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) 
: I would like to pick up from where my colleague left off. The title of the bill “Fair Trading Amendment Bill (No 3)” is fairly innocuous. It is important that the title of a bill—and I think it is recognised these days—should accurately reflect as far as is possible the content of a bill. For example with income tax amendment bills we do not just have Income Tax Amendment Bill (No 1) Income Tax Amendment Bill (No 2) (No 3) and (No 4). Let us go broader than income tax—if it is a taxation amendment bill we are referring to we try to build into the title what is covered in the bill. For example we might have a “Taxation (Annual Rates GST Provision something else and something else) Amendment Bill”. The beauty of that kind of title is that it gives the public a reasonable guide as to what is contained in an amendment bill. 
The problem with this bill is that the title gives no guidance as to a couple of very significant items in it. The Opposition is not opposed to this bill—in fact we are totally supportive of the part of the bill that clamps down on pyramid schemes. It would be quite useful if the title indicated that it is this bill amending the Fair Trading Act that actually does deal with pyramid schemes. It would help people using our statutes were the name to incorporate things like that. That is the first issue in respect of the title. 
The second issue and my colleague the Hon Tony Ryall has mentioned this is that clause 8(3) contains a very significant issue relating to what is commonly called the statute of limitations or the period of limitation. A very major change has been made in shifting from a period where action can be taken 3 years after an event to 3 years after an event was discovered. That is a huge difference because an event may not be discovered for a period of 5 6 7 8 or 10 years. So that is a huge difference. When we do get to debate Part 2 there will be some issues that I hope the Minister in the chair can really cover in respect of that. 
Again I come back to the title. An issue as significant as changing the period of limitation during which action can be taken is a significant change. If it were just being altered from 3 years to 4 years after an event occurred that is not a huge change. Maybe one would not need to argue that the title should cover that but this issue is big. This could change the period of liability from 3 years to 13 years. To have a change as big as that contained in a bill with such a bland title is not satisfactory. That is why I would argue that the title of the bill should really give greater guidance as to the key changes that are contained in the bill. 
There are two of them—the pyramid-selling schemes and the changes to the limitation period after which action cannot be taken. It is not good enough for the Government to get titles right in some areas of legislative activity like in taxation. It is getting titles better in that area but in this area I do not think enough thought has been given to the title. The title of the bill the “Fair Trading Amendment Bill (No 3)” could mean absolutely anything yet the bill has some very very significant things in it. 
Another area that is obviously very significant for business is the doubling of penalties. Again the title gives no guide that this bill doubles the penalties for certain breaches of the law. Again it would be useful if the title were to indicate that that is another major element contained in the bill. So there are a number of key issues. If the bill goes through the way it is the Commerce Commission may not be accountable for certain actions it takes. Again that is a hugely significant issue that we will be asking a number of questions about when we get on to the particular clause—is it clause 10—that covers that. Again in Part 2 I shall be asking about a number of issues around that. The title is really pretty unsatisfactory. 
LINDSAY TISCH (NZ National—Piako) 
: As my colleagues have mentioned we will be supporting this bill. However some provisions need to be looked at more closely and during the Committee stage we will ask the Minister to answer these questions. First the bill stands in the name of the Hon Judith Tizard and is titled the “Fair Trading Amendment Bill (No 3). We always believe that the title of a bill should fairly reflect what the bill states. Nothing in this title articulates the very important changes that the bill purports to make. As I said we will be supporting those changes. My colleague the Hon Tony Ryall has mentioned that this bill allows that there will be documents that do not actually exist and sets out the power that the Commerce Commission will have. Nowhere in the title do we see anything that relates to that. If we go back to the first and second readings there was much debate about pyramid-selling schemes and they are covered in clause 5. One of the amendments that the Hon Tony Ryall has tabled which is a very good amendment to the title would delete all the words after “the” and insert “Fair Trading (Pyramid Selling Schemes and Additional Powers) Amendment Bill”. This is significant. There is a change here although it is only a minor change. If we were to go back to the principal Act—and we will be talking about that later on when we get to clause 5 in Part 2 at some length—if the title were to reflect what is actually in the bill then there is an opportunity to be able to look at that amendment. 
The Hon Tony Ryall has another amendment to the title to delete all the words after “the” and insert “Fair Trading (Miscellaneous Provisions) Amendment Bill”. That probably more reflects that there are some miscellaneous changes that we believe are important. I have gone one step further in my amendment to the title—that we delete all the words after “the” and insert “Fair Trading (Enforcement and Procedural Provisions) Amendment Bill”. Of course this does allow for enforcement proceedings and in clause 8(2) there is the liability that every person who contravenes section 24 commits an offence and is liable on summary conviction to a fine not exceeding $200000. So there is a provision that I have put in my amendment that talks about the enforcement side of this bill. 
Dr the Hon Lockwood Smith made a very important point about clause 8(3) which provides that proceedings under section 40 “may be commenced at any time within 3 years after the matter giving rise to the contravention was discovered or ought reasonably to have been discovered.” That is opened-ended and that is one of the real concerns we have about this bill. Although we are supporting it we really have a concern about that subclause and we will be looking at that one far more closely when we are debating Part 2 and clause 8(3) in particular. 
There are a number of other provisions but I come back to the point I made about making sure that the title which we are supporting fairly reflects what the bill is about. I have mentioned the amendment I have put forward and the two amendments that the Hon Tony Ryall has put forward.