LawNews- Issue 13

Regulation looms for buy-now-pay-later SECTOR

Contents

LawNews is an official publication of Auckland District Law Society Inc. (ADLS).

Editor: Jenni McManus

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Cover: Javier Zayas Photography / Getty Images

A day of reckoning looms for BNPL lenders

prescriptive. Or it could simply be compliance with the principles-based requirement in the CCCFA, in effect leaving it largely to lenders to work out how to ensure the transaction is affordable to the consumer.

Diana Clement

Buy-now-pay-later [BNPL] lenders are staring down the barrel of regulation as vulnerable consumers get badly into debt. According to credit reporting bureau Centrix, BNPL arrears sat at 9.2% in February.

The largely unregulated BNPL industry, which offers loans to consumers for everything from pork chops to mag wheels, falls outside the Credit Contracts and Consumer Finance Act 2003 (CCCFA) and its responsible lending code. They are credit contracts, just not consumer credit contracts.

With consumers falling into arrears to BNPL lenders, the government announced in October 2022 that it would regulate them. But it’s still working on whether the CCCFA will apply in full or in a modified way, says Victoria Stace, senior lecturer faculty of law at Victoria University.

The Ministry of Business Innovation & Employment (MBIE) has just closed a consultation round and the final regulations are expected to be made available later this year.

With other forms of lending, says Aaron Gilbert, head of department – finance, at AUT, lenders need to ensure the customer has the capability to repay loans. “At the moment, there’s no obligation for [BNPL providers].”

To get approval, customers mostly need to show only their driver’s licence at the checkout in a store offering BNPL. They often take out multiple BNPL loans with different providers, then get into financial trouble, according to social agencies such as the Salvation Army.

The issues, Stace says, are:

■ What is the appropriate threshold at which the affordability assessment obligation comes into play? Cabinet is proposing a threshold of $600 but is still consulting on this.

■ For BNPL transactions above whatever the threshold, what should the affordability obligations on lenders be? It could be full compliance with the regulations, which are quite

The CCCFA never anticipated credit contracts that didn’t charge interest but made money instead from late payment fees and merchant charges. When BNPL lenders entered New Zealand in 2014, they were able to take advantage of that loophole.

The loophole should have been closed in earlier rounds of consultation, says Alex Sims, associate professor of commercial law at the University of Auckland Business School. “They are legitimate schemes, but they were exploiting a loophole that should never have been there.”

MBIE’s consultation outlined three potential options:

■ keeping the status quo, which involves a voluntary code;

■ the government establishes appropriate incentives for BNPL lenders to develop an industry code which goes further and addresses the triggers of financial hardship; or

■ it applies the CCCFA to regulate BNPL products.

Many industry players argue that full regulation would be too onerous and they should be allowed to self-regulate. On the other hand, budgeting organisations see considerable harm arising from this unregulated form of lending.

Whatever option MBIE chooses, consumer advocates and others are up in arms at the proposal that a $600 threshold be set and only loans above that amount would be subject to regulation.

Both Sims and Stace say a $600 threshold makes no sense. “Other loans don’t have a limit,” Sims says.

In its submission to MBIE, Fincap, which represents budget advisers (aka financial mentors), says whānau should not be missing meals because of the lack of a requirement for robust affordability assessments for BNPL lending.

“MBIE and the Minister of Commerce and Consumer Affairs must not overlook the significant harm occurring in our communities and in other jurisdictions and accordingly apply the CCCFA to these loans with urgency,” Fincap said.

Financial mentor David Verry, of North Harbour Budgeting Services, sees the harm on the ground. “The hardest hit are those

Selfregulation would capture only arrears

You don’t necessarily want to shut everyone out just because some people are spending money inappropriately

Alex Sims

Continued from page 03

using BNPL for basics. Think Mad Butcher – essentially borrowing for something that will be gone tomorrow but needs to be paid for over several more weeks.

“More and more will opt to keep food on the table, pay the rent and other interest-bearing debts ahead of BNPL, despite nonpayment penalties.”

MBIE’s dilemma

Bringing it under the umbrella of the CCCFA would likely kill the model where consumers can put even $1 reserve auctions on TradeMe on BNPL. That means MBIE has a dilemma. With the BNPL industry entrenched in New Zealand, the government is not necessarily willing to enact regulation that will put it out of business.

The largest player, Afterpay, argues that as new business models are created through innovation, regulation needs to be attuned to the different economic drivers of those heterogeneous business models. In its submission to MBIE, it outlines a system including an industry code, which it argues would be effective.

The situation the government finds itself in is creating difficulties in finding a solution that meets the needs of vulnerable consumers but is not being overly burdensome, Stace says.

Government cowering

Sims says it was a mistake not to bring BNPL under the CCCFA last time it was reviewed with the Credit Contracts Legislation Amendment Bill. The industry lobbied hard at that time.

She cites a 2019 interest.co.nz article which said Afterpay threatened to pull out of New Zealand if it were forced to comply with the government’s then-proposed changes to consumer finance laws.

