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COVID-19 (Further Management Measures) Legislation Bill (Ministry of Justice) (Consistent) (Sections 14, 19, 23(5), 25(c) and 27(1)) [2020] NZBORARp 21 (1 May 2020)

Last Updated: 26 May 2020

1 May 2020

Hon David Parker, Attorney-General

Consistency with the New Zealand Bill of Rights Act 1990: COVID-19 (Further Management Measures) Legislation Bill

Purpose

  1. We have considered whether the COVID-19 (Further Management Measures) Legislation Bill (‘the Bill’) is consistent with the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990 (‘the Bill of Rights Act’).
  2. We have not yet received a final version of the Bill. This advice has been prepared in relation to the latest version of the Bill (PCO 22874/4.0). We will provide you with further advice if the final version of the Bill includes amendments that affect the conclusions in this advice.
  3. We have concluded that the Bill appears to be consistent with the rights and freedoms affirmed in the Bill of Rights Act. In reaching that conclusion we have considered the consistency of the Bill with:
  4. Our analysis is set out below.

The Bill

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  1. The Bill is an omnibus Bill introducing amendments to assist New Zealand to respond to the wide-ranging effects of COVID-19.
  2. There are 17 Schedules to the Bill. These are organised by Ministerial portfolio.
  3. We have not considered Schedule 6 (Courts) or Schedule 14 (Justice). These Schedules are being considered by the Crown Law Office.
  4. A summary of the amendments made in the Bill are set out below.

Core Provisions

  1. The Core Provisions of the Bill:

Schedule 1 - Biosecurity

  1. The amendments in Schedule 1 enable, during the currency of the Epidemic Preparedness (COVID-19) Notice 2020, electronic service of:

Schedule 2 – Commerce and Consumer Affairs

  1. Schedule 2:

Schedule 3 – Commerce and Consumer Affairs – new Schedule 12 inserted into Companies Act 1993

  1. Schedule 3 details a new Schedule 12 to the Companies Act 1993. The key provisions at clauses 3 – 5 of the new Schedule provide a ‘safe harbour’ defence for directors in relation to their duties under ss 135 and 136 of the Act, which require a director not to engage in reckless trading or to incur obligations which the director does not believe will be able to be performed. The new defence applies to protect directors where they hold the opinion in good faith that the company is likely to face significant liquidity problems in the next 6 months due to COVID-19, but it is more

likely than not that the company will be able to pay its due debts after 30 September 2021 (or such later date as prescribed by regulations).

Schedule 4 – Commerce and Consumer Affairs - new Schedule 13 inserted into Companies Act 1993

  1. Schedule 4 amends the Companies Act 1993 to provide for the creation of a Business Debt Hibernation regime. This regime provides companies and other entities with a 1-month protection period from creditor action to allow them to enter into agreements with their creditors in relation to existing debt, in order to maximise the chance of the entity remaining in business or, where this is not possible, to allow for a better return for the entity’s creditors and members than would result from an immediate liquidation of the entity.

Schedule 5 - Corrections

  1. Schedule 5 amends the Corrections Act 2004 to enable hearings or applications relating to offences against prison discipline to be heard by audio link during the currency of the Epidemic Preparedness (COVID-19) Notice 2020, unless the hearing adjudicator or Visiting Justice considers that to do so would be contrary to the interests of justice. Section 139 of the Act currently allows for such hearings and applications to be heard by video link, but the necessary facilities are not widely available in prisons.

Schedule 7 - Customs

  1. Schedule 7 defers the revocation of the Customs Import Prohibition Order 2017 and the Customs Export Prohibition Order 2017, which would otherwise take place on 30 September 2020, on the basis that it will no longer be possible to prepare replacement orders by then due to the effects of COVID-19.

Schedule 8 - Environment

  1. Schedule 8 amends the Resource Management Act 1991 to:

Schedule 9 - Fisheries

  1. Schedule 9 amends the Fisheries Act 1996 to provide the chief executive a discretion to cease the automatic suspension of commercial fishing permits when the total amount of deemed values owed by the commercial fisher includes an amount demanded under s 76 during 20 April 2020 and 30 September 2021, and to provide the ability for the chief executive and commercial fisher to enter into a repayment agreement of the total amount owed within a new specified time.

