Catchpole Brent: Fair Trading Amendment Bill (No 3) — In Committee 
Catchpole Brent: Fair Trading Amendment Bill (No 3) — In Committee 
[Volume:609;Page:6852] 
BRENT CATCHPOLE (NZ First) 
: New Zealand First agrees with the targeting of pyramid selling in the Fair Trading Amendment Bill (No 3) and broadening the target to incorporate newer forms of pyramid selling that have developed since the Fair Trading Act was originally implemented. Such schemes include those where the participants buy or sell an investment opportunity and use agents provided by the scheme’s operators to recruit others to participate on their behalf instead of having to recruit the new participants themselves. 
We also welcome the updates of the penalties. However as mentioned earlier New Zealand First has difficulty with clause 14 “Power to search”. The current wording of section 47 of the Fair Trading Act provides that the Commerce Commission can search to ascertain whether a person has contravened the Act. Clause 14 of this amending legislation extends the commission’s powers under section 47 of the principal Act so that the commission may obtain warrants to search for evidence to demonstrate the nature and extent of the breach of the Act. That is to assist the commission in gathering evidence for the courts. They “may” search. 
The wording of the subparagraphs of new subsection (2) in clause 14 refers to any conduct that “constitutes or may constitute” a contravention of the Act. It is the “may constitute” the contravention of the Act that we have difficulty with because it is very vague and not specific enough to allow the Act to operate properly. New Zealand First does not support that provision which gives vague extensions to the power to search because it gives the commission unfettered powers to undertake “fishing expeditions” in the search to endeavour to find evidence of the conduct that “may” constitute a contravention of the Act. In other words it is undertaking a search on a hunch. We feel that that is not good enough and we have put a Supplementary Order Paper forward that removes the word “may” and replaces it with the word “will”. 
People undertaking legitimate activities such as for example stamp collecting may trade a particularly valuable stamp sell it and use those proceeds to buy a car that is way beyond the means of their income. On the grounds of the wording of that provision it could be considered that that stamp collector’s activities “may constitute” a contravention of the Act and therefore would be subject to a search. That goes against the whole principle of this bill because it takes in too wide a scope and leaves room for abuse. 
We would like to see that clause given a tighter wording as in section 312 of the Crimes Act which deals with applications for interception warrants. That section sets out extensive and definite parameters for the search warrant rather than leaving the parameters vague and easily misinterpreted—or worse abused. The amendment on our Supplementary Order Paper tightens that up. We would prefer it tightened up more along the lines of the Crimes Act but we will be content to see the wording changed from “may” to “will”.