Hon Christopher Finlayson

Part 6 Miscellaneous provisions

CHRISTOPHER FINLAYSON (National) : I want to make a few brief points about Part 6. I endorse what Kate Wilkinson has said, and I certainly do not intend to repeat her comments about the strange level of the fines for some offences that simply do not seem to warrant it.

During the select committee stage she undertook a very careful comparative analysis with other regulatory legislation. As she said, under the plumbers and gasfitters legislation a fine might be $500, but under this legislation it is $10,000. So it is out of kilter, and it would be good if the Minister in the chair, the Hon Clayton Cosgrove, would take a call. If he does not want to talk about the generality of the legislation, I ask him to just take a look at clause 150, which deals with offences that will be committed if one fails to notify a change of circumstances.

What is a change of circumstances? Well, if one refers to what is still clause 66, we see that one has an obligation to notify the registrar of any change of circumstances, and that will mean, as subclause (2) states: “(a) any change in the information recorded in the register; and (b) any change in the real estate business for which the agent, branch manager, or salesperson works (if any); and (c) any change that may be prescribed.”

If one looks at the purpose of the register, set out in clause 63, one sees that, again, it really is a consumer protection mechanism to enable the public to determine, for example, whether a person is a licensed agent or a branch manager, and how to contact that person. So in the overall scheme of things it is pretty low-level regulation. So it does seem rather strange that clause 150(2) has these penalties, up to $10,000 in the case of an individual or $50,000 in the case of a company. I could go through each of the offences provisions in some detail, but I think Kate Wilkinson’s excellent overview should suffice, and my particular reference to clause 150 enables the Minister to come to grips with it if he chooses to.

The second point I want to make concerns the insertion of new Subpart 2A in Part 6, which makes it clear that the civil remedies a person may have against an agent, branch manager, or salesperson are not affected by the passage of the legislation. This bill, as we have said, is consumer protection legislation. Although there are compensation provisions, it is primarily a disciplinary matter if there is misconduct of any sort, but civil remedies are preserved, and they will include claims against an agent under the Fair Trading Act, or for breach of contract or negligence if we have concurrent liability in this country now, and we probably have.

The third point I make concerns the regulations. We have not yet had an answer from the Minister to the points Dr Worth raised in relation to clause 155(aa), and 155(2) and (3), and I hope that before the Committee stage draws to a close we will be able to hear from the Minister on those points, because the whole regulation-making power of the bill is important and needs a response from him.

I would just observe in passing—and it is in the category of a minor slip—that although there are references to subclauses (2) and (3), in clause 155, there is no subclause (1), so that may need to be tidied up. The major changes that were made to the regulation-making power dealt with moving into clause 155 the provisions relating to exemptions that were formerly contained in clauses 12 and 13. There is still the rather strange reference in clause 11 to exemptions that may be granted under regulations; as I said, some inquiries were made and it seemed to relate only to a very few agents in the central North Island.

What are the other changes contained in the regulations? The regulations relating to audit have been tidied up. More detail is provided about the content of regulations regarding an audit. There are better regulations relating to the prescription of offences, so we have an amendment to clause 155(k), which sets the maximum penalty for any offence at, in the case of an individual, an amount not exceeding $25,000, or, in the case of a company, not exceeding $50,000.

Then there is a change relating to compensation. One sees that clause 155(m), which has been deleted, stated that regulations could prescribe the maximum amount of compensation payable under section 107. We had a useful discussion about that, and indeed we sought the advice of the Regulations Review Committee on the appropriateness of allowing such a matter to be set by regulation. Dr Worth and his committee reported to us, as a result of which we have acted on their recommendation, and the maximum compensation the tribunal can award is contained in the bill itself.

So there are a couple of inconsistencies in the regulations, which the Minister may care to address. As Ms Wilkinson said, much of Part 6 is unexceptional and is in fact quite sensible, but there are the issues we have raised, and it would be good if the Minister would condescend to provide us with an answer.