Dalziel Lianne: Trans-Tasman Proceedings Bill — In Committee Third Reading 
Dalziel Lianne: Trans-Tasman Proceedings Bill — In Committee Third Reading 
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Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Another member was on his feet last night and I was hoping that he would continue with the call because it was such an interesting contribution to the debate. 
Hon Ruth Dyson 
: Who was that? 
Hon LIANNE DALZIEL 
: I cannot remember his surname so I cannot say—ha ha! Perhaps one of my colleagues could help me. 
Hon Ruth Dyson 
: It wasn’t Maurice Williamson was it? 
Hon LIANNE DALZIEL 
: No it was not. 
Seriously I do have a serious question to ask. One of my colleagues Raymond Huo made a contribution to the second reading debate last night. The point he was making was in relation to some concerns that had been raised by Chapman Tripp in the public arena prior to the Trans-Tasman Proceedings Bill going to the Justice and Electoral Committee. I alluded to this point myself in the first reading debate but I did so at the end of my contribution. I said that I would deal with it once we got to the Committee stage because as my colleague Raymond Huo pointed out—very well I thought—it is actually quite a tricky area. Let me just run back over the end point of my contribution on the first reading debate. 
I have here the Chapman Tripp publication  
Trans-Tasman integration: court proceedings and enforcement.  
It states: “The proposed recognition and enforcement of regulatory sanctions is perhaps the most controversial part of the regime. The proposed reforms partially displace the longstanding rule that domestic courts do not enforce penal (as opposed to compensatory) laws of foreign states because to do so is contrary to the principles of independent sovereignty.” The point that my colleague Raymond Huo made last night was that under the proposed reforms some of the Australian regulatory penalties imposed by courts can now be seen to be directly enforceable in New Zealand courts and vice versa in the same way civil judgments are. The point he was making—and this is the point elucidated in this commentary—is that regulatory regimes based around civil penalties and regulatory regimes based around criminal penalties are going to be treated differently under the new regime. For civil penalties there will basically be cross-border reach unless it is expressly excluded and that is dealt with in Subpart 7 of the bill which is the part of the bill that I would like the Minister to focus his attention on—clauses 68 and 69. These provisions refer back to Subpart 5 as well. For criminal penalties it will be where they are included in the regulatory reach. On the one hand if sanctions are framed as civil pecuniary penalties they will be directly enforceable unless specifically excluded by Order in Council—“a negative list” approach. Sanctions framed as “regulatory regime criminal fines” will be directly enforceable only if declared to be so by Order in Council—a “positive list” approach. It would be worthwhile to have on the record of the House why the distinction applies in this legislation. It would be an extremely useful contribution to an understanding around how this will work in practice. 
The reason I am asking for this is that Chapman Tripp basically said that it was not obvious that the difference in treatment was warranted because for some of the civil penalties versus criminal penalties arguments one will literally be dancing on the head of a pin. It used the example of a fine under section 40 of the Fair Trading Act which is a criminal penalty and a fine under section 80 of the Commerce Act which is a civil penalty. I think it is quite an interesting point and it would be really worthwhile if the Minster would contribute to our understanding of why there is the difference between the two regimes as they are being implemented in the Trans-Tasman Proceedings Bill. 
It is quite an interesting argument and Chapman Tripp takes it a little bit further. The question is this: “As a matter of broader principle one might ask when and to what extent direct and mutual enforcement of the regulatory penalties is desirable.” So this is really the second issue—the first issue is the distinction between the civil and the criminal penalties. The point that Chapman Tripp went on to make is that “Where those court judgements relate to regulatory proceedings the domestic regulatory systems of both New Zealand and Australia will have a broader reach. But this does not ensure (or even seek to ensure) that the respective regulatory systems will promote the same policies or pull in the same direction.” So the point raised in this article is that there is “a risk of cross-cutting rather than more streamlined regulation in areas such as competition law securities regulation and consumer protection.” As I also said in the first reading debate on this bill it was in my role as the Minister of Commerce that I welcomed the introduction of the Trans-Tasman Proceedings Bill on the basis that a lot of the work that would be seen to be able to be concluded under it would fall within the ambit of my concern in that area. 
But the point that Chapman Tripp makes in this article is that anecdotal evidence suggests “that New Zealand and Australian regulators are still a lot way from sharing a common mindset or working in a truly coordinated fashion. The New Zealand Commerce Commission is unlikely to accept arguments that a New Zealand penalty should be reduced to take account of penalties imposed in Australia in respect of the same or related conduct. Likewise for the Australian Securities and Investments Commission. Perhaps in time a regime of mutual enforceability will foster a joint approach by regulators in such situations. For now one can expect a somewhat imperfect overlap as the effects of closer coordination but not single-source regulation are felt.” I do not necessarily agree with Chapman Tripp on this point. I think that sometimes we leap to an end conclusion without seeing whether there are intermediate steps that we can take along the way and in many respects I prefer the graduated approach that this legislation seems to favour which is to have the mutual enforceability through the approach of the Trans-Tasman Proceedings Bill rather than to have single set of regulation applying across the Australian Securities and Investments Commission the Commerce Commission and indeed the Securities Commission. 
We have moved a long way and as I also said in my first reading speech the mutual recognition of securities offerings and the sorts of advancements that were made under the previous Labour Government will benefit I think from the platform that this establishes. But I think it is worthwhile for the Government to place on record a response to this particular issue because it is one that commentators will continue to reflect on as the legislation comes into force. The legislation as a whole is legislation that we absolutely welcome. As I said in the first reading I was the Minister who was fortunate enough to be able to sign the original agreement on behalf of the New Zealand Government and that is something that obviously someone in my situation would regard as an absolute privilege to do. So we are very pleased that the Government has taken up legislative requirements to match the legislative requirements put in place in Australia. But those two issues I think are worthy of having a good statement on the record of this House. Those who are going to study the in-depth detail of this legislation and are going to implement it from time to time will want to see why the Government has chosen to split the approach on civil and criminal penalties. They will want to see how the new system is supposed to operate when in fact the regulators may be working under different rules. In many respects the blurring of the line between the two will certainly mean that people will see that one country’s own domestic circumstances will be imposing on those of the other.