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Insolvency Practitioners Bill (Consistent) (Section 19) [2010] NZBORARp 15 (1 April 2010)

Last Updated: 16 June 2019

Insolvency Practitioners Bill

1 April 2010 ATTORNEY-GENERAL

LEGAL ADVICE

CONSISTENCY WITH THE NEW ZEALAND BILL OF RIGHTS ACT 1990: INSOLVENCY PRACTITIONERS BILL

1. We have considered whether the Insolvency Practitioners Bill (PCO 14143/5.3) (‘the Bill’) is consistent with the New Zealand Bill of Rights Act 1990 (‘the Bill of Rights

Act’). We understand that the Bill is likely to be considered by the Cabinet Business Committee at its meeting on Monday, 12 April 2010.

2. The Bill amends the Companies Act 1993 and the Receiverships Act 1993. The purpose of the Bill is to make it easier for insolvency practitioners who are unfit to practise to be prohibited from practising or placed under supervision. Under the current law, a creditor or other party must apply to the High Court to get a practitioner prohibited from practising. The Bill introduces a negative licensing system that gives the Registrar of Companies the power to prohibit individuals from providing corporate insolvency services, or to place them under supervision, for up to 5 years.
3. The Bill also strengthens existing statutory measures in relation to the automatic disqualification of insolvency practitioners.
4. The Bill requires the Registrar to establish and maintain a public register of people who are subject to a prohibition or supervision notice and people who are subject to prohibition orders made by the High Court under the Court’s existing powers. The purpose of this requirement is to enable the public to check the register to find out whether a practitioner has been made subject to any restrictions before appointing them to undertake insolvency services. We note that the register may not include all prohibition orders made by the High Court before the register is established.
5. For completeness, we have considered clauses 5 (qualifications of liquidators) and 13 (qualifications of receivers) under section 19 (right to freedom from discrimination) of the Bill of Rights Act. Clauses 5 and 13 disqualify specified family members of people directly involved with a company in liquidation or receivership from appointment as liquidators or receivers of that company. To the extent that this could amount to discrimination on the ground of family status, we consider that this is justifiable under section 5 of the Bill of Rights Act because such family members are so closely related to those who have an interest in a company. Widening the disqualification criteria is aimed at increasing the independence of insolvency practitioners and reducing the likelihood that they will be conflicted.
6. We have concluded that the Bill does not appear to be inconsistent with the rights and freedoms affirmed in the Bill of Rights Act. This advice has been prepared by the Public Law Group and the Office of Legal Counsel.

Jeff Orr

Chief Legal Counsel Office of Legal Counsel

In addition to the general disclaimer for all documents on this website, please note the following: This advice was prepared to assist the Attorney-General to determine whether a report should be made to Parliament under s 7 of the New Zealand Bill of Rights Act 1990 in relation to the Insolvency Practitioners Bill. It should not be used or acted upon for any other purpose. The advice does no more than assess whether the Bill complies with the minimum guarantees contained in the New Zealand Bill of Rights Act. The release of this advice should not be taken to indicate that the Attorney-General agrees with all aspects of it, nor does its release constitute a general waiver of legal professional privilege in respect of this or any other matter. Whilst care has been taken to ensure that this document is an accurate reproduction of the advice provided to the Attorney-General, neither the Ministry of Justice nor the Crown Law Office accepts any liability for any errors or omissions.