Property Law Bill

Hon HARRY DUYNHOVEN (Minister for Transport Safety) Link to this

I move, That the Property Law Bill be now read a third time. The Property Law Bill is of significance to New Zealanders in their everyday lives. Most people at some time buy or sell a house. Many run a small business, which may involve borrowing money and leasing commercial premises. These dealings can involve mortgages, and guarantees to secure loans. The property law rules apply in all of these situations, and it is vital that these rules are up to date, clear, and accessible.

When the Law Commission completed its review of the existing legislation in 1994, it recommended a new Act to restate and update the rules. The Law Commission at the time noted that although property law could never be described as glamorous in comparison with other areas of legal practice, it is fundamental to the workings of our society. The Law Commission’s work on the report, and its contribution to the introduction of the Property Law Bill, has made this important revision of property law possible.

I am grateful to the Law Commission for its assistance with the Property Law Bill, and I particularly acknowledge the role of Justice Blanchard, who wrote the Law Commission report and who has contributed greatly to the development of the Property Law Bill. I also thank the members of the Justice and Electoral Committee for their valuable contribution. The committee made some valuable amendments to modernise and improve the language of the bill, and it also recommended a number of sensible changes to improve provisions in the bill and the practical application of its rules.

The Property Law Bill will improve the standard of legislation on our statute book, and make the law easier to understand for most New Zealanders. The bill deals with many complex, technical rules that apply to dealings in real and personal property. It modernises and simplifies these rules to provide more certainty in their application, which better meets people’s needs and protects people’s property rights. The bill provides a regime of property rules of general application, and it clarifies the relationship of these general rules to the special property rules contained in other specific statutes. To the extent that the substantive law on property is modernised, the bill is largely based on the Law Commission’s report, with some changes that reflect the passing of time since then. The bill partly codifies some common law principles relating to mortgages, leases, and agreements for sale and purchase. The bill also makes a large number of small reforms to the rules that, collectively, will improve the effectiveness of the law. Property law underpins the property dealings of New Zealanders. This bill promotes clarity and enhances certainty in property dealings, which will make property law work better for everyone. This bill is a major achievement in ensuring that the rules in place are fair and enhance certainty.

The Government has demonstrated its commitment to implementing a number of Law Commission proposals. Amending legislation covering wills, succession homicide, arbitration, trustees, and, of course, property law, have all arisen out of Law Commission reports. All of them modernise key areas of law, and make the law more accessible. The manner in which this important area of law reform has been conducted is of credit to this House. I wish again to acknowledge the valuable input of both the Law Commission and the Justice and Electoral Committee on the Property Law Bill, and also of members on all sides of the House who have made a positive and constructive contribution to the passage of this bill. On behalf of the Hon Clayton Cosgrove, I commend this bill to the House.

CHRISTOPHER FINLAYSON (National) Link to this

I join with the Minister in congratulating the Law Commission on a job well done. I particularly thank Justice Blanchard who, when he was a law commissioner, undertook this huge task and did it very well indeed. I am delighted that the Ministry of Justice, at last, has picked up the Law Commission’s report on property and has ensured that this legislation be introduced, referred to the select committee, and passed through its various stages because, as the Minister said, this is the first major reform of property law for 55 years.

There have been some minor amendments to the Property Law Act 1952 over the years, but this is the first major reform for 55 years. That is not as dramatic as reform of evidence law, which took about 98 years, but it is none the less a very lengthy period of time between the Property Law Act 1952 and this reform in 2007. I do not think, notwithstanding the Minister’s praise for everyone, that that reflects very well on the New Zealand Parliament. Although there may be reform at last, it should have occurred a long time ago, and too many important, black-letter, non – party political contentious laws are ignored by this Parliament and are not given the prominence they deserve.

The worst example of law that is out of date and cries out for urgent reform is limitation law, which has not been properly studied and reviewed since 1950. So although we may praise this place in 2007 for getting on with property law reform, the reality of the matter is that our record in law reform—particularly, as I say, non – party political law reform—is very, very poor.

