Smith Lockwood: Fair Trading Amendment Bill (No 3) — In Committee 
Smith Lockwood: Fair Trading Amendment Bill (No 3) — In Committee 
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Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: In speaking to clause 2 “Commencement” I would like to draw the attention of the Minister in the chair to a serious matter. It has become clear in recent years—and when I say “recent years” I mean a period covering probably the last 20 years—as we have made changes to our commercial law in this country that there have been serious issues around commencement dates and transitions. I am sure the Minister in the chair is aware of some quite serious problems that have resulted from the transition from the Commerce Act of 1975 to the Commerce Act of 1986. 
It is quite clear from the commentary that the bill has not been taken very seriously by the Commerce Committee and that worries me. I think it was my colleague from ACT who pointed out that the hearing of evidence took 30 minutes and consideration took 55 minutes. What worries me about the commencement is the issue around the change to the period during which a business may be liable—in other words the provisions of new section 40(3) inserted by clause 8. I would like the Minister in the chair to explain to the Committee how this will work under the commencement arrangement. For example will the new provision in new subsection (3) work if a business sells a service or an item or does anything under the Fair Trading Act as it now is—will it apply to some action taken after the commencement? For argument’s sake let us say that this bill goes through tonight and gets the royal assent tomorrow. After the bill receives the royal assent will new subsection (3) apply to an action that happens from then or could it apply to something that happened say 4 years ago but is not discovered until after this bill receives the royal assent? I think that is quite a serious issue in respect of transition because there are clearly two different circumstances. I do not see how this legislation makes clear which would apply. I hope the Minister in the chair is hearing what I am saying as the question I have is to me quite an important one. Will new subsection (3)—that is the change to 3 years after discovery as distinct from 3 years from the action—apply to actions that happen after the royal assent or will it apply to discoveries that happened after the royal assent? There is a big difference there and it could have a very significant impact on business. 
The bill should make it clear what the Government intends. The Government may say that it is not sure what it intends and that the courts will sort it out. The courts could read the law as I have read this amendment bill as meaning that anything that is discovered after this legislation receives the royal assent would be caught up in the new provision in new subsection (3). The dilemma for those involved under the Fair Trading Act is that without knowing it they could face a greater liability than they did under the previous Act. That is because the action may have taken place 2 years previously when they were operating under the existing Fair Trading Act. Yet with this amendment they could be caught by this changed provision. 
For people selling a service or a good or taking action under this Fair Trading Amendment Bill (No 3) from here on there is no problem because they will know that it will apply to actions that take place after the bill receives the royal assent. They would know the law they were operating under. But I am not sure that this bill makes clear which way it works for events that have already taken place and I would appreciate the Minister taking a call to clarify for the Committee the way it works. It may be that we should amend the provision to make the intention of the transition arrangements more specific on the face of the legislation.