Contents

Chapter 18
Limitation periods

Introduction

18.1In the Issues Paper, we noted a range of approaches to the limitation period for bringing pecuniary penalty proceedings.476 We asked two questions about limitation periods:

Preliminary views

18.2The Law Commission’s preliminary view was that wholesale reliance on the Limitation Act 2010 is not necessarily desirable, since some pecuniary penalty statutes cover a range of conduct of varying seriousness, with some regimes requiring separate limitation periods for different penalties. We also noted that some non-monetary orders such as management bans are not covered by the Limitation Act.

18.3Our preliminary conclusion, therefore, was that the setting of limitation periods for pecuniary penalties should be a conscious policy decision that takes into account the range of penalties that may be sought under the particular regime. We suggested that policymakers may need to examine carefully the range of orders in a single statute and think about how limitation periods apply to each, not just to the scheme as a whole, and that they will need to specify clearly the extent to which a statute’s internal limitation rules displace or exist alongside the Limitation Act.479

Our conclusionsTop

18.4In this Report, based on the submissions we received, and further analysis and research, we confirm the preliminary conclusion reached in the Issues Paper that pecuniary penalty statues should deal expressly with the limitation issue. It would be desirable, in our view, for greater consistency in this aspect of pecuniary penalty design. Therefore, we propose a model approach.

18.5In general, the Commission continues to support the standardisation of limitation periods in relation to civil claims under the Limitation Act, and in relation to criminal offences under the Criminal Procedure Act 2011. However, as pecuniary penalties are a hybrid form of proceeding, sharing features of both civil and criminal proceedings, we conclude that the standard approaches in those statutes are not always apt for pecuniary penalties. Instead, there is a need for a tailored model limitation period that is designed to best balance the relevant policy factors engaged.

18.6In this chapter, we propose a model form of limitation period as the default approach for pecuniary penalty statutes. We have considered the following options:

(a) the approach taken in section 508 of the Financial Markets Conduct Act 2013 (express adoption of the Limitation Act multi-factored limitation period); or
(b) the Commerce Act 1986 discoverability model (three years from reasonable discoverability with a 10-year longstop), supplemented by the addition of the Limitation Act fraud exception to the longstop.

18.7We conclude that the model approach should be one structured on “reasonable discoverability” (option (b)); however, the standard Limitation Act approach (option (a)), should be an alternative option when there is a specific policy justification for applying that model.

18.8The substance of this model is not significantly different to the operation of the three-year late knowledge period in the Limitation Act 2010, the key difference being that the limitation will bite three years after reasonable discoverability, regardless of the standard six-year limitation period that usually applies to civil claims. This essentially shifts the late knowledge period in the Limitation Act to the primary limitation period. Our view is that this model is justified in the context of pecuniary penalties to achieve the appropriate balance between certainty, efficiency and encouraging regulatory responsiveness. We note that this model is largely consistent with the limitation periods in sections 74D, 80 and 80B of the Commerce Act 1986.

476Law Commission Civil Pecuniary Penalties (NZLC IP33, 2012) [Issues Paper] at ch 7, 155–167.
477Issues Paper, above n 476, at Q41.
478Issues Paper, above n 476, at Q42.
479Issues Paper, above n 476, at [7.103].