Clendon David: Illegal Contracts (Unlawful Limitation on Regulators’ Powers) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Clendon David: Illegal Contracts (Unlawful Limitation on Regulators’ Powers) Amendment Bill — First Reading 
[Sitting date: 25 July 2012. Volume:682;Page:3936. Text is incorporated into the Bound Volume.] 
DAVID CLENDON (Green) 
: 
 Tena koe Mr Speaker. Nga mihi o te ahiahi ki a koutou. I am pleased to take a call to speak on the Illegal Contracts (Unlawful Limitation on Regulators’ Powers) Amendment Bill and indeed to speak in support of what we believe is a useful and a still very necessary bill despite the protestations of the Government speakers so far. 
The Greens are not always persuaded that it is a good idea to resort to a legislative solution for a one-off event or one-off problem. Often you simply end up with the sound of stable doors slamming. You end up with legislation that is unnecessary—something that is trying to deal with a problem that has already passed. But as Mr Chauvel has already articulated this is still a very live problem. The mischief that this bill seeks to remedy to resolve is still very much alive. The possibility is that we could once again see something along the lines of the ING-ANZ issue or event. There is a very real possibility that the very uneven distribution of power could put us in a situation again where the well-being of the investment of large numbers of small investors is at risk and where those people are effectively obliged to gamble on what might be the outcome of a deal essentially being offered to them by a bank by an insurance company or by whatever the organisation may be. 
We ought not to have to argue for the principle of avoiding a situation where people or organisations can contract out of their legal responsibilities. That principle you would think would be generally acknowledged. We see it in the Consumer Guarantees Act where suppliers cannot contract out of their obligations to consumers. It is a different situation with trade relationships clearly. But the key principle is that people cannot be obliged or even if they think they have contracted out that there is a legal protection to avoid that happening. We see it in the Consumer Guarantees Act as I have said. We see references to it in the Fair Trading Act—the extension of that being the unfortunate practice of people being persuaded to buy these quite valueless extended warranties for example. There is a well-embedded legal principle of not allowing people to contract out of responsibility. 
Effectively that is all this bill seeks to do—to make a very minor amendment albeit a significant one to a piece of legislation so that people are no longer as I say at some future time put in a position where they might have to second-guess whether taking the deal that is currently on the table will leave them better or worse off than waiting for some legal process some regulatory process to work its way through and come to some sort of resolution. 
Clearly that statement would be opposed by those who might be on the other side of that equation. I was interested to note a newspaper article in the  
Otago Daily Times 
 from the time when this bill was first presented. A gentleman from the ANZ the managing director of private banking and wealth—a splendid title—was concerned about the so-called retrospective nature of this bill. He said that it might “create uncertainty for business if regulatory and legal requirements could be subject to change”. He said that “Under the bill there would be no incentive for parties to agree to out-of-court settlements because agreements to settle disputes would never be full and final”. That is all very well but it rather overlooks the fact that this situation only occurred in a case of what was at best gross negligence and in fact—as was described earlier—was the failure of a company entrusted with people’s investments to operate to an appropriate legal or indeed ethical standard. The best protection for companies holding investments against being taken to task in this sort of thing is simply to act legally responsibly and ethically in these cases. The notion that this would somehow disadvantage the large corporate organisations is simply laughable in fact. 
The Frozen Funds Group Trust or movement if you like was commented on. I think its website has some interesting and useful information. I think that as the campaign quite rightly states on its website which is now effectively an historic item: “The campaign shows what a small group of committed people can achieve.” I think that passing this legislation would be something of a legacy for that small group of people who did stand up for their rights and who worked very hard and fought very hard to get a reasonable outcome out of the situation. 
We support this bill and would encourage others to do so. Kia ora.