Dalziel Lianne: Illegal Contracts (Unlawful Limitation on Regulators’ Powers) Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Dalziel Lianne: Illegal Contracts (Unlawful Limitation on Regulators’ Powers) Amendment Bill — First Reading 
[Sitting date: 25 July 2012. Volume:682;Page:3942. Text is incorporated into the Bound Volume.] 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am very disappointed that the National Government has adopted a position in opposition to a bill the Illegal Contracts (Unlawful Limitation on Regulators’ Powers) Amendment Bill because its members had been advised by their research unit notes that the problem is all fixed because the problem is not all fixed. It was very interesting that that was the case with every single member of the National Government who spoke with perhaps the exception of Jonathan Young who sat on the select committee that heard all of the evidence that was presented in relation to the finance company failures and that heard from people who had lost money in the ANZ and ING debacle which should never have been allowed to occur in this country. People will reflect I think for a long time on the behaviour of a number of the people involved. But let me just say that he at least understood what it was that the bill was designed to do because he was not sticking to prepared notes. 
The truth is that Government members have been told that the legislation is no longer necessary because it is fixed with the new requirements that say that a provision of an agreement or a deed is void if it provides that a party to the agreement or deed is required or bound to waive compliance with any requirement of this Act or the regulations. That is not what people were required to do. 
In fact the way that the group that was established at the time described it was that they said the offer’s condition was that customers would surrender their right of legal recourse against ING ANZ or their financial advisers. Customers also lost their right to benefit if the Commerce Commission had found ANZ or ING breached fair trade. The Frozen Funds Group Trust has called this a form of blackmail. And actually it was because there was nothing else. They had to accept the offer or the offer came off the table. It expired at midnight on a particular day and that was the end of the offer. So they had no choice but to accept the offer and the condition was that if there was a breach of the rules that apply under fair trading with the Commerce Commission if the Banking Ombudsman were to make a ruling that was generally applicable then you would get no benefit from it. You had to rescind that right. 
The problem that I have with that is simply this—and there is no problem with making the settlement conditional on not proceeding with a civil course of action; I have got no problems with that. In fact that was an issue that came up as well. That occurs every day. We give up something in order to get something. In fact the settlement with the Commerce Commission was so that it did not take them to court for their blatant breach of the Fair Trading Act. But where a regulator has identified that there has been a breach of the rules that were designed themselves to protect investors then no agreement that in any way undermines the authority of that regulator should be allowed to stand. It should be illegal. That is why I chose that particular model of the change to the Illegal Contracts Act. 
I know that the Financial Markets Conduct Bill is in front of the Commerce Committee at the moment. There is no harm in sending this bill to that select committee so that they could make sure that they get that clause of the legislation into shape where it would actually protect people from being blackmailed in this way in the future. I think that that would have been a reasonable outcome instead of having a predetermined position coming to the House and actually arguing a point of view that was not substantiated by the legislation that they were referring to. I think it is a disappointment because this was a chance for the Government to set aside perhaps the politics of the situation. 
In fact when I was the chair of the select committee I can say without a shadow of reflection that we worked really well together on both sides of the House—with the Greens as well—in order to achieve some good outcomes in relation to the financial regulation that we started and that National continued on. I believe that this was an example of a bill where the Government has simply just misunderstood that there is a gap in the legislation that needs to be filled. This was a bill that could have filled that gap and I make a last-minute plea to the Government: please support it to the select committee. At least we can resolve the differences there.