Cosgrove Clayton: Property Law Bill — First Reading 
Cosgrove Clayton: Property Law Bill — First Reading 
[Volume:635;Page:6460] 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I move  
That the Property Law Bill be now read a first time. 
 At the appropriate time I intend to move that the Property Law Bill be referred to the Justice and Electoral Committee for consideration. Property law governs a wide range of private and commercial property transactions in the day-to-day life of all New Zealanders. The law applies when people create dispose of or control property interests including land. Commonly the types of dealings affected are residential or commercial transfers mortgages and commercial leases. It is important that the law is up to date clear and accessible to all people. 
The Property Law Bill is significant legislation that updates the general property law rules contained in the Property Law Act 1952 and it includes in legislation for the first time some common law rules. The current Act contains a collection of outdated and piecemeal provisions added over many years and expressed in obscure language. The Act has been in force for over 50 years and some provisions date without redrafting from the conveyancing ordinance of 1842. Some provisions of the Act do not work well with other legislation that applies to property interests. The Property Law Bill will improve the operation of the existing law and make it easier to understand. That will be of benefit to a number of members opposite. It will also ensure that related statutes work together effectively. 
The Law Commission in 1994 completed a major review of the current Act and recommended a new Act to make rules more accessible and easier to understand. The Law Commission report which contained a draft bill was well received by interested parties when it was published. As the Prime Minister explained in her formal statement to Parliament in February this year the Government is committed to implementing a number of old Law Commission reports that modernise key areas of law such as property law and succession law. I am grateful to the Law Commission for its assistance in preparing a property law bill for introduction. I particularly acknowledge Justice Blanchard the author of the Law Commission report for his invaluable contribution to the Property Law Bill. 
The bill is based largely on the recommendations of the Law Commission report. It restates and clarifies the existing Act and includes some rules currently found in the general law or other Acts. There are a large number of small reforms to the rules that collectively will improve the effectiveness of the law. The bill ensures that law relating to property is clear accessible and effective so that it better meets the present and future needs of people such as property owners lessees and mortgagees. The bill provides certainty in property dealings and protects people’s property rights—for example by determining the priority of creditors when there are several securities over the same land. 
The Law Commission considered that the provisions governing mortgages and leases most needed reform. A number of small reforms to the law of mortgages will clarify and reform the rules that apply. For example the bill extends and describes in more detail the notice requirements for mortgagees such as banks and will require them to notify other interested parties such as a friend or relative who guaranteed a mortgage loan when exercising their rights over properties after borrowers have failed to pay loans. Currently a mortgagee who sells a mortgaged property after a borrower has defaulted on a loan must take reasonable care to obtain the best possible price for the borrower. Under the bill this duty extends to other interested parties such as a guarantor. 
Other examples of the reforms in this bill include codifying the law governing the cancellation of commercial leases of land and relief against cancellation for lessees. The bill also codifies the rules for the cancellation of an agreement for the sale and purchase of land where a purchaser is in possession. One specific reform proposed in the bill removes a commercial lessee’s liability for unintentional damage to leased premises when the lessor is insured. The Law Commission expressed concern that lessees can be liable under a lease covenant for repairing premises damaged through their negligence even though the lessor is protected by insurance that is directly or indirectly paid for by the lessee. This is a significant change from the existing law and will be a matter of specific interest during the select committee consideration of the bill. 
Clearly the Law Commission reported back some time ago. Some of its recommendations have been superseded. Other reforms that do not originate from the Law Commission report are also necessary to address issues that have arisen since 1994 because of inconsistencies or overlaps with provisions in new or amended legislation. Property law is of practical day-to-day significance for individuals and businesses in New Zealand. Clear property rules are vital to the operation of society and this bill ensures that our property law is up to date to better meet people’s needs and protect their property rights. I commend the bill to the House.