Schedule 10 – Food safety

  1. Schedule 10 amends the Food Act 2014 relating to registrations which are currently required to be renewed before they expire. New clause 3A of Schedule 4 allows registrations to be renewed after they have expired upon payment of a renewal fee within 1 month after the COVID-19 lockdown period ends, and provides a discretion for registration authorities to renew registrations that expire in the 4 weeks following the lockdown. It applies to the registration of a food control plan, the registration of a food business that is subject to a national programme, or the registration of an importer. An affected person must not operate the affected business until the registration is renewed.

Schedule 11 - Health

  1. Schedule 11 amends the Mental Health (Compulsory Assessment Treatment) Act (‘MH(CAT) Act’). Currently, the MH(CAT) Act requires physical presence for clinical assessments, examinations, reviews of patients and proposed patients, and for judicial examinations of patients. The amendments:

Schedule 12 - Housing

  1. Schedule 12 amends s 88 of the Unit Titles Act 2010 by making it clear that members can attend body corporate and body corporate committee meetings by audio and audiovisual link while the Epidemic Preparedness (COVID-19) Notice 2020 is in force.

Schedule 13 – Internal Affairs

  1. Schedule 14 amends the Fire and Emergency New Zealand 2017 by inserting s 52A, which enables the Fire and Emergency New Zealand, while the Epidemic Preparedness (COVID-19) Notice 2020 is in force, to prohibit lighting fires in open air and other activities the Fire and Emergency New Zealand consider may cause a fire to start or spread in any area to which the epidemic notice applies.
  2. This Schedule also amends the Gambling Act 2003 by inserting s 4A which modifies the definition of “remote interactive gambling” in s 4(1) for a period of 18 months to enable certain specified class 3 gambling operators to undertake remote interactive gambling. This will allow the gambling operators to operate their lotteries despite the social restrictions and continuing impact of COVID-19 is likely to have on face-to- face sales.

Schedule 15 – Local Government

  1. Schedule 15 makes amendments to local government legislation, specifically, the Freedom Camping Act 2011, the Local Election Act 2001, the Local Government Act 2002, the Local Government Official Information and Meetings Act 1987, the Local Government (Rating) Act 2002 and the Waste Minimisation Act 2008.
  2. This Schedule also makes changes to the management of local government by– election timings, provides a temporary definition of “public notice”, postpones the revocation of bylaws, and makes changes to the process used by local authorities when making changes to their long-term plans.

Schedule 16 – Policing

  1. Schedule 16 amends the Arms Act 1983 by inserting s 65I which extends the duration of any dealer’s licence or firearms licence that have or are set to expire during the COVID-19 outbreak.

Schedule 17 – Workplace Relations and Safety

  1. Schedule 17 provides for a temporary amendment to the Parental Leave and Employment Protection Act 1987 under a new Part 3B to that Act. The amendments would last until two years after the date when the COVID-19 emergency period ends and have retrospective application, covering persons to whom the new provisions would apply back to 25 March 2020.
  2. The new provisions apply to ‘COVID-19 response workers. These are defined under new s 30JD as persons entitled to parental leave, who have agreed with their employer to temporarily return to work (or are self-employed and wish to return to work), and whose role cannot reasonably be filled by another person or is in high demand in circumstances related to COVID-19.
  3. Under the Parental Leave and Employment Protection Act as it currently stands parental leave must be taken in one continuous period and ceases if the person entitled to leave returns to work. The principal intention of the new provisions in Schedule 17 is to allow COVID-19 response workers making a temporary return to work to effectively put their parental leave on hold during that time, allowing them to apply to continue receiving parental leave payments once they return to their leave. A single temporary return to work may be made for up to 12 weeks, although Labour Inspectors are given a discretionary power under the new provisions to extend that maximum timeframe or allow multiple lesser periods of work.
  4. Further provisions under Schedule 17 support the intention of the above change. The duration of the parental leave period, and the amount of time required between parental leave periods for separate children, is amended for COVID-19 response workers to ensure their entitlements are unaffected by any temporary period of work during that time. Provisions requiring paid leave to be taken in one continuous period are disapplied. Pre-term baby payments, which run up to the period where parental leave would start if a child is born early, may also be interrupted by a temporary return to work and resumed afterwards. Underlying these changes, new s 30JQ allows the responsible Department to approve a range of ‘irregularities’ under s 71IA of the Act in relation to applications by COVID-19 response workers, including where those are out of time or in the wrong order.