Sims says: “Afterpay jumped up and down [then] and the government cowered. It does that every time. The government should have held out. [Afterpay] was saying ‘we’re going to leave’, and the government goes ‘oh okay’.”

More entrenched

Since then, financial harm has grown. At the same time, BNPL models have become even more entrenched, with the government not wanting to upset existing business models, Sims says. Regulating BNPL out of business might not go down well, including with customers who love their buy now and pay later.

“[Governments] in New Zealand and other places with strong rule of law, don’t really like taking rights away. If you hadn’t ever had the rights in the first place, it’s not an issue. But once you’ve been given them, [governments] shouldn’t be seen as depriving people’s rights. I think that’s part of an unwritten explanation of why [MBIE is treading carefully].”

In general, Sims says, the lack of a federal system in New Zealand means the country can’t experiment. “I know there’s a lot of wrong in the United States, but with their federal system, you can get states trying something out. If it works, other [states] say okay, we’ll copy this’.

“Here, as we’ve seen with this is, if it goes wrong, it’s really hard to back-pedal because people are used to it.”

Making the environment too tough, however, because individuals might get hurt will result in no innovation. “It’s a bit of a balance. That is probably one of the reasons why MBIE is treading a bit carefully because you don’t necessarily want to shut everyone out just because some people are spending money inappropriately.” She suggests if there is major change, providers should be given time to transition to a new model.

Easy debt

Stace says the lack of friction when signing up for BNPL is one of the main reasons customers get into financial trouble.

She says a $600 threshold would not protect the most at-risk consumers. “The main problem arises with [people] who get into debt with multiple buy-now-pay-later transactions. There’s no visibility.” A second or third provider isn’t aware that a customer may already have multiple BNPL loans, Stace says. “They don’t have a full picture of this person’s financial commitments.”

Continued on page 17

Keith McLaughlin

IRD’s tax report stretches the definition of ‘income’ for the rich

Graham Murray, Mathew McKay & Matthew Seddon

Inland Revenue last week released a long-expected report on its high-wealth individuals research project, which states that the median effective tax rate (ETR) for a high-wealth New Zealand family on its “economic income” is 8.9%.

While Revenue Minister David Parker has said there will be “no new tax policy or tax switch” arising from the report’s release, it “will provide a fundamental baseline for debate” on the tax system.

The report brings into focus the importance of defining “income” when assessing a person’s ETR.

Background

The genesis of the report can be traced back to 2020 when the government expanded Inland Revenue’s information-gathering powers for tax policy development.

The government allocated $5 million in its 2021 budget to allow Inland Revenue to exercise its new power to conduct the research into ETRs for high-wealth New Zealand families.

Economic income

The report calculates the ETR for 311 high-wealth New Zealand families between 1 April 2015 to 31 March 2021. The calculation compares how much tax high-wealth families in New Zealand pay relative to their “economic income”.

Economic income is defined in the report to be an individual’s ability to consume goods or services, including both taxable and

non-taxable sources of income.

Economic income seeks to measure the increase in an individual’s economic resources during the period and includes realised and unrealised capital gains.

Key findings

High-net worth individuals are more likely to hold capital assets than other taxpayers, whether directly or indirectly. Defining the comparator as economic income (wider than what is currently taxed in New Zealand), the report concludes that the main source of untaxed “income” is realised and unrealised capital gains.

Around 80% of the median high-wealth New Zealand family’s economic income was said to comprise realised and unrealised capital gains. The report makes the following specific claim:

“Failing to tax forms of income that are earned predominantly by those who are better off is likely to have an important impact in reducing the progressivity of the tax system and is also likely to impose other economic costs through influencing the pattern of investment in the economy.”

As a comparator to ETRs based on economic income, the report also calculates an ETR based on a high-wealth New Zealand family’s “personal taxable income”. It defines personal taxable income as income that is subject to tax under current law such as salary and wages, dividends and interest.

The report concludes that the median personal taxable income ETR was around 30% on a median taxable income for a

Continued on page 17

Including unrealised capital gains within the income base is of particular note, as such ‘gains on paper’ may not ultimately materialise

A tribute to Telise Kelly

Jenni McManus

“Not to brag, but at least six men have described me as terrifying.”

Not the words you’d normally expect to find attached to a formal death notice but, as the hundreds who packed the local hall in the small village of Leigh, north of Auckland, for her funeral on 27 April were to hear (and probably already knew), Martell McKegg senior associate Telise Kelly was anything but ‘normal’.

At 31, after only eight years in practice, she was on track for partnership in her firm’s litigation team. Those who paid tribute at her funeral described her as a fierce and confident advocate, with enthusiasm for every aspect of her life.

They spoke of a cheeky, opinionated, optimistic and generous woman who was “relentlessly positive”, upbeat, competitive and “swore like a sailor”. Her sister-in-law Rose Martin said she was “a socialist lawyer” and a member of the Green Party who “navigated the corporate ladder with grace and tenacity”. An old university friend said she made him feel “joyous and inspired” by her “grunt, grace and exceptional vocabulary”.

