Courts and Criminal Matters Bill

Hon GEORGINA TE HEUHEU (Minister for Courts) Link to this

I move, That the Courts and Criminal Matters Bill be now read a second time.

This omnibus bill amends the District Courts Act 1947, the Land Transport Act 1998, the Sentencing Act 2002, the Summary Proceedings Act 1957, and consequentially amends 16 other Acts. The Law and Order Committee has examined the bill and recommends that it be passed with amendments. I would like to thank the members of the committee for returning this bill to the House in a very timely manner.

This bill presents a comprehensive set of legislative improvements for the recovery of unpaid fines, reparations, and civil debt. It addresses a number of issues, including a general concern about the levels of overdue fines, the dissatisfaction of victims when offenders do not pay their reparation, and the difficulties of creditors and debtors using the courts’ civil debt enforcement processes.

At 31 October 2010, $711 million of fines and reparations remained unpaid. That is $67 million less than I reported during the first reading of this bill in May 2010. The reduction is due to a combination of factors—increased payments and increased remittals, the efforts of the collections unit of the Ministry of Justice acting on behalf of the District Court, and the Government’s policy changes in 2009 in response to illegal street racing.

Nevertheless, for monetary penalties to be a credible sanction further improvements are necessary. The new initiatives contained in this bill are aimed at encouraging people to contact the court to resolve their fines and reparations in a sustainable manner. The three major initiatives are: driver licence stop orders, credit reporting, and super priority.

The first new initiative is the introduction of driver licence stop orders, contained in Part 2, which amends the Land Transport Act 1998. Traffic offences make up approximately 93 percent of all infringement penalties imposed each year and 99 percent of all overdue infringement penalties filed at court for enforcement. A driver licence stop order will enable the court to suspend any driver licence held by an individual with overdue traffic fines. The suspension will remain in place until suitable payment arrangements are made. The Law and Order Committee recommends an amendment to the service provisions to include electronic service, which will also allow for future developments in technology.

The second new enforcement measure is credit reporting, contained in Part 3, which amends the Summary Proceedings Act 1957. Credit reporting will enable information on overdue fines and reparations to be released to the private sector credit-reporting system. This will provide incentives for defendants to pay overdue fines and reparations so that their credit worthiness is not affected. Credit reporting will also enable the information provided by the credit-reporting industry to the Ministry of Justice—for example, updated address information—to be used to collect fines. The Law and Order Committee recommends changes to clause 69 to better align the provisions relating to the release of information with current credit industry practices. After considering a report by the Regulations Review Committee, the Law and Order Committee also recommends amendments to strengthen the existing privacy provisions to clarify that the credit-reporting function is subject to the Privacy Act 1993.

The third major initiative, super priority, is also contained in Part 3. This tool will ensure that the court has priority over a secured party for the sale of proceeds of seized goods where the amount of overdue fines was, or could have been, disclosed by a formal credit report by the ministry. The Law and Order Committee has recommended an amendment to clause 70, to reduce the risk of secured parties relying on out-of-date credit reports. A further amendment removes the requirement for secured parties to present the credit report from the ministry within 3 working days. This change will align the legislative requirements with the current practices of the credit industry.

These three new initiatives are intended to encourage people with outstanding fines to enter into manageable repayment arrangements, with the objective of ensuring that fines remain an effective sanction for breaches of the law.

Reparation is an important aspect of sentencing. Reparation lessens the financial impact of offending on the victim. In addition, when it relates to an offer to make amends by the offender, it can also provide an opportunity for the offender to demonstrate a degree of remorse or at least acceptance of responsibility. This bill confirms the priority for the collection of reparations, and strengthens the consequences of not paying. Offenders can receive significant sentencing discounts for reparation, especially when the reparation is for a significant amount and relates to an offer to make amends. If, however, the reparation is later deemed to be uncollectable, the offender cannot be resentenced for the original offence. This bill removes the current restriction on resentencing an offender who cannot pay reparation.

Last year the Vehicle Confiscation and Seizure Bill amended the Sentencing Act 2002 and the Summary Proceedings Act 1957. This current bill will align the applicable property seizure provisions with the vehicle seizure provisions. The Law and Order Committee recommended a change to the definition of leases in order to recognise that leased property does not belong to the fines defaulter.