Consistency of the Bill with the Bill of Rights Act Section 14 – freedom of expression

  1. Section 14 of the Bill of Rights Act affirms that everyone has the right to freedom of

expression, including the freedom to seek, receive and impart information.

  1. The right has been interpreted as including the right not to be compelled to say certain things or provide certain information. Clauses 13 and 19 of the Bill prima facie limit the right to freedom of expression by requiring entities keep written records of any electronic communications or modifications to their constitutions or rules, and reasons for falling within the provisions of the Bill. The clauses also require entitles to notify and provide the responsible Registrar or government agency with the written records in order to be covered by the Bill.
  1. We consider that the limitations on freedom of expression are rationally connected to an important objective of providing flexibility for entities in their day-to-day functioning during the COVID-19 response. Entities are required to provide written records in order to access the powers in the Bill. We consider that this is a proportionate response.
  2. Clause 9 of Schedule 15 inserts new ss 83B to 83D into the Local Government Act 2002. Section 83 of the Local Government Act sets out a special consultative procedure that a local authority must adopt and use when required under the Act or by other enactments. The new s 83B authorises a local authority to use the special consultative procedure with specified modifications. Specifically, s 83B(4)(b) makes the matters set out in s 83(1)(d) and (e) highly desirable but not mandatory. These matters relate to individuals being given the opportunity to present their views to a local authority.
  3. Clause 9 may prima facie limit a person’s right to impart information. To the extent that these modifications do limit the right to freedom of expression, we consider them to be justified as the local authority may use the modified approach if, and only to the extent that, it is satisfied that it is necessary or desirable to support the measures taken to contain or mitigate the outbreak of COVID-19 or its effects.
  4. For these reasons, we conclude that any limits to the freedom of expression imposed by the Bill are justified under s 5 of the Bill of Rights Act.

Section 19 – freedom from discrimination

  1. Section 19 of the Bill of Rights Act provides that everyone has the right to freedom from discrimination. Family status, including the fact of being a relative of or married to a particular person, is one of the prohibited grounds of discrimination under s 21 of the Human Rights Act 1993.
  2. Subpart 1 of Part 2 of Schedule 2 of the Bill amends the timeframes set out in the within which the liquidators of an insolvent company may recover voidable transactions. The intention of this change is to reduce the period of vulnerability to recovery of such transactions where the debtor company and creditor are unrelated parties. These changes to the voidable transactions regime are of particular importance due to the economic uncertainty and liquidity issues faced by many businesses in the wake of COVID-19.
  3. Clause 7 of Schedule 2 inserts a new definition for “related” into the Companies Act under s 291A, listing a broad range of situations in which a person may be considered related to a company, subject to rules around the timing of the transaction. The list includes any person who is:
  1. Clauses 8 and 9 of Schedule 2 amend ss 292 and 293 of the Companies Act, relating to insolvent transactions and voidable charges (respectively). Currently, a transaction or charge by a company is voidable by a liquidator if it meets the definition for an ‘insolvent transaction’ or ‘voidable charge’ and was made within the period of two years prior to the company’s liquidation. The principal change made by this subpart would amend these provisions so that the full two-year period applies only to transactions between parties which are ‘related’, with transactions between or charges granted to unrelated persons subject to a significantly reduced six-month period.
  2. The amendments introduced within this subpart explicitly apply a longer period of vulnerability to voidable transactions with ‘related’ persons, who may fall within this category based on their relations as family members. We consider that this may prima facie discriminate on the basis of family status.
  3. However, to the extent that the right to freedom from discrimination is engaged by this subpart we consider that the limitations on this right are demonstrably justified in the relevant circumstances. The relevant provisions are designed to prevent the transfer of funds out of an insolvent company to defeat the liquidation process, and the changes in this subpart represent a partial loosening of those restrictions. Family members and spouses of business owners are some of the persons caught by the broad definition of ‘related parties’ whose transactions with a company warrant additional scrutiny, which also extends to close body corporates, business associates and trusts. The extended period which related parties are subject to only becomes relevant where they have been party to an insolvent transaction or voidable charge, enabling a person to receive payment, or obtain a charge over company property, which they would not be entitled to in liquidation. The distinction drawn in this provision appears to be justified and to not go further than reasonably necessary to achieve its objective.
  4. We have therefore concluded that the provisions in subpart 1 of Part 2 of Schedule 2 are consistent with the rights and freedoms affirmed in the Bill of Rights Act.

