Willis Nicola; Clark DavidNICOLA WILLIS (National): Thank you Mr Chair. I'm wanting to ask about clause 6 which inserts new sections 7 and 8 and which relates to one of the main provisions in this bill in so far as it changes the Act which is around the creation of a new offence of unconscionable conduct. In reading the departmental statements about that the regulation review of this by the Ministry of Business Innovation and Employment and in reading the summary of concerns raised by the Ministry of Justice it leads me to a couple of questions for the Minister. Because of course the principle of any regulation is that it needs to provide wherever possible clarity certainty so that those who are affected by that regulation can know what is required of them in order to comply with it and can go about their business accordingly. It is not good regulation if it is subjective if those who are having to operate under it aren't sure how to interpret it lack clarity about what would or wouldn't be allowed for by the regulation and where that regulation creates uncertainty.So it is of concern to me that the Minister's own officials when advising him on these clauses in the bill said that this was not their preferred option—to create this offence of unconscionable conduct. They instead preferred a different option which was the prohibition of oppressive conduct and the reason that they according to the documents released to us had that preference was that they saw a particular threat of the potential for uncertainty associated with the new offence of unconscionable conduct. They said that they thought there was a risk that prohibiting that kind of conduct could lead to the courts either interpreting the prohibition too narrowly which is to say that it wouldn't capture the range of offences that the Minister may or may not have in mind and of course the reverse is also true: that where things are ill defined they may be interpreted too broadly and may end up as a prohibition of a much broader range of conduct than the Minister has in mind.So my first question to the Minister is why he rejected his officials' advice here of not using this offence of prohibiting oppressive conduct rather than the unconscionable conduct. And my second question is around the precise words that are being used here—factors such as conscience and norms of society" that could be referenced under an unconscionable conduct prohibition. Apparently that is what has been followed in the Australian case and I just would like the Minister to clarify for us why he was happy to leave it so vague as to what this regulation actually contains and why he rejected his officials' advice on that matter.Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Thank you and I thank the member. These are in my view good questions that get to the nub of the important issues in this bill quite frankly. And the conversations I have had with officials have gone backwards and forwards on this. In the end the advice shaped by officials that has gone into the Supplementary Order Paper does rest on a belief that actually the unconscionable conduct by not defining it too specifically is actually on balance the best approach. The Australian courts have found a way of interpreting that looking as the member says to the conscience and norms of society for guidance instead of defining too narrowly and risking a piece of legislation that's stuck in time and no longer fit for purpose in a few years' time if things change. It's been preferred to go with a slightly more flexible approach that sets out issues factors a court can consider when determining whether the conduct is unconscionable and that includes the following: the relative bargaining power of the parties; whether unfair pressure or tactics were used; and the extent to which the parties acted in good faith. Now the bill is meant to address serious misconduct that goes beyond what is commercially necessary or appropriate and by not defining unconscionable conduct it means that the risk of a narrow definition unduly limiting the circumstances in which the protections could be used is eliminated."