NZLS supports Land Transfer Bill
The New Zealand Law Society welcomes the modernisation of the Land Transfer Act but is concerned about how some of its new provisions will work.
The Land Transfer Bill is set to amend the Land Transfer Act 1952, which the Law Society says will bring this key piece of property legislation into the 21st century.
The Law Society presented its submission to the Government Administration Committee on 25 May.
A Law Society spokesperson, Ian Haynes, says a law change is well overdue but aspects of some provisions proposed in the legislation need some explaining.
He says two new clauses allow the High Court to alter the land title register in cases of manifest injustice, which introduces a challenge to the fundamental concept of indefeasibility of title.
“These clauses create a very wide field within which the High Court may operate to alter the land title register. This, in turn, has the potential for profound impact on banks and other lenders, who lend money on the security of land,” he says.
The Law Society’s Property Law Section chair, Duncan Terris, says a proposed compensation clause in the Bill would allow a person who is deprived of their interest in land the right to claim compensation from the Crown.
“This right has always existed, but the proposed clause suggests that a person needs to invest time and money into litigation before they can seek compensation and this could make access to compensation more difficult.
“The clause needs to be redrafted to make it very clear that a person may apply for compensation immediately,” he says.
The Bill also proposes that compensation will be assessed using the market value of the land in question, which could potentially result in unfairness to the person receiving compensation. The Law Society recommends that in the event of a compensation claim, the land’s value should be assessed at what has been lost from a claimant’s perspective.
Mr Haynes says the Law Society is also concerned with proposed increased obligations placed on mortgage lenders to verify the identity of borrowers.
“It is assumed that the reason behind this is because mortgage fraud is increasing in Australia yet there has been only one known instance of attempted identity fraud in New Zealand land dealings since Landonline was introduced.
“There is adequate protection in place imposed by regulations and the Registrar-General’s published Land Information New Zealand Standard for verification of identity of a borrower. This already minimises the opportunity for fraud in New Zealand,” he says.
The Law Society says it would welcome any opportunity to provide further advice on the proposed Land Transfer Bill.
Contract and commercial law revision bill introduced
Attorney-General Christopher Finlayson QC has introduced the Contract and Commercial Law Bill, to consolidate 11 contract and commercial acts into a single piece of legislation with a modern style and format.
The bill is the first revision bill on the government’s triennial statute revision programme – the first major statute law revision exercise by any government since 1908.
Revision bills are prepared under subpart 3 of Part 2 of the Legislation Act 2012. They may revise the whole or part of one of more acts and omit redundant or spent provisions as well as making changes in language, format and punctuation and any necessary repeals.
A revision bill must not change the effect of the law, and the Contract and Commercial Law Bill contains no new policy or substantive law changes. Certification statements to this effect are required by s 33 of the Legislation Act.
Mr Finlayson says the government sought submissions on an exposure draft of the bill in October 2015. He says parliamentary procedure for enacting revision bills is streamlined under Standing Orders, but select committee scrutiny is retained.
The New Zealand Law Society’s submission on the exposure draft noted that although the title suggested the bill would cover all contract and commercial law, that was not the case. It said the Fair Trading Act 1986 and Personal Property Securities Act 1999 applied in commercial situations, and consumer law statutes such as the Consumer Guarantees Act 1993 and Credit Contracts and Consumer Finance Act 2003 were an integral part of commercial law, but had not been included.
NZLS supports new AIM method for provisional tax
The New Zealand Law Society supports development of the Accounting Income Method (AIM) as an available method of calculating and paying provisional tax.
In comments on the Inland Revenue Department issues paper Making Tax Simpler: Better Business Tax, the Law Society says a factor critical to the success of AIM will be taxpayer confidence in the calculations and adjustments being made by the relevant software.
“The ability for a taxpayer or their agent to make corrections and adjustments on a real-time basis will also be important,” it says.
“Taxpayers should also be able to rely on the relevant software given it will have been improved by Inland Revenue and, as a corollary, taxpayers should not be liable for use of money interest where any underpayment results from automatic calculations or adjustments being made by the software (which we understand is consistent with the proposal).
The Law Society says it understands that AIM will be available to all provisional taxpayers with a turnover of $5 million or less.
Noting that a criterion based on turnover alone does not necessarily reflect a logical threshold for entitlement to use AIM, it suggests that an improvement could be introduction of a separate (alternative) eligibility criterion based on the amount of a taxpayer’s residual income tax.
This would extend the benefit of AIM to taxpayers who have high turnover, but low margins on their sales, the Law Society says.