Contract and Commercial Law Bill

Revision’s “peculiar pleasures and… peculiar frustrations” (Vikram Seth)

A century’s worth of contract and commercial law statutes is modernised and consolidated by the 222 page Contract and Commercial Law Bill introduced to Parliament last week, the first major statute law revision exercise in New Zealand for over 100 years, with objectives of increasing accessibility and reducing regulatory cost. It is, on any view, an extraordinary and thoughtful accomplishment by the Parliamentary Counsel Office, whose explanatory materials bear reading.

The Bill is enabled by the Legislation Act 2012, which makes provision for preparation of revision Bills – to re-enact previous statute law in an up-to-date and accessible form, without changing its effect (except to clarify Parliament’s intent, reconcile inconsistencies, or update monetary amounts with regard to CPI movements) – in accordance with the Government’s 3-yearly revision programme. As required by the 2012 Act, the Bill has been certified by the President of the Law Commission, the Solicitor-General, a retired Judge of the High Court, and the Chief Parliamentary Counsel as not changing the effect of the law. Parliament may, of course, amend the Bill for any purpose and pass it, which raises a nice question whether such amendment, if not expressly to change the law, must be interpreted as not having that effect. The revision Act’s passage should not be taken as Parliament’s intention to freeze interpretation of the law as it then stood: commerce marches on.

The grab-bag of eleven statutes revised by the Bill, from the Sale of Goods Act 1908 to the Electronic Transactions Act 2002, are some of the core Acts facilitating contemporary contractual and business transactions. They are generally well-comprehended by the commercial community, whose activities are underpinned or determined by the Acts’ provisions and informed by the very many judgments articulating their premises. Less clear is their choice for revision, and the desirability of their consolidation. Is omission of, eg, the Commerce and Fair Trading Acts 1986, similarly influential on commercial conduct, sensible or efficient? What about the Personal Property Securities Act 1999, or the Consumer Guarantees Act 1993 and the Credit Contracts and Consumer Finance Act 2003? Should there be separation between operational (eg, the Sale of Goods and Mercantile Law Acts 1908, and the Carriage of Goods Act 1979) and determinative (eg, the various contracts Acts) consolidations? And does this revision risk deferral of long-overdue substantive reform of, eg, the Contractual Mistakes Act 1977, of which VUW’s Professor McLauchlan says case law “is conflicting and no-one knows what key sections of the Act mean”?

There is justifiable nervousness about easy and obvious application of law on a section in a standalone revised Act to its identifiable successor(s) in a consolidated revision Act, particularly when modern drafting “updates” historical content. The Bill’s drafters presumably were aware of the Supreme Court’s commendation in Ports of Auckland Ltd v Southpac Trucks Ltd [2009] NZSC 112, [2010] 1 NZLR 363 of “the quality of the work which produced the [Carriage of Goods Act 1979] ”. But PCO’s and MBIE’s earlier exposure draft of the Bill illustrated the beguiling ease with which the 1979 Act’s “inherent vice” was proposed to be replaced with “inherent defect”, when the former expression is international market vernacular replicated in other statutes, contracts and standard terms. On the other hand, the 1979 Act’s “stoppage intransitu” just begs (and gets) contemporary translation.

[This article was first published in The Capital Letter (39/19, 24 May 2016)]

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