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Business Payment Practices Bill (Consistent) (Section 14, 21 and 25(c)) [2022] NZBORARp 48 (13 October 2022)
Last Updated: 31 October 2022
13 October 2022
LEGAL ADVICE
LPA 01 01 24
Hon David Parker, Attorney-General
Consistency with the New Zealand Bill of Rights Act 1990: Business Payment
Practices Bill
Purpose
- We
have considered whether the Business Payment Practices 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).
- 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 21913/6.0). We will provide
you with further advice if the final version includes amendments that affect the
conclusions in
this advice.
- 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 s 14 (freedom of expression), s
21 (freedom from unreasonable
search and seizure) and s 25(c) (the right to be
presumed innocent until proven guilty according to law). Our analysis is set out
below.
The Bill
- The
Bill introduces a regime to bring transparency to business-to-business payment
terms and practices in New Zealand. It is based
on feedback from small business
that late payments and lengthy payment terms harm their business, with
potentially wider implications
for economic efficiency.
- The
purposes of the Bill are to:
- Improve
transparency in certain business-to-business payment practices;
- Enable
members of the public and entities to make informed choices about whether to
engage with certain large entities; and
- Create
a source of information to inform future policy work relating to business-to-
business payment practices.
- The
Bill requires large businesses (‘entities’ in the Bill) to disclose
payment practice information, including in relation
to late and overdue payments
made and payment terms, twice a year. The data is to be published on a publicly
searchable register
housed within the Ministry of Business, Innovation and
Employment, and on entities’ websites.
- The
Bill provides for infringements, civil pecuniary penalties and criminal offences
for contraventions of the obligations prescribed
by the Bill, as well as the
establishment and appointment of a Registrar responsible for maintaining the
register. The Bill further
provides the Registrar with inspection powers as well
as assurance, compliance and enforcement functions to support the integrity
of
the register.
Consistency of the Bill with the Bill of Rights Act
Section 14 – freedom of expression
- 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 and
opinions of any kind in any form. The right has been interpreted as including
the right not to
be compelled to say certain things or to provide certain
information.1
- The
Bill includes provisions that limit the right to freedom of expression by
requiring entities to disclose certain information to
the
Registrar2 and on their
websites.3
Is the limitation justified
and proportionate under s 5 of the Bill of Rights Act?
- Where
a provision is found to limit any particular right or freedom, it may
nevertheless be consistent with the Bill of Rights Act
if it can be considered a
reasonable limit that is demonstrably justifiable in terms of s 5 of that Act.
The s 5 inquiry is approached
as follows:4
- Does
the provision serve an objective sufficiently important to justify some
limitation on the right or freedom?
- If
so, then:
- is
the limit rationally connected to the
objective?
- does
the limit impair the right or freedom no more than is reasonably necessary for
sufficient achievement of the objective?
- is
the limit in due proportion to the importance of the objective?
- We
consider that the limits referred to in paragraph 9 above are rationally connected to the
sufficiently important objectives of bringing transparency to, and gathering
evidence about,
business-to-business payment practices and enabling the public
and entities to make informed decisions.
- We
consider these provisions impair s 14 no more than is reasonably necessary and
are in due proportion to the importance of the objectives,
which require the
provision of information. In reaching this conclusion, we note
that:
- The
obligations apply only to larger organisations5;
1 See, for example, Slaight
Communications v Davidson 59 DLR (4th) 416; Wooley v Maynard [1977] USSC 59; 430 US
705 (1977).
2 Clauses 9 and 15 to 17.
3 Clause 13.
4 Hansen v R [2007] NZSC 7.
5 Clause 10 defines ‘large’ by reference
to a slightly modified version of the definition in s 45 of the Financial
Reporting
Act 2013, under which an entity is large in respect of an accounting
period if: a) as at the balance date of each of the 2 preceding
accounting
periods, its total assets together with those of any subsidiaries exceeds $66
million; or b) in each of the 2 preceding
accounting periods, its total revenue
together with those of any subsidiaries exceeds $33 million.
- The
specific payment practices information that entities will be required to
disclose and publish are to be prescribed in secondary
legislation, which must
be consistent with the Bill of Rights Act in order to be valid;
and
- The
information to be disclosed and published is likely to be of limited expressive
value.
- In
addition, cl 18(4) of the Bill allows the Registrar to refuse access to the
register or otherwise suspend its operation, in whole
or in part, if it
considers that it is not practical to provide access. We have considered whether
this provision, although we understand
it to be intended for very limited
use,6 could engage s 14 by limiting entities’ or
individuals’ ability to seek and receive the information contained in the
register.
In our view, no issue of limitation arises given that the same
information will remain accessible on entities’ websites.
- Overall,
we consider that the limits imposed by the Bill on the right to freedom of
expression are justified under s 5 of the Bill
of Rights
Act.
