List of access keys

Explanatory Material: Part 2—The exposure draft Bill

Request for submissions»
Introduction»
Part 1—The revision process»
Part 2—The exposure draft Bill
Part 3—Nature of drafting changes»
Part 4—Issues noted for possible future reform»


The exposure draft Bill is being released for public consultation to get feedback on the specific drafting changes made and on whether the Bill contains any inadvertent changes to the law.

Part 3 of this explanatory material will help you compare the existing Act and the new provisions.

In some cases, no change has been made.  However, most of the provisions have had both structural and textual amendments made to align them with best practice in modern drafting and the PCO’s Plain Language Standard.  The language has been modernised wherever it has been considered that it can be done without risking a change to the law.  Lengthy clauses have been broken up into paragraphs and subparagraphs to help with readability.

The Bill itself contains notes to explain why a particular approach has been taken, or why a change has not been made, and in some instances ask for feedback on a specific issue.  We would particularly like feedback on the provisions in the Bill that have notes, but we also seek comments on any of the other provisions in the Bill. 

Some questions about discrete issues are set out below.

2.1 Minor changes to legal effect

Section 31(3) of the Legislation Act 2012 states that “[a] revision Bill must not change the effect of the law, except as authorised by subsection (2)(i) or (j)”. Subsection (2)(j) (monetary amounts) is not relevant to this revision Bill, but subsection (2)(i) allows minor amendments to be made to clarify Parliament’s intent, or to reconcile inconsistencies between provisions.

PCO and MBIE consider that 18clauses in this Bill make amendments that fall within section 31(2)(i).  They are identified with notes in the Bill and are included in Part 3 of this explanatory material.  The minor amendments appear in the following clauses and are described in Schedule 2 of the Bill:  11, 18, 28, 34 and 35 (and 8(2)), 44(1)(a), 44(3), 70, 71, 72(2), 74(a), 75(1)(b)(i), 76, 77(4) and (5), 80, 81(2)(b), and 82(1).

Question 1: Do the changes made in those provisions amount only to “minor amendments to clarify Parliament’s intent, or reconcile inconsistencies between provisions” within the meaning of section 31(2)(i)?

Question 2: If the Bill does make “minor amendments” to the effect of the law, is there any reason why the amendments should not be made?

Question 3: Are there any other “minor amendments” within the meaning of section 31(2)(i) of the Legislation Act 2012 that should be made?  If so, please provide a detailed explanation of any proposed amendment and why it is justified.

Question 4: Are there any other changes that could be made to improve the Bill as a revision Bill? Proposed changes must fall within the powers contained in section 31(2) of the Legislation Act 2012, such as changes to language, format, or punctuation.

Question 5: Would more examples make the Bill more accessible and readable?

2.2 Should the Act bind the Crown?

Whether the 1908 Act binds the Crown is an issue because it does not contain an express statement that the “Act binds the Crown”.

Under section 27 of the Interpretation Act 1999, “No enactment binds the Crown unless the enactment expressly provides that the Crown is bound by the enactment”.  Section 4(1) of that Act provides that it applies unless “the context of the enactment requires a different interpretation”.

In 2000, the Law Commission noted that an intention to bind the Crown may be implied from the terms of a statute (Study Paper 6 “To Bind Their Kings in Chains” (NZLC SP6, 2000), see paragraphs 3 and 4).  The Paper cited Province of Bombay v Municipal Corporation of Bombay [1947] AC 58 (PC) at 63:

“If it can be affirmed that, at the time when the statute was passed and received the royal sanction, it was apparent from its terms that its beneficent purpose must be wholly frustrated unless the Crown were bound, then it may be inferred that the Crown has agreed to be bound.  Their Lordships will add that when the court is asked to draw this inference, it must always be remembered that, if it be the intention of the legislature that the Crown shall be bound, nothing is easier than to say so in plain words.”

