirements: Clarification of the policy for acceptance of uncertified copies of key documents was sought.