Martin also tells the story of a mufti day at St Cuthbert’s, where Telise did her final year of schooling. While most of the girls dressed demurely in jeans or long dresses, Telise had other ideas, turning up in black skinny jeans, a lacy black corset, heavy eye make-up, piercings, “a ton of buckles” and a black blazer with a black leather cross on the back.

At the time of her death, Telise was rocketing to

the top of her profession. But all this came crashing down on Tuesday 18 April when she was struck by a vehicle outside the North Shore District Court, just minutes before she was due to appear. She leaves behind her husband, Tim Martin, stepson Sebastian Jo, parents Leanne and Keith and countless friends and colleagues.

The leader

To her boss, Martelli McKegg partner Jacque Lethbridge, Telise was “a true leader”.

“[She] was not only one of our brightest stars but one of the brightest stars in the law profession of her generation,” Lethbridge said. “In the practice of law, there are those of us who are driven by the desire to be the last line of defence. Those are the court lawyers, and our craft is advocacy, the art of persuading decision-makers and other parties, bending them towards the cause of our clients. It is an often testing and thankless task where almost

Continued on page 07

Telise Kelly

When I got to the bar, I found Telise holding court as if she’d been with us for years. I was struck by how confident and outgoing she was and her impressive repertoire of swear words, which I loved

She was a natural and artful problem-solver, adept strategist and charismatic spokesperson

Continued from page 06

invariably your clients are dealing with the worst of circumstances.

“And for some of us the calling is great, that desire to stand up for our clients – to be their voice when they feel voiceless. It can be a burden to us. It takes us from our families, it drives us to work tirelessly, even to our own detriment in the cause of those less fortunate. And of all the practice areas within the law, there is no greater need than in family-related litigation.

“Fittingly, this is where Telise chose to place her abundant skill. Telise was an advocate first. It called to her. She was a natural and artful problem-solver, adept strategist and charismatic spokesperson. These are the hallmarks of the greatest of litigators who have filled our highest courts…who have changed the landscape of legal systems and impacted how our society is shaped. This was Telise’s arena and one she was on the precipice of fulfilling, having sharpened her advocacy skills over eight years in practice.”

Just weeks before her death, Telise was elected to the ADLS Council. She was also a member of the ADLS Family Law committee, where convenor Stuart Cummings saw her as a breath of fresh air.

“She arrived with energy, enthusiasm and passion, wanting to make a difference. Trust me, as a committee convenor that’s a Godsend,” Cummings said. “She had skill and a willingness to contribute and brought a great warmth of personality to the place.”

She also joined the Auckland Women Lawyers’ Association and the NZLS family law section.

Early years

Telise grew up near Mangonui in the Far North where her parents owned the Hihi Holiday Park and studied law and accounting at the University of Auckland. Alongside the study it was a life of parties, concerts, new bar openings and good food. At some point –nobody seems quite sure exactly when – Telise met Tim Martin, who later became her husband, and acquired a stepson. Being stepmother to Sebastian Jo was “her absolute joy”, Rose Martin says, “and she did it so well. She was responsible, funny, firm and kind. They had a close and special bond.”

Colleagues

Describing her as “relentlessly positive and upbeat”, Martelli McKegg partner Mike Worsnop said losing Telise had hit the partners and staff very hard, and it would take a long time to come to terms with what had happened.

“And while at least six men described Telise as terrifying, I guarantee there were at least a dozen more who were too scared to say anything at all.”

On arriving at the firm in January 2019, she had risen quickly through the ranks, becoming an associate in April 2020 and a senior associate a year after that. Along the way her focus shifted from general civil litigation towards relationship property, trusts and estates litigation, where she excelled.

Two or three lawyers joined the firm about the same time as Telise, Worsnop said, and the tradition was to go out for a few drinks to welcome the newbies.

“I was running late and when I got to the bar I found Telise holding court as if she’d been with us for years. I was struck by how confident and outgoing she was and her impressive repertoire of swear words, which I loved.”

When preparing to speak at her funeral, Worsnop said he’d come across Telise’s CV.

“Somewhat self-effacingly, she listed her personal and professional strengths as excellent written and oral communication, proficiency in civil procedure, exceptional time management, proficient in effective prioritisation, active and consultative team member, dedication to delivering results, an eye for detail, strong work ethic and genuine initiative, reliable and trustworthy, an ability to thrive under pressure, natural charisma, confidence and leadership, and a sense of humour.

“I think she obviously missed modesty from that list! But it became obvious pretty quickly that Telise was all of those things and more. She was confident, bubbly, funny, bright, knowledgeable, pragmatic, and above all had a rare ability to connect with people.”

Barrister Andrew Steele – a Martelli McKegg partner for 16 years before moving to the Bar – was probably one of the last of her colleagues to socialise with Telise. The pair went out for a boozy lunch on the Friday before her death to celebrate a win in court. They then went back to Steele’s chambers where they were joined by a lawyer “from upstairs”, Steele says – a “right-winger” who got into a political tussle with Telise.

“It was a fierce debate but it was civilised. These were two guys at the top of their game. Telise was not only a top lawyer but a top debater. She had him tied up in 15 moves and he thought he was smart.”