Section 23(5) – right to be treated with humanity and dignity

  1. We have considered whether the proposed amendments in Schedule 11 allowing use of remote technology engage s 23(5) of NZBORA which provides that everyone deprived of liberty shall be treated with humanity and with respect for the inherent dignity of the person.
  1. Section 23(5) captures conduct that lacks humanity but falls short of cruelty, conduct that is demeaning, and/or conduct that is clearly excessive in the circumstances but not grossly so. Previous cases on this right have largely arisen from a context of imprisonment, but academic commentators have argued that it applies to persons deprived of liberty for whatever reason and by whatever means, including under mental health legislation. Whether s 23(5) has been breached will require a court to consider a wide range of factors and circumstances in an individual case.
  2. We do not consider that the discretionary ability to exercise powers under the MH(CAT) Act through AVL or remote technology in and of itself engages s 23(5). Use of AVL or remote technology is not a requirement and is case specific. In any event, we consider that those exercising powers under the MH(CAT) Act must exercise those powers in a NZBORA consistent manner (s 6 of NZBORA).

Section 25(c) – right to be presumed innocent until proven guilty

  1. Section 25(c) of the Bill of Rights Act affirms that everyone who is charged with an offence has, in relation to the determination of the charge, the right to be presumed innocent until proven guilty according to law. The right to be presumed innocent requires the prosecution to prove an accused person’s guilt beyond reasonable doubt.
  2. Schedule 4 of the Bill contains several strict liability offences. Strict liability offences prima facie limit 25(c) of the Bill of Rights Act because the accused is required to prove a defence or disprove a presumption in order to avoid liability.
  3. We have identified the following strict liability offences in the Schedule:
  4. We consider that the proposed strict liability infringement offence regime serves the important purpose to assist New Zealand to respond to the wide-ranging effects of COVID-19, and in particular, to increase the prospects of businesses surviving COVID-19 and is rationally connected to achieving this objective. In considering whether the provisions are proportionate to their objectives, we note that:

$10,000.

  1. Taking into account the above factors, we consider the strict liability offences set out in the Bill are justified under s 5 of the Bill of Rights Act.