Section 21 – freedom from unreasonable search and seizure
- Section
21 of the Bill of Rights Act affirms that everyone has the right to be secure
against unreasonable search or seizure, whether
of the person, property,
correspondence or otherwise. The right protects a number of values including
personal property, dignity,
and
privacy.7
Search and seizure
powers
- The
Bill gives the Registrar powers of inspection that constitute search powers for
the purposes of s 21 of the Bill of Rights Act.8 In
particular, the Registrar may:9
- Require
a person to confirm, in relation to information provided to the Registrar, that
such information is correct or to correct
the information;
- Require
a person to produce for inspection relevant documents within that person’s
possession or control;
- Inspect
and take copies of relevant documents (a relevant document is defined as a
document containing information relating to an
entity or its
disclosures);
- Take
possession of relevant documents and retain them for a reasonable period to make
copies, or for a longer reasonable period if
the Registrar reasonably believes
the documents are evidence of the commission of an offence; or
- Require
a person to provide the Registrar with the results of a qualified
auditor’s review of their payment practices
information.
Are the search and seizure powers
reasonable?
- Ordinarily,
a provision found to limit a particular right or freedom may be consistent with
the Bill of Rights Act if it can be considered
reasonably justified in terms of
s 5 of that Act. However, the Supreme Court has held that an unreasonable search
logically cannot
be
6 In particular, temporary closures for
maintenance or where the continuation of operations or access may risk the
integrity of the
register (as in the case of a cyber attack).
7 See, for example, Hamed v R [2011] NZSC
101, [2012] 2 NZLR 305 at [161] per Blanchard J.
8 New Zealand Stock Exchange v
Commissioner of Inland Revenue [1992] 3 NZLR 1 (PCP).
9 Clause 25.
demonstrably justified and therefore the inquiry does not need to be
undertaken.10 Rather, s 21 is self-limiting in that
the assessment to be undertaken is whether the search power is reasonable. The
reasonableness
of a search and seizure can be assessed with reference to the
purpose of the search and seizure and the degree of intrusion on the
values
which the right seeks to protect.
- We
consider the search and seizure powers in the Bill are consistent with its
purposes and are reasonable in the circumstances. The
powers can only be used
where necessary to monitor compliance with the regime set up by the Bill. Any
intrusion into privacy is minimal,
and there will not be another viable way for
the Registrar to obtain the information. We also consider that the search and
seizure
powers are appropriately limited in scope.
- Accordingly,
we consider that the search and seizure provisions of the Bill are reasonable,
and therefore consistent with s 21 of
the Bill of Rights
Act.
Section 25(c) – right to be presumed innocent until proven guilty
- Section
25(c) of the Bill of Rights Act affirms that anyone charged with an offence has
the right to be presumed innocent until proven
guilty according to the law. The
right to be presumed innocent requires that an individual must be proven guilty
beyond reasonable
doubt, and that the state must bear the burden of
proof.11
- Strict
liability offences, which may be proved by finding that certain facts occurred
without proof of mens rea, prima facie limit
s 25(c) of the Bill of Rights Act.
They may, nevertheless, be justifiable in terms s 5 of the Bill of Rights Act,
especially where:
- The
offences are regulatory in nature and apply to persons participating in a highly
regulated industry;
- The
defendant will be in the best position to justify their apparent failure to
comply with the law, rather than requiring the Crown
to prove the opposite;
and
- The
penalty for the offence is proportionate to the importance of the Bill’s
objective.
Infringement offences
- The
Bill provides that a person who fails to comply with its reporting and
publication obligations commits an infringement offence
and is liable to an
infringement fee of $3,000 or a fine imposed by a court of
$9,000.12 The infringement offences are strict
liability offences, and accordingly they prima facie limit s 25(c) of the Bill
of Rights Act.
- The
actions being punished by the infringement offences are of relatively low
seriousness. As the offences seek to deter entities
from circumventing the
requirements in the Bill, we consider that they are rationally connected to the
objectives of the Bill.
- We
consider the penalties are likely to be commensurate to affected entities’
and individuals’ ability to pay, and necessary
to contribute to the
purposes of the offence regime (including deterrence and punishment). In
relation to proceedings commenced by
filing a charging document, the court
retains the discretion to impose a lower fine than the $9,000 maximum.
10 Hansen v R [2007] NZSC 7, [2007]
3 NZLR 1 (SC) at [162] per Blanchard J.
11 R v Wholesale Travel Group (1992) 84 DLR
(4th) 161, 188 citing R v Oakes [1986] 1 SCR 103.
12 Clause 31.
- We
consider that, as the infringement offences in the Bill relate to regulatory
matters and result only in a monetary penalty and
not a criminal conviction, the
limit on the right can be justified under s 5 of the Bill of Rights
Act.
Conclusion
- We
have concluded that the Bill appears to be consistent with the rights and
freedoms affirmed in the Bill of Rights Act.
Jeff Orr
Chief Legal Counsel Office of Legal Counsel
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