Part 1 of the bill amends the District Courts Act 1947 to improve the civil enforcement process. Civil debt enforcement can be complex, cumbersome, and costly for the parties involved. This bill will enable a court registrar to examine a judgment debtor on behalf of the judgment creditor and to make attachment orders, which are key enforcement tools, more easily accessible. The changes to the civil enforcement system will improve the experience of users of the service and will also free up resources needed to support the courts’ enforcement processes.

The development of the reforms in this bill commenced in 2004 with the review of the infringement system, which was undertaken by the Ministry of Justice and the Law Commission. I acknowledge the work undertaken by my predecessor, the former Minister for Courts, the Hon Rick Barker.

CHARLES CHAUVEL (Labour) Link to this

The Labour Opposition supports the Courts and Criminal Matters Bill as it comes back to the House from the Law and Order Committee for its second reading. I begin by commending the Minister for Courts for making the appropriate gesture of referring to the fact that this bill largely consists of measures that were carried over from work that was under way prior to the change of Government at the end of 2008. Although, of course, I will not bring the Speaker into the debate, it is appropriate to acknowledge your role, Mr Assistant Speaker Barker, as the responsible Minister in the previous Government. You were in charge of the measures that were brought forward for approval in Cabinet so that the bill was ready to be progressed when it was introduced by the current Minister.

Obviously, the first reason for this side of the House supporting the bill is that it had its genesis in the days of the previous Government. The previous Government thought that the driver licence stop orders proposal—from memory, back in July 2008—had real merit. There is real evidence from overseas, particularly from the Australian states, that those orders have had an effect. They have reduced the scofflaw factor, for want of a more elegant way to put it, so it is appropriate to trial them here, as this bill would do.

When one looks at the figures it is obvious that there is a need for some action in this area. Between July 2008 and June 2009, according to statistics from the Ministry of Justice, the courts wiped $95.1 million out of the total $806 million owing by offenders in unpaid fines. More than 10 percent of properly levied penalties are not being collected by the State. Worse than that, there is an increasing trend as far as those penalties are concerned. Clearly, there is some need for a greater power than that which exists in the current law.

It is appropriate, I think, to address the problem of overdue fines for another reason, and that is the dissatisfaction of the victims of crime. Often offenders owing sums by court order will, in respect of those sums, effectively be reimbursing victims through reparation orders. It is very frustrating for creditors—and debtors, actually—using the court’s civil debt enforcement process, which is what they have to fall back on in the absence of any better remedy.

I repeat the Minister’s acknowledgment of you, Mr Assistant Speaker Barker. I also acknowledge the fact that the Minister made officials available to brief the Opposition when this bill was proposed as an omnibus amendment bill. I think it was a useful practice to follow. It certainly made it easier for the Labour Party to understand the Government’s proposal when it brought this legislation forward, to consent to its introduction, and to support it at that stage.

I think it is appropriate, though, to record that there are a couple of missing proposals. I would have thought that the select committee might want to bring these proposals back on board; no doubt we will hear a long and learned discourse from Mrs Goudie about why that was not able to be done on this occasion. Perhaps those provisions will resurface in the Supplementary Order Paper the Minister foreshadowed but was unwilling or unable to give the House any detail about when she gave her second reading speech.

One of the most significant reforms that Labour wanted to put in place in this area was to have a single agency responsible for fines, rather than the 80-plus agencies—

SANDRA GOUDIE (National—Coromandel) Link to this

I commend the excellent Minister for Courts, the Hon Georgina te Heuheu, for bringing the Courts and Criminal Matters Bill to the House. I also acknowledge the excellent work done by Rick Barker as Minister for Courts in the previous Government. I can say that it has been a pleasure, as chair of the Law and Order Committee, to go through this process in a very collegial way—one of the very few occasions of that, I might add—and I acknowledge the work on all sides. I was also very impressed with the officials—in particular our tall, slim young man with glasses. I thought he did an excellent job. In fact, I commend all the officials for the great work that they did. I was very, very impressed. It really is a pleasure to work with people who know what they are talking about.

This bill went through its processes quite well, and some very sensible suggestions were put forward for change. It is a very worthwhile bill. It is something that people have wanted to see changed in some way so that we were not wiping all those thousands of dollars of fines. I applaud the incentivisation of fine payments and the proactive nature of this bill. I think most of the other aspects of the bill have been covered. I can see this bill bringing about a very, very positive outcome in the future, where we will see people being more proactive and responsible for the fines they have incurred.

