O'Rourke DenisDENIS O'ROURKE (NZ First): In my first reading speech on this bill I expressed pleasure to see such an important and comprehensive piece of legislation begin the enactment process because it would as many others have said update a very old land transfer system. I said then that I was very happy with the three main elements of the bill: the avoidance of fraud the cancellation of registrations where that was necessary for some good reason and for better provision for compensation—again where that was necessary. I now still have the same level of approval for the bill as it was then.I am concerned by some of the changes that have been recommended by the Government Administration Committee. I would say at the beginning that I do approve of all of the recommendations that it has made but there are two very important exceptions to it. The first objection I have—and people will not be surprised to hear this—is the recommendation for the deletion of clause 54. That is the clause that would impose new requirements for mortgagees to take reasonable steps—and I emphasise the word reasonable"—to verify the identity of the mortgagor and the authority of the person executing on behalf of the mortgagor. Those are very sensible and basic requirements which would go a long way to assist with avoiding both fraud and mistake. People often forget about mistakes. It would avoid both of those things. Where a person does not have the authority to encumber a property on behalf of a mortgagor or where a person is not actually the mortgagor at all it is very important that there be robust provisions to prevent that sort of mistake or fraud from happening.The most common situations in which you see this is where a trustee or an agent acts without authority or where one of more than one interested proprietor purports to sign on behalf of them all. Many of us have seen cases where those sorts of things happen and they need to be avoided. Where is the best place to avoid them? It is at the beginning when the registration takes place in the first place. That is why clause 54—as it was originally in the bill; as originally introduced—is actually so important. Clause 54(1) would have only required ordinary best practice by requiring verification of a mortgagor's identity and their authority to sign. Clause 54(2) would have allowed the registrar to set the standards for that—they need not be oppressive difficult or burdensome standards. Clause 54(4) would have required documentary evidence of the steps taken to comply to be kept—again nothing terribly burdensome about that. As I say these are very sensible and basic requirements that banks should be required to do—and in the ordinary course of business would be doing—anyway.The reasons given for deletion in my opinion are utterly inadequate and unconvincing and they are these: "sufficient protections already exist" but nobody has said in the supporting documentation to this bill what those already existing sufficient protections are because there are not any. There is little or nothing in the way of existing protections in this respect. Secondly it said that mortgage fraud is unlikely given the Landonline system now used. Well that is not the issue. Yes we do have a low level of fraud in this country but those occasions where fraud does occur are still important and where we can avoid them we should be doing so. Thirdly it is said that the costs of compliance would be too high and disproportionate to the benefit. What a load of nonsense that is. The requirements in clause 54 need not be burdensome need not be costly and could be done in the ordinary course of business with little or no difficulty whatsoever.I say that in fact no other protections actually really exist that could replace these provisions. I say that these provisions are appropriate and desirable and that they are actually beyond reasonable objection. I say that the low incidence of fraud is not a reason to delete this clause; indeed it simply reinforces the need to reinforce best practice by making these appropriate steps mandatory instead of voluntary. That is all it is about.I take with a huge grain of salt any criticism by banks and other institutional lenders that these requirements either would be excessive or might increase costs when all they would do is require the continuation of normal good professional standards—nothing more. Frankly it is a little bit like the pot calling the kettle black for banks to object to these provisions when from them you see sheets of small print and other bureaucratic procedures that would rival the worst bureaucracies in the world. It is the banks themselves that do all that—they create all of that stuff and that is the stuff that causes costs for people who sign mortgages. That is the stuff that causes the delays and causes the difficulties. It is not the sort of sensible provision that you see in this bill. So the banks can take a running jump as far as I am concerned with their objections about this because in fact those objections are vacuous and they can do this without any difficulty whatsoever.I agree that the penalties in clause 54(5) as they were were unnecessary and should be deleted given that clause 54(6) would be sufficient in terms of enforcement by empowering the registrar to require a mortgagee to show how the requirements of clause 54(4) would be met. In my view that would be sufficient and a penalty clause would be unnecessary. So New Zealand First says that clause 54 should be reinstated and during the Committee of the whole House stage I will be submitting a Supplementary Order Paper (SOP) for that purpose. The other objection is to the amended clause 57 by the insertion of clause 57(3). As we know clause 57(1) provides for cancellation of a registration where it would be "manifestly unjust" to maintain it. I disagree with Eugenie Sage when she says that that is a wide provision. It is not; it is a narrow one. "Manifestly unjust" is a high bar. It is quite narrow in its application and it would be a difficult one to meet but it is appropriate. However new clause 57(3) is wrong because it prevents an order for cancellation unless the court finds in the negative—that compensation could not "properly address the injustice".If the standard of the term in clause 57(1) for manifest injustice is met—that high standard is met—then the applicant should be able to get cancellation unless the court finds that it would be unjust to do so for some very good reason. So that would mean that a defendant would have the burden of proof to show that resort to cancellation would be unjust. It should not be necessary for an applicant for such an order to show that compensation would not "properly address the injustice". That should be not necessary and I do not even really know—and nobody else would either—what the words "properly address the injustice" could possibly mean. That introduces uncertainty and is totally unnecessary. The burden of proof is completely wrong and it should be the other way round. In fact clause 59 already exists to provide for compensation where that is applied for.So New Zealand First will during the Committee of the whole House stage seek by way of SOP to delete clause 57(3) because it is actually quite wrong and operates against the true thrust of clause 57. It should be possible for a person to get cancellation and not just compensation where they have shown that there is manifest injustice. It is as simple as that. I do not know why the provision has been put the way it is. The burden of proof is completely wrong; it should be the other way round as I have said. This is a relatively easy fix. I hope people on both sides of the House will see that it needs to be fixed and will support New Zealand First when that SOP is put forward the next time the opportunity arises."