It is beyond the scope of a 10-minute speech to go into the detail of this legislation. I think the Minister accurately and succinctly summarised it. It deals with all aspects of property law from mortgages to leases, to deeds, to steps that may be taken by the courts when dealing with landlocked land, or where neighbours have problems with trees, and so on. It covers a huge number of important matters that affect the daily lives of New Zealanders, and that is why it behoves this Parliament to keep such law up to date.

The only thing I want to focus on—mainly because it is a subject of great interest to me, and particularly as I have read the Law Commission’s recent report on presentation of New Zealand statutes—is that, with the passage of this legislation, some ancient law inherited by this country from the Westminster Parliament will be repealed. In 1988 this Parliament passed the Imperial Laws Application Act. The first schedule to that Act records imperial enactments in force in New Zealand. A large number of those enactments relate to property, and if one reads clause 360, one sees that legislation that goes back to 1267 is going to be repealed.

So this is, in imperial law terms, quite a dramatic change, and when one looks at the first schedule in the light of some changes to the law over the last few years, one sees that there are very few imperial enactments that will remain in force after this legislation comes into force. There will be a couple of constitutional enactments including, interestingly, the Magna Carta and the Act of Settlement, and pieces of legislation that still underpin our constitution. The Royal Marriages Act 1772 is another, but there will be very few other pieces of legislation still in force. So this is, in its own way, another sign that we are moving on from Westminster and are developing our own statute law without the need to rely on Westminster statutes. In fact, it is surprising that there are still a few statutes that remain, other than the constitutional ones.

The only other point I would make about this is that from time to time these ancient statutes are referred to in the course of litigation, so I hope that, notwithstanding the passage of the law, these statutes will be accessible, because if one looks at the Property Law Bill, one sees a couple of references, for example, in clauses 231 and 232, to the Grantees of Reversions Act 1540. It could well be that from time to time the courts will want to go back to that legislation in the course of interpreting the new Property Law Act—as it will soon be—in order to obtain some guidance as to the way in which they should go. That is not an uncommon event in litigation. I refer, for example, to a decision of the Supreme Court in Lai v , which was a case about barristers’ immunity.

In the course of their judgments, their Honours needed to consider law practitioners Acts that went back to 1854. Closer to home, when dealing with land law, I refer to the Registrar-General of Land v —a decision, actually, of Justice Blanchard in the Court of Appeal. The issue in that case was whether conveyancing could be carried on by anyone other than a barrister and solicitor, and the Court of Appeal needed to go back to the original Conveyancing Ordinance of 1842 and trace through various statutes. So too with v . The Court of Appeal needed to consider a range of historical Acts in deciding the issue of whether historical legislation had extinguished any Māori customary property in the seabed and foreshore—and, of course, the court found it did not. So historical legislation is important and, notwithstanding that, we are soon to pass into law the Property Law Bill. I certainly hope that some of the statutes that I have referred to, which are shortly to be repealed, will, none the less, be still accessible for the reasons that I have outlined. So enough said on this issue.

The National MPs have enjoyed taking part in the debate on this legislation. It is fair to say that the National MPs made a substantive contribution to the debate, particularly in the Committee stage. By contrast, the Government MPs said nothing. The only comment I would make about that, other than to reflect on the laziness of the Labour MPs, is to say that there is an obligation on members of Parliament to debate these issues.

In the old days, of course, there used to be a clause by clause analysis. The Property Law Bill is one of those bills that could have profited from a clause by clause analysis. But the reason we do it, and the reason we should take our job as legislators more seriously than the Labour MPs do, is that from time to time courts can have recourse to Hansard if there is an issue about the intention of Parliament. If, of course, the courts refer to the speeches made by National MPs, they will obtain excellent guidance. If they refer to the Labour MPs, they will not find anything, because the Labour MPs never spoke. The Labour MPs throughout the course of this legislation have really been, shall we say, suboptimal. In the select committee, their contribution was, perhaps, a little bit better than that.

I say in conclusion that I think it is a good day for the Parliament as we are shortly to pass the Property Law Bill. It is very timely. It should have been passed some time ago. But I do end by saying that although this is a good day for the New Zealand Parliament in property law terms, there is other legislation that is crying out for reform, and I certainly hope the Government gets on with the job, particularly in the area of limitation.