LYNNE PILLAY (Labour) Link to this

Along with my colleague Charles Chauvel, I would like to speak in support at the second reading of the Courts and Criminal Matters Bill, but, along with my colleague, I speak with a little bit of sadness that the bill, as we often find when it comes to justice matters in this House, simply does not go far enough. But, looking on the positive side, the bill enhances the court’s powers and processes for the collection of fines, other monetary penalties, and civil debt. The three main policy proposals are about credit reporting, super-priority, and the driver licence stop order initiative. There are also many technical amendments. I understand that 20 bills in total are amended.

This is another bill—[Interruption] Sorry, what was that?

KEITH LOCKE (Green) Link to this

The Courts and Criminal Matters Bill tries to confront a real problem, and that is the thousands of unpaid fines and all sorts of administrative difficulties involved in running around chasing after people to try to get some money out of them. But there is an intrinsic problem and I think this bill goes in the wrong direction. That is why the Green Party opposed the bill on the first reading and will oppose it on this reading as well.

The bill is not particularly productive because the people it chases after are, in the main, the very poorest people in our society. They might get a little fine for a parking infringement, a speeding fine, or some small criminal offence, but they are the people who are down; often they are unemployed, between jobs, or in large families. It is often somewhat difficult for them to get money together to pay a fine. They tend to avoid it and put it off, then it gets bigger, and more and more problems develop. There are two ways to deal with that problem. One is to get alongside the person affected and try to work out a repayment system—to work out a way that is not too much of a heavy burden on him or her at any one point in time. The other way is to just slam more penalties on top of that person in various ways.

A lot of the people who will be affected by this bill are young Māori—and maybe Hone Harawira will speak after me. That is where the concentration of unpaid fines often happens to be. The bill will only make young Māori, who are more likely to be unemployed and more likely to be poor, even poorer and in more difficulties socially in all kinds of ways, under the pressure of what is proposed in this bill.

This bill proposes various things like driver licence stop orders. Let us take the example of a young person with fines owing who is finding it very difficult to pay them, and who has finally got a job. If that person jumps into their car to go to work to get money to pay the fine, but all of a sudden is hit with a driver licence stop order, that person cannot get to work. They will lose their job, and get further and further in debt. So stop orders are not necessarily the answer. They are associated with amendments to the Sentencing Act 2002 to make reparation and vehicle confiscation orders more efficient. Somebody who is in this difficult position might not only have their licence taken off them; their vehicle, which is probably the main asset they own in life, might be confiscated. That really puts them back to square one, or behind square one. To make matters worse, this bill authorises unaffordable and unenforceable reparation orders to be substituted by home detention or prison sentences. Again, let us take the young person who is struggling. They have not been able to afford their fines, or, for various reasons, are a bit mixed up. Now not only do they lose their licence or lose their car; they might get chucked in jail or on home detention. That just is not the answer. It may be the answer in some cases, and the Green Party is certainly not denying that, but the whole approach is a punitive approach that does not really put us any further forward.

There is talk often about an underclass in our society. This bill will help to enlarge the underclass—the people who are really in difficulty. When they are subject to all these additional penalties they are more likely to change houses, change names, and try to get away from the authorities. That creates even more problems for them, their families, their friends, and their workmates. It does not really work.

Another element of the bill is to provide information on a person’s fines to credit authorities. Well, that does not necessarily help. Sure, it helps if someone applies for a loan, because the credit authorities can find out that the person has a big fine and might be more likely to default on their loan. But it does not help the person to get out of the bind they are in. We should be starting at the other end, with more social workers, more people working with schools. We should work with all the sorts of organisations who are in contact with these people—community organisations, whānau organisations, iwi organisations, all of the organisations that can work alongside those people to get them to repay their debts.

To my way of thinking the punitive approach does not work. It develops collective anger amongst people who are down at the bottom, a psychology of their being on one side and the people on the other side, the richer people, being out to get them. They think it is fair enough if they dodge the law and dodge the repayments, because that is the only way that they will get by in life.

The Green Party, in summary, sees all of these measures as counter-productive—that is the word for it; they are counter-productive. If we add them all up, we will not necessarily get more money for Treasury out of them; we will get more social problems, more people in prison, more people unemployed, more people who feel alienated from the system, more people who feel that they are part of an underclass, and also more racial divisions in our society in the sense that Māori are more likely to be affected than non-Māori. Thank you.