Steele said he would miss Telise terribly. “She was just the most outstanding lawyer, the most dedicated, she empathised with her clients and I’m the seventh person who was too scared to put their hand up as being terrified…

“Fortunately, we were always on the same side. If you were on the opposite side to her, you had a tiger by the tail because she was out to get justice for her client and would polish a turd if necessary – whatever.

“She never took loss as something she was ever going to do, and she gave it 100%.” Everybody who knew Telise would miss her – “that amazing smile, that enthusiasm, always looking out for the little guy. She was everybody’s friend.”

When news of her death spread across the Auckland legal community during the afternoon of 18 April, Martelli McKegg swung into crisis mode. A grief counsellor was brought in immediately and made available to the litigation team, and other counsellors were engaged during the following days. The entire firm was brought together, a condolences book was set up to be given to Telise’s family and a bus was chartered to take staff to the funeral.

Her death has also had a massive impact on the North Shore court, both the staff and the judiciary, Lethbridge says. There have been reports of judges placing flowers at the site of the accident.

“Telise was many things, but I think I will remember her most for her courage and kindness,” Lethbridge says. “She had these qualities in equal measure.” ■

She was confident, bubbly, funny, bright, knowledgeable, pragmatic, and above all had a rare ability to connect with people

How restorative justice fits with an adversarial system

Professor Leslie Thomas KC

I want to come back to the question I asked: does the adversarial system serve us well? You might think that my discussion so far has been somewhat conservative and Eurocentric. After all, I’ve talked about only the English adversarial model and the French inquisitorial model.

Both are essentially European ideals of justice, although the legacy of colonialism means they have been exported to every part of the world. What about other conceptions of justice that are rooted in other traditions?

As I have stated earlier, the adversarial system of justice has been criticised for being overly focused on winning and losing rather than promoting justice. This has led to calls for alternative models that prioritise collaboration and restoration over confrontation and punishment.

Restorative justice

Restorative justice is a victim-centered approach that focuses on repairing the harm caused by the offence rather than punishing the offender. In a restorative justice model, victims, offenders and community members come together to discuss the harm that has been caused and work together to find a way to repair that harm.

It has several potential benefits. It can provide victims with a greater sense of closure and satisfaction than traditional criminal justice processes. It can reduce recidivism rates by addressing the underlying causes of criminal behaviour. It can foster a sense of community and promote healing among those affected by the offence.

Some forms of restorative justice are rooted in nonWestern traditions and have been heralded as an antidote to the punitive and fault-based European tradition. As

Archbishop Desmond Tutu said:

“We contend that there is another kind of justice, restorative justice, which has characteristics of traditional African jurisprudence. Here the central concern is not retribution or punishment but, in the spirit of ubuntu, the healing of breaches, the redressing of imbalances, the restoration of broken relationships. This kind of justice seeks to rehabilitate both victim and the perpetrator, who should be given the opportunity to be reintegrated into the community [they have] injured by [their] offence.”

Around the world, restorative justice has increasingly been recognised in law, not as a replacement for the judicial system but as an adjunct to it.

There are numerous examples of programs in the criminal justice system. In some instances, criminal cases are referred to a restorative justice process as an alternative to prosecution. In other cases, a restorative justice process takes place prior to sentence and is taken into account in sentencing.

In New Zealand, the Māori have been using restorative justice practices in their communities for centuries. Another example from the UK is the Youth Conference Service in Northern Ireland, introduced in 2003.

The Navajo Nation Peacemaker Program is a good example of a non-Western, non-adversarial tradition of justice coexisting with the formal judicial system. Within the Navajo Nation, the program coexists with the formal tribal court system. As described by the judicial branch of the Navajo Nation in 2004, the role of the peacemaker is “to bring parties together to talk out disputes and to reach a consensual agreement. A peacemaker is not an adjudicator and does not sit in judgment,

Continued on page 09

Some forms of restorative justice are rooted in non-Western traditions and have been heralded as an antidote to the punitive and fault-based European tradition

In the final of a three-part series, British KC Leslie Thomas considers the benefits and limitations of restorative justice

Professor Leslie Thomas KC

Continued from page 08

rather [they facilitate and guide] disputing parties to reach and decide for themselves.”

Although rooted in a particular cultural tradition, the Navajo Peacemaker Program has inspired initiatives elsewhere.

Another example of voluntary dispute resolution in a non-Western cultural context is the Peace and Consensus Committees of Rojava, which respond to crime and conflict by seeking to reach a consensus between the parties. There are also separate women’s committees which deal with violence against women.

Limitations

For those of us who are worried about the impact of the carceral justice system on marginalised people and communities, restorative justice and peacemaking are very attractive options. Clearly, these programs have a great deal of promise in resolving conflicts and addressing harms outside the formal justice system.

However, it is important to note that restorative justice processes have certain limitations. Restorative justice is not appropriate for all cases, particularly those involving serious offences or repeat offenders.

In these cases, the harm caused may be too severe or the offender may be unrepentant, making it difficult to achieve a meaningful restoration of relationships. Moreover, restorative justice requires a willingness to participate from both the offender and the victim.