Dr RICHARD WORTH (National) Link to this

I am grateful for the opportunity to contribute, for a few moments, to this debate on the Property Law Bill. It was wholly appropriate that Mr Finlayson launched a vicious attack on the indolence of the Labour members. But I do not want to dwell on that. I would just say that it is an excellent outcome that we have a reinvigorated Law Commission with only the occasional Homeric nod—I think most recently of the Sentencing Council and the work that was done there, and unfortunately taken up by this Parliament.

I am sure that if Justice Blanchard were in this Chamber today he would be delighted to see now the fruition of his work that extended over a substantial period and was followed by a very substantial delay before the Government introduced this legislation and, with the unstinting support of National, as Mr Finlayson has said, advanced it very much to the near-final stage. For what lies beyond this? It is little more than the Royal assent, and then the passage of this important legislation into law.

It is not easy legislation. There is no doubt about that. It was a substantial stumbling block for many students in the course of their careers at the universities when, after a heavy night of partying, they were forced to endure the trickiness and complexity of property law. Some did well; others perhaps did less well. I would like to start with the comment that the Law Commission made in its preliminary paper, The Property Law Act 1952, and this observation on the nature of the then property law legislation: “The Property Law Act 1952 contains a collection of miscellaneous rules relating to property of all kinds, including land. It is not a code, more a repository for legislative supplements to or corrections of judge-made law. Where it has been thought that the rules of common law or equity had fallen short of producing a sensible solution to a problem concerning the creation, disposition, or control of property interests, legislative attention has been given to the problem by way of a section in the Property Law Act or one of its predecessors.” And so it was that Justice Blanchard commenced work on drafting a model statute, which the Government substantially plagiarised and today this current legislation reflects.

I would say in the short time I have, because I am conscious that others want to take a call before Parliament adjourns for the evening, that one of the most important objectives of the bill is to set out rules of property law accessibly and in a manner that, allowing for the subject matter, can be readily understood. Some of the provisions of the 1952 Act, as I have made comment on earlier occasions, have survived from as long ago as the Conveyancing Ordinance 1842 without redrafting. So major work has been required here. I could make comment on relationships with other Acts, but I think I am more drawn to the comments that Mr Finlayson made in connection with the imperial legislation. The bill repeals just about all of the imperial enactments relating to property, which were preserved in the first schedule to the Imperial Laws Application Act. Some of those provisions continued for a substantial period of time and had real thrust and real impact. I think of sections 83 and 86 of the Fires Prevention (Metropolis) Act 1774 and section 6 of the Statute of Frauds Amendment Act 1828, which we grew to know and love as Lord Tenterden’s Act. So the new Act addresses in modern language such of these provisions as require continuing attention.

May I just close, though, in noting that there are substantial issues of sweeping change in the bill, such as assignment of things in action, the warning before the exercise of mortgagees’ powers, the application of proceeds of mortgagee sales, the continuing liability of the assignor of a lease, and agreements for sale and purchase. But perhaps most important, there is some specific retention of the rule in Hopkinson v Rolt. Mr Power and I were talking about the significance of the rule in before this debate occurred.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) Link to this

Tēnā koe, Mr Deputy Speaker. Kia ora tātou i te Whare. I asked to be on the Justice and Electoral Committee because I have a genuine interest in understanding how Parliament deals with bills that may impact on Māori rights and the rights of others in Aotearoa. I note the committee’s comment on this Property Law Bill: “We are disappointed at the paucity of submissions we received for the bill, especially from the legal fraternity. The bill represents the largest single change to property law in the past 55 years …”. I ask myself what it was about the 365 clauses, 7 schedules, and 55 years of history that meant we received only nine submissions and heard only six. I mean, what is there not to get excited about when considering the changes to clause 60(2) to refer to “the time” fixed for a lease rather than “the date”, or the movement within the subclause of clause 267A(1)(a) to give more priority to the wording “on reasonable terms”? Seriously, when the legislation is as riveting as this, is it any wonder nobody bothers to write in?

