Chapter 6
Application of the New Zealand Bill of Rights Act 1990

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.

6.4In the Issues Paper, we began our discussion of the core procedural safeguards with a section on the relevance of the New Zealand Bill of Rights Act 1990 to pecuniary penalties.104 In sections 5, 25, 26 and 27, that Act provides a framework for both policymakers and the courts on how the appropriate balance between fundamental rights in criminal proceedings, and circumstances when those rights can justifiably be limited, is to be struck. There is a question as to how much that framework can and should inform the balance to be achieved where pecuniary penalties are concerned.
6.5We noted in the Issues Paper that the application of the criminal procedural safeguards in sections 25 and 26 of the New Zealand Bill of Rights Act to pecuniary penalties is uncertain. New Zealand courts have not had an opportunity to rule on the issue, nor has it been the subject of other commentary.105 Whether or not they apply depends on whether the term “offence”, in section 25, can be interpreted to include pecuniary penalties. In essence, this depends on the extent to which courts are willing to adopt an approach that focuses on the substance of a penalty, rather than its form. Courts applying similar provisions in other jurisdictions have, in some circumstances, taken a substance over form approach, and so have found that, even where a penalty or order is not labelled “criminal”, its substance is such that criminal procedural protections should nonetheless apply. A discussion of the relevant New Zealand and foreign case law on the point can be found in Chapter 5 of the Issues Paper, and we do not repeat it here.
6.6It is unclear whether New Zealand courts will apply a similar approach to the term “offence” in section 25, and will examine pecuniary penalties in terms of substance rather than form. Thus far, the term “offence” has only been given a broad interpretation where there has been a risk of incarceration106 or where the orders have had close links with criminal proceedings and procedure.107
6.7On the other hand, the Supreme Court has noted the need for a purposive interpretation of the Act.108 That Court has also been influenced by the Canadian Supreme Court’s finding in R v Wigglesworth109 that, in determining whether a person had been charged with an “offence”, two questions must be considered. First, was the very nature of the proceeding criminal? Secondly, did the accused face “true penal consequences”? A “true penal consequence” was:110

…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.

6.8European courts have taken an even more expansive approach to determining what is, in substance, a criminal offence.111 So far New Zealand courts have not been influenced by that European jurisprudence. However, pecuniary penalties have characteristics that were relevant to those courts’ determinations. Critically, pecuniary penalties are public in nature and, while some are directed at a specific group, others capture the conduct of a broad cross-section of society. They are intended to be punitive and deterrent. In addition, some pecuniary penalties contain a requirement of intent and so involve a degree of moral culpability akin to criminal offences. And while there is no threat of imprisonment, the potential quantum of the penalty outstrips many criminal financial penalties.

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.

6.11Section 27(1) clearly applies to pecuniary penalty proceedings.112 However, again, it is not clear what the provision requires in terms of procedural protections for pecuniary penalties. The challenge under that provision is to identify the breadth of the protection offered by “the principles of natural justice”. Breaches of natural justice by the imposition of pecuniary penalties would need to be justified under section 5 of the Act.

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.

6.13First, pecuniary penalties should be designed so that the risk of a breach of the rights in the New Zealand Bill of Rights Act is minimised. This is preferable from a perspective of good legislative practice, and also because the alternative creates a risk for the Crown that a court will declare an aspect of a pecuniary penalty regime to be inconsistent with the Act. That risk is even more acute with other potential forms of coercive order that are to be imposed through the civil courts. Examples of these sorts of orders can be found in the Public Safety (Public Protection Orders) Bill currently before Parliament,113 and the Vulnerable Children Bill, as it was introduced.114

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.

6.17These conclusions are supported by Professor Paul Rishworth QC’s views expressed in a paper presented in 2012.115 He argued that policymakers should always be vigilant in properly analysing and labelling proposals for laws. They need to ask whether the laws will invade personal liberty and, if so, whether they can be justified under the heightened standard that the broad and expansive rights in the Act (such as section 27(1)) ought to require. In turn, he suggested that this means that possible breaches of New Zealand Bill of Rights Act demand justification under section 5. That is, if rights might be impaired, the limits upon them must be no more than is “reasonable and demonstrably justified in a free and democratic society”.116 The Law Commission endorses this approach.
104Law Commission Civil Pecuniary Penalties (NZLC IP 33, 2012) [Issues Paper] at [5.7].
105With the exception of Commerce Commission v North Albany Motors Ltd (1997) 7 TCLR 575 (HC) at 580–581, where Robertson J said:
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.
106Siemer v Solicitor-General [2010] NZSC 54, [2010] 3 NZLR 767; and Drew v Attorney-General [2002] 1 NZLR 58 (CA).
107Belcher v the Chief Executive of the Department of Corrections [2007] 1 NZLR 507 (CA).
108Siemer v Solicitor- General, above n 106, at [14]. See also Ministry of Transport v Noort [1992] 3 NZLR 260 (CA) at 279.
109R v Wigglesworth [1987] 2 SCR 541.
110​At [24].
111Butler and Butler suggest that the format of art 6 of the European Convention on Human Rights, which is a more general provision than our ss 23–26, may offer some explanation of the expansive view of the notion of “criminal charge”: A Butler and P Butler The New Zealand Bill of Rights Act: A Commentary (LexisNexis, Wellington, 2005) at [21.15.12].
112The Court of Appeal made it clear that s 27 is to be given a wide interpretation in Combined Beneficiaries Union Inc v Auckland City COGS Committee [2008] NZCA 423, [2009] 2 NZLR 56.
113Public Safety (Public Protection Orders) Bill 2012 (68-2).
114Note that the proposed form of coercive, civilly imposed order (“child harm prevention orders”) under the Vulnerable Children Bill 2014 (150-2) as it was introduced to Parliament has now been removed.
115P Rishworth “The Making of Quality Legislation: Some External Constraints and Constitutional Principles” (paper presented at Legislation Advisory Committee/Office of the Clerk seminar The Making of Quality Legislation, Wellington, 11 July 2012).
116At 8.