RAYMOND HUO (Labour) Link to this

As at 31 December 2008 over half a million people and organisations owed penalties totalling $790.2 million. Over 80 percent of those penalties were unpaid infringements that had been filed for enactment by the police, local authorities, and other Government agencies. The amount outstanding is increasing each year. Around 57 percent of the people with penalties owe less than $500. Many of those people can afford to pay the penalties but choose not to do so until an enforcement action is taken against them. Figures released early this year showed that between July 2008 and June 2009 the courts wiped $95.1 million of the total $806 million in unpaid fines. Therefore the amount of outstanding fines is increasing each year, and the amount of unpaid fines that the courts have to wipe is also increasing.

The Courts and Criminal Matters Bill seeks to address concerns about the amount of overdue fines, due to the dissatisfaction of victims when offenders do not comply with reparation orders, and to the frustration of creditors and debtors using the courts’ civil debt enforcement process. Labour supports this bill and I acknowledge the great contribution made by the Hon Rick Barker, who is sitting in the Speaker’s chair. In fact, the bill, as acknowledged by my colleagues earlier, resulted from work done by him while Minister for Courts in the Labour Government.

This bill is an omnibus bill. It amends the District Courts Act 1947, the Land Transport Act 1998, the Sentencing Act 2002, and the Summary Proceedings Act 1957, and consequentially amends 16 other Acts. The principal changes introduce three new sets of incentives to encourage people with overdue fines to enter into and maintain acceptable payment arrangements. The three sets of incentives are credit reporting, super priority, and driver licence stop orders. The credit-reporting initiative proposes the release of the overdue penalty balance of eligible people to the private sector credit industry via credit reports. The District Court will obtain a higher priority over secured property of a credit provider if the loan was advanced when the overdue penalties could have been released under the credit-reporting proposal, and when that property was subsequently seized by the court some or all of these discoverable penalties were still overdue. People were lending money to people to pay for cars, and the car lenders were always assured of getting their money back. The law stops car dealers from hiding behind the law. When the money is lent, the lender can check a register. It gives them grounds to refuse to finance people who have fines.

The bill as introduced provides that if an enforcement officer serves a person with a driver licence stop order, the person must immediately surrender his or her driver’s licence to the enforcement officer.

The Law and Order Committee received 15 submissions from individuals, organisations, and other parties. More than half of the submissions expressed support for parts of the bill. Some submissions supported the intent of the bill but would like to see the court go further in supporting the resolution of debts and encouraging financial literacy. Some of the general submissions expressed concern about its fairness and the impact on poor and vulnerable people of the current and proposed fines and civil debt enforcement mechanisms. Some of the issues raised at the Law and Order Committee are worth noting. The Privacy Commissioner is particularly concerned about the release of Government-held personal information to private sector credit reporters and the shift in the use of personal information that this signifies. The commissioner recommends that the relevant clause, clause 69, be removed from the bill.

Licence suspension is another issue that we spent a considerable amount of time deliberating on. Our current collection measures focus largely on seizing goods that can be sold to resolve fines and reparation. Internationally, licence suspension is widely used as a fixed-term penalty for traffic offences and as a variable-length fine compliance measure. Queensland Transport reports a 75 percent success rate in collecting fines after threatening or imposing licence suspension. There are four further differences between Australia and New Zealand. In Australia, first of all, there is a statutory obligation to promptly update address information on the driver’s-licence register; secondly, third-party body insurance is compulsory; and, thirdly, there is deemed service by post for all driver’s-licence suspensions. I think New Zealand can learn a great deal from this experience. Fourthly, there is an onus on people who owe fines to find out if their licence has been suspended, rather than the state authorities having to prove service. By comparison, in New Zealand there is no statutory obligation to ensure that address information on the driver’s-licence register is always up to date. The accident compensation scheme precludes third-party compulsory body insurance.

Attachment orders were another issue the Law and Order Committee looked at closely. Attachment orders are used to allow deductions to be made from wages and benefits to pay debts. At present, attachment orders can be imposed only after an examination hearing to assess the judgment debtor’s ability to pay the debt; both parties are required to attend the hearing, which can be inconvenient and incur delays and further costs. Some ideas were floated at the select committee as to the way service can be improved, or, using alternative methods, be deemed to have occurred. Service by post is certainly one effective way for us to look at, but what about some new methods such as emails, or messages via cellphone, or Facebook?