It is also not designed to settle factual disputes. It isn’t equipped to deal with a situation where the accused denies that they did what they are accused of.

Second, some feminists have been critical of the use of restorative justice in the context of sexual and gender-based violence on the ground that it might serve as an opportunity for the abuser to re-victimise and re-traumatise the victim and might not lead to effective action being taken against the perpetrator to protect other victims.

On the other hand, this is not to say that restorative justice is always inappropriate for cases of sexual and gender-based violence. As I highlighted earlier, Rojava has adopted a system of women’s peace committees that deal with violence against women. And in the West, other feminist legal scholars have identified a positive case for restorative justice in some cases of sexual and gender-based violence.

It is also important to note that implementing restorative justice can be challenging in large, complex legal systems where resources may be limited and there may be resistance to

change from those invested in the existing system.

What can we learn from all of this? Restorative justice remains a promising alternative to traditional punitive approaches in cases where it is feasible and appropriate.

We can say that restorative justice and peacemaking models have significant advantages as an alternative to punitive justice. But they aren’t suitable for every case. And in the places where they have been deployed on a large scale, they have tended not to be a replacement for the traditional justice system but an adjunct to it.

While these alternative models of justice have their own advantages and disadvantages, they all share a focus on collaboration, problem-solving and community involvement, rather than adversarialism and punishment.

There are also more radical alternatives. Some people on the anti-carceral left, who believe in the full abolition of police and prisons, have instead adopted the idea of “transformative justice” which rejects this kind of integration into the carceral system.

That’s a whole complex topic in itself, with several arguments for and against.

Conclusion

In conclusion, the adversarial system of justice in England and Wales has numerous flaws that have been extensively discussed in this series over the past three weeks.

While it can be effective in certain cases, it is not universally effective in getting to the truth and it can become profoundly unfair when one party is unrepresented or there is a significant inequality of resources between the parties.

However, we should be cautious about replacing it with another system, as the inquisitorial system may not necessarily lead to fairer trials or better outcomes. We should also be sceptical of the belief that continental European systems are superior to our own.

Restorative justice and peacemaking should be embraced but it is important to recognise that they are not appropriate in every case and are not a complete replacement for the adversarial system. In many cases, we still need a means of resolving factual disputes and deciding who is telling the truth.

Therefore, mitigating some of the adversarial system’s problems by increasing legal aid funding significantly is the most effective measure when it comes to mitigating inequality of arms. We must also strive to address the systemic biases and inequalities present in the current system and work towards more equitable and just outcomes for all parties involved. ■

Professor Leslie Thomas KC is a lecturer at Gresham College in central London ■

Mitigating some of the adversarial system’s problems by increasing legal aid funding significantly is the most effective measure when it comes to mitigating inequality of arms

Australians should be wary of scare stories comparing the Voice with New Zealand’s Waitangi Tribunal

implement those recommendations.

Deceptive and wrong

Michael Belgrave

Australian Senator Jacinta Nampijinpa Price’s recent claim that the Waitangi Tribunal has veto powers over Parliament was met with surprise in New Zealand, especially by members of the tribunal itself. That’s because it is just plain wrong.

As the debate around the Voice to Parliament ramps up across the ditch, we can probably expect similar claims to be made ahead of this year’s referendum. But the issue is so important to Australia’s future that such misinformation should not go unchallenged.

From an Australian perspective, New Zealand may appear ahead of the game in recognising indigenous voices constitutionally. But that has certainly not extended to granting a parliamentary power of veto to Māori.

The Waitangi Tribunal was originally established as a commission of inquiry in 1975, given the power only to make recommendations to government. And so it remains. The Crown alone appoints tribunal members and many are non-Māori.

As with all commissions of inquiry, it’s up to the government of the day to make a political decision about whether or not to

Price’s claim echoed a February article and paper published by the Institute of Public Affairs, aimed at influencing the Voice referendum. Titled The New Zealand Māori voice to Parliament and what we can expect from Australia, it was written by the director of the institute’s legal rights program, John Storey.

The paper makes a number of assertions: the Waitangi Tribunal has a veto over the New Zealand Parliament’s power to pass certain legislation; the Waitangi Tribunal was established to hear land claims but its brief has expanded to include all aspects of public policy; and the Waitangi Tribunal “shows the Voice will create new indigenous rights”.

The last of the statements is deceptive and the others are completely wrong. The Waitangi Tribunal’s jurisdiction was largely set in stone by the New Zealand Parliament in 1975 when it was established.

Far from investigating land claims, it initially wasn’t able to examine any claims dating from before 1975. Parliament changed the tribunal’s jurisdiction in 1985, giving it retrospective powers back to 1840 (when the Treaty of Waitangi/te Tiriti o Waitangi was signed).

The tribunal then started hearing land claims. But in its first decade, it focused on fisheries, planning issues, the loss of Māori

Continued on page 11

The ability to return land has almost never been used and is being progressively repealed across the country as treaty settlements are implemented in legislation

Photo: Fiona Goodall Stringer / Getty Images

Far from expanding its jurisdiction, the tribunal’s powers have been steadily reduced in recent decades

Continued from page 10

language, government decisions being made at the time and general issues of public policy.

