Parker DavidHon DAVID PARKER (Labour): Can I agree with the Attorney-General that this is good legislation and that it is timely to consolidate these various Acts of Parliament into one piece of legislation that makes it easier for people to follow and to update some of the language.I want to just talk about two issues and I do so to emphasise the importance of the subject matter of the legislation. The Attorney-General has already made reference to the change that was made at the Justice and Electoral Committee that inserts a new Subpart 7 in Part 2 of the bill which relates to stipulations as to time not necessarily being of the essence.What this means in practice is that if we did not do this and you had agreed to buy a car for example tomorrow and you said Oh look I'm going to come along and buy that car tomorrow."—or someone might have an agreement to sell a car tomorrow. If you did not turn up tomorrow on Friday then it would be permissible for someone to rely upon—even though at the time you entered the agreement no one thought that it really mattered whether you picked the car up on the Wednesday or the Thursday or the Friday or the Saturday. If you did not have this provision the person who was selling you the car could just say: "Oh you didn't turn up on the day; I sold it to someone else. Even though I've already agreed to sell it to you on the Friday because you didn't turn up on the Friday I'm going to cancel the contract on the Friday and it's all over." Well that is unfair if in the circumstance people actually really were not worried whether you were picking the car up on the Friday or the Saturday. So the law intervenes in that situation and says that for you to be able to bring a contract to an end on a particular day time has to be of the essence. That ensures fairness so that if I had an agreement to buy a car on the Friday and I did not turn up on the Friday the person who was selling it to me would somehow have to either wait for a reasonable period of time or somehow make it clear that to them time was of the essence. Unless it was clear in my contract with the person selling the car to me that time was of the essence they would actually have to give me a bit of notice before they could declare the whole thing over.That provision is more important in respect of land transactions where sometimes—more often—things do go wrong. The mortgage might not come through on the day because the signature that was put on it does not quite meet the bank's rules or it does not get a certificate from the solicitor to support all the documentation so it is not willing to advance the funds until that is all tied up or you might be selling on the same day that you are buying and your sale does not go through quite as planned and therefore you are not in a position to get the money from the sale to pay for your purchase—that is an obvious example of where you should have a bit of time to fix things up rather than just calling it off instantly. There are generally provisions that govern that in contracts for the sale of land and in respect of the general rule if you do not have a provision in your contract having this particular provision sitting in the Contractual Remedies Act probably fixes that anyway.But the point that was made to the select committee was that we also needed to protect people in respect of the sale of goods and arguably as it was in the Contractual Remedies Act rather than of more general application. The preservation of this very old equitable rule going back to the 1800s originating in the United Kingdom and no doubt applying in most of the Commonwealth jurisdictions and even the United States and other countries like us around the world—that particular rule would have been lost in respect of contracts for the sale of goods. That would have resulted in unfairness—unfairness on occasions when people are buying or selling goods. So it is for that reason that the committee has recommended that this particular provision be lifted out of the Contractual Remedies Act and actually be of more general effect including in its application for the sale of goods. The other thing I wanted to raise was something that does go to substance that is not fixed by this legislation. The Attorney-General said that he recognised that there are matters of substance that the Government would like to fix and I think he was probably referring to matters that were slightly less substantial than this. But I still do not like a change that was made to the law in respect of reservation of title clauses which was made some years ago. The issue was raised for me by the change that is made to the bill in respect of liens. Liens over goods are pretty simple things. You know when you have something that is left with you for repair—it might be a watch it might be a vacuum cleaner it might be a car—if the person does not ever turn up and pay for the repair that they gave the good to you for you can exercise a lien. You can keep that good until they pay and if they do not pay you can through a mechanism that is set out in the law sell it and deduct what is owed to you for the repairs and refund the balance to them. That is a good self-help remedy for small business people who are repairing goods.The equivalent in respect of people who are supplying goods as opposed to repairing goods was that until probably about 10 years ago—I do not know; something like that—you could actually when you sold a good if you were clear at the time you did it say: "I'm not giving you title to the good that I'm supplying you until I've been paid." They were called reservation of title clauses. They were reserving title to the seller of the good until they were paid. Those clauses were effective at law. They were sometimes called Romalpa clauses after the original English case that recognised those interests and they were a very effective remedy for small businesses to protect themselves against not being paid. These were very very important for a small business that might sell—I do not know it might supply their main line of product to one particular business and if that business goes broke and does not pay them it can make their business bankrupt. The banking industry managed to convince a prior Parliament in New Zealand that those were wrong—that those reservation of title clauses which had been recognised in New Zealand for quite a while and in other jurisdictions around the world should only ever be valid if you had registered a security interest under the Personal Property Securities Act I think it is in New Zealand. So if you had not registered in the Companies Office or whoever it is that maintains that register—some arm of the Government—that interest in advance or at the same time as you provided those goods you could not rely up on your retention of title clause.The effect of that in practice has been that we have preferred the interests of large banks because if title is then thought to have passed to that person who received those goods—even though they have not paid for them—they are then covered by the bank debenture. So the mortgage that the bank has over the business then gets the benefit of the value of those goods rather than the small business that provided those goods to the company or the person even though they have not been paid. I think that is just unfair and that is why I thought that the courts of equity in the UK and the New Zealand courts were right to actually say that if you supply a good with a reservation of title clause that is clearly part of your contract at the time the contract is formed—you cannot retrospectively do it; at the time the contract is formed—if you retain title and you are not paid so long as that good has not been incorporated in a fixture and obviously if it is a window and it is now in a house it is no longer a chattel it is part of a fixture. There were disputes like that that were generally sorted out very practically I think in the event of a liquidation of a company or a bankruptcy of an individual. But it was a self-help remedy for small businesses and the effect of that change in the law in New Zealand was that we actually made it bigger for the big boys who have got the debenture over the company or the general chattel security over a business or an individual and we in effect did the small businessman or the small businesswoman in the eye because despite the fact that they said "Well you can't get title to this until you've paid for it." we effectively ruled most of those instruments out by creating a bureaucratic process around them."