Given the large and growing amount of outstanding penalties, the effectiveness of monetary penalties as a sanction for offending is being eroded. The threat of credit reporting, together with other measures proposed in the bill, will provide people with a stronger incentive to voluntarily resolve them. There is another problem with the existing regime. Currently, there are 80-plus issuing authorities, and this undoubtedly impedes the collection of fines. Labour proposed to create a single agency to have responsibility for fines. It is regrettable that this provision is missing from this bill.

I look forward to the bill’s third reading. Thank you.

Dr CAM CALDER (National) Link to this

It is a great pleasure to rise to speak on the Courts and Criminal Matters Bill. Do the crime and do the time: that is the received wisdom, and given that the State has the miscreant in custody at the time that sentencing is passed, that is what happens. Our Department of Corrections does a wonderful job and many are the prisoners who receive drug and alcohol counselling or instruction in literacy and numeracy during the course of their sentence. For lesser crimes, of course, imprisonment is not an appropriate sentence, and then do the crime and pay the fine is an axiom that is unfortunately often honoured more in the breach than in reality. A staggering $778 million of reparations, fines, other monetary penalties, and court costs remain unpaid. Over 80 percent of that extraordinary mountain of money, around $640 million, is fines for traffic-related matters.

The National-led Government believes this situation is untenable, and we are setting out to do something about it. As John Mortimer observed: “No brilliance is needed in the law. Nothing but common sense, and relatively clean finger nails.” I am pleased to report that during the consideration of this bill the Law and Order Committee, as far as I was able to assess, displayed consummate common sense, cooperation bordering on collegiality, a precious commodity in that committee, and fastidious personal presentation. It is therefore a good tranche of law.

This bill continues National’s commitment to working towards accountability. The bill will ensure court-ordered payments and reparations to victims are paid sooner, thus continuing National’s focus on a more victim-based justice system. I commend this bill to the House.

STUART NASH (Labour) Link to this

I stand in support of the Courts and Criminal Matters Bill. I would like to make three points.

JONATHAN YOUNG (National—New Plymouth) Link to this

I found the previous speech from Stuart Nash to be very interesting, especially as the member opposite talked about the super-priority aspect of the Courts and Criminal Matters Bill. It actually gives the courts, as it says, priority over other security holders regarding a debt, if a person owes a fine to the court. That enables the situation to develop whereby if a person goes to a finance company and seeks to raise a loan to purchase, perhaps, a vehicle, and the finance company discovers there is a super priority against that person because of unpaid fines, the finance company is most unlikely to advance those funds, knowing that the courts will have first claim. Mr Nash talked about the “naming and shaming” aspect of that provision, but I guess he did not understand that the Hon Rick Barker has said he authored that idea. Is that not interesting? I would have hoped that those members talked among themselves about ideas like that. The Hon Rick Barker thought that was a brilliant idea. I give all credit to the Hon Rick Barker, who played a significant part in preparing this bill, over a number of years.

Many people whom I have talked to feel that that provision has some merit, because it will bring accountability. It will bring accountability to people who purchase vehicles, who have high amounts of indebtedness against them, and who incur incredibly high numbers of fines, but who do not pay those fines. When it was put in my local newspaper that $95 million had been written off the amount of debt owed by people in respect of fines, people contacted me, saying they were outraged that that amount of fines had been written off. People generally feel that that is unfair. They also feel that when people who have fines do not pay them, the defaulters are scoffing at, or showing contempt towards, our legal system. People feel that there is an undermining of our justice system when people do not pay fines.

This bill will bring greater power to enforce payment. It will bring in a more modernised, automated system, which will enable communication to happen more readily between those who owe fines and the courts. It will enable far greater efficiency and ensure far greater compliance on the part of people who have incurred fines—for whatever reason that may be—in terms of their paying those amounts. As people have said, the amount that is owed could do some good to our economy—indeed, that is true. We have an alarming problem, and this bill will go a long way towards ensuring that we will see increased credibility in the justice system, and monetary penalties being viewed as a credible sanction.

I was incredibly shocked by Mr Locke’s presentation of his views regarding this bill. I do not believe that a person’s not having a high income is an excuse not to pay a fine. The person can choose not to cause the infringement in the first place. We need to have a greater sense of responsibility in our country. I know that some people say they cannot afford to get their cars warranted. If that is the case, they cannot afford to drive a car. They should not be driving an unwarranted car, because that car is not deemed to be safe. It is irresponsible to other road users for someone to drive an unwarranted car. It is a travesty and an outrage that people say in this House that that issue does not matter.