Historic grievances

Over the past 38 years, the tribunal has focused on what are called “historical treaty claims”, covering the period 1840 to 1992. In 1992, a major settlement of fishing claims began an era of negotiation and settlement of these claims, quite separate from the tribunal itself.

With the majority of significant historic claims now settled or in negotiation, that aspect of the tribunal’s work is coming to an end. It has returned to hearing claims about social issues and other more contemporary issues.

Far from expanding its jurisdiction, the tribunal’s powers have been steadily reduced in recent decades. In 1993, it lost the power to make recommendations involving private land – that is, land not owned by the Crown. In 2008, it lost the power to investigate new historical claims, as the government looked to close off new claims that could undermine current settlements.

There is one area where the tribunal was given the power to force the Crown to return land. The 1984-1990 Labour government set a policy to rid itself of what were seen as surplus Crown assets. A deal was struck between Māori claimants and the Crown to allow the tribunal to make binding recommendations to return land in special cases.

This compromise was not created by the tribunal but through ambiguity in legislation, which was resolved in favour of Māori claimants in the Court of Appeal. The ability to return land has almost never been used and is being progressively repealed across the country as treaty settlements are implemented in legislation.

Wide political support

Storey quotes a number of tribunal reports, which make findings about the Crown’s responsibilities, as if these findings are binding on the Crown or even on Parliament. This is not the case. The Waitangi Tribunal investigates claims that the Crown

has acted contrary to the “principles of the treaty”

The Waitangi Tribunal establishes what those principles are, but they are binding on neither the courts nor Parliament. Having made findings, the tribunal makes recommendations – not to Parliament, as Storey suggests, but to ministers of the Crown. Some recommendations are implemented, others are not. Where there is a dispute between the Crown and Māori, the tribunal has often recommended negotiation rather than making specific recommendations for redress.

Storey has elsewhere referred to the tribunal as a “so-called advisory, now binding, Māori Voice to Parliament” that has “decreed” certain things.

In the longer paper he does admit the “tribunal cannot dictate the exact form any redress offered by government must take”. But he then falls back on the notion of a “moral veto” –that its status is so elevated that Parliament is forced, however reluctantly, to do its bidding.

Yet not only does the Crown ignore tribunal recommendations as it chooses, it refuses even to be bound by the tribunal’s expert findings on history in negotiating settlements.

The Waitangi Tribunal will remain a permanent commission of inquiry because there is wide political support for its work. Nor can be it held solely responsible for increasing Māori assertiveness or political engagement with government, even if this was in any way a bad thing.

A larger social shift has taken place in Aotearoa New Zealand over the past few decades. No fiat from the Waitangi Tribunal has eliminated the cultural misappropriation of Māori faces and imagery – something Storey warns could mean “tea towels with a depiction of Uluru/Ayers Rock, or boomerang fridge magnets, would become problematic”.

The Waitangi Tribunal has often done no more than make Māori histories, Māori perspectives and Māori values accessible to a non-Māori majority. It has certainly had no power to control where debates on indigenous issues fall. ■

Michael Belgrave is a Professor of History at Massey University ■

The above was first published in The Conversation and is republished with permission

The Waitangi Tribunal has often done no more than make Māori histories, Māori perspectives and Māori values accessible to a non-Māori majority

ADLS/REINZ ASPRE 11th Ed (3): Key points

Webinar 1 CPD hour

Monday 8 May 12pm – 1pm

Price from $80 +GST

Presenters Thomas Gibbons, principal, Thomas Gibbons Law, supported by Janine Tan, legal advisor, REINZ

Ready, set, retire! Crafting succession and lifestyle change

ALL LEVELS DEVELOPMENT SEMINAR

Cradle to Grave™ 2023

In Person

ADLS/REINZ will release the new version of the 11th edition of the Agreement for Sale and Purchase of Real Estate on 9 May 2023. It reflects legislative changes to the unit titles disclosure regime (which take effect on 9 May) and other practical matters, including real estate agents’ retention of deposits and new definitions. This webinar, timed for the day prior to the new version’s release, will cover the reasons for, and details of, the changes.

GENERAL PRACTICE

ALL LEVELS CONFERENCE

Christchurch & Auckland

Livestream

7.5 CPD hours

Monday 22 May &

Thursday 25 May

8.15am – 5.15pm

Price from $600 + GST Chair Bill Patterson

In Person | Livestream

2 CPD Hours

Tuesday 16 May 4pm – 6.15pm

Price from $140 + GST Presenters Don Thomas QSM; Janine Roberts and Carmel Byrne

So, you want to retire or have a change of lifestyle? Where do you start? Do you have succession options? Drawing on the experience of two lawyers, an accountant and a career coach, this seminar will arm you with practical information and insights to take you from ‘what if’ to ‘made it’. Chair John Hart, barrister, John W Hart Limited

Cradle to Grave™ is the flagship conference for general legal practitioners as well as those working in the areas of property, family law, trusts, taxes, wills and estate planning. The Cradle to Grave™ conference offers a unique opportunity to engage, connect and learn from the best legal minds in your area of practice.