Section 27(1) – right to natural justice

  1. Section 27(1) of the Bill of Rights affirms that everyone has the right to the observance of the principles of natural justice by any tribunal or other public authority which has the power to make a determination in respect of that person’s rights, obligations, or interests protected or recognised by law.
  2. We have considered whether clauses of the Bill allowing for appearance by remote access facility, such as audio link or audio-visual link, could limit the right to natural justice as affirmed by s 27(1) of the Bill of Rights. Provision for use of remote technology arises in Schedule 5 (Corrections), Schedule 8 (Environment) and Schedule 11 (Health).
  3. The right to be present before the courts, which is usually interpreted to entail physical presence, is considered a fundamental safeguard against unfairness or error in court proceedings. The right is reflected in a number of the specific criminal procedure protections of the NZBORA. In civil proceedings, it arises as an incident of the right to natural justice affirmed by s 27(1). It is not yet settled whether the criminal procedure protections apply in the context of prison disciplinary proceedings in New Zealand, but the right to natural justice does.
  4. There are inherent differences between physical presence and appearance by remote access facility that can offend the right to be present in court if the effect on the fairness of the proceedings is unacceptable.
  5. In respect of Schedule 5 (Corrections), to the extent that these differences could be exacerbated by appearance by audio link as opposed to AVL, the proposed extension of the types of remote access facility that can be used to conduct prison disciplinary proceedings could engage s 27(1).
  6. In considering the justifiability of any limitation on s 27(1), we note that the proposed extension promotes and is rationally connected to the important objective of enabling prison disciplinary proceedings to proceed in a timely manner notwithstanding the COVID-19 context, which could make it difficult or impossible for external adjudicators to physically attend hearings in prisons. Hearings can proceed by audio link only if the relevant authority considers that to do so is compatible with the interests of justice, and only during the currency of the Epidemic Preparedness (COVID-19) Notice 2020. In these circumstances, we are satisfied that the amendment proposed by Schedule 5 is consistent with the rights and freedoms affirmed in the NZBORA.
  1. In respect of Schedule 8 (Environment), in considering the justifiability of any limitation on s 27(1), we note that the proposed extension promotes and is rationally connected to the important objective of enabling resource management proceedings to proceed in a timely manner notwithstanding the COVID-19 context, which could preclude a public hearing with all participants physically present. Hearings can be conducted by remote access facility only if the relevant authority is satisfied that to do so is appropriate and fair. In these circumstances, we are satisfied that proposed new s 39AA of the RMA is consistent with the rights and freedoms affirmed in the NZBORA.
  2. In respect of Schedule 11 (Health), we note that the differences between physical presence and appearance by remote technology could be exacerbated in a mental health context.
  3. In considering the justifiability of any limitation on s 27(1), we note that the proposed amendment is rationally connected to the important objective of enabling Review Tribunal proceedings to proceed in a timely manner. The principal function a Review Tribunal is to consider the condition of a patient who has applied for review, or in respect of whom an application for a review has been made, under s 79 (Tribunal review of person subject to compulsory treatment order) or s 80 (Tribunal reviews of certain special patients) of the MH(CAT) Act.
  4. We have also considered the safeguards. A participant may be permitted to appear at a hearing by remote technology after the Review Tribunal makes a determination taking into account certain criteria: the available technology must allow, wherever reasonably practicable, the person to be both heard and seen; the potential impact of the use of the technology on the effective maintenance of the rights of the person, including the right to assess the credibility of witnesses and the reliability of evidence presented to the Tribunal; and any other relevant matters. In these circumstances, we are satisfied that there are appropriate safeguards guiding the use of remote technology, such that the amendment is consistent with the rights and freedoms affirmed in NZBORA.
  5. We have also considered whether the amendments to the Commerce Act 1986 in Schedule 2 concerning the ability for the Commerce Commission to circumvent the participatory process in s 62 could limit interested parties' rights to natural justice as affirmed by s 27(1) of the NZBORA.
  6. In reaching the view that it does not, we note that the amendment gives the Commission a discretion to dispense with the procedural requirements in s 62, but not preclude compliance in appropriate cases. Applications for authorisation would still need to be notified to interested parties and the public under s 60(2), and the Commission would still need to take into account any submissions received under s 61(3). Further, the modifications to the authorisation process apply only to applications received during the currency or within 6 months of the expiry or revocation of the Epidemic Preparedness (COVID-19) Notice 2020. In these circumstances, we are satisfied that the proposed amendments to the Commerce Act 1986 are consistent with the rights and freedoms affirmed in the NZBORA.
  1. For these reasons, we conclude that any limits to the right to natural justice imposed by the Bill are justified under s 5 of the Bill of Rights Act.

Conclusion

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  1. We have concluded that the Bill appears to be consistent with the rights and freedoms affirmed in the Bill of Rights Act.

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Jeff Orr

Chief Legal Counsel Office of Legal Counsel


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