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Simon Power

23 March, 2010

Bill to improve trans-Tasman court proceedings passes first reading

A bill to simplify the conduct of trans-Tasman court proceedings passed its first reading in Parliament today.

The Trans-Tasman Proceedings Bill implements a treaty between the New Zealand and Australian governments, and aims to make it easier to resolve legal disputes with connections on both sides of the Tasman. 

The treaty was signed in July 2008.

"The bill will enhance legal co-operation between New Zealand and Australia, to reflect the close relationship and the confidence we have in each other's judicial and regulatory institutions," Justice Minister Simon Power said.

"Since the Australia New Zealand Closer Economic Relations Trade Agreement was signed 26 years ago, it has become increasingly easy for people, goods, and services to move between New Zealand and Australia.

"However, little has been done to make it easier to resolve the legal disputes that inevitably arise. This bill will address that."

The bill will reduce the cost and complexity of trans-Tasman litigation and provide more effective legal remedies. It will apply to a broad range of disputes, benefiting both businesses and individuals.

The new measures will expand the range of court judgments that can be enforced between the jurisdictions, and streamline the process for enforcement.

The bill also improves regulatory enforcement by allowing civil pecuniary penalties and certain criminal regulatory fines imposed in one country to be enforced in the other.

"This bill reflects the commitment both governments have made to enhance the operation of the Single Economic Market," Mr Power said.

"It will enable closer integration of our civil justice systems to the benefit of both countries and it will further reduce barriers to trans-Tasman trade."

Legislation to implement the Treaty in Australia is awaiting the Royal assent having been passed by the Australian Parliament.

It is intended that legislation in both countries will come into effect at the same time.

A copy of the Trans-Tasman Proceedings Bill is available here

Questions and Answers:

Why is the Trans-Tasman Proceedings Bill important?

The new legal framework to be established by this bill, alongside an equivalent Australian Bill, will help to resolve legal disputes with a trans-Tasman element more efficiently and effectively, and at a lower cost to businesses and individuals. 

The bill also supports the development of a single economic market between New Zealand and Australia, and will improve the regulatory environment by reducing barriers to cross-border enforcement of civil penalties and certain criminal fines.

What does the bill do?

  • Simplifies the process for civil proceedings in a New Zealand court to be served in Australia.

  • Extends the range of Australian civil court judgments that can be enforced in New Zealand, with enforcement being refused only if it conflicts with public policy.

  • Allows interim relief to be obtained in New Zealand in support of civil proceedings in Australia.

  • Adopts a common ‘give way' rule for situations in which a dispute could be heard by a court in either New Zealand or Australia.

  • Encourages greater use of technology for trans-Tasman court appearances.

  • Allows civil pecuniary penalties and certain criminal regulatory fines imposed in Australia to be enforced in New Zealand.

  • Allows the arrangements for service and enforcement of judgments to be extended to tribunals on a case-by-case basis.

What are the practical consequences of the bill?

While the proposals deal primarily with technical legal issues, they have important practical consequences, for example:

  • Anna sells her New Zealand house to Ted and moves to Australia. Ted later finds a problem with the house and starts court proceedings in New Zealand against Anna. The proceedings are served on Anna in Australia but she ignores them and takes no action. Ted obtains a court judgment by default against Anna for payment of damages. Ted now wants to enforce that judgment against Anna in Australia. Under the current regime, this would not be possible as Anna was served out of New Zealand and did not appear before the New Zealand court. However, under the new regime, an Australian court will be able to enforce the judgment.

  • S Ltd is an Australian based company. It offers an investment scheme to New Zealanders. S Ltd is registered as an overseas company in New Zealand and has appointed an agent to accept service of legal proceedings in New Zealand. There is a misleading statement in its investment documents. S Ltd is prosecuted under the Securities Act and the court imposes a fine. Under the current regime, because S Ltd has moved all its assets to Australia, it is not possible to enforce payment of the fine. Under the new regime, Australia and New Zealand can agree to include legislation like the Securities Act in the enforcement arrangements. In that case, this fine could be enforced against S Ltd in Australia in the same way as if it were a civil judgment from a New Zealand court.

How were the proposals in the bill developed?

The bill is a result of a joint process of consultation and policy development between New Zealand and Australia.

In 2003, the Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement was established to review trans-Tasman cooperation in court proceedings and regulatory enforcement. 

The Working Group comprised senior officials from the relevant government agencies in both Australia and New Zealand. In 2005, the Working Group issued a public discussion paper canvassing the problems, and proposed solutions.  Submissions were sought from key stakeholders, including the judiciary, the legal and accounting professions, industry and consumer bodies, academics and Australian and New Zealand government departments and bodies, as well as the Australian state and territory governments.

In December 2006, the Working Group presented its final recommendations. The New Zealand and Australian governments agreed to adopt the reforms.

The resulting Agreement between the Government of New Zealand and the Government of Australia on Trans-Tasman Court Proceedings and Regulatory Enforcement was signed in July 2008.  The text of the agreement and its accompanying National Interest Analysis were presented to Parliament and examined by the Law and Order Select Committee. The committee reported to Parliament on 4 September 2008.

Once enacted, the Trans-Tasman Proceedings Bill in New Zealand and the equivalent Australian bill will enable the agreement to be brought into force.

Where can I find a copy of the Agreement between Australia and New Zealand that led to the Bill?

A copy of the agreement between the Government of New Zealand and the Government of Australia on Trans-Tasman Court Proceedings and Regulatory Enforcement can be found here

Is legislation also required in Australia?

Separate legislation is required in both New Zealand and Australia to bring the Agreement into force. 

The New Zealand and Australian legislation will need to mirror each other.  The two bills have therefore been developed to align as far as possible. 

A copy of the Australian Trans-Tasman Proceedings Bill is available here

What is the single economic market and how does it relate to the bill?

A key priority for the Government is to work with Australia to create a single economic market which provides a seamless operating environment for business.

In August 2009, the Prime Minister of New Zealand and the Prime Minister of Australia announced a new framework of principles and a range of shared practical outcomes for developing cross-border economic initiatives.  The new framework will help to reduce the transaction costs which companies face when doing business on both sides of the Tasman, as a result of differences in laws and regulations.

The bill supports closer economic relations between Australia and New Zealand, and the progress being made toward a single economic market by strengthening regulatory enforcement, and making it easier for both individuals and businesses to resolve trans-Tasman legal disputes.

Where can I find a copy of the New Zealand Bill?

A copy of the Trans-Tasman Proceedings Bill can be found here

  • Simon Power
  • Justice