In-person conference includes networking from 5.15pm.

Courtroom conduct and courtesy

LITIGATION

ALL LEVELS SEMINAR

In Person | Livestream

1.5 CPD hours

Tuesday 23 May 5pm – 6.30pm

Price from $110+GST

Presenters Justice Mathew

Downs and Judge Anna Skellern

With perspectives and insights from a High Court judge, a District Court judge and an experienced litigator, this seminar offers the practical information you need to present yourself, your case and your profession in the best light.

Chair David Jones KC

Criminal and immigration law: where two worlds collide

CRIMINAL IMMIGRATION

ALL LEVELS

Webinar 2 CPD hours

Tuesday 30 May 4pm – 6pm

Price from $140 + GST

Presenters Jack Cheng, senior associate, Meredith Connell; Elly Fleming, associate, Pitt and Moore; Yvanca Clarisse, associate, Duncan Cotterill and Matt Stansfield, practice lead, Manukau Office

| Border and Visa Operations | Immigration New Zealand, MBIE

Leading your career –for women

WOMEN

INTERMEDIATE WORKSHOP

If you practise in criminal law, chances are you’ve had a client facing charges that could impact his or her immigration status. And vice versa for those who practise in immigration law. Attend this webinar to better understand and manage the intersection of these two areas of law.

Chair Judge Jonathan Moses

In Person Auckland

8 CPD hours

Thursday 8 June

8.45am – 5pm

Price from $980 + GST

Facilitators Miriam Dean KC and Liz Riversdale

This practical, interactive one-day workshop will arm you with resources, self-confidence and focus to apply immediately to your role and enhance your future career.

The workshop will be followed by a networking event from 5pm.

Events

Hamilton express lawyers’ lunch

Zak Kneebone and Madi Bradley

Tony Herring, Sam Bell and Larry Keane Sharnae Aben, Tim Fletcher, Soo Park and Pat Steele

Rebekah Revell, Rosemary Alchin, Ashleigh Beech, Sarah Fraser and Jemani Sherson

Treasure McKinstry, Kyra Wells and Jaime Lomas

Thank you to those who attended the Hamilton Lawyers’ Lunch, held at the Bank Bar.

Jacqui Owen and Lyndsay Wilson

Featured events

Connecting New Zealand lawyers

Wellington Express Lawyers’ Lunch

Tuesday 16 May 12.30 – 2pm

Dirty Little Secret, 54 Taranaki Street, Te Aro, Wellington

Newly Suited Fark Knows Quiz Night

Wednesday 17 May 5.30 – 7.30pm

Coops Corner Pub, 204 Quay Street, Auckland CBD

ADLS Employment Law Dinner 2023

Wednesday 31 May

6pm – 9.30pm

Park Hyatt, 99 Halsey Street, Auckland CBD

North Shore Express Lawyers’ Lunch

Wednesday 7 June 12.30pm – 2pm

Franc’s, The Strand, Takapuna, Auckland

Upcoming

June

Tauranga Express Lawyers’ Lunch

July

Christchurch Lawyers’ Lunch

Newly Suited “Beats by Bingo” Night

Central Auckland After 5

August

East Auckland Lawyers’ Lunch

Soon to be added:

Sept | South Auckland After 5

Sept | Otago Lawyers’ Lunch

Sept | Hawke’s Bay Lawyers’ Lunch

Oct | South Auckland Lawyers’ Lunch

Oct | Wellington After 5

Nov | Hamilton After 5

events@adls.org.nz

Offices Available

Following some barristers retiring, we have three offices of varying sizes available for rent.

The Chambers share a refurbished floor (with separate areas) with Hussey & Co., a boutique forensic and general accounting firm. There are shared meeting rooms (a formal boardroom with video conferencing facilities and a less formal meeting room), and communal entrance and client waiting area.

Telephones, internet connection, printing and secretarial services also available and some furniture available.

Cost depends on office size and range from $150 – $300 per week plus gst. No long-term commitment required.

Photographs of the Chambers can be viewed at www.hco.co.nz/gallery.

Contact: Shane Hussey for further details, Shane@hco.co.nz

09 300 5481

WILL INQUIRIES

Please refer to deeds clerk. Please check your records and advise ADLS if you hold a will or testamentary disposition for any of the following people. If you do not reply within three weeks it will be assumed you do not hold or have never held such a document

LawNews: The no-hassle way to source missing wills for $80.50 (GST Included) reception@adls.org.nz

CHANG

Wen-Huai

• Late of 84 Minzhi Road, Longtan District

• Married

• Retired

• Aged 64 / Died 10’01’2022

FU

Yiping

• Late of 36 Cromdale Ave, Highland Park, Auckland

• Single

• Retired

• Aged 66 / Died 16’12’2022

ZOU Lihua

• Late of 401/10 Waterloo Quadrant, Auckland Central

• Single

• House-wife

• Aged 69 / Died 17’12’2021

ASSOCIATE CORONERS

Applications are invited from persons wishing to be considered for appointment as a full-time Associate Coroner. The appointment will be for a five-year term.