Chapter 11 of the Legislation Design and Advisory Committee Guidelines (2018 edition) states that “The default position is that legislation (or any other enactment) does not bind the Crown unless that enactment expressly provides that the Crown is so bound (see section 27 of the Interpretation Act 1999).  However, the practice in New Zealand is that legislation ought to bind the Crown unless good reasons exist for it not to do so.”

The first revision Bill, now enacted as the Contract and Commercial Law Act 2017, binds the Crown to the extent that the Acts that it revised were binding on the Crown.

The Limited Partnerships Act 2008 (the 2008 Act) replaced Part 2 of the Partnership Act 1908Section 5 of the 2008 Act expressly binds the Crown.

We seek your feedback on the following questions:

Question 6: Can an intention to bind the Crown be implied because the terms of the Partnership Act 1908 make it apparent that the Act’s purpose must be wholly frustrated unless the Crown were bound?

Question 7: Is it desirable that the new Partnership Law Act should bind the Crown? Would expressly providing for the new Act to bind the Crown be a minor amendment within the powers of section 31(2)(i) of the Legislation Act 2012 (ie, the power to “make minor amendments to clarify Parliament’s intent, or reconcile inconsistencies between provisions”)?

2.3 Transitional and savings issue: the new Act applies to all partnerships

The Bill will repeal, and replace, the existing Partnership Act 1908.

The new Act will apply to all partnerships, regardless of whether they are formed before or after it comes into force, and repeals, and replaces, the 1908 Act.  That is, the new Act will apply, in place of the existing Act, to partnerships that existed while the 1908 Act was in force.

This will not affect the validity or effect of anything that has already happened or the bringing or completion of proceedings that relate to an existing right, interest, or duty (see sections 17 to 22 of the Interpretation Act 1999).

The usual approach is to apply new law to new matters going forward.  However, the proposed transitional approach is considered appropriate in the case of a revision Bill because the Bill will have been certified as resulting in no change to the effect of the law (other than minor amendments to clarify Parliament’s intent, or to reconcile inconsistencies between provisions).  This approach extends the advantages of revision to partnerships formed before the new Act comes into force.

It may also be favoured as the most accessible approach since users will not be required to continue to refer to the repealed Act in the future.  In addition, the minor amendments identified in Schedule 2 of the Bill will not apply to the existing partnerships.

This was the approach taken in the first revision Bill, now enacted as the Contract and Commercial Law Act 2017.  In that case, the law applied to all contracts, regardless of when they were entered.

We are interested in whether there are any practical concerns with this approach.  For example, it may be that existing legal or transactional documentation refers to or adopts consistently the terms, language, and cross-references of the 1908 Act.  There may be concerns that this approach could, therefore, result in issues of accessibility or interpretation.  People might have concerns that the basis on which they have structured their partnership business has changed.

The provisions dealing with these transitional and savings arrangements are in Schedule 1 of the Bill.

The Ministry of Business, Innovation, and Employment and the Parliamentary Counsel Office favours the approach in the Bill because it is consistent with and reflects:

  • the revision powers in the Legislation Act 2012
  • the revision Bill certification process
  • the new fast-track parliamentary process under the Standing Orders of the House of Representatives (because there would be no substantive law change)
  • the approach taken in the Contract and Commercial Law Act 2017.

The transitional approach taken during the last revision and consolidation of Acts in 1908 is similar to the proposed approach.  See, for example, section 1(3) of the Partnership Act 1908.  This subsection provided that all matters and proceedings commenced under the consolidated enactments (the Mercantile Law Act 1880 and the Partnership Act 1891) could be continued, completed, and enforced under the new Act.

We are keen for views on this point.

Question 8: How should the Bill approach transitional arrangements?

2.4 Other questions

Question 9: Are there other issues in the Partnership Act 1908 that may need reform that we have not identified in Part 4 of the explanatory material?

Question 10: Do you have any other comments relating to the Bill?

Next: Part 3—Nature of drafting changes » 

Back to top »

© Crown copyright 1997–2018