Wood MichaelMICHAEL WOOD (Labour—Mt Roskill): That was me—I was the last to my feet Mr Chair so I am very flattered and somewhat surprised but delighted to take the call.The CHAIRPERSON (Hon Chester Borrows): The Minister's pet.MICHAEL WOOD: Ha ha! That is a disturbing comment Mr Chair but I will take it in good heart. Ha ha! I am very happy to rise and there are a couple of particular clauses I am keen to speak to in this part of the debate. Those are clauses 54 and 57 and I want to talk about some of the alterations made at the Government Administration Committee to these clauses but also a couple of the Supplementary Order Papers (SOPs) that have been put forward by Denis O'Rourke. Really Part 1 was a scintillating debate but it was a mere entrée and we really are getting to the meat of the matter here because we are getting into those serious issues about what a manifest injustice is and what the changes are that we are actually looking at making to the Torrens system here. These things potentially do have a significant impact.I want to come back to that discussion about the importance of indefeasibility which this whole system rests upon. It rests upon the certainty that we want to have about the identity of the owner of land and sitting underneath that we need to have certainty about the identity of sellers and buyers of land. That comes to the heart of clause 54 which I would like to speak about a little bit here now.The select committee has struck out clause 54 and when we go through the submissions there are a small number of submissions that encourage this step to be taken. It is probably no surprise that the chief submission that does that comes from the New Zealand Bankers' Association. I will make sure I retain parliamentary language and am kind but let me just say that bankers can be bankers and in this respect the New Zealand Bankers' Association has advanced an understandable argument from its point of view. No industry or sector ever welcomes an additional level of legislative scrutiny or regulation over its activities but I have to say that I think the select committee may have over overheard the concerns that have been raised by that organisation.What I can say is that yes possibly there are some small compliance costs that would come about as a result of clause 54—and let us just be clear about what clause 54 as it was when it came to the select committee does: it simply asks that those parties who are lending in a mortgage situation—chiefly but not exclusively the banks—take steps to absolutely ensure that they verify the identity of the mortgagor or the identity and authority of a person who executes a mortgage" and I am reading from the struck-out clause 54(2) here. Of course there will be compliance costs associated with undertaking those steps. When we put protections into our system there usually are compliance costs. So the question is not whether there are compliance costs and if the answer is yes we strike it out; the question should be that if there are compliance costs then taking into account what we achieve by some public-good regulation are those compliance costs reasonable?What I have not come across in either the submission of the New Zealand Bankers' Association or in the select committee commentary is actually any real quantification or argument that those compliance costs really are excessive or burdensome given the importance of getting this stuff right and bearing in mind how bad it is and how many people are potentially very badly damaged and the processes that we then have to go through to fix it up if we do not verify correctly the identity of mortgagors. So I am not at all convinced by the arguments around the compliance costs.There was also an argument put forward I think by the Auckland District Law Society which of course has produced many fine contributors to our society—a few National Government Cabinet Ministers as well. It has got a very very good submission that it has put forward here. It sort of makes a convenience argument about this as well and it says effectively: "This will mean that parties who are providing mortgages will need to attend the legal offices of solicitors to sign the documents." Certainly I can see that that is a small inconvenience but I think that in the greater scheme of things it is not a burdensome one particularly when we know that when you are buying a house it is not something you do every week. It is a major transaction; there are going to these things associated with it. So I think taking— Phil Twyford: There is in Auckland.MICHAEL WOOD: In Auckland that is right. Well there are some people who are trading them every week but not most ordinary people. So I do not think that those arguments that have been put up in favour of striking down clause 54 really do stand and for that reason I certainly stand in support of Denis O'Rourke's—[Bell rung]The CHAIRPERSON (Hon Chester Borrows): I will just—[Interruption] Order! I will allow a second call but I should inform the House that it gives me no small amount of pleasure to overrule my former lecturer from Victoria University—a fine school. However the Supplementary Order Paper in respect of a register for foreign owners is in scope.MICHAEL WOOD: Well look this evening just gets better and better. There has been action all over the place—unprecedented things happening in the House this evening and I hope to improve on it with some comments shortly about clause 57 which I know people have been waiting for all night. So as I say I just want to reaffirm that support for Denis O'Rourke's Supplementary Order Paper 314 for the reasons that I have outlined which would effectively reinstate clause 54 which was struck out at the select committee.The other thing I would just note on that is that I have done a number of years working in close association with the banking sector as a union representative of the good folks who actually produce the documentation and sign off on mortgages and what I do know is that most of the banks do have pretty robust internal procedures for very obvious reasons—to protect themselves in this area. So I think the argument is somewhat specious that having a legislative confirmation that that is important provides any additional great burden on those very large and very profitable organisations. It simply does not stack up with the experience that I have.If we move on to clause 57 I just want to talk particularly about clause 57(3). This is another clause where we have a Supplementary Order Paper from Denis O'Rourke who has been very prolific in this debate as he is in some others. What Mr O'Rourke suggests is that we strike out clause 57(3). This is actually really important: this relates to what the courts might do when we do find that there is the case of manifest injustice. So going back to the earlier commentary manifest injustice is that very high threshold that we have set that means that we have got a narrow way through the Torrens system in terms of the utter integrity and indefeasibility of the land register. Clause 57(3) as it is written sort of puts an extra test in there because—I will just read it out so we have got clarity on this: "An order under this section may be made only if the court is satisfied that in the circumstances the injustice could not properly be addressed by compensation or damages".That really is the point of the SOP from Denis O'Rourke SOP 313. Effectively what he is saying is that if there is a manifest injustice—if we have got this wrong if we have already cleared the hurdle cleared that very high legal bar that there is a manifest injustice—why would we not just put it right and correct the register? Why would there have to be this additional judicial test to be looked at about whether it is appropriate to first consider compensation or damages. It almost seems to be an additional complication in the system. If we have got it wrong if there is a manifest injustice let us simply fix that up in the first place. I think that is what Mr O'Rourke is trying to achieve through his SOP to remove clause 57(3). The Labour Party sees the merit in that and does support that SOP.I just want to refer to a couple of other submissions that came in in respect of this and actually just to pay some tribute to a very good submission that came through from the Wellington Community Justice Project. I have seen submissions from this group on a number of other bills before; a wide range of bills. The group is as I understand it of Wellington law students and recent graduates who submit and engage in the legislative process to make sure that we have good and socially just law. It makes the point—and I am reading from section 9 of its submission here—that "The words 'manifestly unjust' indicate an extremely high threshold that naturally promotes caution." So again they are sort of reaffirming the point in respect of this issue with clause 57(3) that it is a very high threshold—a very high threshold—and I think that within the legal system it is going to take a pretty strong case to clear it. If we get there why are we complicating the matter further by bringing in questions of compensation or damages as well?While we are on the question of "manifestly unjust" I do just want to comment on a slight divergence of view that came through between different submissions. The Wellington Community Justice Project addressed the question of whether we should have a definition in clause 57 of the term "manifest injustice—or more appropriately in the interpretation clause. They came down on the side of saying no. There are possibly some reasons of certainty but actually it is probably better to leave that to the courts. I would note that the Auckland District Law Society came to the opposite view and actually did call for there to be greater clarity by way of definition in the bill.The Labour Party thinks that the select committee got this one right on balance—that it is a complex area and it is better to let the courts build up a body of jurisprudence around this through their own interpretation. Thank you very much."