If this bill had taken a look at the property law references in Article 11 of the Declaration on the Rights of Indigenous Peoples, it would have been a matter of great interest. Article 11 of the declaration states: “Indigenous peoples have the right to practise and revitalize their cultural traditions and customs. This includes the right to maintain, protect and develop the past, present and future manifestations of their cultures, such as archaeological and historical sites, artefacts, designs, ceremonies, technologies and visual and performing arts and literature. States shall provide redress through effective mechanisms, which may include restitution, developed in conjunction with indigenous peoples with respect to their cultural, intellectual, religious and spiritual property taken without their free, prior and informed consent or in violation of their laws, traditions and customs.”

Now, that makes a lot of sense to me. So I had a look to see how the Property Law Bill stacked up with the Declaration on the Rights of Indigenous Peoples. To no one’s great surprise, it does not. A search of the 284 pages of the bill does not come up with too much on intellectual, religious, or spiritual property interests, except for a reference to Māori cultural values in Part 6, clause 331 on page 205. Funnily enough, on the day the Government announces initiatives on climate change, we find that the word “cultural” pops up in this bill around trees—specifically, under clause 328, which requires that a court have regard to Māori cultural values when determining an order for the removal or trimming of trees. Now, that may seem kind of minor, but in fact it is a radical and significant step, coming as it does from a Government that stole the foreshore and seabed from Māori, cancelled support for Māori students, took the Treaty of Waitangi out of the curriculum, voted to delete Treaty principles from legislation, passed laws to take Māori off various boards, and voted against the Declaration on the Rights of Indigenous Peoples.

Being Māori in the new millennium is tough when all of your cultural values are being subjected to ridicule from rednecks, and rejection from the Government, and there is no support whatsoever from Māori MPs in Government, either. Long-held concepts about our connection to the forests through our whakapapa connections to Tāne Māhuta are difficult to promote in an environment where members of the Labour Māori caucus are happy to dismiss those very concepts, and to laugh about indigenous rights. We need to hold on to those concepts, because they give us a deeper sense of who we are, where we have come from, where we are today, and where we might be tomorrow. They give us a deeper sense of our obligations and responsibilities to care for this world, because we are an integral part of it and not just the rapacious landlords that Western culture might have us believe.

It is important that we, as Māori, recognise and pay due respects to our origins and to our place in Aotearoa, and to the stories that tell us of Tāne Māhuta separating Papatūānuku and Ranginui so that our world might have light; of Tāne Māhuta providing sustenance through food, shelter, and clothing; of the importance of trees for whakairo and as the source of rongoā; of the traditions, rituals, and ceremonies for selecting and removing trees; of protecting and preserving the tapu associated with particular trees; of the need to take seriously our responsibility to treat the resources of the forest with the care and respect they deserve; and, of course, of the great father of the forest, the 4,000-year-old kauri named after Tāne Māhuta himself.

Unfortunately, however, this Property Law Bill has precious little else of direct relevance to Māori until we get to schedule 7 and see the amendments to a whole host of Māori Acts related to housing and lands, such as Te Ture Whenua Maori Act and the Maori Trustee Act. But instead of protecting Māori property rights, these amendments unsurprisingly continue down the path well trodden by colonial Governments of doing their best to separate Māori from their land. I note that under the suggested amendments in this bill if a whānau decided to mortgage their Māori land and failed to make payments, a mortgagee sale would be carried out as if it were general land. In this way the restrictions on the sale of Māori land under Te Ture Whenua Māori Act, to keep Māori land from being lost to Māori hands, would not be able to be used.

In the same way that it is often difficult to talk about Māori cultural values in a world attuned to disrespecting anything Māori, so too is it difficult to talk about Māori connection to land in a place where land is nothing but a consumer item to be purchased and sold to the highest bidder. So I will not. In closing, though, I will say that in a Parliament where the Government refuses to honour its obligations to Māori in Aotearoa and to indigenous peoples anywhere else in the world, the Māori Party accepts with great humility its role of defending Māori rights and promoting Māori interests for the benefit of all who live in Aotearoa. The Māori Party will support this bill at third reading because, for all its flaws, it is compatible with our commitment to kaupapa Māori and our responsibility to uphold the rights of indigenous peoples with respect to their cultural, intellectual, religious, and spiritual property. Tēnā koe; kia ora tātou te Whare.