Associate Coroner can undertake all of the functions of a Coroner with the exception of holding inquest hearings. It is expected that the primary focus of the Associate Coroner will be the initial coronial processes referred to as the ‘duty coroner’ stage and as authorised by section 16 of the Act 2006.

To be appointed as an associate coroner the Act requires that you must have held a practising certificate as a barrister or solicitor for at least five years.

A position description and application forms are available from the Ministry of Justice website here. The close off for expressions of interest is 4pm 12 May 2023 .

Continued from page 04

Self regulation

The industry is working with Centrix on a product called Pay Watch, which is central to the selfregulation model.

Keith McLaughlin, managing director at Centrix, says when it’s up and running BNPL providers will load arrears at the end of each day. “That will appear on our database, and it will be flagged that the customer is in arrears.” It’s then up to other providers to choose whether they will lend.

Sims, however, doesn’t buy the argument that self-regulation will work. “If they were going to be responsible, they would have already done that. It’s a

Continued from page 05

high-wealth New Zealand family. The report makes the following claim in this regard: “This result shows that taxes on personal taxable income are progressive and that high-wealth families will generally have a relatively high ETR on personal taxable income.”

The report also identifies that 67% of the median high-wealth New Zealand family’s economic income was earned through trusts, either as trustee income or capital gains from trust assets. The current tax rate for trustee income is 33%.

Implications

Tax policy and reform may be the subject of increased discussion in light of this report, especially as 2023 is an election year.

While Parker announced there would be “no new tax policy or tax switch” arising from the release of the report, he noted that the report “will provide a

bit late now,” she says.

“I know from practical experience from being on the Telecommunications Dispute Resolution [board], when it’s voluntary the worst offenders are not members.

“[Voluntary self-regulation] may reduce [harm to consumers overall], but it won’t eliminate it.” It’s likely as well that customers refused by one BNPL lender would gravitate to another provider that wasn’t a signatory.

Another issue, Stace says, is that self-regulation would capture only arrears. It might not capture whether the consumer can really afford a loan in the way that a full affordability assessment under the CCCFA would do.

“The question becomes, ‘well, what would that do to the industry?’” She adds that it shouldn’t be taken

fundamental baseline for debate on the fairness of our tax system, allowing future tax policy to be based on better data and more solid evidence”.

The report brings into focus the importance of defining “income” when assessing a person’s ETR and the debate about what ought and ought not to be regarded as income.

The finding of a median 30% ETR on a high-wealth New Zealand family’s personal taxable income largely correlates with New Zealand’s progressive income tax rates. This suggests high-wealth New Zealand families are paying the required amount of income tax on income that is currently subject to tax in New Zealand.

The finding of a median ETR of 8.9% on economic income reflects the adoption of a broader base for calculating the ETR. Using economic income as a base is significant departure from the concept of taxable income under the Income Tax Act 2007, which does not include gains of a capital nature, subject to some exceptions, such as the bright-line test, the financial arrangements rules and the foreign

at face value that BNPL is a good innovation and therefore should not be killed.

“The financial mentors say the industry will evolve. They [might] have business models that will allow, buy-now-pay-later only for bigger transactions, for example. Or they’ll figure out other ways of doing it.

“There [may be] other ways and means of achieving the same thing that don’t have these same risks for vulnerable consumers.”

The final word goes to AUT’s Aaron Gilbert who says: “Buy-now-pay-later has some benefits to it, particularly for a portion of the population that is locked out of more conventional credit. So, from a regulation perspective, I think we need to be a little careful that we don’t throw the baby out with the bathwater.” ■

investment fund rules.

Including unrealised capital gains within the income base is of particular note, as such ‘gains on paper’ may not ultimately materialise. Many taxpayers would not regard an unrealised increase in the value of their home or their business as having the same character as other accepted forms of income, such as salary, dividends and interest.

As far as we are aware, no jurisdiction imposes tax comprehensively on economic income as defined in the report. The last year also demonstrates that economic losses can be suffered by holders of capital.

The report considers only the position of highwealth families. Any broadening of the tax base to include items of economic income would impact all holders of capital assets such as land and business assets, not just high-net worth families. ■

Tax Avoidance Law in New Zealand 3rd edition

Author James Coleman

The 3rd edition of this authoritative text by James Coleman enables practitioners to comply with s BG 1 with increased confidence and predict with greater certainty when it applies. The book includes discussion of the Supreme Court’s judgment in Frucor

Also included is a new chapter analysing some common transactions that risk being categorised as tax avoidance.

Price for ADLS members $99 plus GST*

Price for non-members:$110 plus GST*

(* + Postage and packaging)

To purchase this book, please visit adls.org.nz; alternatively, contact the ADLS bookstore by phone: (09) 306 5740, fax: (09) 306 5741 or email: thestore@adls.org.nz.

Graham Murray and Mathew McKay are partners and Matthew Seddon is a lawyer at Bell Gully ■