Smith Lockwood: Fair Trading Amendment Bill (No 3) — In Committee 
Smith Lockwood: Fair Trading Amendment Bill (No 3) — In Committee 
[Volume:609;Page:6854] 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: In speaking to Part 2 of this bill there are three clauses that I would particularly like to focus on. The first one is clause 8. During the debate on Part 1 I raised the issue of the transition in the new arrangements in respect of the limitation on liability. I note that in the commentary on this bill the Commerce Committee makes the comment that “This will not operate retrospectively.” It worries me that when one reads the bill one finds there is nothing to make that clear. 
Hon Judith Tizard 
: Clause 16. 
Dr the Hon LOCKWOOD SMITH 
: The Minister calls out “clause 16”. That clause entitled “Provisions as to proceedings already barred and pending proceedings” states: “Nothing in this Act—(a) enables any proceedings to be brought that were barred before the commencement of this Act;”. But I think the problem remains because within the last 3 years a person involved in a business knew that there was a 3-year limitation on the time in which an action could be taken if something had gone wrong. This bill will change that even though the event may have occurred before this legislation takes effect. I do not believe that clause 16 covers that and that is what worries me. As I read the bill including clause 16 I do not think that on the face of it the bill is clear on that transition. That just worries me because we have seen so many things go wrong with transitional arrangements in commercial law. 
Proceedings in respect of an event that has occurred within the last 3 years and that has not yet been found to be faulty are not barred by clause 16. The time period is extended by this legislation for something that may have occurred prior to the commencement of this legislation and that is retrospective. It has a retrospective impact on the person conducting the business. I would appreciate it if the Minister could take some advice on that. It should be made absolutely clear that the provisions of new subsection (3) inserted by clause 8 do not catch an event that occurred prior to the commencement date of this legislation even if the event occurred within 3 years of that date or otherwise the effect of this legislation will be retrospective. That is the first issue that I think the Minister should take a call on. 
The second issue I would like to comment on is clause 10. As a member of Parliament my experience of the Commerce Commission goes back many years and I believe it should not be exempt from the requirement to give undertakings as to damages. The Commerce Commission can have a profound impact on businesses. The actions of the Commerce Commission resulted in a certain business in my electorate going out of business—that is what that business believes and that is what a select committee minority report argues. Admittedly the bill is not about exactly that kind of situation but the Commerce Commission can have a profound impact on businesses in this country—it can put them out of business. An injunction taken out under clause 10 could result in a business going out of business. The Commerce Commission must not be exempt from undertakings as to damages when that is the possible consequence of its actions. I think we should hear an explanation from the Minister as to why the Government is taking that quite extraordinary step in this legislation when it is so clear that the actions of the Commerce Commission under clause 10 could put a business out of business. Once that has occurred that business has no come-back against the Commerce Commission. The situation is already hard enough. It is hugely difficult to take action against the Commerce Commission. The resources of small businesses are not remotely the same as those of the Commerce Commission and to make the Commerce Commission exempt from giving any undertakings as to damages tilts the balance in a most unfair manner in favour of it. 
Finally in respect of new section 47(2) inserted by clause 14 and the issue of the new powers to search I say that even the Inland Revenue Department does not have the same powers. As I read paragraph (b) of that section the Commerce Commission could have the power to take a computer from a business for the purpose of gathering or recovering evidence which is a power that even the Inland Revenue Department does not have. In recent legislation that has gone through this House under this Government a lot of care has been given by select committees to make sure that computer hard drives cannot be taken from businesses because some businesses could not operate if that was done. I do not see in this provision the protection that is provided in most recent legislation for other important bodies even in relation to provisions to combat terrorism. Other important bodies cannot take a computer without restraints around that yet I do not see here anything to constrain the Commerce Commission from taking a computer from a business as it seeks to recover evidence from the business. Why should the Commerce Commission have more powers to remove a computer from a business person than the Inland Revenue Department? That shows the hasty way that this bill has been drafted and it shows that the select committee has not adequately aligned this provision with those in other legislation recently passed by this Parliament.