KATE WILKINSON (National) Link to this

In speaking in support of this Property Law Bill at its third reading, it is interesting to note the introductory remarks of the Law Commission report some 13 years ago that recommended way back then a new Property Law Act. It basically stated: “Although property law could never be described as glamorous in comparison with other areas of legal practice,”—and I have to have an aside here to say that I practised in the area of property law for 28 years—“it is nevertheless fundamental to the workings of our society, dealing as it does with transfers, leases, mortgages and similar transactions. … The new Act which accompanies this Report is intended to replace a statute which is now over 40 years old and was itself very largely a compilation of provisions introduced many years before, … [It] is not intended as a complete codification of property law, much of which will continue to be governed by the common law. It will, however, provide a convenient statement of some of the common law and it will modify portions of it which are no longer thought to be satisfactory.” I would have to say that that is pretty much what it does.

So 8 years later we have this new Property Law Bill. It is a Government bill that has, I must admit, the trademarks of being a Government bill. If one talks with practising conveyancing lawyers and asks them what their biggest bugbear is in relation to property law, most would say shared ownership of land—in other words, unit titles, composite, freehold, or leasehold ownership. In fact, the Law Commission produced a report back in 1999 addressing some of these very issues and difficulties. This new Property Law Bill would have been an ideal vehicle to deal with these issues, but, unfortunately, it is silent.

If we really need to codify our property law, then surely it would make sense to consolidate it as much as possible into one statute. The Law Commission report back in 1999, Shared Ownership of Land, said about the consequences of inaction in relation to cross-leases: “It is important to be clear about the consequences of not grasping the nettle of reform … It is surely better to try and sort out such potential problems now, than to shut one’s eyes to them.” Then, in relation to unit titles—a statutory code enabling ownership of strata estates held by proprietors in defined shares—the commission reported 7 years ago that this scheme needed refining. In fact, it recommended 14 changes to this scheme alone, all of which have been ignored. If this bill really is intended to restate, reform, and codify our real estate law, then it has done only part of the job.

Apart from what the bill does not cover, I have some concerns from a technical point of view about some of what it does cover. For example, it provides that an attorney executing a deed must have been appointed by deed. We have just had the third reading of the Protection of Personal and Property Rights Amendment Bill, from which members will be aware that some attorneys appointed under that legislation are actually appointed by court order, and not by deed. So any such attorney appointed by court order and not by deed would be unable to sign a property agreement for sale and purchase under the Property Law Bill.

When we read through the original 1994 Law Commission report and compare it with this Government bill, it is important to note and understand why some of the proposals have been disregarded or ignored. I think the release of assignors from a lease of liability has been mentioned. That is a somewhat well debated and well discussed issue. It is well established that the liability of an assignor of a lease continues until the end of the lease term. The commission’s report refers to the difficulty caused someone who is assigned a lease and subsequently finds that there remains a continuing and open-ended liability. Several solutions—some of them arbitrary, admittedly—were proffered, including putting a cap of, say, 5 years on that liability. I have to say that, as a matter of practice, when negotiating a lease, a clause is often inserted that puts an end time or a date on that liability. I would suggest, however, that it is of sufficient concern in the property market to have considered this liability and provided for it in the current bill.

This bill is an important bill. It covers laws that affect all homeowners in New Zealand. It is interesting that in relation to easements, which are a pretty important part of property law because they involve rights of way, sewerage, drainage, and things like that, this bill proudly proclaims that we no longer have prescriptive easements, but the Land Transfer Act 1952 made that same proclamation. In some ways, this bill is much ado about nothing, merely because it repeats our existing, well-known, and understood property law. It assists some areas by clarification, and it repeats some other areas. In some areas it is surprisingly silent, and in some areas it does not go far enough. It would have been useful had it dealt with shared ownership of land and unit titles, but it has not. It is a start, and it is worth supporting.