6.1Part 3 of the Report sets out our Recommendations and Guidelines about the core procedural rules and safeguards that should apply to the imposition of pecuniary penalties. The balance we have achieved is fundamentally based on our assessment of the nature and role of pecuniary penalties as set out in the previous two chapters; and on the principles of fairness, effective and efficient regulation, and certainty as described in Chapter 1.
6.2Achieving the right balance between the principles of fairness, and effective and efficient regulation is absolutely fundamental to our review. This is because of the statutes where pecuniary penalties are commonly found: they often feature where a dedicated and resourced enforcement agency has been established to oversee an activity, and to ensure that it is carried out in a way that meets various public objectives. It follows that there is a recognised public interest in such oversight, and that the agency should be empowered to carry out its role effectively and in a way that ensures the efficient use of public money.
6.3We have had at the forefront of our minds that any recommendations for enhanced procedural safeguards might be viewed as impeding enforcement agencies’ ability to oversee and enforce their regimes, and so might be met with concern. Because of this we have been very careful only to propose enhanced protections where we are fully persuaded that there is a sound basis for them in law and principle.
…imprisonment or a fine which by its magnitude would appear to be imposed for the purpose of redressing the wrong done to society at large rather than to the maintenance of internal discipline within the limited sphere of activity.
6.9If New Zealand courts were to adopt the approaches of the European and Canadian judges, some pecuniary penalties may be susceptible to a finding that they amount to an “offence” for the purposes of sections 25 and 26 of the New Zealand Bill of Rights Act.
6.10In any event, the right to natural justice is protected in broader terms by section 27(1) of the Act:
Every person 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.
6.12At the outset of this chapter, we said that there is a question as to the extent to which these provisions of the New Zealand Bill of Rights Act should be kept in mind by policymakers and courts when creating and applying pecuniary penalties. In light of the above, we have drawn three conclusions on this question.
6.14Our second conclusion is that pecuniary penalties will be best protected from challenge under the New Zealand Bill of Rights Act if section 5 of that Act is used as the benchmark for determining when procedural safeguards can be limited. Section 5 provides:
Subject to section 4, the rights and freedoms contained in this Bill of Rights may be subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.
6.15We agree that in some circumstances the procedural protections we propose should be able to be modified or limited. In essence, this will be where the interest in effective and efficient regulation outweighs the interest in fairness. However, modifying or limiting a procedural safeguard should not be done lightly. Applying the test in section 5 will ensure that limits on, for example, the penalty privilege proposed in Chapter 9, will be no more than is reasonable and demonstrably justifiable.
6.16Third, pecuniary penalties, and other new forms of coercive or punitive orders that are to be imposed through the civil courts, must be designed in a way that gives appropriate recognition to substance over form. Any assessment of such orders that limits itself to a perfunctory labelling of them as “civil” is unacceptable. Imposition of punitive or coercive orders through the civil courts should not be considered as making them immune from consideration under the ambit of the New Zealand Bill of Rights Act.
Although this is a civil proceeding it does have much of the flavour or complexion of at least a quasi criminal case. Establishment of wrongdoing will lead to the infliction of a penalty. The need for the timely dispatch of the coercive powers of the State is underlined by the New Zealand Bill of Rights Act. Although not directly applicable the philosophy which permeates that legislation should not be ignored.See also the subsequent Court of Appeal decision where Robertson J’s observation was noted: Commerce Commission v Giltrap City Ltd (1998) 11 PRNZ 573 (CA) at 577.